Bridgepoint Group plc
Annual Report & Accounts
2023
Strategic Report
Introduction 2
Financial highlights 3
Bridgepoint at a glance 4
Our purpose and values 6
Chairman's statement 8
Chief Executive’s statement 10
Our partnership with ECP 12
Market overview 18
Strategy 22
Our business model 24
Our people 32
Stakeholder engagement and section 172(1) statement 36
How we approach sustainability 42
KPIs: tracking our performance 48
Alternative performance measures 50
CFO statement 54
Our historical performance 64
Viability and going concern statements 65
Risk management 68
TCFD disclosures 74
Non-financial and sustainability information statement 81
Governance
Board of Directors 82
Senior Independent Director’s governance review 86
Corporate governance report 87
Nomination Committee report 91
Audit and Risk Committee report 92
ESG Committee report 99
Remuneration Committee report 100
Annual report on remuneration 101
Directors’ report and additional disclosures 112
Statement of Directors’ responsibilities 116
Financial Statements
Independent auditor’s report 117
Consolidated financial statements 126
Notes to the consolidated financial statements 134
Other Information
Non-statutory financial information 194
Shareholder information 196
Glossary 197
Contents
Bridgepoint – 2023 Annual Report & Accounts
Introduction
Bridgepoint is an international
alternative asset management
group with offices in Europe,
North America and Asia. We invest
across private equity, private credit,
and following the ECP transaction,
infrastructure, creating value by
helping build companies with greatly
enhanced long-term potential.
The 2023 Annual Report for Bridgepoint Group plc incorporates:
− the Strategic Report;
− the Directors’ report, the corporate governance report
and the Directors’ remuneration report; and
− the financial statements,
each of which has been approved by the Board of Directors
ofBridgepoint Group plc.
Adam Jones
Group Chief Financial Officer
and Chief Operating Officer
20 March 2024
Find out more
bridgepoint.eu
An explanation of the alternative performance measures
(“APMs”) used by the Group, including underlying profit
before tax, underlying EBITDA and reported and underlying
earnings per share, is set out on pages 50 to 53 along with a
reconciliation to statutory measures.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Financial highlights
Alternative performance measure
Key
Key performance indicator
Measure defined by IFRS
Assets under management
2023 AUM includes €21.1bn from ECP
€61.6bn
(2022: €38.0bn)
Management and other fees
£265.3m
(2022: £241.5m)
Underlying FRE
£95.0m
(2022: £74.3m)
PRE
£55.3m
(2022: £64.9m)
Underlying EBITDA
£148.8m
(2022: £139.2m)
Underlying profit before tax
£133.8m
(2022: £120.0m)
Reported profit before tax
£86.0m
(2022: £127.4m)
Underlying earnings per share
14.9p
(2022: 13.8p)
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Bridgepoint at a glance
Total operating
income
£321.6m
(2022: £307.4m)
Underlying
earnings per share
14.9p
(2022: 13.8p)
Underlying
EBITDA
£148.8m
(2022: £139.2m)
Reported profit
before tax
£86.0m
(2022: £127.4m)
Underlying
FRE
£95.0m
(2022: £74.3m)
Total employees (FTEs)
391
15
offices worldwide*
34
nationalities*
>330,000
people working for
Bridgepoint and ECP-
backed companies*
ESG
UN PRI 5-star rating
233
investment-related
professionals*
Our year in numbers*
Bridgepoint Group plc, €61.6bn AUM
(pro forma for the ECP transaction)
Bridgepoint Direct Lending
Bridgepoint Credit Opportunities
Bridgepoint Syndicated Debt
ECP Value-add Infrastructure
ECP Forestar Infrastructure Debt
Read more on pages 12 to 17, and 28 to 29
Bridgepoint Europe
Bridgepoint Development Capital
Bridgepoint Growth
Private Equity
€28.1bn AUM
Private Credit
€12.4bn AUM
Infrastructure
€21.1bn AUM
Our investment strategies
Who we are
Bridgepoint Group plc is one of the world’s leading private asset
growthinvestors. When the partnership with ECP completes,
Bridgepoint will have c. €61.6 billion of assets under management
(“AUM”) and local presence inEurope, North America and Asia,
combining global scale with local market insight and sector
expertise, consistently delivering strong returns through cycles.
Bridgepoint specialises in private equity, infrastructure
and private credit.
Led by a team of partners who have a long history of working
together, Bridgepoint has a well invested platform that provides a
strong foundation for future growth. The Group has a differentiated
and sustainable investment approach underpinned by a long-standing
commitment to investing responsibly. Environmental, social and
governance principles are partof Bridgepoint’s DNA, with a set
ofspecific goals set and measured for every investment.
* Following completion of ECP transaction
* Bridgepoint only
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Track record of our capital under management
Total assets under management
€19bn
€18bn
€19bn
€23bn
€27bn
€28.1bn
€12.4bn
€21.1bn
€11bn
€8bn
€10bn
€1bn
€1bn
Infrastructure
Private Equity
€20bn
€19bn
€27bn
€33bn
€38bn
€61.6bn*
Private Credit
2018 2019 2020 2021 2022 2023
€61.6bn
(2022: €38.0bn)
*2023 AUM is pro forma for the ECP transaction, all other years are unadjusted
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Purpose
Bridgepoint aspires to be a force for
good. We drive growth and build value
by connecting people, capital, ideas
and opportunity.
Our purpose and values
Values
In everything we do, from committing
investors’ capital, to working with
portfolio companies, to supporting
our teams, we’re guided by our values:
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
We do
what we say
We do
the right thing
We act
with intelligence
and humility
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Chairman’s statement
William Jackson
Strong performance in 2023 and well placed
for continued growth
I am pleased to report that Bridgepoint enjoyed a strong year
of performance in 2023, delivering a good set of financial results
and making meaningful progress with the company’s development
strategy with the addition of ECP to the platform.
The Group’s AUM now stands at €62 billion following successful
fundraisings and taking into account the announcement of the
partnership with ECP. Both have enabled Bridgepoint to hit its
five-year targeted AUM (set at our 2021 IPO) in under three
years, reflecting the long-term growth potential of the business.
In 2023, Bridgepoint recorded underlying profit growth of 12%
for the year and all funds remained on target or better in terms
of deployment and performance with the most recent fully
invested private equity funds, BE VI and BDC III, ranking in the
top quartile for their respective vintages and with valuation growth
largely driven by strong underlying company trading performance.
Fundraising remains on track, with BE VII expected to close this
quarter with some €7 billion of capital commitments. Important
new fundraisings for BDC V and BDL IV are now well underway,
alongside other funds entering the market in 2024.
Having delivered these results, the Bridgepoint platform
ended a productive 2023, and is strategically well-placed
and well-resourced in what is a rapidly changing environment
in alternative asset management. This positioning has been
achieved by continuing to diversify and deepen Bridgepoint’s
position across its three different middle market verticals of private
equity, credit and shortly infrastructure. Each vertical is focused
on value-add growth investing.
Deepening our leadership as the platform scales
With Bridgepoint’s increased scale in 2023, it was a natural time
to separate the roles of Chairman and Chief Executive. This has
allowed me to concentrate on my role as Chair of the Group and
the private equity business with Raoul Hughes assuming the role
of Chief Executive. As a long-standing managing partner, Raoul
is extremely well qualified to continue to lead Bridgepoint and
maintain the culture and values that have been key to our success.
Since assuming his role, Raoul has introduced a new management
structure to oversee the much-enlarged business and strengthened
the balance sheet with new long-term financing to enable the
company to continue to grow and further diversify.
Our executive strength is supported by the high-calibre
Non-Executive Directors on the Board, whose substantial
experience and strategic insight has been invaluable to the Group.
Within the next 12 months, the firm expects to appoint at least
one additional Non-Executive Director to enhance the Board’s
expertise and diversity.
ECP significantly enhances
the investment platform
The agreement to add ECP to the Bridgepoint platform was a
particular highlight of 2023 and at completion will position the
Group strongly for the future. It will significantly enhance the
reach of the organisation in its marketplace by adding to
Bridgepoint’s overall capabilities which, frankly, are already not
typically seen in middle-market peers.
ECP and its management team will add an important third pillar
tothe business and significantly accelerate Bridgepoint’s stated
strategy at the time of the IPO of scaling through product and
geographic diversification. Fundraising for ECP’s flagship fund,
ECP V, which has a fund target of $4 billion, is set to close
inApril.
William Jackson is Chairman of Bridgepoint's Board and
co-Chair of the Bridgepoint Europe Investment Committee.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
→
William Jackson
Chairman
Continued work on ESG and corporate
responsibility
Bridgepoint rigorously integrates environmental, social,
andgovernance (“ESG”) principles into its investment processes
and approach to portfolio management. Carolyn McCall’s
leadership of the Board’s new ESG Committee is instrumental
in overseeing our ESG commitments. In its first year, the
committee has focused on developing an understanding
ofBridgepoint’s ESG and DEIB activities and initiating
areviewof Bridgepoint’s sustainability strategy.
Supporting this strategy, I am pleased to report that in 2023,
The Bridgepoint Charitable Trust continued its philanthropic
efforts, supporting a range of charitable projects that underscore
our commitment to positively impacting the communities in
which we operate. This included the Alpine Challenge, where
100 colleagues undertook a trek for two days, covering over
2,500m of total ascent and raising funds for seven charities.
The Bridgepoint Charitable trust matched the total
amountraised.
Dividend
Bridgepoint aims to grow its dividend progressively over
time as it scales through organic growth in existing businesses
and by adding complementary or adjacent strategies.
Bridgepoint is a cash-generative business in a strong financial
position. A final dividend of 4.4 pence per share is being proposed,
consistent with the interim dividend. Combined with a capital
return of 7.6 pence per share through the share buyback
programme and the interim dividend of 4.4 pence per share,
the total capital return to shareholders in 2023 (16.4 pence)
ismore than double that in 2022 (8.0 pence).
Exciting prospects ahead
Over the three years since our IPO, Bridgepoint has made good
progress in delivering against the objectives set at the time of
our listing. Fund performance continues to be strong, AUM has
grown ahead of expectations, the management team has been
further strengthened, and we have delivered on the first stage
ofour diversification strategy to significantly enhance our
investment platform.
With a strengthened balance sheet following our recent refinancing
and as the completion of fundraising for Bridgepoint and ECP’s
two largest funds nears, the Group also has strong medium-term
visibility in its financial outlook. This places Bridgepoint in
anexcellent position to exploit opportunities in a rapidly
changing marketplace.
With its diversified investment strategies, differentiated origination
capabilities, and a healthy exit pipeline, I’mconfident that
Bridgepoint is well placed to perform intheyear ahead and beyond.
William Jackson
Chairman
“Bridgepoint stands stronger than
ever,with a platform that is both well
diversified and capitalised, and further
enhanced by the strategic addition
of ECP.”
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Bridgepoint is a global leader in value-add growth investing with
€62 billion of AUM across private equity, credit, and following the
ECP transaction, infrastructure. The Group’s strong local presence
in Europe, North America and Asia, combines global reach with
local insight, and sector expertise, enabling strong returns to be
delivered consistently through cycles.
2023 was no exception, with the Group’s strong set of financial
results exceeding expectations, driven by solid fund performance
across strategies and further progress on fundraising.
Financial performance ahead of expectations
In 2023, Bridgepoint grew AUM organically by 7% to €41 billion,
contributing to a 10% increase in management fees year-on-year
to £265 million, and a 28% increase in underlying FRE to
£95 million. As guided in our interim results exits, particularly
within the firm’s SMID Cap strategy, were concentrated towards
the second half of the year. This, along with the growth of
Bridgepoint’s portfolios overall, delivered PRE of £55 million.
Consequently, underlying EBITDA and underlying profit before
tax increased by 7% and 12% respectively to £149 million
and £134 million and underlying earnings per share grew
to 14.9 pence per share.
Fundraising approaching completion
for flagship fund
The strong story continued on fundraising, with BE VII expected
to close this quarter with €7 billion of capital commitments.
In relation to ECP, ECP V, which has a fund target of $4 billion,
is set to close at the end of April. Appetite for Bridgepoint’s private
credit funds remains robust, supported by a strong performance in
2023, with a total of €0.7 billion raised for the Bridgepoint Direct
Lending and Credit Opportunities strategies, alongside the pricing
of two CLOs. Fundraising for BDC V is underway, with an
expected transition from BDC IV to BDC V by Q1 2025.
To support future growth further investment in Bridgepoint’s
global coverage team has been made, with important senior
coverage hires in North America, Asia and the DACH region
in Europe. This enables the firm to continue to raise increasing
amounts of capital from a broadening range of investors and
to expand the Group’s product offering.
Delivering high-quality returns through
disciplined investment
Bridgepoint’s investment strategies aim to deliver absolute returns
for fund investors through a disciplined approach, characterised
by measured diversification across sectors, geographies
and deployment timelines. This approach proved instrumental
in driving performance in 2023, with all funds remaining
on or ahead of plan.
Private equity
In 2023, 13 platform investments were made through
Bridgepoint’s private equity strategies, deploying €2.7 billion.
BE VII committed €1.7 billion in capital to 5 acquisitions,
and has now committed 31% of its primary capital. BE VII
deployment remains on track, with a four-year investment period
expected before transitioning to BE VIII. BDC IV also had
a strong year with eight acquisitions, taking total commitments
to 79% of primary capital. BDC III made notable progress,
with the Multiple on Invested Capital rising from 3.0x
at the end of 2022 to 3.8x at the end of 2023. During the year,
€1.1 billion was also returned to private equity fund investors.
Infrastructure
The addition of ECP marks a major step forward in Bridgepoint’s
strategy as set out at IPO, adding an energy transition
infrastructure business to the firm’s private equity and credit
businesses. ECP's leading position in the energy transition market
positions the Company well in the global drive for
decarbonisation and enhanced energy security, as reflected
in its fund performance in 2023. With the transaction on track
to complete in the first half of 2024, we look forward to driving
growth in the enlarged group.
With Bridgepoint and ECP being people-centred companies,
the importance of cultural compatibility cannot be overstated.
After a year of extensive collaboration, it’s clear that both firms
share a common ethos, with a focus on long-term talent retention,
team collaboration and prioritising investors. Personally,
I'm hugely excited about leading the firm in the next chapter
of this combined story.
Chief Executive’s statement
Raoul Hughes
Raoul is the Chief Executive of Bridgepoint Group plc and Chair
of Bridgepoint’s Group Management and Operating Committees.
He joined the firm in 1988.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Private credit
The credit market in 2023 offered favourable conditions,
with Bridgepoint Credit funds benefiting from higher interest
rates. This, coupled with disciplined credit decision-making,
is driving enhanced fund performance. Over the year,
Bridgepoint’s Direct Lending and Credit Opportunities
strategies deployed approximately €1.3 billion of capital,
demonstrating a compelling track record of delivering
consistently strong risk-adjusted returns. For example, in
aggregate as of Q4 2023, the BDL funds delivered impressive
gross and net IRRs of 9% and 8% respectively and a gross cash
yield of 10%, with no realised losses in their portfolios.
This success is attributed to BDL’s rigorous asset selection,
targeting businesses in resilient sectors with strong credit
fundamentals, and a thorough due diligence approach that
leverages the Bridgepoint Group’s extensive knowledge and
experience. In terms of fundraising, BDL III and BCO IV were
successfully closed in 2023, along with two CLOs. Fundraising
for BDL IV and BCO V has been launched, while CLO 6 is in
its warehousing phase, with pricing anticipated in the summer.
Deepening the platform’s leadership
as it scales
In line with Bridgepoint’s broadened platform, a new
management structure has been put in place to support the
firm’s medium-term priorities and help enable the growth and
diversification of the platform. Boards have been established for
the firm’s private equity and credit businesses, and comparable
board will be established for ECP when it joins the Group.
Each board is led by a senior team responsible for growing
their respective product areas while continuing to focus
on their core investment activities.
At the Group level, a Group Management Committee has been
established, which is responsible for the delivery of the Group’s
strategy. It will include members from both Bridgepoint and,
following the ECP transaction, the ECP investment businesses.
A Group Operating Committee has also been established,
responsible for the day-to-day operations of the Group,
ensuring that central functions efficiently support each
business unit and the Group’s expansion.
→
Raoul Hughes
Chief Executive
These committees bring together a dedicated and highly
experienced management team to drive growth and enhance
shareholder value. I look forward to seeing the results of their
combined efforts.
Looking to the future with confidence
Bridgepoint’s diversified investment strategies and healthy
pipeline of potential investments and exits position the firm
well to navigate the year ahead with confidence.
Amid ongoing industry consolidation, opportunities for inorganic
growth and expansion into new asset classes are being actively
explored, alongside continued scaling of Bridgepoint’s current
strategies and broadening product offerings.
We are ambitious and confident in the Group’s ability to deliver
continued growth and value creation.
I’d like to thank all colleagues working at Bridgepoint for their
dedication and hard work. It is thanks to them that the business
is in such a strong position today.
Raoul Hughes
Chief Executive
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Our partnership with ECP
In 2024, we will welcome Energy Capital
Partners (“ECP”), a leading North
American infrastructure investor,
to the Bridgepoint platform.
This partnership represents a significant third pillar for the
business, marking a decisive step forward in creating a fully
diversified alternative asset manager. It strengthens Bridgepoint’s
position as one of the world’s leading private asset growth
investors focused on the middle market.
ECP at a glance
ECP is a market leader in value-add infrastructure specialising
in energy transition and sustainability focused investing.
In its over two decades of investment, the business has
raised nearly $30 billion of capital.
To date, ECP has primarily operated in North America, where
the energy transition sub-segment of the infrastructure market
stands to be a key contributor to, and beneficiary of, the global
decarbonisation effort. Investment in the space is expected to
reach $1.9 trillion per annum through to 2050, creating significant
investment tailwinds and multiple potential growth avenues.
47
investment FTEs
>25
years of sector investing experience
66
platform companies
ECP is led by a team of 15 partners, including founder
Doug Kimmelman and managing partners Peter Labbat
and Tyler Reeder. The senior partners each have more
than 20 years’ experience investing in critical electrification
and decarbonisation infrastructure, supported by a team
of 47 investment professionals.
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Bridgepoint – 2023 Annual Report & Accounts
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
ECP, €21.1bn AUM
Flagship funds
€16.5bn AUM
Private credit
solutions
€0.3bn AUM
Continuation funds
€3.8bn AUM
Other vehicles
€0.5bn AUM
Attractive spectrum of investment products
The core of ECP’s business, representing approximately 80% of AUM, consists of the flagship funds.
Its credit business is a high growth area, following a recent strategic move to double the size of the credit team.
ECP targets the most attractive themes within
energy transition
With AUM of €21 billion, ECP is a market
leader in the following sub-segments:
Renewables
& storage
Wind, solar, geothermal, hydro,
waste-to-energy, energy/battery
storage & solutions
Environmental
infrastructure
Circular economy: environmental
clean-up, recycling, waste
management & beneficial re-use
Sustainability,
efficiency &
reliability
Energy efficiency, renewable fuels,
carbon capture, energy use
& supply, digital infrastructure,
hydrogen
Power
generation
Modern, efficient gas-fired power
generation as an energy transition
solution
ECP is the largest independent owner of US power generation
capacity and a top three independent owner of renewable
capacity inNorth America.
Partnership benefits for Bridgepoint
and our shareholders
The combination reinforces the Group’s position as a global
leader in middle-market private assets investment.
Increases Bridgepoint’s scale and accelerates strategic
diversification
Like Bridgepoint, ECP is a value-add, hands-on investor.
Value-add infrastructure is highly complementary to our
established private equity and private credit platforms.
This combination not only reinforces our position as a global
leader in middle-market private assets investing, but also
adds scale and diversification.
ECP’s market leadership in a transformative sector
ECP is a market-leading infrastructure investor with a focus on
energy transition. It is particularly well-positioned to capitalise on the
global shift towards decarbonisation and enhanced energy security.
Highly complementary fit for both partners
On the distribution side, the partnership brings together two
mature platforms. ECP has over 200 client relationships of which
over 170 are new relationships for Bridgepoint. The people, office
and industrial networks of ECP and Bridgepoint strongly
complement each other.
Enhances the Group’s earning quality and margin profile
Financially, the transaction immediately enhances the Group’s
quality of earnings. The FRE proportions of EBITDA and margins
both see a material step-up.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Announcement date: June 2019
Location: North America
Sector: Energy storage solutions
Convergent is a leading provider of energy storage inNorth
America. Convergent has over a decade of experience financing
and managing all aspects of the energy storage development cycle
to help customers reduce electricity costs andincrease reliability.
The company’s commercial, industrial andutility-scale assets
can yield seven-figure savings while advancing the clean
energy transition.
Energy storage – most often lithium-ion-based battery storage –
enables businesses, hospitals, schools and other critical
infrastructure to avoid peak pricing during severe weather events
and utilities to reduce wholesale demand and energy costs while
increasing reliability and supporting the clean energy transition.
Energy storage and solar-plus-storage ensure power is delivered
atthe most strategic times.
Convergent has over $1 billion invested in or committed to
systems in operation or under development across North America
and over 800MW/1GWh of energy storage and solar-plus-storage
systems in operation or under development, which is equivalent
to the power consumed by approximately 750,000 homes.
The company’s proprietary asset management platform, PEAK
IQ®, leverages machine learning and deep market knowledge
to optimise asset performance and maximise value. Given that
batteries store power and do not generate it, knowing when to
charge and discharge a battery storage system is critical. PEAK IQ®
helps customers reduce and forecast their energy costs while
decreasing their carbon footprints.
800 MW/1 GWh
of energy storage and solar-plus-storage systems
operating or under development by Convergent
9,800 + tCO
2
e
avoided by Convergent’s solar generation
and storage portfolio in 2022
ECP in action
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Announcement date: April 2022
Location: North America
Sector: Environmental infrastructure
Restaurant Technologies is a leading provider of cooking oil
management systems, serving nearly 40,000 restaurant chains,
independent restaurants, grocery stores, delis, hotels, casinos,
convenience stores, universities and hospitals.
The company offers two critical services to food service venues:
fresh oil delivery and used cooking oil (“UCO”) collection.
Traditionally, these processes are often regarded as ‘pain points’
incommercial kitchens, resulting in labour inefficiencies and safety
hazards. Restaurant Technologies’ closed-loop system automates
these pain points, eliminates undesirable and dangerous manual
labour, reduces plastic waste associated with traditional fresh oil
delivery and ultimately offers savings to the customer relative
to the manual alternative. UCO is then aggregated across the
company’s nationwide depot network and sold into the biofuel
market as recycled feedstock for low carbon transportation fuels.
US renewable diesel capacity is expected to grow rapidly,
creating unprecedented feedstock shortages in the renewable fuels
industry. UCO, as the lowest carbon-intensity feedstock available,
represents the most valuable input for renewable diesel producers.
As global efforts to curb carbon emissions intensify, ECP believes
that Restaurant Technologies is well-positioned as the largest
independent source of UCO inNorth America.
Since 2009, Restaurant Technologies has partnered with
BurgerKing to manage waste oil from more than 1,200 restaurants
across the US. Burger King uses Restaurant Technologies’ Total
Oil Management system, which automates the entire cooking
oil process while increasing efficiency and improving safety
in restaurant kitchens. Restaurant Technologies estimates that
this programme helped Burger King recycle 13.2 million pounds
ofwaste oil in 2022.
289.4 million lbs
of waste oil recycled by Restaurant Technologies
28,000 tCO
2
e
avoided by Restaurant Technologies solutions
15
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Doug Kimmelman Q&A
Can you describe ECP’s focus within
theenergy sector and its importance
inthecurrent market?
ECP specialises in infrastructure investments, with a strong
emphasis on the fast-growing energy transition and environmental
sectors. This includes our traditional focus areas of power
generation, renewables and storage, as well as newly actionable
opportunities in renewable fuels and carbon capture. These sectors
are critical in the global decarbonisation effort, representing
significant investment opportunities as societal demand for clean
energy continues to increase.
ECP stands as a pioneer in the space, with our team having
invested in the sector since the 1990s. My journey began
as a partner at Goldman Sachs, where I spent 22 years helping
to build the firm’s risk management and investing business
in electricity before founding ECP. I bring 40 years
of experience in the electricity and environmental sectors.
Our domain network, deal-sourcing capability and investing
expertise are deep, having been built over several decades.
The heightened societal demand globally for clean energy
and energy transition solutions, along with federal, state and
corporate initiatives in the US, is driving many of these investment
opportunities. In addition, we believe we are at the early stages
of a paradigm shift in the electricity markets, with power demand
expected to dramatically increase driven by artificial intelligence
and demand centre growth.
What excites you most about joining forces
with Bridgepoint?
I’m very excited about the opportunity to accelerate the growth
of both our firms. This partnership is the culmination of a really
long dialogue; William and I have known each other for many
years and we’ve spent over a year talking to the team at
Bridgepoint. So, we know each other really well, which
strengthens the foundation of our collaboration.
Our firms not only share a culture of collaboration, ethical integrity
and investment excellence, but like ECP today, Bridgepoint also
has an impressive performance-driven and value-based culture.
This alignment at a people level makes ECP and Bridgepoint
a really great fit.
The motivation to combine forces with Bridgepoint is high.
Our complementary and non-overlapping platforms offer
new avenues for growth, especially given our strong presence
in North America and Bridgepoint’s strong presence in Europe.
This strategic alignment enables us to leverage our outstanding
global investor lists, which have limited overlap, presenting
significant optimisation opportunities. We are particularly proud
of our team’s deep and long-standing track record in the energy
transition sector and this partnership presents an exciting
opportunity to expand our investing expertise on a global scale.
Doug founded ECP in April 2005 and serves as its Senior Partner.
He will become a member of Bridgepoint’s Group Management
Committee and is a member of ECP’s Management
and Investment Committees.
“I’m very excited about the
opportunity to accelerate the
growth of both our firms.”
16
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
$4.0 billion
target for ECP V fundraise set to close in April
How does ECP’s invesment approach
align with Bridgepoint’s?
ECP, like Bridgepoint, is a value-add, hands-on investor.
Our investment parameters are focused on achieving mid-to-high
teens returns for our investors, which may be slightly lower than
traditional private equity, but still offer highly attractive returns
on a risk-adjusted basis. We invest in hard and real assets that
are not only critical to society but also provide an inflation
and downside protection that many investors seek
in the current macroeconomic environment.
Can you share some highlights of ECP’s
performance and its fundraising efforts?
The core of ECP’s business is our flagship funds, which represent
approximately 80% of our AUM. We have achieved a consistent
track record, delivering a gross multiple of invested capital
of approximately 2x since 2010. This success has been supported
by our current sector focus, which benefits from a high cash yield
to our investors, averaging about 10% annually. Our Fund ECP IV
has been ranked as a first quartile performer on a net IRR basis
and is recognised by Preqin as one of the top-performing
infrastructure funds.
Our fundraising efforts for the next flagship fund, ECP V,
are nearly concluded and the fund is expected to close in April,
which has a target of $4.0 billion. Despite the challenging
fundraising environment, the energy transition area remains
a high priority for investors.
Looking ahead, what are ECP’s goals and
aspirations, including within the energy
transition space?
We are, of course, approaching closing of our flagship fund ECP V.
Private credit has also emerged as one of the attractive growth
areas in the alternative space recently and we are confident
in our ability to expand ECP’s credit team alongside the existing
Bridgepoint Credit team.
We may explore new investment opportunities in Continental
Europe, leveraging Bridgepoint’s deep networks and expertise
in the region. Our aim is to continue pioneering in the energy
transition space, leveraging our extensive investment track
record to explore nuanced opportunities across renewables,
environmental infrastructure and sustainability sectors. Our goal
is to drive significant growth, not only for our firm but also in
making a positive contribution to the global energy landscape.
Doug Kimmelman
Senior Partner, Founder of ECP
→
Doug Kimmelman
Senior Partner,
Founder of ECP
17
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Market overview
Bridgepoint is well positioned for uncertain times.
2023 unfolded against a challenging macroeconomic backdrop. The global economy experienced
thecomplexities of a combination of inflationary pressures, geopolitical tensions and monetary policy
adjustments. Despite this uncertainty, Bridgepoint’s disciplined investment approach, experienced team,
broad sector diversity and geographic presence, coupled with a middle market focus, leave the Group
well positioned.
Macroeconomic conditions
Throughout 2023, the global economy continued to navigate a
complex macroeconomic landscape, impacted by interest rate
policy adjustments initiated to curb inflation. These monetary
measures have set a new tone both in Europe and the US.
Geopolitical factors further affected the economic narrative,
leading to a cautious outlook among investors. This macroeconomic
picture was increasingly reflected in valuations across financial
markets, resulting in a nuanced picture for private market activities.
At the time of writing, as we look ahead to the rest of 2024,
thereare some reasons for optimism: inflation is tapering across
mostmajor markets, it appears the US economy may achieve
themuch discussed ‘soft landing’ and there is an expectation of
amodest uptick in EU market growth, all positive indicators
forprivate markets globally.
Bridgepoint’s alternative investment strategies are well positioned
for the current environment, with middle market assets typically
both higher growth and less dependent on macroeconomic growth
than larger businesses, with higher interest rates boosting returns
in private credit and with energy transition infrastructure
benefiting from strong sector tailwinds as well as the resilience
associated with the asset class. These factors, coupled with
Bridgepoint’s continued discipline in investment approach and
portfolio construction, provide a level of stability for Bridgepoint
amidst broader market volatility.
Private market activity
Through 2023 the alternative asset middle market continued to
exhibit resilience, with a reasonable level of deal activity, albeit
reduced relative to the record levels seen during 2021 and the
firsthalf of 2022. There are now signs of improving momentum
inthe market and a strengthening exit environment.
In the medium-term, the private asset management market continues
to benefit from sector tailwinds. Private market investments are an
increasingly important asset class both for investors seeking returns
and for asset management firms, resulting in increasing allocations
to private assets. In comparison to public markets, the nature of
private markets investing is typically longer term, with capital locked
into funds for periods commonly ranging from seven to 10 years,
which provides some stability during periods of uncertainty.
Whilst not immune to trends in the level of market activity,
Bridgepoint continued to deploy and return capital, completing
13 private equity acquisitions and 6 exits. In total Bridgepoint
deployed €3.3 billion during 2023 with all funds remaining on
track to hit their deployment targets.
It is worth noting that within Bridgepoint’s private equity business
the sector-led investment approach results in an average tracking
period of three years prior to investment and 88% of acquisitions
resulting from either proprietary sourcing or from limited auctions.
Both of these contribute to Bridgepoint’s ability to deploy capital
despite wider market conditions. In relation to ECP, its deep
sectorknowledge similarly gives it significant off-market
origination capability.
Impact on Bridgepoint
Factor
18
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Interest rates
The Federal Reserve stated towards the end of 2022 that
it would “stay the course” with rate hikes “until the job was done”.
This was borne out, not just in the US but more generally,
as rates continued to rise through the first half of 2023,
followed by a more consistent second half of the year
as inflation began to taper across most of our markets.
A higher interest rate environment had a detrimental effect on
alternative asset activity through 2023 as investors continued
to adjust to the new environment. However, this is less impactful
for Bridgepoint’s private equity strategy, which is not dependent
on leverage for the creation of investment returns, and higher rates
improve investor returns for Bridgepoint’s private credit strategy.
The majority of Bridgepoint equity portfolio companies enjoy
high margins with strong cash generation, creating returns through
focused domestic and international value creation strategies
rather than leverage, which is typically modest compared to peers.
The vast majority of Bridgepoint Credit’s portfolios feature
floating rate instruments (i.e. Euribor+), with Euribor having
increased from negative at the start of 2022 to nearly 4% by
December 2023. As a result, credit returns typically benefit from
the higher rate environment. In addition to this, the recent market
uncertainty has created a number of opportunities for private
credit to increase market share. The decline in activity from
traditional lenders has resulted in increased opportunities for
Bridgepoint’s Direct Lending strategy, while Bridgepoint’s Credit
Opportunities strategy has benefited from volatility in the
secondary market, providing opportunities for investment
at attractive prices.
Fundraising
The majority of 2023 saw a continuation of the well-documented
slowdown in alternatives fundraising, with macro volatility leading
to investor caution and many mature investors facing allocation
issues in part because of a denominator effect exacerbated by the
relative outperformance of alternative assets and in part a lack of
liquidity caused by lower returns of capital from exits. The impact
was most significant in mature markets where investors are at or
near their target allocations to alternative asset classes. This more
conservative investor outlook resulted in greater focus by investors
on reinvesting with their existing managers rather than committing
to new managers. The overall effect was offset in part by
significant new capital continuing to flow to the alternatives asset
class and more generally towards the end of 2023 and into the
start of 2024, the outlook for fundraising has improved.
In 2023, material capital was raised for BE VII and ECP V,
both of which will close shortly, and the Group successfully
closed BDL III and BCO IV. €2.7 billion was raised in 2023
across Bridgepoint (excluding ECP), a significant achievement,
especially given the lower level of fundraising in the year across
the market more generally.
In a more cautious investor environment, Bridgepoint’s deep
and well-resourced investment platform, disciplined investment
strategy, consistent deployment pace and highly experienced team
have all proved valuable. Bridgepoint is well placed for BDC V,
BDL IV, BCO V and BG II, which are now fundraising.
Impact on Bridgepoint
Factor
Please see overleaf for more
information on the energy transition
market and the opportunities it creates
for ECP
19
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
The energy transition opportunity
is significant...
1. Goldman Sachs, “Carbonomics”, 23 June 2021
$1.9tn
Average annual required investment
in decarbonisation
11
Energy transition is a rapidly growing segment of infrastructure.
Infrastructure is the fastest-growing asset class within private
markets, with approximately $1.3 trillion of AUM, and it has
grown at a rate of over 15% per year since 2010. The energy
transition segment has been a significant driver of wider growth.
The expansion has been driven by increasing concerns about
energy security and reliability, and the ongoing global transition
to a net-zero carbon economy.
Energy transition stands to be a key contributor to and beneficiary
of the global decarbonisation effort, particularly in North America,
where ECP primarily operates. Heightened global societal demand
for clean energy and an energy transition, coupled with public
support – exemplified by policies such as the $400 billion Inflation
Reduction Act in the US – are driving numerous investment
opportunities. To decarbonise the energy sector, a forecasted
investment of $1.9 trillion annually is needed through to 2050.
However, to limit global warming to 1.5°C, this investment must
increase by 150%, amounting to around $2.7 trillion per year.
Investment at this scale will create significant tailwinds for the
sector and open up numerous avenues for growth.
In addition, a paradigm shift is underway in North America as it
relates to electricity markets. The key markets on which ECP
focuses are experiencing record electricity demand, a trend which
is expected to accelerate even further, driven by the adoption of
electric vehicles, the AI boom and the onshoring of manufacturing.
In order to achieve federal zero emissions targets by 2030, EV
sales must increase 17-fold. Since the US Inflation Reduction Act
was enacted, $110 billion has been invested in domestic clean
manufacturing, including $70 billion in the EV supply chain and
$10 billion in solar manufacturing. Finally, data centres continue
to expand across the US, with AI data centres requiring seven
times more power than traditional data centre racks. As a result,
data centre electricity consumption is expected to represent
7% of US electricity demand by 2030 (up from 2% in 2020).
As electricity demand increases, power and renewable generation
will be critical to ensuring the reliability and resiliency of the grid.
The market for ECP
20
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
...with multiple tailwinds expected
to drive continued growth
Battery storage
projected to grow to a
cumulative 5,827GWh
by 2050 from
22GWh in 2019
2
Need for battery
recycling,
environmental
remediation, water and
waste management
Societal demand for energy security,
clean energy and sustainability solutions;
supported by the US Inflation Reduction
Act of 2022
As storage technology
develops, natural gas is
expected to ensure grid
reliability at a low cost
‘Electrification’ of
everything combined with
increased demand from
EVs, big data, AI and
onshoring manufacturing is
expected to drive electricity
demand growth
2. BNEF Energy Storage Outlook, December 2020
21
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Strategy
Scale existing
strategies
Product strategy
extension
Expand into
new alternative
asset classes
Continued organic and M&A-driven growth across investment strategies and geographies
Continue the track record of strong
AUM growth established over the
past two decades through scaling
existing strategies.
Capitalise on Bridgepoint’s strong
position by continuing to scaling existing
strategies, through further enhancing
each strategy’s investment platform and
exploiting the opportunity of an evolving
alternative asset management market.
Continual investment in our platform
enables the consistent scaling of existing
strategies within their respective
markets. This includes through
deepening the presence in existing
geographies which increases the
opportunities to deploy capital. In
combination with long-term growth in
the middle market this enables growth
in core successor funds. Sequential fund
growth is complemented by growth
in separately managed accounts
(particularly in Bridgepoint Credit)
and the growth in continuation funds.
Continue to launch new credit,
infrastructure and equity products
within existing investment strategies.
Utilise the strength of our existing
platform, origination capability, domain
and sector knowledge and strong central
functions to launch funds that
complement our core strategies.
Bridgepoint has a strong track record of
developing new products within existing
investment strategies. Both the private
equity and credit businesses began as
single investment strategies before
growing both organically and
inorganically, so that each currently
has three distinct investment products.
The combination with ECP will increase
these opportunities, for example there
is an opportunity to accelerate ECP’s
nascent infrastructure debt strategy.
Continue to successfully develop
new businesses in adjacent private
market asset classes, either through
acquisition or incubation.
Significant scope remains to enhance
Bridgepoint’s scale and market
positioning, and create platform
synergies through entry into adjacent
alternative asset classes.
The forthcoming combination with
ECPis the latest example of the Group’s
strong track record of successfully
acquiring andintegrating new businesses.
In the medium-term, Bridgepoint sees
scope forsimilar acquisitions within other
private markets asset classes, such as real
estate and secondaries, as well as other
segments of existing asset classes where
the Group’s well-invested operating
platform, capital-raising capabilities and
reputation would enable acquired
businesses to more successfully scale
theiroperations.
Bridgepoint is a global leader in middle market private asset investing
and strongly positioned to continue to deliver significant growth.
Our strategy is focused on growing and diversifying Bridgepoint’s business and creating value for clients and shareholders.
There are three strategic pillars:
22
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
A track record of expansion
Bridgepoint has grown from a middle market private equity business primarily focused on the UK to a diversified alternative asset
manager with a global presence.
Independence from NatWest
Bridgepoint established as an independent business following
a management buyout
Acquisitions of Hermes’ direct investment
platform & funds
(Previously managed by Edmund de Rothschild) Takes Bridgepoint’s
institutionalised approach and platform to the SMID cap market
Partnership with ECP
The combination with ECP will bring
material benefits to the enlarged
Bridgepoint Group and delivers
on the strategy communicated at IPO:
− Combination will accelerate
Bridgepoint’s strategic diversification
by adding value-add infrastructure
as a meaningful third growth pillar
− Provides ECP with mature
European investment platform
and complementary credit offering
− Highly complementary fit from
a cultural, client relationships
and geographic focusperspective
IPO
Provides capital for accelerated growth and listed share currency
for potential acquisitions
Bridgepoint Credit (EQT Credit acquisition)
Creates material presence in the second largest alternative asset
class, providing scale and further growth potential
Dyal (now named Blue Owl) minority transaction
Provides capital to the Group for accelerated growth
Bridgepoint Credit (organic expansion)
Establishes Bridgepoint in the second largest alternative asset class,
providing diversity and growth potential
US presence established
Develops Bridgepoint’s global presence, supports portfolio companies,
increases deployment capability and therefore potential fund growth,
and reinforces existing activities in North America
Bridgepoint Growth
Third pillar of Bridgepoint PE
2023
2021
2020
2018
2016
2000
2009-10
€62bn
1
€33bn
€20bn
€9bn
€3bn
AUMYear
1. Pro forma for ECP as at 31 December 2023
Strategy in action
23
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Our business model
Bridgepoint is a global leader
in middle market private asset
investing. The Group has a 30-year
track record of delivering compelling
returns with an attractive risk profile.
We provide the capital and expertise to facilitate growth
We raise capital from, and invest on behalf of, a globally diverse, long-standing and growing blue-chip client base,
which includes many of the world’s leading investors. Indeed, the Group has base of more than 280 institutional investors
with longstanding relationships with Bridgepoint. We use our expertise and leading investment platform to generate strong
returns for these investors and receive fees for managing their capital.
First-class investor
services
Raise fund capital
Strong returns for
fund investors
Leading investment
platform
Invest in middle
market assets
Fees for managing
clients’ capital
Hands-on value
creation
Create strong consistent
investment performance
A combination of:
Enables us to:
Delivering:
We take a responsible approach to investment and value creation
Read more on pages 42 to 47
24
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Our investment strategies
A global leader in middle market private assets investing
Our client base
Clients by geography
Pension Funds
Asset Managers
& Insurance
SWFs
Endowments,
Foundations
& Family offices
Other
42%
35%
14%
8%
1%
Americas
Europe
APAC
MENA*
41%
34%
13%
12%
Pension Funds
Asset Managers
& Insurance
SWFs
Endowments,
Foundations
& Family offices
Other
42%
35%
14%
8%
1%
Americas
Europe
APAC
MENA*
41%
34%
13%
12%
Clients by type
€61.6bn
Assets under management
(pro forma for the ECP transaction)
€12.4bn AUM€28.1bn AUM
€21.1bn AUM
Bridgepoint Direct Lending
Bridgepoint Credit Opportunities
Bridgepoint Syndicated Debt
Bridgepoint Europe
Bridgepoint Development Capital
Bridgepoint Growth
ECP Value-add Infrastructure
ECP Forestar Infrastructure Debt
Private CreditPrivate Equity
Infrastructure
* MENA includes Israel Information shown on this page is pro forma for the ECP transaction
25
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Differentiated and sustainable approach delivering high-quality returns
Bridgepoint’s private equity investment approach has delivered
strong and consistent returns. Based on latest benchmarking
(Q3 2023), all Bridgepoint Europe and Bridgepoint Development
Capital funds raised after the global financial crisis of 2008
to 2009 arefirst or upper second quartile performers.
Bridgepoint has delivered these high-quality returns through
careful portfolio construction, sensible use of leverage and
disciplined asset selection focused on high margin, cash
generative businesses in combination with a hands-on
value-creation philosophy.
We create value through:
Pre-eminent dedicated middle market investor with global presence
Our business model continued
How we create value in
private equity
Bridgepoint offers a differentiated
middle market position. It operates at enterprise
values below those targeted by large cap firms
and more broadly and deeply than other middle
market platforms.
Entrepreneurial culture
30+ years of institutional heritage
Outstanding market position
and reputation
Total middle market immersion
Broad, well-established
networks on the ground providing
high-quality origination
Sector-driven investment strategies
directed towards niches with structured
growth and designed to exploit
local insight
Value-creating operating skills –
deepened during GFC
Our people Our market presence Our approach
26
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
We create value through:
Deep experience with a broad and differentiated origination capability
How we create value in
private credit
Bridgepoint Credit uses its deep market
presence and insight-driven approach to create
investment opportunities from across the whole
Bridgepoint network in defensive sectors with
strong downside protection.
Leveraging experience, insight and the Bridgepoint network to deliver compelling
risk-adjusted returns
The highly experienced Bridgepoint Credit team has invested
approximately €18 billion in more than 350 companies since
inception with a demonstrable track record of delivering
consistently strong risk-adjusted returns. For example, in aggregate
as of Q4 2023 the BDL II fund has delivered gross and net IRRs
of 9% and 8% respectively from the unlevered sleeve and a gross
cash yield of 10%. Additionally across BDL funds their have been
no realised losses in their portfolios, demonstrating the success of
BDL’s rigorous asset selection process, which focuses on businesses
operating in defensive sectors with strong credit fundamentals, and
involves the team’s thorough due diligence approach that utilises
the full breadth of Bridgepoint’s knowledge and experience.
Our people Our market presence Our approach
Highly experienced
and cycle-tested team
Broad platform with presence
in eight Bridgepoint offices
Stringent asset selection to hit target
performance with the least possible risk
Culture of shared knowledge 330+ industrial advisers
Invest in resilient business models
in defensive industries
Leverage the whole Bridgepoint
network and deep sector expertise
27
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Deep sector knowledge and market leadership drives consistent, strong risk-adjusted returns
ECP, which has raised nearly $30 billion of capital since inception
in 2005, has a leading position in the highly sought after energy
transition and sustainability-focused investing ecosystem in North
America. Energy transition investing stands to be the key driver
and beneficiary of the global decarbonisation effort, with forecast
investment in the space expected to be €1.9 trillion per annum
until 2050, creating significant tailwinds and multiple potential
growth avenues.
ECP delivers value through real specialisation built up through
navigating multiple energy, regulatory and environmental
transitions over three decades. This has resulted in a consistently
strong investment performance track record delivering a gross
MOIC of ~2.0x since 2010.
We create value through:
A leading Infrastructure investor focusing on energy transition
How ECP creates value in
Infrastructure
ECP is a market leader in critical infrastructure
focused on energy transition, electrification
decarbonisation-focused infrastructure assets,
with deep sector experience and a decades-
long track record.
25+ years of successfully investing
inenergy transition
Deep domain expertise and networks
Early mover advantage in the sector
The largest independent owner
of US power generation capacity
Invest in real assets, critical
to society and with inflation
anddownside protection
Focus on risk management and
minimising commodity price risk
Reputable and reliable capital across
theenergy transition spectrum
Local market insight and
sectorexpertise
Value-add, hands-on partner
Our people Our market presence Our approach
28
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Strong cultural fit
Shared ECP and Bridgepoint values:
– Fund investors come first
– Collegial approach
– Longevity of talent
– More than 75 partners across
the combined platform
– 15 year average tenure of partners
in both businesses
Combined platform will have
> 460 FTEs across 14 offices
in Europe, US and Asia
Client base significantly enhanced
>170 new client relationships to Bridgepoint
<25% overlap in investor bases by commitment
Deep bench of senior talent
Highly complementary
geographic focus
Highly complementary
client relationships
The combination with ECP will bring together two highly
complementary businesses
29
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Sector: Food and environmental science services
Location: UK
Date acquired: 2023
Transaction size: £80 million
Fund: BDC IV
Fera Science is a differentiated provider of complex testing, research
and development, assurance and data services to the agriculture,
food and environmental sectors. The company, which is headquartered
in the UK, operates in a £600 million market which is benefiting
from strong tailwinds including ongoing population growth and
the resulting increase in food production, regulatory requirements
and testing intensity, as well as a growing focus on supply chain
transparency and sustainability.
The partnership builds on Bridgepoint’s track record and expertise
in the testing, inspection and certification (“TIC”) and agriTech
markets with previous investments made including LGC, the
international life sciences measurement and testing company;
6-9%
expected growth rate of Fera’s addressable TIC market
in the medium-term, underpinned by secular tailwinds
Element, the global leader in materials and product qualification
testing in the aerospace, energy, fire and transportation markets;
Achilles, the technology enabled provider of sustainable supply
chain solutions; Rovensa, a provider of specialty crop nutrition,
biocontrol and protection products; and Sun World, a leading
fruitgenetics, R&D and licensing business.
Our investment in Fera will focus on accelerating itsorganic
revenue growth in both the public and private sectors, supported
by investment in business development functions and resources.
Fera operates in a fragmented market, which offers the potential
for further upside to the investment case through smaller tuck-in
acquisitions or more sizable M&A.
Our business model in action
30
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Sector: Technology
Location: US
Investment date: 2021
Instrument: Convertible preferred equity
Fund: BCO IV
Blume Global is a leading provider of supply chain execution
and visibility software. Launched as an independent business
in 2018, the company provides a cloud-first, intelligent operating
platform that orchestrates global supply chain processes
for shippers (buyers and suppliers), logistics service providers
and carriers. There are more than 10,000 companies on Blume
Global’s platform, including some of the largest shippers,
ocean carriers, railroads and global freight forwarders.
Blume’s mission is to reduce inefficiencies and waste
across global supply chains through digitisation.
Bridgepoint Credit’s partnership with Blume benefited from
a long-standing relationship with Blume’s CEO, Pervinder Johar,
who has been part of Bridgepoint’s industrial advisor network
for a number of years.
Our investment in Blume was made in the form of a bespoke
structured convertible preferred equity instrument to meet the
needs of the situation. The capital was used to support organic
growth as well as to make a complementary acquisition to expand
Blume’s European presence.
Blume’s highly strategic product offering and capabilities were
recognised throughout the industry, and in 2023, we exited our
investment when Blume was sold to WiseTech Global, a listed
competitor, realising attractive risk-adjusted returns for the
Credit Opportunities platform.
Blume Global’s mission is to reduce
$1 trillion
of waste from global supply chains
31
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Our people
Our people are our greatest asset. Our ability to deliver for
our investors, portfolio and shareholders relies on our ability
to attract and retain the best talent.
We aim to recruit the very best talent, incentivise them to work hard and drive returns for our investors. We also strive to create
a work environment where every voice is heard, and every individual’s wellbeing is valued. Because doing so makes Bridgepoint
a better place to work. And becoming more diverse, equitable and inclusive broadens the team’s perspective, which helps us achieve
our investment and strategic goals.
14
years’ average partner tenure
7.7/10
engagement score in 2023
Attract
We aim to recruit the
very best talent,
building diverse teams
of professionals who
exhibit passion for
performance and drive.
Retain
Our rewards are
weighted towards
performance and
long-term alignment
with fund investors.
Develop
We operate an
‘apprenticeship model’
offering hands-on
learning,
supplemented with
extensive training and
development.
Care
Our values define how
we do business and
how we treat people.
We foster a creative,
connected community.
391
employees
>30
nationalities
55%
of investment professionals
are multilingual
14%
low turnover among investment
professionals
Our people strategy centres around four key pillars
32
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
We do what we say
We do the right thing
We act with intelligence and humility
Our values
Our values guide everything we do, from committing
investors’ capital, to working with portfolio companies,
to supporting our teams. These values are:
These values define us, guide us, shape our culture and
help us to uphold the highest standards of corporate
governance and professionalism across Bridgepoint.
33
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Investing in our people
During 2023, we continued to invest in our people – growing and
further embedding our learning culture across the organisation.
Based on the investment lifecycle, our approach is to enhance
on-the-job learning for investment professionals with skill development
in origination, deal execution, portfolio management and exits.
Investment professionals across private equity and private credit
follow a skills and attributes framework, which is designed to
ensure consistent development and benchmarking of capabilities.
We also have a learning platform which provides a wealth of
online courses and modules.
To support career progression, Bridgepoint offers a wide variety
of talent and leadership development programmes. As part of this,
we promote international rotations and secondments, fostering
diverse experience across various markets, funds and teams.
These programmes are continuously evolving to remain current
and relevant to the needs of our colleagues.
Complementing this hands-on approach, we offer comprehensive
annual performance appraisals, executive coaching and mentoring
initiatives, including the Women’s Mutual Mentoring Programme.
Supporting the wellbeing of our people – mental and physical –
has always been important to us. We offer a variety of mental
health resources including our Employee Assistance Programme,
the Thrive app and access to professional psychologists. We also
provide a Wellness allowance to eligible employees to support
their fitness activities and hobbies.
Employee feedback and engagement
We value regular employee feedback as it helps us guide the
direction of new initiatives that positively impact our people’s
experience. We conduct regular employee engagement surveys
which inform decisions at the Board level and guide our efforts to
retain and attract top talent. We have also enhanced our internal
communications to help employees better understand and deliver
our strategic objectives.
We were pleased with the results from our latest employee
engagement survey, which had a participation rate of over 80%
and an overall engagement score of 7.7 (out of 10). The strongest
themes included peer relationships and being able to count
on colleagues to help out when needed, clear expectations
on goal-setting and delivery, as well as a strong understanding
of the strategy and goals of the Company.
DEIB
It’s our ambition to better reflect the communities in which
we operate by creating an environment where the best have
an opportunity to thrive, regardless of background. Our approach
to Diversity, Equity, Inclusion & Belonging (“DEIB”) is about our
diversity of thought and collective intelligence and the impact they
can bring on the quality of our decision-making, outcomes and
performance. It is not about tokenism or ticking boxes.
We recognise that we still have a way to go but we’re proud of what
we’ve achieved so far. We have a balanced team when it comes to
gender, with women representing close to half our collective workforce
and occupying half of the leadership roles in our specialist teams.
Our people continued
Associate
International Associate
Programme
Two-year programme
consisting of:
− Launch event for orientation
− Four training modules on
technical and
communication skills
− International rotation
within the first four years
− Closing celebration event
Leaders’ Forum
Annual event which:
− Fosters cross-office
networking
− Enhances insights into
Bridgepoint’s key markets
− Facilitates discussion on
Bridgepoint’s strategic
growth
Conference on Leadership
Annual event which:
− Develops leadership skills
− Features active learning
sessions and external
speakers
− Includes discussions with
Bridgepoint’s senior leaders
New Partner Development
Programme
One-year programme
consisting of:
− Leadership briefing with
peers
− Guidance from a senior
Bridgepoint mentor
− External executive
coaching sessions
Partner
Investment professionals: Learning and development pathway at Bridgepoint
We aim to recruit irrespective of identity or background, provide a
framework for all talent to progress and enable the best to advance.
34
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
On the investment side, we’ve affected real change with 25%
of our investment professionals now being women, a marked
development since 2016 when that figure was closer to 5%.
More female talent is coming through the senior ranks, with the
ultimate aim of ensuring we have female representation in key
decision-making forums across the Bridgepoint Group. DEIB,
of course, extends beyond gender and there is work going on
across our organisation to ensure that we’re making progress.
We have implemented a range of programmes that target specific
aspects of DEIB:
− The International Associate Programme (“IAP”) addresses
gender imbalance and helps us make our investment teams
more equal. Our goal is to raise the number of female investment
professionals to 30% by end of 2025 (and 40% when you
exclude the Partner group).
− Our mentoring programmes pair mentors and mentees from
across our firms and business units. They highlight and celebrate
different backgrounds and experiences and build cohesion and
inclusiveness across the Group. Over 100 mentor-mentee pairs
have participated in these programmes in the last three years.
− An insights week targets young people from a wide range of
socioeconomic backgrounds and introduces them to different
professional pathways and entry points into the asset
management industry, to help pave the way to greater social
diversity within our industry. In 2023, we hosted 40 students
aged between 16 and 22 at our London office, from a wide
range of backgrounds.
− Our Women’s Leadership Forum and dedicated mutual
mentoring programme ensure every voice is heard and help
to break down barriers to communication and understanding,
ensuring a more inclusive environment.
41%
of promotions in 2023 were female
25%
female investment professionals
Wherever we’ve identified the need for action, we’ve done so decisively
and will continue to do so. In addition to creating programmes that seek
to benefit our people, we have put in place a company-wide DEIB
framework that guides balanced recruitment, fair opportunities for
promotion and training, as well as family policies that support our team
members throughout all stages in their lives. In 2024, our DEIB strategy
will maintain our focus on gender and inclusion, while extending our
efforts beyond gender. You can read more in our ESG Committee
report on page 99.
We also affect change by partnering with other firms in the
industry, for example as members of France Invest, Level 20,
Out Investors, 10,000 Black Interns in the UK and Girls Who Invest
in the US. You can find out more about some of these on page 46.
By becoming more diverse, equitable and inclusive,
Bridgepoint is becoming a better business.
Our people and networks
Our people have been making an impact across the Company.
A highlight of 2023 was the Alpine Challenge, where
100 colleagues undertook a trek for two days, covering over
2,500m of total ascent and raising funds for seven charities.
The Bridgepoint Charitable Trust matched the total amount raised.
We celebrated International Women’s Day with a series of
informal events across the office network. Our London office
partnered with Smart Works, a charity dedicated to helping
unemployed women regain the confidence to succeed at job
interviews and return to employment. Our colleagues contributed
by donating professional clothing, shoes and accessories for women.
Volunteering initiatives included planting trees with UK charity
‘Trees for Cities’ and supporting the annual summer party organised
by ‘Lebenshilfe Frankfurt’, a charity promoting disability equality.
Gender breakdown
As at 31 December 2023
Executive Committee
members
1
11
12
Female
Male
Total
Board of Directors
2
6
8
Female
Male
Total
Direct reports to Executive
Committee members
13
43
56
Female
Male
Total
All Group employees
1
(permanent)
177
212
389
Female
Male
Total
1. Of those that provided data.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Stakeholder engagement and
section 172(1) statement
Key stakeholders
The Board has identified its key
stakeholders as colleagues, the community,
fund investors, portfolio companies,
regulators, shareholders and suppliers
1
.
Section 172 of the Companies Act 2006 requires the Directors to
act in a way that they consider, in good faith, would most likely
promote the success of the Company for the benefit of its
members as a whole.
In doing this, section 172 requires the Directors to have regard,
amongst other matters, to:
− the likely consequences of any decisions in the long-term;
− the interests of the Company’s employees;
− the need to foster the Company’s business relationships
with suppliers, customers and others;
− the impact of the Company’s operations on the community
and environment;
− the desirability of the Company maintaining a reputation
for high standards of business conduct; and
− the need to act fairly as between members of the Company.
The Corporate Governance Code requires the Board to understand
the views of the Company’s key stakeholders and describe how
their interests, and the matters set out in section 172 of the
Companies Act 2006, have been considered by the Board
in discussions and decision-making.
Colleagues
Fund investors
Shareholders
Portfolio companies
Community
Regulators
Suppliers
1. Ordered alphabetically
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
The key considerations in respect of these stakeholders and the Board’s approach to engaging with them are explained below.
Colleagues
Key considerations
Bridgepoint is a people
business. Its employees are
integral to the continued
success of the Group,
and therefore the retention,
development and motivation
of colleagues is key.
How Bridgepoint engages with colleagues
The Board actively engages with colleagues through a variety of channels, including
town hall briefings, videos and team meetings. On an annual basis, the Group
conducts an employee engagement survey to obtain feedback from employees,
the results of which are fed back to business unit heads, senior management and the
Board as appropriate, and a number of actions are taken in response. The year-on-
year progress on survey results is monitored carefully as part of this review.
Members of the Board meet with various members of senior management and
colleagues from across the business, both through Board and committee meetings
and through separate discussions. This enables them to continue to build
relationships with the senior management team as well as the broader employee base.
A designated Non-Executive Director (Angeles Garcia-Poveda) is responsible for
gathering employee feedback and spent time across Bridgepoint’s network during
2023. Angeles was also actively involved in a number of firm-wide initiatives in
2023, including involvement in activities held within Bridgepoint on International
Women’s Day in March.
The Group continuously invests in its people through internal career development
initiatives, such as the International Associate Programme, Conference on
Leadership, Leaders’ Forum, New Partner Development Programme and mutual
mentoring programmes. We also have a learning platform which provides a wealth of
online courses, including the Bridgepoint Core Training Programme which provides
employees the opportunity to develop their personal and professional skills through
internal and external training. In addition to professional development, colleague
wellbeing is a core focus, with health resources including our Employee Assistance
Programme, the Thrive app, access to professional psychologists, and a wellness
allowance for eligible employees to support their fitness activities and hobbies.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Stakeholder engagement continued
Fund investors
Key considerations
Fund investors are a central
focus of the Group’s business.
They provide the capital
which the Group invests
as part of its investment
management activities and
are who the Group owes
regulatory duties to.
How Bridgepoint engages with fund investors
The Group has a dedicated investor relations function, which manages the Group’s
relationships with all of its fund investors whilst seeking to develop new relationships
with prospective investors.
Management of relationships with fund investors has continued to be a key priority
throughout 2023 as a result of the Group’s significant fundraising activities across
strategies. High levels of engagement and communication with existing and
prospective fund investors continued throughout the year, including during annual
investor meetings and investor committee sessions where investors’ views were
heard on a range of topics. Regular feedback on these meetings and ongoing
fundraising activity is provided to the Board and to senior management.
Fund investors typically undertake due diligence on the Group as part of their
assessment of an investment into a Bridgepoint managed fund. Undertaking these
exercises with both the Group’s private equity and private credit investor bases
during 2023 helped to provide the Group with an up-to-date view of the primary
concerns and considerations of such investors, and these were factored into how
the Group approached the establishment, management and operation of the funds
in which fund investors invest.
Fund investors also receive regular updates through calls, relationship meetings
and various forms of written reports which focus on the provision of high-quality
and timely information and data.
Shareholders
Key considerations
A strong and transparent
relationship with
shareholders is essential for
the long-term success of the
Group.
How Bridgepoint engages with shareholders
Members of the Board (including the Executive Directors and the
Senior Independent Director) regularly engage with shareholders of the Company
and encourage feedback as part of this engagement process, and in 2023 more time
was invested by Directors in speaking to and meeting with existing and potential
shareholders. This engagement helped the Board to understand the, at times,
conflicting interests of different shareholders, and to make decisions in a way that
treats shareholders and other stakeholders fairly.
In connection with the Company’s agreement to add ECP to its platform, a webcast
was hosted in September and a general meeting was held in October where
shareholders were provided an opportunity to engage with the Company
and ask questions about the transaction.
Bridgepoint’s approach to capital allocation throughout the year took into account
the views of shareholders, and reflective of this, the Board believes the two share
buyback programmes announced during the year demonstrated a focus on balanced
and disciplined capital allocation.
The ongoing participation of employee shareholders as attendees and presenters at
meetings of the Board and its committees also provides an opportunity for the Board
and its Non-Executive Directors to connect with shareholders.
As in previous years, following the release of both Bridgepoint’s preliminary results for
2022 and 2023 interim results, shareholders and analysts were given the opportunity
to join a webcast attended by certain Directors to discuss the results and raise questions,
and this was complemented by regular engagement throughout the year with equity
research analysts.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Portfolio companies
Key considerations
The companies in which
funds managed by the
Group invest are
thesource of returns
to its fund investors
and ultimately the
Group’sshareholders.
Bridgepoint-backed
companies employ over
300,000 people and
have a significant role
inthe wider community.
How Bridgepoint engages with portfolio companies
Responsible management of portfolio companies and prudent investing centres around
sustainable value creation through a constant focus on financial and non-financial
improvement. Strong relationships with management teams within portfolio companies and
deep sector and industry knowledge provide an opportunity for better strategic decision-making
at the investment level. This helps to drive value within portfolio companies, which
ultimately benefits the relevant fund investors and the Group’s shareholders whilst also
benefiting the stakeholders of portfolio companies.
The Group’s investment teams provide the principal means of portfolio company
engagement, with investments in Bridgepoint’s private equity strategy typically involving
the appointment of Group investment professionals as directors on portfolio company boards,
and investments in Bridgepoint’s private credit strategy often involving close relationships with
CFOs and management teams through the lender relationship.
Several of the Group’s functions engage with portfolio companies at the outset of an
investment and also throughout the investment lifecycle in order to identify relevant
opportunities for operational improvement. The Group’s Sustainability team launched its
inaugural portfolio company feedback survey in 2022 in respect of sustainability matters
and throughout 2023 the team has worked on addressing several feedback points, including
providing portfolio companies with more resources and guidance documents throughout
the year, in particular as part of the climate programme. Alongside investment teams, the
Sustainability team drives the integration of ESG criteria into the Group’s investment
approach whilst the Group’s IT team makes recommendations following cybersecurity
reviews, in each case working with the management teams of portfolio companies to address
any identified opportunities following investment. For more information on ESG see pages
42 to 47.
Community
Key considerations
The Group recognises
the responsibility
it has to wider society
and is committed to
contributing positively
to the communities
in which it operates.
How Bridgepoint engages with the community
Bridgepoint is regularly involved in community outreach and has a long history of charitable
giving. The Group frequently seeks out partners where donations and support can make
a real difference in the communities where the Group’s offices and people are based.
In June, 100 colleagues from across the Group took part in the Bridgepoint Alpine
Challenge, a multi-day trek which brought colleagues from various offices together whilst
fundraising for seven charities nominated by participants. The Bridgepoint Charitable Trust
matched all donations made, with a total of £222,000 raised and split equally between
the charities. The Bridgepoint Charitable Trust donated over a further £170,000 throughout
the year across a number of projects and to a number of community and charitable causes.
As part of the Group’s activities in connection with International Women’s Day in March,
donations of women’s professional clothing were made to Smart Works, a London-based
charity focused on helping unemployed women return to employment. In March, several
colleagues were involved in tree planting in a local community in West London whilst in April,
the London office donated an Easter egg for every child at a local primary school. As in previous
years, the Frankfurt office offered support to Frankfurter Lebenshilfe’s annual summer party
in September, and in December a Christmas gift appeal delivered gifts to two local London
primary schools with the Bridgepoint Charitable Trust matching donations.
The Board actively encourages, supports and monitors progress on initiatives that
it believes will have a positive impact on the environment andcommunities in which
the Group operates.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Stakeholder engagement continued
Regulators
Key considerations
Regulators provide key oversight in
respect of how the Group operates
its business. The interests of fund
investors and shareholders are
servedby Bridgepoint engaging
constructively with regulators.
How Bridgepoint engages with regulators
During 2023, Bridgepoint received regulatory registration
in Luxembourg, which involved significant and constructive
engagement with the Commission de Surveillance du Secteur Financier.
In connection with the Company’s transaction to add ECP to the Group,
several global regulators were engaged to seek various clearances and
approvals, including the UK’s Financial Conduct Authority.
The Group continues to contribute to industry bodies such as the British
Private Equity & Venture Capital Association and Invest Europe, and
through these and other channels the Group participates in regulator
consultations and provides other input.
Suppliers
Key considerations
Good relations with suppliers
are important to the Group’s
day-to-day functioning.
How Bridgepoint engages with suppliers
The Group regularly engages with its key suppliers, many of which are
established and reputable professional services firms, to ensure that each
party understands the requirements of the other and to ensure
transparent and constructive relations.
The Group typically approaches several providers when new or renewed
service provision is required, a process which creates an open dialogue
where a mutually beneficial relationship can be forged, in the interests
of both parties and ultimately the Group’s other stakeholders as well.
The Group ensures appropriate due diligence is undertaken in respect
of third-party service providers prior to appointment, and appropriate
monitoring and oversight of appointed third-party service providers
is undertaken on a periodic basis.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
The Board’s approach during 2023 to the matters set out in section 172 of the Companies Act 2006 is set out below.
Relevant consideration under section 172(1) of the Companies Act 2006 The Board’s approach in 2023
(a) Long-term consequences of decisions
The Board maintains oversight of the Group’s performance, and reserves to
itself specific matters for approval, including overall commercial strategy and
the business plan of the Group. This allows the Board to ensure that
longer-term considerations are taken into account.
Details of the Group’s strategy are set out on pages 22 to 23 of this Annual
Report. During the year, the Board spent significant time discussing potential
strategic opportunities, including the ECP transaction, and considered the
longer-term growth of the business (including how excess funds held by the
business are appropriately invested).
Further details of other matters considered by the Board during the year are set
out on page 89.
(b) Interests ofemployees
The Board has designated Angeles Garcia-Poveda as the Non-Executive
Director responsible for gathering workforce feedback.
More generally, the Board recognises the importance of employee engagement
and Diversity, Equity, Inclusion and Belonging, and has incorporated them as
measures of Executive Director performance.
The Board has considered the results of an employee engagement survey
undertaken in the second half of 2023, and various matters arising outof it.
The Remuneration Committee also considered broader workforce remuneration
during the year.
(c) Fostering business relationships with
suppliers, customers and others
Details on engagement with Bridgepoint’s stakeholders are set out
on pages 37 to 40.
(d) Impact of operations on the community
and the environment
During 2023, the Board’s ESG Committee discussed ESG matters and the
Board considered the Group’s charitable giving strategy as well as the Group’s
tax strategy. Further details on ESG and sustainability matters are set out on
pages 42 to 47. The Group has been carbon neutral and operating on 100%
renewable electricity since 2020. There were also continued efforts in 2023
todrive DEIB initiatives both at Bridgepoint and within our portfolio.
(e) Desirability ofmaintaining areputation for
highstandards of businessconduct
The corporate governance framework of the Group is summarised
on pages 87 to 89.
The Board has pursued compliance with substantially all of the Corporate
Governance Code since the Company’s IPO.
At Board meetings, the Group’s Company Secretary highlights developments
in corporate governance and wider legal requirements.
(f) The need to act fairly as between members of
the Company
Details on engagement with Bridgepoint’s shareholders are set out on page 38.
The Board’s decisions in respect of both the ECP transaction and the share
buyback programmes included consideration of the effect of each on the
members of the Company and how to act fairly as between them.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
How we approach sustainability
We want to help businesses do good and grow faster
and we believe sustainable, resilient businesses deliver
superior returns and a better society.
When we invest, we invest to grow. Bridgepoint looks to support
strong-performing, good-quality, well-managed businesses that
have the potential to flourish, whether via international expansion,
operational improvement or acquisitions.
But that’s not all we look for. We want to generate attractive
returns in a manner the millions of beneficiaries of our funds
can be proud of. From the outset, this is what we have
strived to achieve.
We are growth investors, and we back businesses at critical
stages in their lifecycle. This gives us the opportunity to drive
positive change, not just in terms of performance but also in the
environment and society in which we operate.
3
We believe in the power of the individual.
By bringing diverse teams together that reflect the world
in which we live, we can deliver better performance.
4
We believe well-governed businesses perform better
and are more resilient.
Structure, accountability, effective decision-making,
and performance monitoring all enable sustainable
success for all stakeholders.
To create lasting and sustainable positiveimpact
1
We believe that business can and should be a force for good.
We drive growth and build value by connecting people,
capital, ideas and opportunities.
2
We believe we must invest in our world and its environment.
Environmental action is ushering in a new era of innovation,
efficiency, and sustainable growth. Climate change represents
an investment risk and an opportunity.
Since Bridgepoint was founded in 1985, our ambition has remained consistent:
Beneath that ambition lie four key sustainability beliefs
that guide our investment decision-making:
We evaluate our four core sustainability beliefs across essential areas: our group operations as entity, our investment decision making,
our portfolio operations, and portfolio practices.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Sustainability at Group level
It is our aim to make Bridgepoint a leader and a role model in corporate responsibility by continuously meeting and raising
environmental, social and governance standards.
Governance
Laying our sustainability foundations
Our rigorous approach to the management of fund investments
includes putting in place structures to ensure that Bridgepoint remains
accountable and transparent, and that there is complete alignment
of interest between the Company and third-party fund investors.
Our Board-level ESG Committee, comprising Non-Executive
Directors, aims to ensure that ESG considerations, including
climate concerns, are integrated into the Company’s strategic and
financial planning. It met twice in 2023 and assists the Board in
fulfilling its oversight responsibilities in relation to ESG matters.
Read more about our ESG Committee on page 99.
Harnessing the power of our people
Bridgepoint is an international business: our employees come
from over 30 nations and 55% of investment professionals are
multilingual. But nationalities and languages are just the start.
Weare working hard to enrich the diversity of our organisation
onevery level and to ensure we foster an inclusive culture where
everyone has equal opportunity to succeed – we are currently at
25%+ female representation in investment teams and aim to be
30% by the end of 2025 (40% if you exclude partners).
Read more about DEIB on pages 32 to 35.
Upon joining Bridgepoint, all new employees are provided with
sustainability training, providing new joiners with important
information on sustainability activity and our progress. In addition,
throughout 2023, the Sustainability team hosted training seminars
for the investment teams including sessions covering climate
change and responsible investment. These sessions form part
of a regular ESG and DEIB training program.
Sustainability team
Across the group we have a dedicated sustainability team of seven
who play a pivotal role in strengthening our programme and
driving performance at a Group level and across fund portfolios.
Since 2019, Bridgepoint has been
calculating its firm-level carbon
footprint on an annual basis and since
2020 has been offsetting the greenhouse
gas emissions associated with our
operations (including scope 1,2,3
emissions, excluding scope 3 category
15 financed emissions).
Since 2020, we operate our global office
network on 100% renewable energy,
partnering with ACT Commodities,
a Bridgepoint portfolio company
and leading supplier of market-based
environmental solutions.
The partnership with ECP will mark a
step change in the Group’s sustainability
impact. In 2023, we have also established
an ESG Committee of the Board to
oversee the implementation of the
Group’s ESG and DEIB policies
See more on ECP on pages 12 to 17
See ESG committee report on page 99
2019 2020 2023
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Before, during, after
We carry out thorough ESG due diligence before we invest.
We are proactive in working with our portfolio companies
to raise their ESG ambitions and help them to achieve their targets.
By further embedding ESG in the strategies of our portfolio
companies, we set them up for sustainable success both
during and after the investment period.
As the opportunity moves into full diligence
The investment team is responsible for ensuring that any
sustainability-related issues are identified and assessed. Third party
ESG due diligence is a requirement for every potential investment
and forms a key input to the decision making of the relevant
investment committee.
Following completion
As part of a 100-day plan, the investment team will work with
management to ensure the right governance structure for ESG
is in place. For example, this could include ensuring there
is a Board member responsible for ESG matters and a member
of the team individual responsible for ESG on a day-to-day basis.
Typically during this early stage of the investment period the
Bridgepoint’s team will support the management team to prioritise
a number of ESG related initiatives based on a combination
of pre investment due diligence and engagement with the
management teams.
Sustainability through the private equity investment cycle
During investment
Bridgepoint provides guidance and support to management teams
via Bridgepoint’s Board representatives and dedicated sustainability
team. For the Sustainability team this often includes the
coordination of external ESG advisers to support on specific projects
as well as 1:1 sessions providing support on the development and
implementation of sustainability strategy. In addition, portfolio
companies have access to a ‘Sustainability Resource Centre’ which
provides guidance, tools and resources covering key topics such
as developing sustainability strategies, as well as information
on Bridgepoint’s compliance and climate programmes.
A final key element of ESG engagement with portfolio companies
is reporting. We understand the importance of collecting and
reporting reliable sustainability data and do this via an annual
portfolio company survey. Each portfolio company supplies a range
of ESG related information, from which a selection of KPIs forms
part of the regular reporting presented to the relevant Portfolio
Monitoring Committee.
At divestment
At divestment, we ensure that governance structures put in place
during investment are sustainable post-investment and include
detailed information on ESG-related matters as part of vendor
due diligence.
Pre-investment
When we first consider a
potential investment, our team
will identify any potential
sustainability red flags and
opportunities as part of our early
transaction screening. As an
example, we have a private
equity exclusion list that
highlights sectors and activities
that we will not support. An
opportunity can be rejected
on sustainability grounds at
this or any later stage.
We aim to discuss
sustainability collaboratively
with portfolio companies as
early as possible – from the
due diligence stage before
we have made the
investment through to
signing and closing the
investment and beyond.
Throughout the fund
investment period, we
regularly review sustainability
programmes and progress with
management teams, ensuring
alignment with Bridgepoint’s
expected standards and
industry-specific good
practice. Our objective is to
create value by embedding
sustainability practices at our
portfolio companies.
Our goal is to set up businesses
for sustainable success
following the Bridgepoint
investment period.
Directly
post-investment
During the
investment period
At divestment
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
ESG-linked margin ratchets
In 2023, Bridgepoint Credit organised for a sustainability council
to the Loan Market Association (LMA) to run training on the
SLLPs and in particular, how they should be used to structure
robust ESG margin ratchets. This training was provided
to the Bridgepoint Credit investment team members and the
Sustainability team to support them to implement robust and
ambitious ESG-linked margin ratchets. Bridgepoint Credit’s
Sustainability team has also developed an ‘ESG Margin Ratchet
Introduction’ document for portfolio companies to give an
overview or our approach and some guidance regarding KPI
and target setting.
Embedding our climate impact assessments
Our long-term goal is to make the assessment of climate impact
a core part of our credit analysis. The challenge is to obtain data
from companies that do not often measure their own climate
impact. In 2022, Bridgepoint Credit partnered with a leading
global carbon accounting platform to assess the carbon footprints
of BDL III and BCO IV portfolio companies. In 2023, we have
extended the scope to include BDL II and a number of SMAs.
Please see pages 78 to 80 for TCFD Metrics and targets for more
information.
Lending weight
Bridgepoint Credit invests across the capital structure
and risk-reward spectrum, through our Direct Lending, Credit
Opportunities and Syndicated Debt strategies.
Sustainability through the private credit investment cycle
Where we make credit investments, we apply an ESG due
diligence framework and offer ESG related loan pricing incentives.
Where Bridgepoint Credit holds a meaningful equity stake, the
credit team supports the implementation of appropriate ESG
policies and relevant KPIs to mitigate potential sustainability risks.
Pre-investment
screening
Incentivisation Monitoring
When assessing the attractiveness of an
investment opportunity, we consider
material sustainability aspects as part of
our due diligence. Our sustainability
analysis is included within the
investment recommendation reports
which are shared with the relevant
credit investment committees, which
consider the information as part of the
ultimate investment decision.
In addition, an assessment of the
governance and policies of the owner of
the company is implemented to ensure
its governance and policies are in line
with Bridgepoint’s sustainability
standards. The due diligence process
involves the completion of an ESG
questionnaire which results in a scoring
of the company’s sustainability practices
and solutions.
We offer incentives to sponsors where
appropriate with ESG-linked margin
ratchets and regularly monitor portfolio
company performance relative to
ESG-related KPIs agreed within ESG
margin ratchets. These KPIs are
typically linked to the interest
rate margin of a loan which can
be increased or decreased to reflect
underperformance or outperformance.
Targets are set with the aim of being
in alignment with the Sustainability-
Linked Loan Principles (“SLLPs”), and
are therefore material and ambitious
sustainability topics relevant to the
company. KPIs may include carbon
emission reduction, waste reduction,
increasing employee diversity, and
improving performance within third-
party sustainability.
We use a regular ESG survey to assess
portfolio sustainability performance
on an ongoing basis and use this survey
as a platform for engagement with
portfolio companies.
Additionally, twice a year, we conduct
a formal ESG portfolio review
to evaluate sustainability progress
and identify any issues that need
to be addressed. These reviews provide
an opportunity for the credit investment
team to engage with portfolio
companies, gain sustainability related
information and revise our internal
scoring of a company’s ESG practices
and solutions.
Sustainability at ECP
A key milestone in Bridgepoint’s sustainability journey
last year was the announcement that ECP, a leading
North American infrastructure investor specialising in
energy transition and sustainability-focused investing,
will be joining the platform.
This partnership underscores a unified commitment
within Bridgepoint and ECP to embed sustainability
principles across our group operations, investment
strategies, and portfolio practices, reflecting our shared
dedication to responsible investing.
Refer to pages 12 to 17 for more information on ECP
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Sustainability industry associations
Bridgepoint drives positive change
in the investment industry
Sustainability initiatives
− Sustainable Markets Initiative (“SMI”) – We are members
of the SMI’s private equity roundtable. The SMI, which was
launched by HM The King at the World Economic Forum
2020, is a global coalition of leading companies that share
a vision for the need to accelerate global progress towards
a sustainable future and to tackle climate change
and biodiversity loss.
− Initiative Climate International (“iCI”) – In 2021, Bridgepoint
joined the iCI, an initiative for private equity action on climate
change in support of a collective commitment to understand
and reduce carbon emissions of private equity-backed
companies and secure sustainable investment performance.
− ESG Data Convergence Initiative (“EDCI”) – We are
a founding member of the EDCI which was set up by a group
of GPs and LPs in 2021 led by CalPERS and Carlyle. The EDCI
is the private equity industry’s first-ever collaboration to align
on a standardised set of ESG metrics and a mechanism
for comparative reporting. Throughout 2023, we served
as a Steering Committee member which is a position
we have held since 2021.
DEIB initiatives
− Level 20 – A not-for-profit organisation which promotes gender
equality and diversity in private equity. Bridgepoint’s co-head of
UK investment activities, Emma Watford (Partner and Chair of
theDEIB Committee), sits on Level 20’s Advisory Committee.
− France Invest – Bridgepoint’s Head of Capital Markets,
Edouard Giuntini, co-heads the Talent & Diversity Commission
of France Invest, which promotes industry-wide efforts to
increase diversity within investment firms and the businesses
they support. Other members of the Paris investment
team are also active within the commission, including
Anne-Sophie Moinade, who co-led the publication
of France Invest’s rule-book to promote social diversity
at industry level, issued in 2022.
− ILPA’s Diversity in Action – Bridgepoint is a signatory to the
Institutional Limited Partners Association’s ‘Diversity in Action’
initiative which aims to advance diversity, equity and inclusion.
− 10,000 Black Interns – We became a member of the ‘10,000
Black Interns’ programme in 2020 to help address the under
representation of Black talent in the financial sector.
− Out Investors – We are a member of Out Investors,
a global organisation that was founded with the mission
to make the directinvesting industry more welcoming
for LGBTQ+ individuals.
Read more about DEIB on pages 34 and 35
A track record of industry leadership
Dedicated Sustainability
team launched
Launched the
Bridgepoint
Charitable Trust
Sustainability topics become
embedded in investment
decision-making
Founding member
and contributor to
Walker Guidelines
for Disclosure and
Transparency
Became a UN PRI signatory
Published our first Responsible
Investment Policy
Sustainability incorporated into
our governance with the inaugural
executive ESG Committee meeting
Founding member of BVCA training
onresponsible investment which
was rolled out to all investment
team members
Consistent sustainability
reporting across the and
portfolio established
First GHG footprint
calculated for the Group
(firm-level)
2009
2007 2013 2016
2019
2014 2017
46
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Sustainability performance
UN PRI 2023 score published in 2023
In our 10
th
year as a UN PRI signatory, we are pleased to have
received the top rating (5 stars) in all three core modules of the
assessment, including achieving full marks for the private debt
and private equity modules. Additionally, we scored 4 stars
in the new module – Confidence Building.
This achievement recognises Bridgepoint’s effort and
commitments to being a leader in corporate responsibility,
and to integrating environmental, social, and governance
principles into the full lifecycle of our investments.
Sustainalytics
For the second time, we received a Sustainalytics score in 2023,
which put us in the 16
th
percentile (from the top) in our
sub-industry (Asset Management and Custody Services).
Whilst this is a good result, we will continue to develop our
processes and aim to improve our score on a year-on-year basis.
For more information on climate risk and risk management more
generally please see pages 74 to 81
BE VII, BG II, BDL III
and BCO IV become
Bridgepoint’s first SFDR
Article 8 aligned funds
ESG-linked bridge facilities put
in place for BCO IV and BDL
III, a first for Bridgepoint Credit
Purchase of renewable
energy attribute certificates
for 100% renewable electricity
for 2020 onwards
Purchase of carbon offsets
tocontribute to carbon
neutrality for 2020 onwards
Bridgepoint Group plc ESG
Committee constituted,
replacing the previous
executive-level committee
Bridgepoint’s Sustainability
team grows to seven including
a dedicated climate &
environment resource
Sustainability-linked loan set
up for a Plc lending facility
with climate and DEIB KPIs
Project launched to refresh
portfolio climate risk
assessment and start looking
at natural capital risk
Bridgepoint Hardship Fund
launched to help support our
communities through
Covid-19
Bridgepoint’s Sustainability team grows to
five including a dedicated credit resource
ESG-linked bridge facility put in place for
BEVII, a first for Bridgepoint Private Equity
Project launched to estimate our financed
emissions across the private equity
and credit portfolios
2021 2023
2020 2022
Module Bridgepoint Peer Median
Policy, Governance
and Strategy
97 / 100
76 / 100
Direct –
Private equity
100 / 100
86 / 100100 / 100
Direct –
Fixed income –
Private debt
100 / 100
80 / 100100 / 100
47
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
KPIs: tracking our performance
Total AUM (€bn)
€40.5bn
26.6
32.9
38.0
40.5
20212020 2022
2023
0
10
20
30
40
50
Fee Paying AUM (€bn)
€26.0bn
16.3
19.3
23.4
26.0
20212020 2022
2023
0
5
10
15
20
25
30
Description
Assets under management upon
which management fees are
charged by the Group,
including CLOs
Definition
See page 53 for
adetaileddefinition
Link to strategy
All three pillars of our strategy
aim to grow AUM
(see page 22)
Description
The total value of assets held
in the Group’s funds plus the
value of capital which has been
committed but not yet drawn
Definition
See page 53 for
adetaileddefinition
Link to strategy
All three pillars of our strategy
aim to grow AUM
(see page 22)
Outcome
Total AUM increased by 6.6%
primarily due to additional
commitments raised for BE VII,
BDL III, BCO IV and the
impact of revaluations of fund
investments.
Outcome
Fee Paying AUM increased
by 11.1% primarily due to
additional BE VII commitments
and an increase in invested
capital in our Credit strategies.
Underlying FRE (£m)
£95.0m
2021*2020 2022*
2023
0
20
40
60
80
100
24.9
47.4
74.3
95.0
Underlying FRE margin (%)
35.7%
2021*2020 2022*
2023
0
5
10
15
20
25
30
35
40
16.7
23.8
30.6
35.7
Description
Underlying FRE margin
is a measure of underlying
profitability, excluding
investment income
Definition
See page 51 for definition
Guidance
35% in the medium-term until
BE VIII starts to generate fees
* restated to exclude non-operating
foreign exchange gains/losses.
Description
Underlying Fee Related
Earnings (“FRE”) is a measure
of underlying profitability,
excluding investment income
Definition
See page 51 for definition
Remuneration linkage
Links to the ‘FRE’ element of
the annual bonus plan
* restated to exclude non-operating
foreign exchange gains/losses.
Outcome
Underlying FRE grew 27.9% to
£95.0m due to higher
management and other fees and
prudent cost control.
Outcome
Underlying FRE margin
improved to 35.7% due to
higher management and other
fees and prudent cost control.
48
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
EBITDA(£m)
£97.1m
2021*2020 2022*
2023
0
30
60
90
120
150
58.7
84.2
136.0
97.1
Underlying EBITDA (£m)
£148.8m
2021*2020 2022*
2023
0
30
60
90
120
150
66.4
112.8
139.2
148.8
Description
A measure of profitability prior
to depreciation of property
leases, amortisation of
intangible assets, the cost
of financing and taxation
Definition
See page 51 for
adetaileddefinition
Link to strategy
All three pillars of our
strategy aim to grow EBITDA
(see page 22)
* restated to exclude non-operating
foreign exchange gains/losses.
Description
Underlying EBITDA excluding
exceptional expenses related to
the pending ECP transaction, the
acquisition of EQT Credit, the
IPO and M&A due diligence
which were not incurred in the
normal course of business
Definition
See page 51 for
adetaileddefinition
Link to strategy
All three pillars of our strategy
aim to grow EBITDA
(see page 22)
* restated to exclude non-operating
foreign exchange gains/losses.
Outcome
EBITDA decreased by 28.6%
with the increase in Underlying
EBITDA more than offset by
the increase in exceptional
expenses due to the
ECP transaction.
Outcome
Underlying EBITDA grew
to £148.8m due to higher
management and other fees
and prudent cost control.
PRE (£m)
£55.3m
20212020 2022
2023
0
10
20
30
40
50
60
70
80
42.3
71.2
64.9
55.3
Profit before tax (£m)
£86.0m
20212020 2022
2023
0
30
60
90
120
150
48.5
62.6
127.4
86.0
Description
Performance Related Earnings
(“PRE”) is a measure of income
attributable to fund
performance and consists of
income from the fair value
remeasurement of investments
and carried interest
Definition
See page 51 for definition
Remuneration linkage
Links to ‘PRE’ element of the
annual bonus plan
Description
A statutory measure of profit
after expenses, depreciation
and amortisation and financing
but before taxation
Definition
Profit for the year attributable
to equity shareholders
beforetaxation
Outcome
PRE was 14.8% lower due
to reduced levels of exits in
Bridgepoint funds.
Outcome
Reported profit before tax
decreased by 32.5% to
£86.0 million in 2023,
reflecting the transaction
costs associated with the
ECP acquisition.
49
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Alternative performance
measures
These full-year results include several measures which are not
defined or recognised under International Financial Reporting
Standards (“IFRS”), including financial and operating measures
relating to the Group such as EBITDA, Underlying EBITDA,
Underlying EBITDA margin, Underlying profit before tax,
Underlying FRE, Underlying FRE margin, PRE, Fee Paying AUM
and Total AUM, all of which the Group considers to be alternative
performance measures (“APMs”). These are reconciled to the
statutory results in the table below.
These APMs and KPIs are used by the Board and management to
analyse the Group’s business and financial performance, track the
Group’s progress and help develop long-term strategic plans. These
APMs are presented to provide additional information to investors
and enhance their understanding of the Group’s results and
operations. Furthermore, the Board believes that these APMs are
widely used by certain investors, securities analysts and other
interested parties as supplemental measures of performance and
liquidity. However, as these measures are not determined in
accordance with IFRS or any generally accepted accounting
standards, and are thus susceptible to varying calculations, they
may not be comparable to other similarly titled measures used by
other companies and have limitations as analytical tools. In
particular, there are no generally accepted principles governing the
calculation of these measures and the criteria on which these
measures are based can vary from company to company, which
means that other companies may define and calculate such
measures differently from the Group.
In addition, as the Group is required by IFRS to consolidate certain
Collateralised Loan Obligations (“CLOs”) which are managed by
the Group and in which the Group has an investment, and so the
consolidated statement of financial position includes the assets and
liabilities and the consolidated statement of cash flows includes the
gross cash inflows and outflows for the period for those
consolidated CLOs.
The consolidation of these CLOs could distort how a reader of the
financial statements interprets the balance sheet and cash flows of
the Group, therefore the CFO statement includes a summarised
non-statutory balance sheet and cash flow statement which
exclude the third-party CLO assets and liabilities. Such measures
are also APMs. Full versions of these statements can be found on
pages 194 and 195.
APMs should not be considered in isolation and investors should
not consider such information as alternatives to total operating
income, profit before tax or cash flows from operating activities
calculated in accordance with IFRS, as indications of operating
performance or as measures of the Group’s profitability or
liquidity. Such financial information must be considered only in
addition to, and not as a substitute for or superior to, financial
information prepared in accordance with IFRS included elsewhere
in this Annual Report.
50
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
EBITDA Earnings before interest, taxes, depreciation and amortisation. It is calculated by reference to total
operating income and deducting from it, or adding to it, as applicable, personnel expenses and other
operating expenses.
Underlying EBITDA
Calculated by excluding exceptional items and certain share-based payments from EBITDA.
Exceptional items are items of income or expense that are material by size and/or nature and are not
considered to be incurred in the normal course of business.
The excluded share-based payments relate to awards that were granted following the IPO to a targeted
group of employees with the aim of increasing employee ownership in the Group. The awards are not
considered to be an alternative to cash-based compensation, are not included in the cost-base when
considering operating segment performance and will cease to be a reconciling item once the awards
issued as part of the strategy are fully vested. The share-based payment expenses related to the
executive director Restricted Share Plan, and any share-based payment charges on awards made prior
to the IPO are included in underlying costs.
A breakdown of exceptional items within EBITDA is included within note 8 of the financial
statements, on page 152.
Underlying EBITDA
2023
£m
2022
£m*
EBITDA 97.1 136.0
Add back: exceptional items within EBITDA 47.7 3.2
Add back: certain share-based payments 4.0 –
Underlying EBITDA 148.8 139.2
Underlying EBITDA
margin
Underlying EBITDA as a percentage of total operating income.
Underlying FRE
Underlying EBITDA less carried interest and income from the fair value remeasurement of investments
and adding back the cost of bonuses linked to investment profits.
Underlying FRE
2023
£m
2022
£m*
Underlying EBITDA 148.8 139.2
Less: carried interest (30.0) (24.2)
Less: fair value remeasurement of investments (25.3) (40.7)
Add back: investment linked bonuses 1.5 –
Underlying FRE 95.0 74.3
Underlying FRE margin
Underlying FRE as a percentage of total operating income excluding carried interest and income from
the fair value remeasurement of investments.
Underlying FRE margin
2023
£m
2022
£m*
Underlying FRE 95.0 74.3
Total operating income 321.6 307.4
Less: carried interest (30.0) (24.2)
Less: fair value remeasurement of investments (25.3) (40.7)
Adjusted total operating income 266.3 242.5
Underlying FRE margin 35.7% 30.6%
PRE
Performance Related Earnings is calculated by adding the fair value remeasurement of investments to
carried interest income.
PRE
2023
£m
2022
£m
Carried interest 30.0 24.2
Fair value remeasurement of investments 25.3 40.7
PRE 55.3 64.9
* 2022 comparative information has been restated to exclude non-operating foreign exchange gains and losses
51
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Alternative performance measures continued
Underlying profit
before tax
Calculated by excluding exceptional items, certain share-based payments and the amortisation
ofacquisition related intangible assets from within profit before income tax.
Underlying profit before tax
2023
£m
2022
£m
Profit before tax 86.0 127.4
Add back: exceptional items within EBITDA 47.7 3.2
Add back: amortisation of acquisition related intangible assets 3.0 3.0
Add back: certain share-based payments 4.0 –
Less: exceptional other income (6.9) (13.6)
Total underlying profit before tax 133.8 120.0
Underlying profit before
tax margin
Underlying operating profit before tax as a percentage of total operating income.
Underlying profit
after tax margin
Underlying profit after tax as a percentage of total operating income.
Underlying basic and
diluted earnings per share
Calculated by dividing underlying profit after tax gross of non-controlling interests by the number
ofshares in issue at the period end.
Underlying basic and diluted EPS
2023
£m
2022
£m
Profit after tax 70.7 120.6
Add back: exceptional items within EBITDA 47.7 3.2
Add back: amortisation of acquisition related intangible assets 3.0 3.0
Add back: certain share-based payments 4.0 –
Less: exceptional other income (6.9) (13.6)
Total underlying profit after tax 118.5 113.2
Number of shares at year end (m) 794.6 823.3
Underlying basic and diluted EPS (£) 0.15 0.14
Cash conversion ratio
Calculated by dividing cash generated from operations (excluding exceptional and adjusted items) by
underlying FRE.
Cash conversion ratio
2023
£m
2022
£m*
Cash generated from operations 99.7 35.6
Exceptional and adjusted items within cash flows from operations 18.3 0.1
Adjusted cash generated from operations 118.0 35.7
Underlying FRE 95.0 74.3
Cash conversion ratio 124.2% 48.0%
Non-current assets
(excluding third-party
CLO assets)
Calculated by excluding consolidated third-party CLO non-current assets from total non-current assets
as defined by IFRS, and adding back the investment into CLOs on a non-consolidated basis.
Non-current assets (excluding third-party CLO assets)
2023
£m
2022
£m
Total non-current assets 582.2 540.0
Add: investment in CLOs on a non-consolidated basis 81.1 45.2
Non-current assets (excluding third-party CLO assets) 663.3 585.2
* Comparative information has been restated to exclude non-operating foreign exchange gains and losses
52
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Current assets (excluding
third-party CLO assets)
Calculated by excluding consolidated third-party CLO current assets from total current assets as defined
by IFRS.
Current assets (excluding third-party CLO assets)
2023
£m
2022
£m
Total current assets 1,795.5 1,247.8
Less: consolidated CLO assets (1,348.8) (741.3)
Less: consolidated CLO cash (76.0) (24.6)
Current assets (excluding third-party CLO assets) 370.7 481.9
Non-current liabilities
(excluding third-party
CLO liabilities)
Calculated by excluding consolidated third-party CLO non-current liabilities from total non-current
liabilities as defined by IFRS.
Non-current liabilities (excluding third-party CLO liabilities)
2023
£m
2022
£m
Total non-current liabilities 1,318.8 757.1
Less: fair value of consolidated CLO liabilities (1,152.0) (597.5)
Non-current liabilities (excluding third-party CLO liabilities) 166.8 159.6
Current liabilities
(excluding third-party
CLO liabilities)
Calculated by excluding consolidated third-party CLO current liabilities from total current liabilities
asdefined by IFRS.
Current liabilities (excluding third-party CLO liabilities)
2023
£m
2022
£m
Total current liabilities 337.7 258.0
Less: consolidated CLO liabilities (14.9) (2.6)
Less: consolidated CLO purchases awaiting settlement (176.8) (120.6)
Current liabilities (excluding third-party CLO liabilities) 146.0 134.8
Fee Paying AUM
Assets under management upon which management fees are charged by the Group, including CLOs.
For all funds with private equity strategies and the Bridgepoint Credit Opportunities funds I to III,
FeePaying AUM is either based on total commitments (during the commitment period) or on net
invested capital (normally during the post-commitment period).
For the Bridgepoint Direct Lending funds and Bridgepoint Syndicated Debt funds as well as expected
future Bridgepoint Credit Opportunities funds, Fee Paying AUM is based on net invested capital
throughout the life of the fund.
Fee Paying AUM in 2023 is €26.0 billion, or €36.7 billion pro forma for the ECP transaction.
Total AUM
The total value of unrealised assets as of the relevant date (as determined pursuant to the latest
quarterly or semi-annual valuation for each Bridgepoint fund conducted by the Group) plus undrawn
commitments managed by the Group. The valuations for Total AUM come from the Group’s valuations
of the investments of the Bridgepoint funds.
The Group values all investments of the Bridgepoint funds at least twice a year, but in most cases four
times a year. Each investment undergoes the same detailed valuation process, in accordance with the
Group’s valuation policies and in line with fund requirements. Completed valuations are presented and
discussed at the relevant Bridgepoint valuation committee and are audited at year end by the relevant
fund auditor.
Total AUM in 2023 is €40.5 billion, or €61.6 billion pro forma for the ECP transaction.
Management fee margin on
Fee Paying AUM
The underlying management fee rate in the Bridgepoint funds, calculated as the weighted average
management fee rate for all Bridgepoint funds contributing to FeePaying AUM as at the end of the
accounting period.
53
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
CFO statement
During 2023, we completed an initial share buyback programme
of £50.0 million and in October 2023 announced a second
programme committing up to a further £50.0 million, reflecting
the confidence we have in the resilience of our business and the
attractive fundamental value and prospects of the Company. At
31 December 2023, £10.2 million of the second £50.0 million
had been used to repurchase shares.
The Group was well-capitalised at year end with a net cash
position of £238.8 million (excluding cash belonging to
consolidated CLOs) alongside undrawn revolving credit banking
facility of £250.0 million.
We also recently priced $430.0 million of US private placement
notes. This new financing further strengthens the balance sheet
and provides the Group with further resources to continue our
strategic growth plans, as well as an amount which will be used to
refinance part of the debt which will transfer with ECP.
Adam Jones
Group Chief Financial Officer
and Chief Operating Officer
Group financial performance in 2023 was driven by 6.6% growth
in Total AUM to reach €40.5 billion and an 11.1% increase in Fee
Paying AUM to €26.0 billion at year end. This increase drove a
£23.8 million or 9.9% increase in management and other fees
(including the recognition of £6.7 million of late fees relating to BE
VII). When combined with careful cost management, personnel
investment phased to fundraising progress, and a lower bonus pool
reflecting the reduced numbers of exits compared to prior periods,
this helped deliver a 27.9% increase in underlying FRE, and a 5.1
percentage point increase in underlying FRE margin to 35.7%.
Investment performance delivered £55.3 million of PRE despite
volatile and uncertain markets delaying exits. Whilst PRE is not linear
and was materially weighted to the second half as advised at our 2023
interim results, our second half performance does reflect improving
economic conditions compared with the first half of the year.
PRE, in combination with Underlying FRE, delivered Underlying
EBITDA of £148.8 million, an increase of £9.6 million or 6.9%.
Underlying profit before tax of £133.8 million was £13.8 million
or 11.5% higher than the previous year, primarily driven by the
full year impact of BE VII and growth of Fee Paying AUM in our
credit business, with good momentum on deployment and the
de-risking of carried interest through fund performance, partially
offset by modest cost growth and slightly lower investment returns.
Reported profit after tax of £70.7 million includes the impact of
costs incurred in the ECP transaction.
The pending ECP transaction, expected to complete in Q2, is a
major step in delivering on the strategy set out at the time of the
IPO, adding Infrastructure as a significant third pillar alongside our
Private Equity and Credit businesses. The transaction positions the
Group well for future growth and diversification and will be
immediately accretive to FRE and earnings per share.
Throughout the course of this section reference is made to adjusted measures which
the Company considers to be APMs or key KPIs. These are not defined or recognised
under IFRS but are used by the Directors and management to analyse the business and
financial performance, track the Group’s progress and help develop long-term strategic
plans. Pages 50 to 53 set out definitions of each of the APMs used within the CFO
statement and how they can be reconciled back to the financial statements.
The Group’s financial performance in 2023 delivers profits which are
ahead of expectations due to careful cost management, fees which are in
line with expectations and investment income modestly outperforming
expectations despite the more challenging, but improving, market
conditions. Fundraising for BE VII is completing soon (and on target),
with thecompletion of the ECP transaction expected in the second
quarter, together means the Group is positively positioned at the start
of 2024.
54
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Summary
Financial summary
Year ended
31 December
2023
Year ended
31 December
2022 Change (%)
Total AUM (€bn) 40.5 38.0 6.6%
Fee Paying AUM (€bn) 26.0 23.4 11.1%
Management fee margin on Fee Paying AUM (%) 1.12% 1.16% (0.04)ppt
Management and other fees (£m) 265.3 241.5 9.9%
PRE (£m) 55.3 64.9 (14.8)%
Total operating income (£m) 321.6 307.4 4.6%
Total expenses (excluding exceptional expenses and adjusted items) (£m)* (171.3) (168.2) 1.8%
Underlying EBITDA (£m)* 148.8 139.2 6.9%
Underlying EBITDA margin (%)* 46.3% 45.3% 1.0ppt
Underlying FRE (£m)* 95.0 74.3 27.9%
Underlying FRE margin (%)* 35.7% 30.6% 5.1ppt
Underlying profit before tax (£m) 133.8 120.0 11.5%
Reported profit before tax (£m) 86.0 127.4 (32.5)%
Reported profit after tax (£m) 70.7 120.6 (41.4)%
Reported basic and diluted EPS (pence) 8.7 14.6 (40.3)%
Underlying basic and diluted EPS (pence) 14.9 13.8 8.5%
* 2022 comparative information has been restated to exclude non-operating foreign exchange gains and losses.
Fundraising
Private Equity AUM at 31 December 2023 amounted to €28.1 billion.
The BE VII strategy is expected to hold its final close in March, with €7 billion of commitments.
Bridgepoint Direct Lending (“BDL”) III concluded fundraising in May 2023. In total, including separately managed accounts, the strategy
raised over €3.4 billion of investable capital. The second half of 2023 saw Bridgepoint Credit Opportunities (“BCO”) IV holding its final
closing, the launch of CLO 5 and CLO 6 entering warehousing. As a result of these fundraisings, Credit AUM ended the year at
€12.4 billion.
Fundraising for Bridgepoint Development Capital (“BDC”) V and BDL IV are now well underway, alongside other funds entering the
market in 2024.
ECP AUM at 31 December 2023 amounted to $23.3 billion. Fundraising for ECP V is almost complete with commitments expected in
excess of the $4 billion target we shared in September. Fundraising for ECP Forestar Credit Fund and related separately managed
accounts remains in progress with a target of over $2 billion.
Overall, we expect to raise c. €20 billion across the Group, including ECP, weighted towards the ECP VI and BE VIII raises in the next
fundraising cycle.
→
Adam Jones
Group Chief Financial Officer &
Chief Operating Officer
55
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
CFO statement continued
Total AUM development during the year
€ billion Private equity Credit Total
31 December 2022 26.8 11.2 38.0
Fundraising 1.1 1.6 2.7
Divestments (1.1) (0.8) (1.9)
Revaluations 1.3 0.4 1.7
31 December 2023 28.1 12.4 40.5
Total AUM at 31 December 2023 was €40.5 billion compared to €38.0 billion at the end of 2022. The 6.6% increase is primarily due
to additional commitments raised for BE VII, BDL III, BCO IV and the impact of valuation growth of fund investments.
ECP AUM at 31 December 2023 was €21.1 billion.
Fee Paying AUM development during the year
€ billion Private equity Credit Total
31 December 2022 16.4 7.0 23.4
Fundraising: fees on committed capital 1.4 – 1.4
Deployment of funds: fees on invested capital 0.2 1.8 2.0
Realisations (0.2) (0.6) (0.8)
31 December 2023 17.8 8.2 26.0
Fee Paying AUM at 31 December 2023 was €26.0 billion compared to €23.4 billion at the end of 2022, with the 11.1% increase in
2023 primarily due to additional BE VII commitments and an increase in invested capital in our Credit strategies. In aggregate our Credit
business added €1.2 billion of Fee Paying AUM during 2023, including the launch of new CLOs.
ECP Fee Paying AUM at 31 December 2023 was €10.7 billion.
Abbreviated income statement
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Management and other fees 265.3 241.5 9.9%
PRE 55.3 64.9 (14.8)%
Total operating income 321.6 307.4 4.6%
Total expenses* (224.5) (171.4) 31.0%
Total expenses (excluding exceptional expenses and adjusted items)* (171.3) (168.2) 1.8%
EBITDA* 97.1 136.0 (28.6)%
Underlying EBITDA* 148.8 139.2 6.9%
Underlying FRE* 95.0 74.3 27.9%
Depreciation and amortisation (18.7) (18.3) 2.2%
Net finance and other income** 7.6 9.7 (21.6)%
Net finance and other income/(expenses) (excluding exceptional net other income)** 0.7 (3.9) (117.9)%
Underlying profit before tax 133.8 120.0 11.5%
Reported profit before tax 86.0 127.4 (32.5)%
Tax (15.3) (6.8) 125.0%
Reported profit after tax 70.7 120.6 (41.4)%
* 2022 total expenses, total expenses (excluding exceptional expenses and adjusted items), EBITDA, Underlying EBITDA, and Underlying FRE have been restated to exclude
non-operating foreign exchange gains and losses.
** 2022 net other income and net other expenses (excluding exceptional net other income) have been restated to include non-operating foreign exchange gains and losses.
56
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
The Group’s consolidated income statement has two key components: the first is the income generated from management and other fees,
which are from long-term fund management contracts. The second component is the variable income from investments in funds and
carried interest, or PRE. Underlying FRE is management and other fees plus other operating income less costs excluding exceptional
expenses, bonuses linked to investment returns and the costs associated with certain employee share schemes. PRE together with FRE
forms the EBITDA of the business.
Exceptional items are items of income or expense that are material by size and/or nature and are not considered to be incurred in the
normal course of business. Exceptional items are classified as “exceptional” within the Group Consolidated Statement of Profit or Loss
are disclosed separately to give a clearer presentation of the Group’s results. In the year ended 31 December 2023, exceptional expenses
within EBITDA were predominantly relating to transaction costs incurred in the acquisition of ECP. Exceptional other income outside of
EBITDA relates to the remeasurement and revaluation of a deferred consideration payable to EQT. In the year ended 31 December
2022, exceptional expenses included costs related to the acquisition of the EQT Credit business and other potential acquisitions. Further
explanation of these items is included within note 8 of the financial statements (see pages 152 and 153).
Underlying profit before tax excludes the aforementioned exceptional items, costs relating to certain employee share schemes and the
amortisation of intangible assets arising from the acquisition of EQT Credit. Further explanation of these items is included within note 8
of the financial statements (see pages 152 and 153).
Total operating income
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Management and other fees 265.3 241.5 9.9%
PRE 55.3 64.9 (14.8)%
Other operating income 1.0 1.0 0.0%
Total operating income 321.6 307.4 4.6%
Total operating income increased by 4.6% from £307.4 million in 2022 to £321.6 million in 2023 reflecting higher management fees
offset by reduction in fair value remeasurement of investments.
Management and other fees increased by £23.8 million, or 9.9%, from £241.5 million for the year ended 31 December 2022 to
£265.3 million for the year ended 31 December 2023, and was attributable to the below reporting segments in the year.
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Private equity 205.0 187.8 9.2%
Credit 56.5 50.8 11.2%
Central 3.8 2.9 31.0%
Management and other fees 265.3 241.5 9.9%
The increase in fees was primarily due to a full year of BE VII fee paying commitments recognised by the Private Equity business in 2023,
plus fees on increased levels of invested capital in BDL III and BCO IV and the launch of new CLOs in the Credit business. These increases
were partially offset by declining fees on older funds which are in their divestment phase, where fees are based upon the remaining invested
capital and reduce when investments are sold.
Income from the Group’s share of carried interest reflects the continued growth in the value of the fund portfolios in 2023, along with the
de-risking of carry receipts from exit activity and improved economic conditions. The income of £30.0 million is earned primarily from the
BDC III portfolio and the initial recognition of carried interest from the BG I fund during the year.
Income recognised as a result of increases in the value of co-investments was £25.3 million. This reflected smaller valuation increases across
the private equity fund range, in part due to lower levels of exits.
57
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
CFO statement continued
Operating expenses
£ million
Year ended
31 December
2023
Year ended
31 December
2022*
Change
(%)
Personnel expenses (excluding exceptional expenses and adjusted items) (126.1) (125.8) 0.2%
Other operating expenses (excluding exceptional expenses) (45.2) (42.4) 6.6%
Total expenses (excluding exceptional expenses and adjusted items)* (171.3) (168.2) 1.8%
Certain share-based payments (4.0) – n/a
Investment linked bonuses (1.5) – n/a
Exceptional expenses (47.7) (3.2) 1,390.6%
Total expenses* (224.5) (171.4) 31.0%
* 2022 comparative information has been restated to exclude non-operating foreign exchange gains and losses.
Personnel expenses (excluding exceptional expenses and adjusted items) increased by 0.2%, from £125.8 million in 2022 to £126.1 million
in 2023, reflecting deliberate phasing of investment team hires to match fundraising progress and timing of replacement hires for natural
attrition. 2023 costs also reflect a lower bonus expense associated with a lower number of investment exits during the year.
In the year ended 31 December 2023, reported personnel costs included £1.5 million of investment linked bonuses (2022: £nil) and
£4.0 million of share-based payments (2022: £nil) excluded from underlying metrics for the reasons explained in the APM definitions
on page 51.
Personnel expenses (excluding exceptional expenses and adjusted items) as a percentage of total operating income was 39.2% for the
year ended 31 December 2023, compared to 40.9% for the year ended 31 December 2022. The improvement in the ratio in 2023
wasprimarily due to an increase in total operating income.
Other operating expenses (excluding exceptional expenses) as a percentage of total operating income remained broadly consistent at
14.1% for the year ended 31 December 2023, compared to 13.8% for the year ended 31 December 2022. Other operating expenses
(excluding exceptional expenses) increased by 6.6% from £42.4 million in 2022 to £45.2 million in 2023 driven by higher fundraising
costs and higher levels of travel activity.
EBITDA
£ million
Year ended
31 December
2023
Year ended
31 December
2022*
Change
(%)
Underlying EBITDA* 148.8 139.2 6.9%
Exceptional expenses within EBITDA (47.7) (3.2) 1,390.6%
Certain share-based payments (4.0) – n/a
EBITDA* 97.1 136.0 (28.6)%
* 2022 comparative information has been restated to exclude non-operating foreign exchange gains and losses.
Underlying EBITDA increased to £148.8 million in 2023 from £139.2 million in 2022, excluding exceptional expenses and adjusted
items. Whilst investment returns were lower than 2022 due to delayed exits across the private equity market, this was offset by higher
management and other fees and prudent cost control.
Exceptional expenses within EBITDA of £47.7 million in 2023 primarily related to £43.5 million of transaction costs relating to the
acquisition of ECP.
EBITDA, inclusive of exceptional expenses, adjusted items and other M&A due diligence costs, decreased by 28.6% primarily due to the
increase in exceptional expenses due to the ECP transaction.
58
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Depreciation and amortisation expense
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Depreciation (14.9) (15.3) (2.6)%
Amortisation of intangibles (3.8) (3.0) 26.7%
Total depreciation and amortisation expense (18.7) (18.3) 2.2%
Depreciation and amortisation expense increased by 2.2% from £18.3 million in 2022 to £18.7 million in 2023. This increase was
primarily due to the cessation of legacy leases in London following the move to 5 Marble Arch, offset by higher lease costs associated
with new offices in Frankfurt and Amsterdam during 2023. The amortisation of intangibles acquired with the EQT Credit business
(fund customer relationships) of £3.0 million in both 2022 and 2023 respectively have been excluded from the underlying profitability
measures in order to enable a clearer analysis of the business’s performance.
Finance and other income or expenses
£ million
Year ended
31 December
2023
Year ended
31 December
2022*
Change
(%)
Net finance and other income/(expense), excluding exceptional items 0.7 (3.9) (117.9)%
Exceptional other income 6.9 13.6 (49.3)%
Net finance and other income, including exceptional items 7.6 9.7 (21.6)%
* 2022 net other income/(expense) has been restated to include non-operating foreign exchange gains and losses.
Finance and other income or expenses includes interest income from cash deposits and interest cost on bank facilities, lease liabilities and
finance expense on amounts payable to related party investors, along with non-operating foreign exchange gains and losses.
Net finance and other income, excluding exceptional items, increased by £4.6 million to income of £0.7 million, compared to a net
expense of £3.9 million for the year ended 31 December 2022. These movements are principally due to increased interest income from
cash on deposit. Net finance and other expenses will increase in 2024 as a result of the US private placement financing undertaken by
the Group, along with the borrowings transferring with ECP.
Exceptional other income of £6.9 million (2022: £13.6 million) relates to remeasurement and revaluation of the deferred contingent
consideration payable to EQT AB in relation to the acquisition of EQT Credit in 2020, and the associated unwind of discounting. The
deferred consideration was settled during the year for a final amount of £9.4 million.
Profit before tax
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Underlying profit before tax 133.8 120.0 11.5%
Exceptional expenses (47.7) (3.2) 1,390.6%
Exceptional other income 6.9 13.6 (49.3)%
Certain share-based payments (4.0) – n/a
Amortisation of acquisition related intangible assets (3.0) (3.0) 0.0%
Reported profit before tax 86.0 127.4 (32.5)%
Underlying profit before tax margin 41.6% 39.0% 2.6ppt
Underlying profit before tax increased by 11.5% from £120.0 million in 2022 to £133.8 million in 2023. The underlying profit before
tax margin increased from 39.0% for the year ended 31 December 2022 to 41.6% for the year ended 31 December 2023.
Reported profit before tax decreased by 32.5% from £127.4 million in 2022 to £86.0 million in 2023, reflecting the transaction costs
associated with the ECP acquisition.
59
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
CFO statement continued
Tax
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Tax (15.3) (6.8) 125.0%
The tax charge increased from £6.8 million in 2022 to £15.3 million in 2023. The effective tax rate for the year ended 31 December
2023 was 17.8% compared to 5.4% for the year ended 31 December 2022. This was primarily due to an increase in deferred tax
liabilities which reflect the lower level of fund exits and the exceptional transaction costs relating to the ECP transaction. Adjusting for
these transaction costs, the underlying effective tax rate is 11.4%.
As detailed in note 11 to the financial statements (see page 154), the Group has a lower effective tax rate than the UK statutory rate. This
is largely driven by timing differences on the taxation of management fee income and significant tax loss carry-forwards in the UK due
to certain forms of income that are not subject to UK corporation tax.
Profit after tax
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Profit after tax 70.7 120.6 (41.4)%
Profit after tax decreased by 41.4% from £120.6 million in 2022 to £70.7 million in 2023, reflecting the transaction costs associated
with the ECP acquisition and the higher tax charge for the year.
Earnings per share and dividend per share
£ pence
Year ended
31 December
2023
Year ended
31 December
2022
Change
(pence)
Reported basic and diluted earnings per share 8.7 14.6 (5.9)
Underlying basic and diluted earnings per share 14.9 13.8 1.1
Interim dividend per share 4.4 4.0 0.4
Final dividend per share 4.4 4.0 0.4
Underlying earnings per share grew by 1.1 pence per share, reflecting the increase in underlying profit after tax. An interim dividend of
£35.3 million, or 4.4 pence per share, was paid on 25 September 2023.
The Directors are proposing a final dividend of 4.4 pence per share in respect of the second half of 2023.
Consolidated balance sheet
Summarised consolidated statement of financial position (statutory basis)
£ million
As at
31 December
2023
As at
31 December
2022
Change
(%)
Assets
Non-current assets 582.2 540.0 7.8%
Current assets 1,795.5 1,247.8 43.9%
Total Assets 2,377.7 1,787.8 33.0%
Liabilities
Non-current liabilities 1,318.8 757.1 74.2%
Current liabilities 337.7 258.0 30.9%
Total Liabilities 1,656.5 1,015.1 63.2%
Net Assets 721.2 772.7 (6.7)%
Equity
Share capital and premium 289.9 289.9 0.0%
Other reserves 12.6 9.1 38.5%
Retained earnings 418.7 473.7 (11.6)%
Total Equity 721.2 772.7 (6.7)%
60
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Net assets principally comprise cash and money market funds, the fair value of investments and carried interest receivable from private equity and
credit funds, and goodwill arising from the acquisition of the EQT Credit business.
Non-current assets increased by 7.8% from £540.0 million at 31 December 2022 to £582.2 million at 31 December 2023 and current assets
increased by 43.9% from £1,247.8 million at 31 December 2022 to £1,795.5 million at 31 December 2023, primarily due to the impact of the
build-up of the CLO 5 portfolio following its launch and the warehousing of assets in CLO 6. The balance sheet now includes the full consolidation
of the assets and liabilities of CLOs 1, 3, 4, 5 and 6, which are required under IFRS to be presented gross on the balance sheet.
At 31 December 2023, the Group had cash of £238.8 million (including amounts in money market funds, but excluding cash belonging to the
consolidated CLOs).
Total liabilities increased by 63.2% from £1,015.1 million at 31 December 2022 to £1,656.5 million at 31 December 2023. Non-current liabilities
increased from £757.1 million at 31 December 2022 to £1,318.8 million at 31 December 2023, primarily due to an increased level of liabilities
owed by consolidated CLOs. Current liabilities increased by 30.9% from £258.0 million at 31 December 2022 to £337.7 million at 31 December
2023. Excluding the impact of consolidated CLOs, non-current liabilities remained relatively stable, increasing by 4.5%.
Total equity reflects the 2023 profit, offset by dividends paid, the cost of the share buyback programme and a decrease in other reserves due to
movements in fair value of hedging instruments, which is partially offset by foreign exchange movements. These resulted in total equity of
£721.2 million at 31 December 2023, down from £772.7 million at 31 December 2022.
The consolidation of certain CLOs could distort how a reader of the financial statements interprets the balance sheet of the Group. The Group’s
maximum exposure to loss associated with its interest in the CLOs is limited to its investment in the relevant CLOs which at 31 December 2023
was £96.3 million (2022: £60.3 million).
The graph below shows a reconciliation of the CLO related assets and liabilities within the consolidated balance sheet to the Group’s exposure.
Fair value of
CLO investments
CLO assets CLO liabilities
Net exposure
CLO cash Trades pending
Assets attributable to third
party CLO note holders
Assets attributable to
Bridgepoint equity holders
0
300
600
900
1200
1500
15.2
1,348.8
76.0
(176.8)
96.3
(1,166.9)
In addition, a summarised consolidated balance sheet on a non-statutory basis, excluding third-party CLO assets and liabilities, is included below.
Summarised consolidated statement of financial position (excluding third party CLO assets and liabilities, non-statutory)
1
£ million
As at
31 December
2023
As at
31 December
2022
Change
(%)
Assets
Non-current assets 663.3 585.2 13.3%
Current assets 370.7 481.9 (23.1)%
Total Assets (excluding third-party CLO assets) 1,034.0 1,067.1 (3.1)%
Liabilities
Non-current liabilities 166.8 159.6 4.5%
Current liabilities 146.0 134.8 8.3%
Total Liabilities (excluding third-party CLO liabilities) 312.8 294.4 6.3%
Net Assets (excluding third-party CLO assets and liabilities) 721.2 772.7 (6.7)%
1. A full non-statutory consolidated statement of financial position excluding third-party CLO assets and liabilities (unaudited) is included on page 194.
61
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
CFO statement continued
Liquidity
The Group’s liquidity requirements arise primarily in relation to the funding of operations and the Group’s plans in connection with its
expansion and diversification strategy. The Group funds its business using cash from its operations (retained profits), capital from
shareholders and, from time-to-time, third-party debt.
Total financial debt and net cash position
£ million
As at
31 December
2023
As at
31 December
2022
Change
(%)
Bank borrowings – – –%
Cash and cash equivalents (excluding CLO cash) 238.8 196.0 21.8%
Term deposits with original maturities of more than three months – 100.0 (100.0)%
Net cash (excluding consolidated CLO cash) 238.8 296.0 (19.3)%
At 31 December 2023, the Group had net cash of £238.8 million compared with net cash of £296.0 million at 31 December 2022.
Prior to the ECP transaction, the Group has no debt and had in place the undrawn £250 million revolving credit facility and the
undrawn £75 million acquisition bridge facility (up-sized to £125 million subsequently to the year-end).
As announced recently, the Group recently priced $430.0 million of US private placement notes. The proceeds will be used to provide
additional resources to deliver the Group’s strategic growth plans and be used to refinance any amount of ECP debt which requires
refinancing on the completion of the ECP change of control process. The new notes will be structured in four tranches with maturities of
3, 5, 7 and 10 years and an average coupon of 6.17 per cent. The closing of the new notes is expected during Q2 2024, subject to the
completion of the ECP transaction and customary conditions.
As at 31 December 2023, in addition to the liabilities shown on the balance sheet, the Group had approximately £257.0 million and
£30.3 million of remaining undrawn capital commitments to the Bridgepoint funds in each of the private equity and private credit
segments, respectively.
Consolidated cash flows
Summarised consolidated cash flow statement (statutory basis)
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Net cash flows from operating activities 95.0 33.9 180.2%
Net cash flows from investing activities (320.0) (57.3) 458.5%
Net cash flows from financing activities 325.6 (86.6) (476.0)%
Net increase/(decrease) in cash and cash equivalents 100.6 (110.0) (191.5)%
Total cash and cash equivalents at beginning of the year 220.6 327.3 (32.6)%
Effect of exchange rate changes (6.4) 3.3 (293.9)%
Total cash and cash equivalents at the end of the year 314.8 220.6 42.7%
of which: cash and cash equivalents at the end of the year (for use within the Group) 238.8 196.0 21.8%
of which: CLO cash (restricted for use within relevant CLO) 76.0 24.6 208.9%
Total cash and cash equivalents at the end of the year 314.8 220.6 42.7%
Net cash flows from operating activities for the year ended 31 December 2023 were £95.0 million. The increase of £61.1 million in the
net cash flows from operating activities compared to the year ended 31 December 2022 was due to the favourable movements in the
Group’s working capital. Operating cash flows, excluding the payment of exceptional costs relating to the ECP transaction, represented
124.2% of FRE demonstrating the strong cash generation of the business (2022: 48.0% due to the delayed receipt in the collection of
certain management fees, accumulation of fundraising costs recoverable from funds and timing differences on fund related payments).
Net cash flows from investing activities include receipt of deferred proceeds from the sale of the Group’s investment in Bridgepoint
Credit II, proceeds from carried interest and investment income, which is driven by the timing ofinvestments into, and receipts from
divestments from, the underlying Bridgepoint funds. Net cash flows from investing activities for the year ended 31 December 2023
were £320.0 million; this was made up of investments of £449.9 million relating to consolidated CLOs, which includes the impact of the
launch of CLO 5 and the warehousing of CLO 6 (which are both consolidated), andthe receipt of £100.0 million redeemed from cash
held in term deposits with an original maturity of more than three months which was classified separately from cash and cash equivalents
at 31 December 2022 under accounting rules.
62
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Net cash flows from financing activities include cash drawn from and repaid to consolidated CLO investors, dividend payments to
shareholders and other transactions with shareholders. For the year ended 31 December 2023 net cash flows from financing activities
totalled £325.6 million, which primarily related to net inflow of CLO cash from investors in CLO 4 and 5 (which are consolidated) of
£576.2 million, offset by dividends paid to shareholders of £68.0 million and payments to acquire shares as part of the share buyback
programme, which totalled £60.2 million by the end of the year.
In addition to £238.8 million of its own cash at 31 December 2023, the Group had £76.0 million recorded on the balance sheet as
consolidated CLO cash which was held by the consolidated CLO vehicles, legally ringfenced and not available for use by the Group.
Theconsolidated cash flow statement includes the gross cash inflows and outflows for the period in respect of the consolidated CLOs,
and cash held at 31 December 2023 for those CLOs which are required to be consolidated. This could distort how a reader of the
financial statements interprets the cash flows of the Group, therefore a cash flow statement without the consolidated CLO vehicles is
presented below.
Summarised consolidated cash flow statement (excluding cash flows relating to consolidated CLOs, non-statutory)
1
£ million
Year ended
31 December
2023
Year ended
31 December
2022
Change
(%)
Net cash flows from operating activities (excluding consolidated CLOs) 95.0 33.9 180.2%
Net cash flows from investing activities (excluding consolidated CLOs) 94.3 (93.7) (200.6)%
Net cash flows from financing activities (excluding consolidated CLOs) (140.8) (69.6) 102.3%
Net increase in cash and cash equivalents (excluding consolidated CLOs) 48.5 (129.4) (137.5)%
Cash and cash equivalents at beginning of the year (excluding consolidated CLOs) 196.0 323.1 (39.3)%
Effect of exchange rate changes on cash and cash equivalents (excluding consolidated CLOs) (5.7) 2.3 (347.8)%
Cash and cash equivalents at the end of the year (excluding consolidated CLOs) 238.8 196.0 21.8%
Add back: investment in term deposits with original maturities of more than three months – 100.0 (100.0)%
Net cash at the end of the year (excluding consolidated CLOs) 238.8 296.0 (19.3)%
1
A full non-statutory consolidated cash flow statement excluding third-party CLO assets and liabilities (unaudited) is included on page 195.
Guidance
− Fundraising:
− BE VII on track to close in line with expectations, with an average fee rate of 1.4%
− expect to raise more than €20 billion across the wider platform during the next range of fund cycles
− Credit deployment: average increase in Fee Paying AUM of €1 billion a year from 2024 to 2026
− PRE:
− expect H2 weighting in 2024 (c. 2/3) reflecting exit pipeline (in line with 2023)
− expected to be at the upper end of our normal range of between 20% and 25% of total income
− Cost: excluding the impact of ECP, total costs in 2024 likely to represent mid to high single digit compound growth from 2022
− Underlying FRE margin:
− expected to be around 30% to 35% in 2024 (including ECP)
− medium term guidance of around 35% until BE VIII starts to generate fees
− Group financing: additional $430 million financing will pay fixed coupon of 6.17%
− Tax: blended Group underlying tax rate expected to be around 15% following ECP transaction
63
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Our historical performance
2019 2020 2021* 2022* 2023
Total AUM (€bn) 19.3 26.6 32.9 38.0 40.5
Fee Paying AUM (€bn) 12.7 16.3 19.3 23.4 26.0
Management fee margin on Fee Paying AUM (%) 1.25% 1.19% 1.18% 1.16% 1.12%
Management and other fees (£m) 143.9 148.6 197.7 241.5 265.3
PRE (£m) 24.0 42.3 71.2 64.9 55.3
Total operating income (£m) 169.8 191.8 270.6 307.4 321.6
Total expenses (excluding exceptional expenses and adjusted items) (£m) 116.7 125.4 157.8 168.2 171.3
EBITDA (£m) 53.1 58.7 84.2 136.0 97.1
Underlying EBITDA (£m) 53.1 66.4 112.8 139.2 148.8
Underlying EBITDA margin (%) 31.3% 34.6% 41.7% 45.3% 46.3%
Underlying FRE (£m) 29.1 24.9 47.4 74.3 95.0
Underlying FRE margin (%) 20.1% 16.7% 23.8% 30.6% 35.7%
Underlying profit before tax (£m) 47.5 52.6 90.5 120.0 133.8
Profit before tax (£m) 47.5 48.5 62.6 127.4 86.0
Reported basic and diluted EPS (p) 5.09 5.79 7.02 14.64 8.74
Underlying basic and diluted EPS (p) 5.09 6.29 10.41 13.75 14.91
Permanent headcount (at year end) 260 310 344 377 391
* 2021 and 2022 total expenses (excluding exceptional expenses and adjusted items), EBITDA, Underlying EBITDA, Underlying FRE and Underlying FRE margin has been restated to
exclude non-operating foreign exchange gains/losses
An explanation of the alternative performance measures used by the Group, including Underlying profit before tax, Underlying EBITDA
and reported and underlying basic and diluted earnings per share, is set out on pages 50 to 53 along with a reconciliation to the nearest
statutory measures.
64
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Viability and going
concernstatements
The Strategic Plan reflects the Group’s strategy, which is
summarised on pages 22 to 23, including plans to scale existing
strategies, develop new products and build new investment
strategies.
Key assumptions within the Strategic Plan include:
− the raising of new funds, which impacts the amount of
management fees;
− the timing and level of returns from funds, which impacts
co-investment and carried interest cash flows and profit recognition;
− changes in the cost base, primarily in relation to people costs and
inflation; and
− future business acquisitions, which expand investment strategies
and strengthen performance.
Progress against the current year’s budget, which underpins the
Strategic Plan, is monitored through the year.
Assessment of viability
The assessment of the Group’s viability requires the Directors to
consider the principal risks that could impact the Group, which are
outlined on pages 70 to 73.
Whilst all the risks identified could have an impact on the Group’s
performance, the specific risks that are likely to have the most
impact on the business model, future performance, solvency and
liquidity of the Group in the three-year period covered are
considered to be:
− Fund under-performance – prolonged and/or significant
under-performance of multiple funds may adversely affect the
Group’s medium-term business, brand and reputation, income
received by the Group, itsgrowthand its ability to raise capital
for future funds.
− Fundraising challenges – the inability to raise additional or
successor funds (or only raise successor funds of a materially
lower size to predecessor funds), or a change in the terms on
which investors are willing to invest,could have a material
adverse impact on the Group’s business, revenue, net income,
cash flows or the ability to retain employees.
− The Directors review the key risks regularly and consider the
options available to the Group to mitigate these risks to ensure
the ongoing viability of the Group is sustained.
The Group’s future viability and prospects are underpinned by
the following:
− a large proportion of revenue (75% for 2024 to 2026) is made
up of income from long-term fund management contracts, with
greater diversification on the completion of the acquisition of
ECP;
− a significant majority (82%) of forecast management fees in
2024 to 2026 from funds already raised or in advanced
fundraising progress, including ECP funds;
− a largely predictable cost base, of which over three quarters is
personnel related;
− good visibility of income, expenditure and future profitability
during and beyond the period covered by this assessment;
− a strong balance sheet, with net cash of £239 million at
31 December 2023, with no borrowings and an undrawn
£250 million revolving credit banking facility;
− recent pricing of US private placement notes providing the
Group with additional resources to continue its strategic growth
plans and refinance any debt transferring with ECP requiring
repayment; and;
− available levers to operate during stress events include reduced
variable compensation costs and reduced dividend payments.
Viability statement
In accordance with the UK Corporate Governance Code, the
Directors are required to undertake assessment of the prospects
and viability of the Group.
Assessment of prospects
The Group’s long-term prospects are primarily assessed through
the production of the Group strategic plan (the “Strategic Plan”).
The Strategic Plan is updated regularly to take into account
updated fundraising expectations, fund activity and expected
returns and changes within the cost base. The Strategic Plan is
presented to the Board at least annually, where it is formally
approved, following a robust review and challenge process.
Although the Strategic Plan covers a substantially longer period,
the three-year period to December 2026 has been selected for the
viability statement on the basis that it is the period over which
forecasting assumptions are most reliable due to the high visibility
of earnings from fees and investment returns.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
The Group’s viability requires consideration from the
perspectiveof capital for solvency, adequacy of regulatory
capitaland liquidity.
Stress testing has been performed on the Strategic Plan, which
considers the impact of the Group’s key risks crystallising over
the three-year assessment period. The stress scenarios applied to
the three-year period are:
Scenarios
Links to
principal risks
Scenario 1:
Weaker fund performance
Assumptions:
50% reduction in co-investment
cash returns and no carried interest
(beyond that already recognised)
− Fund under-
performance
Scenario 2:
25% reduction in fund sizes for funds not
yet closed
Assumptions:
No further fundraising
− Fundraising
challenges
Scenario 3:
A combination of scenarios 1 and 2 above
(this is seen as a worst-case scenario and
highly unlikely)
− As above
Having reviewed the results of the stress tests, the Directors have
concluded that the Group would have sufficient capital and liquid
resources in each of the respective scenarios, taking appropriate
controllable management actions where applicable, so that the
Group’s ongoing viability would be sustained.
Controllable management actions to relieve stresses on the Group’s
ability to operate during these scenarios include:
− changing the timing of, and/or reducing the size of, the Group’s
dividends;
− reducing of ceasing the share buyback programme;
− reducing variable compensation costs (which represent
c. 40% of payroll costs); and
− utilisation and/or extension of debt facilities.
It is possible that a stress event could be more severe than those
modelled and have a greater impact than has been determined
plausible. Other actions are available that may reduce the impact
of more severe scenarios, but these have not been considered in
this viability statement.
The Group undertakes reverse stress tests to identify circumstances
under which the business model becomes unviable. The most
plausible severe scenario to cause the business model to be unviable
is a macro-economic shock which results in the write-down of the
value of investments held by the funds.
This would impact the level of investment returns/result in losses
for the Group but is unlikely to have an immediate impact on
viability. If the impact is not temporary (unlike Covid-19, for example)
and more permanent, this could impact the ability to exit fund
investments and raise new funds, and therefore impact the Group
beyond the period covered in this viability assessment.
The reverse stress test determines the level of reduction to forecast
distributions from funds in order to trigger a business model failure
point, in the absence of any management actions. Such a scenario,
and the sequence of events which could lead to it, is considered to
be extremely remote, as it requires forecast fund distributions to be
reduced by 57%, whilst maintaining a broadly similar level of
forecast investing activity during the same period, whereas a
macroeconomic event is also likely to constrain investment activity
more substantially.
Whilst the occurrence of one or more of the principal risks has the
potential to impact future performance, none of them are
considered likely, either individually or collectively, to give rise to
trading deterioration of the magnitude indicated by the reverse
stress testing and to threaten the Group over the three-year period.
ECP transaction
The ECP transaction is expected to complete in Q2 2024 after
final regulatory approval. As part of their assessment of the viability
and prospects of the Group, the Directors have considered:
− the cash consideration payable as part of the transaction, which
will be settled from existing cash resources of the Group, and
deferred cash payments which will be payable in future periods;
− the forecast future earnings of the ECP business, in
consideration of fundraising and fund performance risk and the
associated impact on future investment returns, with stress
scenarios modelled in line with those set out above; and
− the perimeter balance sheet, including $225 million of US
private placement debt which will transfer to the Group.
The Directors consider that the Group’s prospects as a result of the
transaction are enhanced as the transaction will be immediately
accretive to earnings and positions the Group well for future
growth and diversification.
Conclusion
Based upon the assessment set out above, the Directors have a current
reasonable expectation that the Group will be able to continue in
operation, with adequate liquidity and capital, and meet its liabilities
as they fall due over a viability horizon of at least three years.
Viability and going concern statements continued
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Liquidity and resources
As at 31 December 2023, the Group had a strong balance sheet
with net cash of £239 million (2022: net cash of £296 million,
including £100 million of term deposits with original maturities of
over three months), no borrowings, the undrawn £250 million
revolving credit facility and the undrawn £75 million acquisition
bridge facility (upsized to £125 million subsequently to the
year-end).
As announced recently, the Group recently priced $430.0 million
of US private placement notes. The proceeds will be used to
provide additional resources to deliver the Group’s strategic
growth plans and be used to refinance any amount of ECP debt
which requires refinancing on the completion of the ECP change
of control process.
The new notes will be structured in four tranches with maturities
of 3, 5, 7 and 10 years and an average coupon of 6.17 per cent.
The closing of the new notes is expected during Q2 2024, subject
to the completion of the ECP transaction and customary
conditions.
In order to ensure liabilities are settled when they fall due, the
Group’s liquidity is monitored regularly. This includes monitoring
the timing and level of operating expenses and the timing of
drawdowns and receipts from fund investments.
Stress testing
In making their assessment the Directors have considered
scenarios prepared in conjunction with the viability statement,
including a delay in fundraising and lower returns from fund
investments, which would impact the income and cash flow of the
Group. The Directors are satisfied that, even under these stressed
scenarios, the Company and the Group would remain a going
concern.
Conclusion
The Directors have acknowledged their responsibilities in relation
to the financial statements for the year to 31 December 2023.
After making their assessment of going concern, the Directors
considered it appropriate to prepare the financial statements
of the Company and the Group on a going concern basis
for at least 12 months from the date of the approval of the
financial statements.
Going concern statement
In accordance with the Companies Act 2006, the Directors have
a responsibility to evaluate whether the Group has adequate
resources to continue its operational existence for the foreseeable
future and for at least the next 12 months from the signing of the
financial statements.
Assessment of going concern
In carrying out their going concern assessment, the Directors
considered a wide range of information, taking into account both
the Company’s and the Group’s current performance and outlook,
using information available up to the date of the issue of the
financial statements. This included:
− the Group’s business and operating models and strategy;
− the Group’s risk appetite and approach to managing risk; and
− a summary of the current financial position and resources of the
Group, including the impact of the pending ECP transaction.
Business model
As shown by the table below, a high proportion of the Group’s
revenue is made up of management and other fees, which are
under long-term fund management contracts. When considered
together with a largely predictable cost base, of which over three
quarters is personnel related, the Group has a good level of
visibility of income, expenditure and future profitability when
projected for and beyond the next 12 months, including that in
respect of ECP.
Year ended
31 December
2023
Year ended
31 December
2022
Underlying FRE (£m) 95.0 74.3
Management and other fees as % of total
operating income (%) 82.5% 78.6%
Underlying FRE margin (%) 35.7% 30.6%
Personnel expenses as % of total expenses
(excluding exceptional costs and adjusted
items) (%) 73.6% 75.3%
Key assumptions made in the forecasts that underpin the
Directors’ going concern assessment are set out above within the
viability statement and include the raising of new funds, the timing
and level of returns from funds and changes in the cost base from
hiring and inflation.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Risk management
1
Our approach and key
developments in 2023
The Group believes that risk management is a fundamental part of
robust corporate governance and good management practice.
Good risk management does not mean avoiding risks at any cost
but rather making informed and coherent choices regarding the
risks the Group and the funds it manages want to take in pursuit of
their strategies and objectives, having regard to the methods used
to manage and mitigate those risks. Accordingly, risk management
is embedded within all areas of the business, both at a Group and
strategy level and across geographies, including in culture,
decision-making processes, practices, business planning and
reporting activities.
The Group manages a variety of risks in connection with its
business activities, and the Board is ultimately responsible for
oversight of the Group’s risk management and internal control
systems. This includes determining the nature and extent of the
key risks that the Board is willing to take in order to achieve the
Group’s strategic objectives, and reviewing management’s
implementation of effective systems of risk identification,
assessment and management.
The Board is assisted in its risk management role by the Audit and
Risk Committee, which monitors and reviews the Group’s internal
controls and risk management framework. More details of the
Audit and Risk Committee are set out on pages 92 to 98. During
2023, the Audit and Risk Committee considered an updated risk
management framework. It also reviewed a paper which explained
the work undertaken to support the disclosures within the circular
provided to shareholders in connection with the ECP transaction
and discussed the integration of ECP into the enterprise risk
management process.
To manage risk, the Group operates on a three lines model:
− First line
Business units have the primary responsibility for managing
risks in their respective areas.
− Second line
Bridgepoint’s Legal and Compliance team assists with risk
management, monitoring the operation of first line controls.
− Third line
Deloitte, as the Group’s outsourced internal auditor, provides
risk assurance on the effectiveness of governance, risk
management and internal controls, including first and second
line controls.
Completing its first full year of engagement, the Group’s internal
audit function focused in particular on credit investment
governance, data management and governance and a review of the
Group’s compliance monitoring programme. The results of their
audits and any associated recommendations were reported to the
Audit and Risk Committee.
Prudent risk management within business units is underpinned by
a strong control culture with clear oversight of responsibilities, and
there is ongoing thematic compliance monitoring. The Group
maintains comprehensive insurance cover with a broad range of
policies covering a number of insurable events.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
2
Risk management
process
The Group undertakes the following process to identify, manage
and monitor risks:
1. Set strategy – The Board considers and approves the
Group’sstrategy, which forms the basis of the Group’s risk
identification process and risk appetite, allowing those risks
that may impact achievement of strategic objectives to be
focused on.
2. Identify risks – Periodically an exercise is undertaken to identify
and update the key and emerging risks facing the Group. This
is performed by each relevant business unit and collated into a
broader risk management framework which is ultimately
reported on to the Board and the Audit and Risk Committee.
3. Evaluate risks – The Group evaluates risks based on two key
factors: the likelihood of the risks eventuating, and the impact
on the Group were the risks to eventuate (both financially and
in respect of other matters such as reputation). The relevant
risks are categorised and rated based on the product of these
two factors and contextualised with a further evaluation of
other factors such as speed to impact and whether the risk is
trending in a particular direction.
4. Manage and mitigate risks – Mitigating actions, controls and
monitors are identified for each risk, taking into account the
effectiveness of the current control environment, and the
impact of these on the likelihood and impact of the relevant
risk are evaluated. Where appropriate, changes to the control
environment or other mitigants are identified and implemented.
5. Monitor and review risks – The Group undertakes ongoing
monitoring of risks identified and the ongoing effectiveness of
mitigants implemented and reports on this exercise to the
Board and the Audit and Risk Committee.
When identifying risks, the Group categorises these within one of
the following three areas: strategic and external risks, investment
risks, and operational risks.
Strategic and external risks relate to the ability to deliver on the
Group’s strategic objectives or risks from external or broader events.
Investment risks are those associated with investments made by the
Group or the funds managed by it. Operational risks are those
associated with the Group’s day-to-day operations, including risks
relating to internal processes, people or systems. Risks in each of
these categories may, if poorly managed, ultimately result in a
negative impact on the profitability or prospects of the Group.
3
Key risks
The Group’s risk management framework is designed to identify
abroad range of risks and uncertainties which it believes could
adversely impact the stability and financial prospects of the Group.
Asimilar process is undertaken with respect to risks specifically
facing the funds managed by the Group and as required by
applicable regulatory regimes. As part of each of these frameworks
and processes, ESG-related risks are actively considered.
The following pages set out the Group’s key risks identified and
the primary mitigating actions, controls or monitors implemented
for each risk as well as the change in that risk during the course of
2023 compared to 2022.
The key risks are described based on the Group’s combined
assessment of the likelihood and impact of each risk eventuating
after the Group’s controls and mitigants, as well as the speed to
impact of that risk.
Additional risks and uncertainties that the Group may face,
including those that are not currently known or that the Group
currently deems immaterial, may individually or cumulatively also
have a material effect on the Group’s business, results of operations
and/or financial condition.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Risk management continued
Fundraising challenges
Strategic and external
Change in risk during FY23
h
Description
The current Bridgepoint funds have a finite life and a finite
amount of commitments from fund investors. Once a fund nears
the end of its investment period, the Group raises additional or
successor funds in order to keep making investments and,
overthe long-term, earn management fees (although funds and
investment vehicles continue to earn management fees after the
expiration of their investment periods, they generally do so at a
reduced rate).
The alternative investment management sector is intensely
competitive, with the Group competing with a number of other
persons for investor capital, including sponsors of public and
private investment funds. Fundraising markets remained
congested in 2023. If market conditions for competing
investment products result in a greater number of competing
products promoting similar or higher rates of return than those
achieved by the Bridgepoint funds, the attractiveness of
Bridgepoint funds to investors could decrease and Bridgepoint
could experience reduced investor commitments.
The inability to raise additional or successor funds (or raise
successor funds of a comparable size to predecessor funds), or a
change in the terms on which investors are willing to invest,
could have a material adverse impact on the Group’s business,
revenue, net income, cash flows or the ability to retain employees.
Mitigation
The Group’s capital raising efforts are supported by an in-house
global investor services team, which utilises the Group’s data and
technology capabilities.
The Group has made efforts to broaden its investor base, both in
terms of the number of investors across the platform and the
geographic spread of such investors, helping to alleviate
competitive pressures. In particular, the introduction of new
products and strategies to Bridgepoint (through growth or
acquisition) helps to broaden the investor base by investor type,
geography and investment strategy.
As a leading middle market investor, the Group offers investors a
differentiated approach arising from its global reach and ability to
deploy capital across middle market strategies. This differentiation
insulates the Group, to some extent, against the competitive
pressures arising in respect of attracting fund investors.
Law and regulation
Strategic and external
Change in risk during FY23
h
Description
The international nature of the Group’s business, with corporate
and fund entities located in multiple jurisdictions and a diverse
investor base, makes it subject to a wide range of laws and
regulations. It is supervised by a number of regulators, including
the Financial Conduct Authority in the UK, the Securities and
Exchange Commission in the United States, the Autorité des
Marchés Financiers in France and the Commission de
Surveillance du Secteur Financier in Luxembourg. Failure to
comply with these laws and regulations may put the Group at
risk of fines, lawsuits or reputational damage. The failure of the
Group to comply with the rules of professional conduct and
relevant laws and regulations could expose the Group to
regulatory scrutiny, including penalties or enforcement actions.
Increased law and regulation may impact the Group’s operating
entities, funds, and the markets and sectors in which the Group’s
investment strategies invest or from which capital is raised.
Mitigation
The Group is supported by dedicated Legal and Compliance
functions that provide guidance to the business on its regulatory
and legal obligations. These functions work with colleagues in
other central functions and in local offices to monitor regulatory
and legislative changes in the jurisdictions in which the Group
operates and interact with regulators and industry bodies to stay
informed of regulatory changes. They also proactively take actions
across the business to comply with any changes in law or regulation.
Employees of the Group are provided with periodic training on
the laws and regulations relevant to the Group.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Changes in macroeconomic environment
Strategic and external
Change in risk during FY23
h
Description
Macroeconomic events may contribute to volatility in financial
markets which can adversely impact the Group’s business by
reducing the value or performance of the investments made by
Bridgepoint’s funds. These pressures may result in challenges in
finding investment opportunities for funds as well as challenges
in exiting existing investments to realise value for investors. This
could in turn affect the Group’s ability to raise new funds and
materially reduce its profitability.
For example, rising interest rates may adversely impact multiples
and discount rates used for investment valuations. Higher
interest rates may also reduce our ability to secure favourable
financing for fund transactions, impacting fund returns. Higher
interest rates may also impact the cost of financing under Group
facilities, or the availability of such financing. Furthermore,
unhedged foreign exchange rate movements impact total returns
and fund net asset values.
Mitigation
The Group’s business model is predominantly based on illiquid,
closed-end funds which allow investment teams to remain
disciplined throughout economic cycles. A range of approaches
are used to inform strategic planning and risk mitigation across
such cycles, including active management of the Group’s fund
portfolios, profitability and balance sheet scenario planning,
treasury management, and stress testing to ensure resilience
across a range of macroeconomic outcomes.
Operating products in different asset classes can also help to mitigate
the impact of macroeconomic change, for example higher interest
rates may benefit the Group’s private credit strategy.
Senior management of the Group regularly updates the business
on economic trends and outlooks to aid investment teams and
corporate functions to anticipate and proactively address
macroeconomic risks.
Fund underperformance
Investment
Change in risk during FY23
h
h
Description
In the event that certain of the Bridgepoint funds were to
perform unsatisfactorily, in particular if this were the case for a
larger Bridgepoint fund (for example, the current private equity
flagship fund, Bridgepoint Europe VII or its successors), this may
adversely affect the Group’s business, brand and reputation and
lead to difficulties for the Group in attracting fund investors and
raising capital for new funds in the future.
Mitigation
The Group has in place a robust and disciplined investment
process where investments are analysed and selected by the
Group’s Operating Committees and Investment Advisory
Committees. Portfolio Management and Portfolio Review
Committees regularly monitor investment performance and
delivery of investment objectives. Any ‘at risk’ investments are
subject to a detailed review by a Portfolio Working Group or
receive other specialist attention.
Investment processes not only evaluate and mitigate the risks
inherent in particular investments or divestments, but also ensure
that all investment decisions are taken in accordance with the
relevant fund’s investment strategy.
The Group limits fund exposure to individual investments, and
diversifies investments in terms of sector, vintage and geography.
The deal flow of Bridgepoint funds is driven by the Group’s
sector strategy which is continually refined to exploit market
conditions, including changes in competitive pressures. The
Group’s investment approach has evolved through different
economic cycles, helping it to resist temporary pressures.
The introduction of new products and strategies to Bridgepoint
(through growth or acquisition) also helps to reduce dependence
on performance of any individual fund.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
Decreased pace or size of investments
made by Bridgepoint funds
Investment
Change in risk during FY23
h
h
Description
The Group’s revenue is driven in part by the pace at which the
Bridgepoint funds make investments and the size of those
investments, and a decline in the pace or the size of such
investments may reduce the Group’s revenue.
Many factors could cause a decline in the pace of investment,
including the inability of the Group’s investment professionals to
identify attractive investment opportunities, decreased
availability of capital on attractive terms and the failure to
consummate identified investment opportunities because of
business, regulatory or legal complexities, new regulations,
guidance provided or other actions taken by regulatory
authorities, or uncertainty and adverse developments in the
global economy or financial markets.
The Group competes for investment opportunities for the
Bridgepoint funds, and such competition is based primarily on
the pricing, terms and structure of a proposed investment and
certainty of execution. The market for private equity transactions
has at times been characterised by relatively high prices, which
can make the deployment of capital more difficult.
A failure to deploy committed capital in a timely manner may
have a negative impact on investment performance and the
ability to raise new funds.
Mitigation
The rate of investment is kept under review by senior
management to ensure that it is maintained at an acceptable level.
The Group has ongoing dialogue with its investors and is
sensitive to their concerns regarding investment and realisation
pace. These concerns are taken into consideration when setting
the short and long-term strategy of a fund, and where necessary
consent is sought to modify investment periods to align with the
pace of investment that is reasonably and responsibly achievable.
Personnel and key people
Operational
Change in risk during FY23
h
h
Description
The Group’s personnel, including its investment professionals
and specialist teams, are highly important to the Group’s business
and its strategy implementation, and the market for such persons
is highly competitive. The Group’s continued success is therefore
dependent upon its ability to retain and motivate its personnel
and to strategically recruit new talented professionals.
In particular, the Group depends on the efforts, skill, reputations
and business contacts of its executive management and other
keysenior team members and the information and dealflow
theygenerate.
Mitigation
The Group has competitive reward schemes in place for all
employees, with rewards weighted towards performance and
long-term alignment with fund investors, driving value for the
Group. For senior management, these include a blend of short
and long-term incentives.
The Group performs ongoing succession planning and invests
inleadership development.
Risk management continued
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Information technology andcybersecurity
Operational
Change in risk during FY23
h
h
Description
The Group relies on the secure processing, storage and
transmission of confidential and other information in Bridgepoint
computer systems and networks. Cyber-security incidents and
cyber-attacks have been occurring globally at a more frequent
and severe level and will likely continue to increase in frequency
in the future. As an increasingly global business, the Group faces
various cyber-security threats on a regular basis, including
ongoing cyber-security threats to, and attacks on, information
technology infrastructure that are intended to gain access to
proprietary information, destroy data or disable or degrade or
sabotage systems.
Cyber-security failures, technology failures or data security
breaches could result in the confidentiality, integrity or
availability of data being negatively affected, causing disruption
or damage to the Group’s business.
Mitigation
The Group has in place an internal vulnerability management
programme, as well as critical asset processes to patch critical
vulnerabilities. Phishing testing is performed at least quarterly,
and penetration testing is undertaken annually.
The Group has a disaster recovery plan in place, and all key systems
are hosted in the cloud, providing an inherent level of resilience.
Third-party service providers
Operational
Change in risk during FY23
h
h
Description
Certain of the Group’s funds and Group activities depend on the
services of third-party service providers, including those
providing banking and foreign exchange, professional advisory
services, information technology, insurance broking, depository
and alternative investment management services. The Group
is subject to the risk of errors, failure, or regulatory non-
compliance by such persons, which may be attributed to the
Group and subject it or the Bridgepoint funds to reputational
damage, business disruption, penalties or losses.
Mitigation
The Group ensures appropriate due diligence is undertaken in
respect of third-party service providers prior to appointment,
and appropriate monitoring and oversight of appointed third-
party service providers is undertaken on a periodic basis.
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Strategic ReportBridgepoint – 2023 Annual Report & Accounts
TCFD disclosures
Compliance statement
In this report we set out our climate-related financial disclosures. In accordance with the requirements of Listing Rule 9.8.6(8),
Bridgepoint Group plc has included climate-related financial disclosures consistent with the TCFD recommendations within this Annual
Report. At the time of publication, the Company is compliant with the following disclosures:
− Governance (all recommended disclosures);
− Strategy (all recommended disclosures);
− Risk management (all recommended disclosures); and
− Metrics and targets (recommended disclosures a) and b) only, with work ongoing to define an intermediate target and associated KPIs
for disclosure c)).
In 2024 we plan to continue our progress in reporting against all four pillars of the recommendations.
Governance
a)
Board oversight
of climate-
related risks and
opportunities
(See more on
Governance on
pages 86 to 90
and the ESG
committee
report on
page99)
The Board, assisted by the ESG Committee and the Audit and Risk Committee, is accountable for the Group's
responsible investment strategy in which, climate-related risks and opportunities are factored. The Board is updated at
every meeting by the chairs of the ESG and Audit and Risk Committee and will periodically have deeper discussions
covering specific ESG related projects, performance and initiatives.
The ESG Committee ensures that sustainability considerations, including climate concerns, are integrated into the
Company's strategic and financial planning and monitors ESG performance across the Group and portfolio. Updates
on ESG matters, including as relevant to climate change, are provided to the ESG and Audit and Risk Committees via
management in addition to the regular updates provided by the Chief Executive in his Board briefing.
b)
Management’s
role in
assessing and
managing
climate-related
risks and
opportunities
Adam Jones (CFO) is the Board-level executive sponsor for sustainability matters, whilst our Chief Investment
Officer (CIO), Xavier Robert, is responsible for sustainability matters at the Executive Committee level.
The Executive Committee meets regularly and implements the Group’s sustainability strategy, sets priorities, agrees
sustainability targets and oversees responsible investment procedures and policies. Following the year-end, the
Executive Committee has been replaced by the Group Management Committee and Group Operating Committee,
that will take on the same role.
The responsibility for identifying, assessing, and managing climate-related risks impacting Bridgepoint’s operations
on a day-to-day basis is led by the Sustainability team whose responsibilities include managing risks associated with
the Company’s investment activities. The Sustainability team, with support from the Legal and Compliance team
and input from relevant business units, is responsible for developing a register of climate-related risks and
opportunities as well as devising suitable mitigation strategies for any material risks identified. In addition, the
Sustainability team provides support to the Board, its committees, and the Executive Committee (now the Group
Management Committee and Group Operating Committee) in carrying out their responsibilities and assists in the
development and implementation of the Group’s sustainability strategy. The Sustainability team reports directly to
the CIO and the ESG Committee while the Legal and Compliance team provides regular updates to the Audit and
Risk Committee on risk-related matters.
We are committed to supporting the transition to a low carbon economy
and journey to net zero in line with the Paris Agreement and reporting
our progress transparently in line with the Task Force on Climate-related
Financial Disclosures (“TCFD”) recommendations.
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Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Strategy
Identifying
climate-related
risks and
opportunities
over the short,
medium, and
long-term
The climate-related risk for the Group is low.
In 2023 we conducted a climate scenario analysis covering 100% of our private equity portfolio and 58% of our
private debt AUM focusing on our most recent funds and those with the greatest management influence. The
analysis used three different climate scenarios, which are aligned to the Financial Conduct Authority’s (FCA) ESG
Sourcebook:
− 2°C orderly: aligned with Representative Concentration Pathway (RCP) 2.6 and assumes a temperature rise of
<2°C by 2100
− 2°C disorderly: aligned with RCP 2.6 and assumes a temperature rise of <2°C by 2100, assuming that this is
achieved through a period of inaction followed by more significant decarbonisation policies implemented from
2030 onwards
− 4°C “hot house”: aligned with RCP 8.5 and assumes a temperature rise of c.4°C by 2100
− These scenarios have been assessed across three distinct timeframes:
− Short-term: 2025
− Medium-term: 2030
− Longer-term: 2050
To understand the potential transition risks and opportunities (policy and legal, technology and market) for
Bridgepoint, the assessment used an integrated assessment model (IAM) scenario analysis tool, which comprises a
computable general equilibrium (CGE) model, an energy transitions model, and an emissions projections model
(namely, the Model for the Assessment of Greenhouse Gas Induced Climate Change, MAGICC).
Physical risk analysis leveraged climate modelling data from meteorological data specialists, the Cross Dependency
Initiative (XDI) and to quantify potential exposure to physical risks, a “productivity loss” metric was applied that
utilises damage curves similar to those used in the insurance industry. The productivity loss metric quantified the
potential lost revenue due to operational disruption resulting from climate change.
The assessment concluded that, overall, our private equity and credit portfolio is exposed to relatively low climate
risk and therefore, the earnings of portfolio companies are not modelled to be significantly impacted under 2°C and
4ºC degree scenarios (more detailed results can be found in the metrics and targets section). We are committed to
repeating this exercise regularly, covering both the Group and portfolio companies as both develop and change.
We have used the Implied Temperature Rise (ITR) measure to help understand the key barriers to achieving
Bridgepoint’s net zero target. The ITR analysis pointed out that Bridgepoint’s private equity and credit portfolios are
currently marginally misaligned to 2°C or 1.5°C pathways, and indicated a need to accelerate the implementation of
our climate programme which will help tackle portfolio emissions. (More detailed results on ITR is available in the
metrics and targets section below).
The above assessment has been carried out for our existing portfolio. However, pre-investment ESG due diligence is
perhaps the most important stage in our investment cycle for identifying climate related risks. For example, during
the due diligence process for private equity, our investment teams, in collaboration with external sustainability
advisers, identify material risks, including climate-related risks, and develop recommendations for suitable control
measures. The due diligence process accounts for both physical and transitional climate-related risks, including but
not limited to climate regulations mandating measurement and reduction of scope 1, 2 and 3 Greenhouse Gas
(GHG) emissions, compliance obligations related to country-specific emission trading schemes, risk of flooding to
key operational locations and associated impacts on supply chains.
75
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
TCFD disclosures continued
Strategy continued
Impact of
climate-related
risks and
opportunities
The direct impact of climate-related risks on the Group’s operations is considered to be limited. Therefore, while
climate-related impacts are considered within our risk management system, they are not a principal risk.
Based on the scenario analysis previously outlined, both physical and transition risks are likely to be limited for
Bridgepoint’s investment activities. This is largely driven by the geographic and sectoral composition of the
companies in which Bridgepoint invests:
− Both credit and private equity portfolios are primarily comprised of European businesses. These markets have
typically set transition plans and clear NDC (Nationally Determined Contribution) targets and climate action is
therefore already incorporated in the baseline ‘BAU’ scenario. As such, the difference in outcomes between a “hot
house” and a 2
O
C scenario is slight.
− From a sector standpoint, Bridgepoint has limited exposure to heavy industry. As a result, most investments have
relatively limited barrier to change in relation to decarbonising their operations.
In terms of transition risks, given the relatively low carbon intensity of the portfolio, the financial impact to the
portfolio companies modelled is typically low and attributable to changes in revenues or costs of goods sold (as
opposed to high carbon costs). Physical risk exposure is also modelled to be low in the medium-term on the earnings
of companies in both the private equity and credit portfolios.
The resilience
of the
organisation
and strategy
Taking into account the climate scenario analysis previously described, the risks identified and the processes we
have established to manage them, we consider the Group to be reasonably resilient to the impact of climate change.
Moreover, relevant disaster recovery policies are in place to ensure the safe and continued operation of our offices
and IT infrastructure should a material climate change related event take place.
As a result of incorporating ESG due diligence into our pre investment screening processes the risk associated with our
portfolios is also limited. In aggregate portfolio risk is further reduced by diversification across geographies and sectors.
Risk management
Processes for
identifying
and assessing
climate-related
risks
(See more
onrisk
management
on pages 68
to73)
Identification of climate risks forms part of our overall approach to risk management.
The Legal and Compliance team, which reports to the Audit and Risk Committee and the Executive Committee,
periodically undertakes a process to identify the Group’s key risk exposures, including climate-related risks. As risks
are continually evolving, the Compliance and Sustainability teams regularly screen ESG regulatory matters that are
material to Bridgepoint, including those related to climate risk and undertake horizon scanning to identify emerging
risks. Any material issues identified will be escalated to the Executive Committee, Audit and Risk Committee and
ESG Committee as appropriate.
We consider our biggest exposure to climate issues to be in our investment portfolio and this is where we continue
to focus our attention. As developed in the strategy section, in 2023 we have conducted a comprehensive climate-
related risk mapping exercise to develop a more granular overview of our climate related risks. The results of this
assessment will be integrated into the Company’s central risk register to ensure climate-related risks continue to be
considered in the Company’s strategic and financial planning.
76
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Processes for
managing
climate-related
risks
(See more on
risk
management
on pages 68 to
73 and a list of
relevant
industry bodies
and ESG
integration into
the investment
process is
included on
pages 42 to 47)
At the Group level, sustainability and climate-related risks are included within the central risk management system. All
enterprise risks are assigned an owner, to ensure oversight of the risk management process. Where specific technical or
legal expertise is required, the Group is supported by our extensive network of sustainability and legal advisers,
industry associations and working groups. Mitigation strategies, and control measures are identified for each risk, and
an evaluation is undertaken of the current control environment.
Whilst the direct environmental impact from Bridgepoint's own operations is considered to be limited, we are working
on reducing our GHG footprint through the implementation of office emission reduction initiatives, supplemented by
verified carbon credits.
Across our investment strategies, we consider active engagement an essential component of Bridgepoint’s approach to
sustainability risk management. Throughout the investment period, we support and collaborate with portfolio
companies’ management teams to implement best-practice sustainability processes, policies and risk management
systems. Within our private equity portfolio, we work with portfolio company management teams to ensure
appropriate ESG governance is in place at both Board and executive team level. Furthermore, the team ensures
portfolio companies establish appropriate sustainability and carbon reduction initiatives and uses specific sustainability
KPIs to monitor the companies’ progress. We also leverage our network of sustainability advisers to help portfolio
companies to identify and manage material sustainability related risks.
In 2023, we enhanced the management of climate related risks through the implementation of our climate programme.
The programme enhances risk management through ensuring proper GHG accountability and science-based target
setting.
Within our credit strategy, where possible, Bridgepoint provides portfolio companies with financial incentives and
penalties in the form of ESG margin ratchets. The margin ratchets include specified sustainability targets relevant to the
business. Thereby, management of sustainability-related risks remains a focal point throughout our investment period.
Integration of
climate-related
risks into
overall risk
management
(See more on
risk
management
on pages 68 to
73)
Climate-related risks are integrated into the Group’s risk management framework, which is further detailed on pages 68
to 73.
A similar risk management process is in place for our investment portfolio, monitored and managed by the Sustainability
and Investment teams with oversight from the ESG Committee. Any material climate risks identified over the course of
pre investment due diligence are reviewed by the relevant investment committees, with our Investment teams
supporting portfolio companies during investment to develop sustainability roadmaps, monitor KPIs and report on
progress. To encourage detailed disclosure on sustainability matters, all portfolio companies are required to provide at
least annually a comprehensive account of their sustainability performance, including with respect to management of
climate-related risks. The climate programme described in the previous section, supports portfolio companies in gaining
a more granular understanding of their GHG footprint and in developing credible emission reduction plans which
provide a degree of risk mitigation.
Where the climate programme at a portfolio company is in the early stages of implementation, we have estimated the
financed emissions of our private equity and credit portfolio using PCAF methodology. Please see our disclosure under
metrics and targets.
77
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
TCFD disclosures continued
Metrics and targets
Metrics used
to assess
climate-related
risks and
opportunities
Bridgepoint has been monitoring the Group’s scope 1, 2 and 3 emissions since 2019. We have disclosed the GHG
emissions related to our investment portfolio since 2022, calculating this in line with the GHG Accounting &
Reporting Standard for the Financial Industry, developed by PCAF.
To help enable portfolio companies to calculate their GHG footprint, in 2023 we launched a centralised Climate
Programme. The programme helps portfolio companies both in the calculation and verification of GHG emissions
and also the development of tailored GHG emission reduction plans. We believe that this programme will make a
material difference in the robustness of the reporting of our financed scope 3 emissions.
Alongside GHG emissions, we track a broad range of sustainability and climate-related metrics across our private
equity and credit investment activities.
In private equity portfolio companies, annual KPIs include energy consumption, adoption of climate-related policies
and the implementation of appropriate governance and risk structures, as well as other company specific KPIs (e.g.
water consumption, hazardous and non-hazardous waste production, biodiversity and life-cycle assessment) that are
monitored throughout the investment period to ensure alignment to Bridgepoint’s sustainability standards.
In our private credit business, we have established an annual portfolio company scoring system, which enables us to
assess sustainability performance against over 30 KPIs, including environmental metrics such as consumption of
renewable energy and GHG emissions reduction.
In terms of specific metrics used to assess climate related risks, we have also used both CVaR (Climate Value-at-Risk)
and ITR. Detailed below.
CVaR is a forward-looking metric used to measure the climate-related risks and opportunities within an investment
portfolio.
− In the medium-term (2030), the climate transition is modelled to have a low negative impact on the earnings of
the private equity portfolio of -0.2% and -0.1% under the 2°C disorderly and orderly scenario respectively, when
compared to a business as usual (BAU) “hot-house” scenario. Similar to private equity, the credit portfolio is
modelled to have earnings 0.6% lower and 1% lower in 2030 under the orderly and disorderly scenario
respectively relative to the BAU scenario.
− In the longer-term (2050), earnings for the private equity portfolio are modelled to be 1% higher under the 2°C
scenarios compared to the BAU scenario. The credit portfolio is modelled to continue to experience a reduction in
potential earnings (compared to BAU) of 0.3% and 0.5% for the orderly and disorderly scenarios respectively.
ITR is a forward-looking metric that translates the output of longer-term scenario analysis into an estimated change
in temperature, expressed as a numeric degree rating.
− For private equity, in the short and medium-term, the portfolio is projected to be marginally misaligned to a 2°C
scenario.
− For private debt, the portfolio is projected to be marginally misaligned to a 2°C carbon scenario.
78
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
Bridgepoint
Group
emissions
and financed
emissions
The method used for calculating GHG emissions is in line with the GHG Protocol Corporate Accounting and
Reporting Standard and ISO 14064-1. We have included all sites and activities which fall under our operational
control boundary.
The calculation includes:
Scope 1 emissions, which include an estimation of emissions from cooling systems within the offices Bridgepoint
occupies as well as mobile and stationary combustion.
Scope 2 emissions, which include purchased electricity as well as heat procured for our offices. They have been
calculated using the location-based approach as well as the market-based approach to illustrate our efforts to procure
renewable electricity since 2020.
Scope 3 emissions, which include:
− Category 1 (purchased goods and services) based on a combination of the average-data and spend-based
methodologies. In previous years the calculation had primarily included spend related to IT equipment, but in
2023 this has been extended to other categories such as advisory fees, catering services etc.
− Category 3 (fuel and energy) derived from the energy use in 2023.
− Category 6 (business travel) based on expenditure and distance travelled for air travel, rail travel, taxis, and rental
cars, and on the number of nights stayed or expenditure on hotels.
− Category 7 (commuting) based on mode of transport, distance travelled and number of days to the office collected
through a survey conducted during 2023.
− Category 15 (investments) based on calculations in line with PCAF methodology. These are shown separately in
the following section.
− Categories 2, 4, 8, 10, 11, 12,13,14 are either not relevant or not significant and have not been calculated.
Below are the Group’s emissions (tCO
2
e):
Reporting year 2023 2022
Emissions Scope UK Rest Of World Total UK Rest Of World Total
Total energy consumption (kWh) 434,361 855,391 1,289,752 584,954 861,498 1,446,452
Total energy from renewable sources (kWh) 267,193 409,426 676,619 196,885 387,009 583,894
% of energy from renewable sources 62% 48% 52% 34% 45% 40%
Scope 1 (tCO
2
e) 12 18 30 62 35 97
Scope 2 – location-based (tCO
2
e) 82 175 258 104 165 269
Scope 2 – market-based (tCO
2
e) 30 97 127 66 95 162
Total Scope 1+2 – location-based (tCO
2
e) 94 193 288 166 200 366
Total Scope 1+2 – market-based (tCO
2
e) 42 115 157 128 131 258
Emissions intensity for Scope 1+2
– locations- based (tCO
2
e/FTE) 0,41 1,26 0,75 0,76 1,38 1,01
Emissions intensity for Scope 1+2
– market-based (tCO
2
e/FTE) 0,18 0,75 0,41 0,59 0,90 0,71
Scope 3 emissions (tCO
2
e) N/A N/A 4,415 N/A N/A 1,713
79
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
TCFD disclosures continued
Metrics and targets continued
Bridgepoint
Group
emissions
and financed
emissions
continued
Estimated emissions from financing activities.
We have estimated portfolio company emissions for our private equity portfolio and our selected credit funds (covering
58% of private debt AUM) using the PCAF methodology. For credit in 2022, BCO IV and BDL III were included and
in 2023, we have extended the scope to include BDL II and a number of SMAs. We also calculated the weighted average
carbon intensity (WACI), measuring tonnes of CO
2
e produced per million dollars of revenue.
2023 2022
Strategy
Total emissions
(tCO
2
e)
WACI (tCO
2
e/M$)
(Scope 1, 2 and 3)
Total emissions
(tCO
2
e)
WACI (tCO
2
e/M$)
(Scope 1, 2 and 3)
Private Equity 1,630,824 464 892,638 191
Private Credit 340,488 190 114,612 161
Comparisons with the previous reporting year
Our Scope 1 emissions represent 30 tCO
2
e in 2023 compared to 97 tCO
2
e in 2022. Whilst we have continued to
use the same externally managed service for calculating emissions, our approach continues to be refined and
improved and it was determined that the previous year’s figures associated with cooling were overestimated.
Scope 2 location and market-based emissions decreased by 4% and 21% respectively vs 2022. This was driven by
moving the London office to a new, BREEAM certified, more energy efficient building.
Scope 3 emissions represent 4,415 tCO
2
e compared to 1,713 tCO
2
e in 2022. This is the result of enhancing our
approach to reporting, including the addition of new categories such as commuting and energy related activities and
extending the scope of other categories such as purchased goods and services. Our scope 3 emissions remained
primarily the result of business air travel which accounted for 67% of scope 3 emissions, whilst 26% was the result
of purchased goods and services.
For financed emissions (category 15), the GHG emissions account for 1,630,824 tCO
2
e in 2023 for private equity
relative to 892,638 tCO
2
e in 2022. This change is the result of improving the PCAF data quality used in the calculation:
in 2022, 100% of the financed emissions were estimated using sector and region-based emissions factors (PCAF data
quality score 4). In 2023, we have incorporated company reported GHG emissions, following the GHG protocol
standard for 12 companies, which represents approximately 25% of private equity AUM (PCAF data quality score 2).
For private credit, GHG emissions accounted for 340,488 tCO
2
e in 2023 vs 114,612 tCO
2
e in 2022 as the result of the
inclusion of additional funds in the calculation and the use of reported scope 1 and 2 emissions for 31 credit portfolio
companies. In 2024 and beyond we aim to increase the use of reported emissions and calculate our financed emissions
with data quality score 1 and 2 to continue improving the accuracy of the portfolio data we disclose.
Targets,
performance,
and key
priorities
At a Group level we aim to achieve the following:
Procure 100% of the Group’s office electricity from renewable sources, either through ‘green’ electricity tariffs or through
the purchase of energy attribute certificates. We are pleased to report that we have satisfied this target since 2020.
Offset our residual emissions by purchasing carbon credits in certified nature-based investment schemes which are in
line with the “beyond value chain mitigation” recommendations from the Science-Based Targets initiative as part of
their Net-Zero standard.
Reduce our emissions through initiatives such as our UK employees benefiting from electric vehicle lease and cycle to
work schemes as part of their benefits package, and moving the London office to building BREEAM rated ‘Excellent’.
At portfolio level, we have set a long-term ambitious target of achieving net zero emissions in our portfolio by 2040.
We recognise that this is an ambitious agenda, and we will take into consideration the maturity of our portfolio
companies’ sustainability strategies, offering them the necessary level of support as they work towards improving
their sustainability performance.
Further demonstrating our drive to invest responsibly, we have committed to aligning all our new private equity and
private debt funds to Article 8 of the SFDR. BE VII, BDC V and BG II are aligned to Article 8 and have dedicated
climate objectives. Within the credit business, BDL III, BDL IV and BCO IV are also aligned to Article 8.
80
Bridgepoint – 2023 Annual Report & Accounts Strategic Report
The Group complies with the non-financial reporting requirements
contained in sections 414CA and 414CB of the Companies Act
2006. Details of our business model are included on pages 24 to
31 and our principal risks and how we manage those risks are
included on pages 68 to 73.
Employee matters
At Bridgepoint we firmly believe that our people are our greatest asset
From the recruitment of diverse and talented professionals
whoexhibit a passion for performance and drive, to the development
of staff through hands-on learning and extensive training, we strive to
foster a collaborative and inclusive environment. We are committed
tobeing an equal opportunities employer and oppose all forms of
unlawful discrimination. As such, we ensure our overall levels of
remuneration are without gender bias and are designed to attract,
develop and retain talented employees.
Employee diversity
As at 31 December 2023, the Group had 391 permanent
employees. Of those that provided data, 212 were male, and 177
were female. There are efforts to increase the pipeline of future
female leaders at the firm, such as a 50:50 International Associate
Programme target split of men and women, and a targeted increase
in the number of women in the investment team to 30% by 2025.
For more information on DEIB see the People section on pages 32
to 35.
Human rights
We are committed to preventing any form of slavery and human
trafficking. We seek to ensure there are no such practices in our
business and supply chain. Periodically, Bridgepoint reinforces
policies against modern slavery and human trafficking through
firm-wide training.
Our latest statement on modern slavery can be found on the
Company’s website.
Whistleblowing
The Group has a whistleblowing policy that encourages colleagues to
report suspected wrongdoing as soon as possible, and an externally
managed whistleblowing reporting system is in place that allows
colleagues to raise concerns in confidence. Whistleblowing matters
raised are escalated as appropriate to the Audit and Risk Committee.
Anti-bribery and corruption
We are committed to ethical business practices across all our
operations and investments. Our policy is never to offer, request or
receive bribes, and to refuse any request to pay them. We report any
instances of bribery or corruption we discover to relevant regulators
and authorities as appropriate. Our investment approach includes a
detailed review of bribery and corruption matters to ensure we do not
invest in companies or projects that engage in corruption or appear to
have a high risk of such behaviour. We investigate and deal with all
reported or identified cases of corruption in line with our policy,
which applies to all entities within the Group wherever we do
business.
Environmental matters
The Group’s disclosures in accordance with the Streamlined
Energy and Carbon Reporting requirements are set within the
TCFD section out on pages74 to 80.
Non-financial and sustainability information statement
81
Strategic ReportBridgepoint – 2023 Annual Report & Accounts
William Jackson
Chairman
Raoul Hughes
Chief Executive
Appointment
Appointed Managing Partner in 2003 and Chairman in June 2021
Skills and experience
William has worked extensively on private equity transactions across
Europe over a 30-year career and has served on numerous boards.
William is also a Non-Executive Director of Berkeley Group, the
FTSE 100 property company. He is a graduate of Oxford University.
Other significant appointments
− Non-Executive Director, The Berkeley Group Holdings plc
Appointment
Appointed Vice Chair in 2016 and Chief Executive
in October 2023
Skills and experience
Raoul joined Bridgepoint in 1988 and has over 30 years of
experience within the alternative assets market and has been
extensively involved in private equity investments across Europe.
Raoul is Chair of Bridgepoint’s Group Management Committee
and Group Operating Committee.
Raoul has a degree in Business Administration from the University
of Bath where he also supports a number of PhD programmes.
Board of Directors
82
Bridgepoint – 2023 Annual Report & Accounts Governance
Adam Jones
Chief Financial Officer
and Chief Operating Officer
Archie Norman
Senior Independent Director
Appointment
Joined the Group in 2018 and appointed in June 2021
Skills and experience
Prior to Bridgepoint Adam held a number of global CFO roles,
including most recently at Pret A Manger and previously
All3Media, NBC News in New York and Universal Studios.
Adam started his career with leading accounting and professional
services firm PwC and then spent nine years at IMG, the global
sports management group, in a number of roles up to Senior
International Vice President.
Adam has an Honours degree in Accounting from the University
of Birmingham.
Appointment
Appointed in June 2021
Skills and experience
Archie has a breadth of business experience and an extensive track
record in business change, having led the transformation of a
number of major UK businesses. He has served on the board of a
number of publicly listed companies in the UK and internationally.
He is currently Chairman of Marks and Spencer plc and of Signal
AI and has served as Chairman of ITV plc and of Lazard UK. He
has also served as Lead Non-Executive Director at the Department
of Business, Energy and Industrial Strategy. Amongst other
positions he has held during his career, Archie has previously
served as Chief Executive and Chairman of ASDA plc and Finance
Director of Kingfisher plc. He has served as a Non-Executive
Director on the Board of British Rail, Railtrack and Geest, and has
also served as a Member of Parliament in the House of Commons
of the Parliament of the United Kingdom for eight years.
Other significant appointments
− Chairman, Marks and Spencer plc
Audit and Risk Committee
Key
Nomination Committee
Remuneration Committee
ESG Committee
Committee Chair
83
GovernanceBridgepoint – 2023 Annual Report & Accounts
Angeles Garcia-Poveda
Independent Non-Executive Director
Carolyn McCall DBE
Independent Non-Executive Director
Appointment
Appointed in June 2021
Skills and experience
Angeles is an international executive with extensive experience
ingovernance.
Angeles is an international executive with extensive experience in
governance. She is currently Chairperson of the Board of Legrand
SA, the CAC 40 global specialist in electrical and digital building
infrastructure, where she has been lead independent director and
chaired the Nominations, Governance and Remuneration committees.
She is an independent director at Edenred, listed in the French CAC
40 index, and sits on the Board of Directors of Puig and the French
Institute for Sustainable Finance. She also spent 14 years with the
Boston Consulting Group, where she worked as a consultant in Madrid
and Paris prior to another 15 years with Spencer Stuart where she
was part of the global Management Team and served as a Director.
Other significant appointments
− Chairperson of the Board, Legrand SA
− Non-Executive Director, Edenred SE
Appointment
Appointed in July 2021
Skills and experience
Carolyn is a seasoned chief executive with a strong track record
invalue creation and business transformation.
She is currently Chief Executive of ITV plc, having been Chief
Executive of easyJet for nearly eight years. She has also held
various commercial and management roles at the Guardian Media
Group, including CEO of the Guardian and Observer before
becoming Group CEO in 2006. She has served on the Boards of a
number of publicly listed global companies, including New Look,
Tesco, Lloyds Bank Group and Burberry, where she was the SID.
She has also served as a Director of the Department of Business,
Energy and Industrial Strategy and has been a Trustee of the Royal
Academy of Arts for 8 years.
Other significant appointments
− Chief Executive, ITV plc
Board of Directors continued
84
Bridgepoint – 2023 Annual Report & Accounts Governance
Cyrus Taraporevala
Independent Non-Executive Director
Tim Score
Independent Non-Executive Director
Appointment
Appointed in January 2023
Skills and experience
Cyrus is a highly respected industry leader in asset management
with more than 30 years of experience, having successfully led and
grown global businesses of scale.
He is currently a Non-Executive Director of Shell plc and
previously he was President and Chief Executive Officer of State
Street Global Advisors from 2017 to 2022. Prior to joining State
Street, Cyrus held numerous leadership roles in asset management
including at Fidelity, BNY Mellon, Legg Mason and Citigroup.
Earlier in his career, Cyrus was a partner at McKinsey & Company,
based in New York and Copenhagen.
Cyrus was a founding member of the New York Exchange Board
Advisory Council, which proactively addresses the critical need for
inclusive leadership on corporate boards by connecting diverse
candidates with companies seeking new directors. He serves as a
Board member of two non-profits: the Trustees of Reservations, a
Massachusetts-based conservation organisation, and GBH, a public
media producer, distributor, broadcaster and content creator.
Other significant appointments
− Non-Executive Director, Shell plc
Appointment
Appointed in June 2021
Skills and experience
Tim has significant experience in the rapidly evolving global
technology landscape as well as many years of engagement with
both mature economies and emerging markets.
He is Chairman of British Land, having been a Non-Executive
Director since 2014 and previously serving as Chair of its Audit
Committee. He is the Deputy Chair, Senior Independent Director
and Chair of the Nomination Committee at Pearson plc and is
Non-Executive Director at the Football Association. Tim was
formerly a Non-Executive Director of HM Treasury and CFO of
ARM Holdings plc for 13 years and held senior financial positions
at Rebus Group Limited, William Baird plc, LucasVarity plc and
BTR plc. From 2005 to 2014, he was a Non-Executive Director
and Chair of the Audit Committee at National Express Group
PLC, including time as interim chairman and six years as senior
independent director.
Other significant appointments
− Chairman, The British Land Company plc
− Non-Executive Director, Pearson plc
Audit and Risk Committee
Key
Nomination Committee
Remuneration Committee
ESG Committee
Committee Chair
85
GovernanceBridgepoint – 2023 Annual Report & Accounts
Senior Independent
Director’s governance
review
→
Archie Norman
Senior Independent Director
Stakeholder engagement
A full review of stakeholder engagement can be found in the
Strategic Report on pages 36 to 41.
Corporate Governance Code compliance
The governance report explains the key features of the
Group’sgovernance framework. The Board remains committed
tomaintaining high standards of corporate governance, and the
Group complies with substantially all of the provisions of the
Corporate Governance Code. Further details are set out on
page90.
Board evaluation
In accordance with the Corporate Governance Code, the 2023
Board evaluation was externally facilitated. The Board evaluation
concluded that the Board and its committees were operating
effectively and a number of opportunities to enhance operations
were identified. Further details are contained in the Nomination
Committee report.
Annual General Meeting
The Company’s AGM will take place on Wednesday, 15 May
2024 and the notice of meeting and related explanatory notes
willbe distributed to shareholders in due course.
Archie Norman
Senior Independent Director
Find out more: bridgepoint.eu
On behalf of the Board, I am pleased
topresent the Group’s governance
reportfor 2023.
In 2023 the Board conducted a series of in-depth reviews of business
strategy and performance. A key area of focus was delivery of the plan
to extend into new asset classes and in particular the ECP transaction,
which will add infrastructure investing to the Bridgepoint platform and
will drive a material increase in AUM. This represents the first step in
the delivery of the strategy announced at the time of the IPO in 2021.
In addition, the Board discussed the financing arrangements for the
Group and detailed updates on the Private Equity and Credit
businesses. The Board seeks to engage with colleagues across the Group,
and one of the Board meetings was held in Bridgepoint’s Frankfurt
office, where a presentation on DACH operations and strategy was
given.
Board composition
On 1 October 2023 the roles of Chair and Chief Executive were
split, with Raoul Hughes becoming Chief Executive and joining
the Board, and William Jackson continuing as Chairman.
Following announcement of the ECP transaction, the Board
concluded that it was timely to evolve the governance of the
Group, reflecting the increased scale of the business. No Non-
Executive Directors were appointed during 2023, although efforts
to identify candidates that would naturally add to the Board’s
expertise and breadth of thinking are continuing. It is expected
that at least one additional Non-Executive Director will be
appointed during 2024. In making this appointment, the focus
remains on ensuring that the relevant candidate contributes to the
overall diversity of viewpoints within the Board, as well as the mix
of skills and knowledge. Further details are contained in the
Nomination Committee report.
86
Bridgepoint – 2023 Annual Report & Accounts Governance
1. Our governance framework
Below is a summary of the Group’s governance structure.
Board
Responsible for providing leadership, including
setting the Group’s purpose, strategy and values,
and promoting its long-term sustainable success.
A full schedule of matters reserved for the Board
isavailable at bridgepoint.eu
Committees
The Board has established the following committees
toassist it.
The terms of reference for the Audit and Risk,
Remuneration, Nomination and ESG Committees
areavailable at
bridgepoint.eu
Audit and Risk Committee
The Audit and Risk Committee oversees external
and internal audits, and the Group’s financial
reporting and disclosure. It also oversees the Group’s
risk management framework and system of internal
controls.
Remuneration Committee
The Remuneration Committee determines the policy
for Director remuneration and sets the remuneration
of Executive Directors and senior management.
Nomination Committee
The Nomination Committee evaluates the
composition and performance of the Board and
senior executive team. It ensures that plans are in
place for orderly succession for appointments to the
Board and senior management, and considers
candidates for Board positions.
ESG Committee
The ESG Committee assists the Board in its oversight
of environmental, social and governance matters.
Disclosure Committee
The Disclosure Committee evaluates the need for
announcements to the market and signs off and
approves the release of RNS announcements
relating to financial results or other material
information. The Disclosure Committee comprises
Raoul Hughes, William Jackson, Adam Jones and
Archie Norman.
Chief Executive,
Group
Management
Committee &
Group Operating
Committee
The Board delegates day-to-day responsibility for running the Group to the Chief Executive. The Chief
Executive is assisted in this by the Group Management Committee, which oversees implementation of the
overall strategy of the Group as determined by the Board, and the Group Operating Committee, which
manages day-to-day operations and the Group’s professional services. Prior to 1 January 2024, the Chief
Executive was assisted in these responsibilities by the Executive Committee which was replaced by the
Group Management Committee and the Group Operating Committee described above.
Corporate governance report
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GovernanceBridgepoint – 2023 Annual Report & Accounts
2. Board roles and responsibilities
The Board provides entrepreneurial leadership and direction to Bridgepoint. The Board promotes the long-term sustainable success
ofBridgepoint, generating value for shareholders and contributing to wider society. The Board is also responsible for oversight
oftheGroup’s governance and internal control. A full schedule of matters reserved for the Board is available at bridgepoint.eu
Broadly, key executive and non-executive responsibilities are divided as follows:
Chairman
− Leads the Board and is responsible for the overall effectiveness of the Board and its committees
− Sets the Board’s agenda, approving strategy, monitoring financial and operational performance
− Ensures good governance
− Promotes a culture of openness and debate on the Board, facilitating effective contribution from Non-
Executive Directors
− Ensures the Board as a whole has a clear understanding of the views of the Company’s shareholders
Chief Executive
− Runs the Group on a day-to-day basis and implements the Board’s decisions
− Develops strategies for consideration by the Board, alongside the Group Chief Financial Officer and
executive management
− Leads the Group Management Committee and Group Operating Committee
− Along with the Group Chief Financial Officer, represents the Group to external stakeholders
Group Chief
Financial
Officer and
Chief Operating
Officer
− Provides strategic financial leadership to the Group and runs the finance function on a day-to-day basis
− Manages the operating platform of the Group
− Develops strategies for consideration by the Board, alongside the Chief Executive and executive management
− In conjunction with the Chief Executive, represents the Group to external stakeholders
− Leads the development of annual budgets for Board approval
Corporate governance report continued
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Bridgepoint – 2023 Annual Report & Accounts Governance
Board roles and responsibilities continued
Senior
Independent
Director
− Acts as a sounding board for the Chairman
− Is available to shareholders if they have concerns about contact with the Chairman, Chief Executive or
Group Chief Financial Officer through normal channels, or if such contact has failed to resolve the
relevant issues
− Leads meetings of the Non-Executive Directors at least annually to appraise the Chairman’s performance
Non-Executive
Directors
− Bring special expertise to the Board
− Constructively challenge and hold to account the Executive Directors against agreed performance objectives
− Monitor the delivery of the strategy within the risk and control framework set by the Board
− Monitor the integrity and effectiveness of the Group’s financial reporting, internal controls and risk
management systems
Company
Secretary
− Responsible for advising, in conjunction with the Group General Counsel, on legal, governance and listing
matters at the Board level and assisting the Board in all governance-related matters
− Provides support to the Board and its committees, ensuring that it has the resources required
to operate effectively
− Maintains the books and records of the Group, and prepares minutes of Board meetings
3. Board activities
During 2023, the Board met eight times and among other areas discussed:
− the ECP transaction, including integration topics;
− updates on the performance of each of the Group’s strategies and funds, as well as the fundraising process for funds
currently in the market;
− entry into a new revolving credit facility;
− engagement with the Company’s shareholders;
− Bridgepoint’s DACH strategy and operations;
− the implications of generative AI;
− the establishment of the share buyback programmes;
− financial reporting matters and approval of the Group’s 2022 Annual Report and 2023 interim results;
− the 2024 budget, and progress against the 2023 budget;
− shareholder and proxy adviser feedback; and
− legal and governance updates.
Board meetings have standing agenda items which ensures that key aspects of the business are given due consideration.
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GovernanceBridgepoint – 2023 Annual Report & Accounts
The attendance at Board and Committee meetings in 2023 is set out below, along with the number of meetings attended by individual
Directors, and the total meetings that they were entitled to attend.
Name Board Audit and Risk Remuneration Nomination ESG
William Jackson 7/7 – – 4/4 –
Raoul Hughes 1/1* – – – –
Adam Jones 7/7 – – – –
Angeles Garcia-Poveda 7/7 – 6/6 4/4 2/2
Archie Norman 7/7 5/6 5/6 4/4 –
Cyrus Taraporevala 7/7 6/6 6/6 – –
Dame Carolyn McCall 7/7 6/6 – 4/4 2/2
Tim Score 7/7 6/6 – 4/4 –
* Raoul joined the Board on 1 October 2023.
4. Culture
The Group’s core values of ‘We do what we say’, ‘We do the right thing’ and ‘We act with intelligence and humility’ underpin a strong,
professional and inclusive culture. The Board had a number of opportunities to monitor and review the Group’s culture throughout the
year including holding Board meetings in several Bridgepoint offices around the network, the employee engagement survey and ad hoc
meetings between colleagues and Directors. The Board recognises the contribution of Bridgepoint’s unique culture to the success of the
business and is satisfied that it is aligned with the Company’s purpose, values and strategy. No specific corrective action was requested
ofmanagement during the year.
5. Conflicts of interest
In accordance with the Company’s Articles the Board has a formal system in place for Directors to declare conflicts of interest and for
such conflicts to be considered for authorisation.
In circumstances where a potential conflict arises, the Board (excluding the Director concerned) will consider the situation and either
authorise the arrangement in accordance with the Companies Act 2006 and the Company’s Articles or take other appropriate action.
All potential conflicts authorised by the Board are recorded in a register, which is maintained by the Company Secretary. Directors have
a continuing duty to update the Board with any changes to their conflicts of interest.
6. Compliance with the Corporate Governance Code
The Company is subject to the 2018 Corporate Governance Code for the year ended 31 December 2023, which is publicly available
atwww.frc.org.uk. The Company has, during 2023, applied the principles of, and complied with the provisions of, the Corporate
Governance Code, subject to one exception.
Provision 9 of the Corporate Governance Code recommends that, on appointment, the Chair of a company should be independent
when assessed against the circumstances set out in provision 10, and that the roles of the Chair and Chief Executive should not be
exercised by the same individual. In October 2023, Raoul Hughes became Chief Executive with William Jackson continuing as Chairman.
William was not independent on appointment. The Nomination Committee determined that William continuing as the Group’s Chairman
would be in the best interests of the Group. William has been engaged with the Group since 2000 and has been Managing Partner since
2003, and therefore provides stability andcontinuity through his detailed understanding of the Group’s operations and the sectors in
which it operates.
Corporate governance report continued
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Bridgepoint – 2023 Annual Report & Accounts Governance
Nomination
Committee report
→
Archie Norman
Chair of the Nomination Committee
Succession planning
The separation of the Chair and Chief Executive roles was an
important evolution in Bridgepoint’s governance, increasing the
executive expertise on the Board. During the year the Committee
reviewed and discussed long-term succession planning for executives
and other members of senior management, as well as the influx
oftalent that will follow the ECP acquisition.
Board evaluation
In 2023 The Effective Board LLP facilitated the evaluation of the
Board and each of its committees. The Effective Board LLP has
noconnection to the Group or individual Directors.
The Board evaluation concluded that the Board and its committees
were operating effectively, but a number of opportunities to
enhance operations were identified, including:
− holding a longer Board-level strategy day during 2024 to review
and refine the Group’s strategy following the ECP transaction;
− continued scheduling of deep-dive presentations from business
units to the Board; and
− the development of a dashboard of key KPIs to help the Board
to quickly understand the performance of the Group.
Senior management and direct reports
As at 31 December 2023, of the 12 members of the Executive
Committee, one was a woman, and of the 56 direct reports to
members of the Executive Committee, 13 were women. There is a
continuing focus on improving female representation in senior
levels of the business, including through initiatives such as a
women’s leadership development programme.
As a longer-term project, it is our intention to continue to increase
the pipeline of potential future female leaders, such as through a
50:50 International Associate Programme gender split target, and a
targeted increase in the number of women in the investment team
to 40% by 2025.
Archie Norman
Chair of the Nomination Committee
Find out more: bridgepoint.eu
During 2023, the Nomination Committee
oversaw the Chief Executive succession
and appointment of Raoul Hughes as
Chief Executive. There has also been a
focus on planning longer-term succession,
both to the Board and leadership team.
The Committee continued the search for
further Non-Executive Directors with
complementary skills and experience.
Board composition and appointments
On 1 January 2023, Cyrus Taraporevala was appointed as an
independent Non-Executive Director following an extensive
process overseen by the Nomination Committee. Cyrus’ significant
experience in the asset management sector has been an asset for
the Board, and Cyrus has contributed substantially to the Audit
and Risk Committee and Remuneration Committee. In December,
Cyrus was appointed as a member of the Nomination Committee.
Although Cyrus’ appointment resulted in the Parker Review target
being satisfied through 2023, there are only two women on the
Board out of eight Directors. The Committee is in active
discussions to bring on board a further female Director. During
2024 it is intended that there will be at least one further Non-
Executive Director appointment, with a focus on further
complementing the calibre, breadth of expertise and diversity of
thinking amongst Board members.
In September, the Company announced a separation of the Chair
and Chief Executive roles with effect from 1 October, with Raoul
Hughes becoming Chief Executive and joining the Board, and
William Jackson remaining in the Chair role and focusing his
continuing role in the core PE business. Raoul was an architect of
both the EQT Credit acquisition and the ECP transaction, and was
central to the establishment of the Group’s North American
business. Having worked at Bridgepoint for over 30 years, he has a
deep understanding of Bridgepoint and its culture and values. The
Committee believes that continuity and retaining deep investment
expertise is critical to the success of the existing business. The
announcement of the ECP transaction was a natural time to evolve
the governance of the Group, while enabling the business to
continue to benefit from William and Raoul’s expertise.
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Audit and Risk
Committee report
→
Tim Score
Chair of the Audit and Risk Committee
Details on activities undertaken by the Committee in relation to
each of these areas are contained in the Committee report on the
following pages. The primary areas of focus during the year included:
− Reviewing the content and integrity of the full-year and
half-year financial reporting and the Annual Report.
− Receiving updates from the internal auditor and management in
respect of internal controls, including, cyber security risk, data
management and governance, ESG and private equity and credit
investment governance.
− Reviewing the work undertaken to support the disclosures in
relation to the ECP transaction within the shareholder circular
for the transaction, and also the work being undertaken in
relation to the integration of ECP with the Group.
Lastly, I wish to thank my fellow members of the Committee for
their contributions during the year and I look forward to
continuing our work in 2024.
Tim Score
Chair of the Audit and Risk Committee
Find out more: bridgepoint.eu
The purpose of the Audit and Risk
Committee is to assist the Board in
fulfilling its oversight responsibilities
relating to financial reporting and the
internal controls and risk management of
the business. I am pleased to present the
report of the Committee for the year
ended 31 December 2023. This report
outlines how the Committee discharged
the responsibilities delegated to it by the
Board during the year, and the key topics
it considered in doing so.
The principal responsibilities of the Committee can be summarised as:
− Financial reporting – monitoring the integrity and quality of
thefinancial statements of the Company, including any formal
announcement relating to financial performance, and reviewing
and challenging where necessary major issues regarding accounting
principles, policies, practices, judgements and presentation.
− External audit – oversight of the external auditor, reviewing the
effectiveness of the external audit process, making recommendations
to the Board on the appointment, re-appointment and removal
of the external auditor, and developing policy on the engagement
of the external auditor to supply non-audit services.
− Internal audit – oversight of the internal auditor, reviewing the
work performed by the internal auditor, and reviewing the
effectiveness of internal audit, including its plans and resources
and making recommendations to the Board on the appointment,
re-appointment and removal of the internal auditor.
− Risk management and internal controls – monitoring the
adequacy and effectiveness of the Company’s internal controls
and risk management systems.
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Bridgepoint – 2023 Annual Report & Accounts Governance
Committee governance
Meetings
The Committee meets regularly, at least three times a year. In
carrying out its duties, the Committee is authorised by the Board
to obtain any information it needs from any Director or employee
of the Group. The Committee met six times during 2023 and has
met twice since the end of the year prior to the publication of the
Annual Report.
Composition
The Committee possesses a good balance of skills and knowledge,
including financial sector experience. In 2023, the Audit and Risk
Committee comprised four independent Non-Executive Directors,
all of whom have financial or related business experience due to
the senior positions they hold or have held in other listed or
publicly traded companies or similar large organisations.
The Chair of the Committee, Tim Score, is the Group’s designated
financial expert, having recent and relevant financial experience as
former Audit Committee Chair for the British Land Company plc,
and being an Associate Chartered Accountant. The qualifications
and relevant experience of the other Committee members are
detailed on pages 82 to 85.
The Group CFO is not a member of the Committee but attends
meetings at the invitation of the Chair of the Committee. Mazars
LLP, as external auditor, and members of the Group’s Finance
team also regularly attend meetings. Deloitte, who are the internal
auditors, are also invited to attend each meeting.
The Committee will meet separately with the external auditor at
least twice a year to ensure that they are receiving full cooperation
from management and are obtaining all the information they
require. The external auditor is able to raise matters directly with
the Audit and Risk Committee if they consider that it is desirable
to do so. In addition, the Chair of the Committee meets with the
external auditor and members of the Finance team separately, as
appropriate, throughout the year.
Terms of reference
The Committee has formal terms of reference which can be
accessed on our website at bridgepoint.eu.
The terms of reference are reviewed by the Board on a regular basis.
Effectiveness
The operations of the Audit and Risk Committee were reviewed as
part of the externally facilitated Board evaluation undertaken in
2023. The Committee was found to be operating effectively, and
more details on the Board effectiveness review more generally can
be found on page 91.
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Areas of focus in relation to financial reporting
Areas of focus considered by the Committee in relation to financial reporting for the year ended 31 December 2023, and the actions in
respect of these matters, are set out in the following table:
Matter Work undertaken
Alternative performance measures
The Group uses a number of alternative performance measures,
including, but not limited to:
− EBITDA;
− Underlying EBITDA;
− Underlying EBITDA margin;
− PRE;
− Underlying FRE;
− Underlying FRE margin;
− Underlying profit before tax; and
− Underlying profit before tax margin.
A full list can be found on pages 50 to 53.
The Committee discussed the alternative performance measures
with the Executive Directors, considering their appropriateness.
The Committee was satisfied that the alternative performance
measures selected provide useful information to stakeholders,
and do not detract from the IFRS measures.
Exceptional items
The Group’s income statement includes exceptional items which
are separately disclosed. The identification of exceptional items
involves judgement.
The Committee reviewed the items selected by management for
treatment as exceptional items in the financial statements, which
for the year ended 31 December 2023 principally related to the
acquisitions EQT Credit and ECP, and costs incurred in relation
to other potential acquisitions.
The Committee was satisfied that the treatment was appropriate
and in line with the Group’s accounting policies.
Consolidation
The Group holds investments in a number of funds, carried
interest partnerships and CLOs which it manages. Judgement is
required to be exercised in terms of assessing whether these
investments are controlled by the Group and therefore need to
be consolidated into the Group’s financial statements.
The Committee reviewed management’s assessment of
investments that the Group is deemed to control in accordance
with IFRS 10 “Consolidated Financial Statements”, and their
treatment within the financial statements, which for the year
ended 31 December 2023 included consideration of the
treatment of CLO 5 and 6.
The Committee concluded that it was satisfied with
management’s assessment.
Revenue recognition
Revenue recognition for the Group’s management fees is not
complex. The recognition of carried interest and investment income
revenue is more complex, and involves estimates and judgement.
The Committee reviewed the recognition of management fees,
carried interest and investment income. In particular, during the
year the Committee reconsidered the methodology applied for
the recognition of carried interest income, including the
discounts applied to the fair value of unrealised investments and
how it was applied to funds depending upon the stage and
maturity profile of each fund.
The Committee concluded it was satisfied that revenue had been
properly recognised in the financial statements.
Audit and Risk Committee report continued
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Bridgepoint – 2023 Annual Report & Accounts Governance
Matter Work undertaken
Investment valuation
The Group’s co-investments represent a significant portion of the
consolidated balance sheet. As these are mainly unquoted and
illiquid, considerable professional judgement is required in
determining their valuation.
The Committee reviewed the methodologies used to value the
Group’s investments in private equity and credit funds, the
process and governance over the valuations and the outcome of
that process as at 31 December 2023.
Specifically, during 2023, the Committee:
− reviewed how multiples are selected for application in
thevaluation of private equity investments and the more
significant changes during the year (increases and decreases);
− reviewed changes to the disclosures of estimates used in
investment valuation within the financial statements;
− understood how ESG factors are considered in portfolio
company valuations; and
− reviewed the inputs used within the discounted cash
flowmodel in respect of theCLO notes.
Having challenged the approach to valuation taken by
management, the Committee was satisfied with the approach
taken as at 31 December 2023 and the disclosures made within
the financial statements.
Effective tax rate
The Group is subject to normal full tax rates in the jurisdictions
in which it operates. However, its current effective tax rate is
lower than the UK statutory tax rate. This is because of timing
differences in when the Group’s income is taxed and the Group
has significant tax losses carried forward in the UK. Taken
together these are key drivers in the difference in the rate.
The Committee reviewed the way in which the tax charge for the
year had been determined, including the recognition and
utilisation of tax losses carried forward and the reconciliation of
the effective tax rate to the UK statutory rate.
The Committee also understood how the acquisition of ECP will
impact the effective tax rate of the Group going forwards.
The Committee concluded that it was satisfied with
management’s approach to the calculation of tax.
Disclosures relating to the acquisition of ECP
Material subsequent events such as an acquisition are required to
be disclosed within the financial statements, including the impact
on the balance sheet, which includes the fair valuation of
identifiable assets and assumed liabilities at the acquisition date
along with any goodwill and intangible assets.
The Committee reviewed disclosures included within the
financial statements relating to the pending ECP transaction.
The Committee understood how the prospective opening
balance sheet will be derived, including the fair value of acquired
assets and liabilities assumed and the recognition of assets and
liabilities that have not been previously reported in the acquiree’s
financial statements, such as intangible assets.
The Committee reviewed the proposed disclosure which is now
included in the financial statements.
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Audit and Risk Committee report continued
Matter Work undertaken
Viability statement and going concern
The appropriateness of preparing the Group financial statements
on a going concern basis, and whether the assessment undertaken
by management regarding the Group’s long-term viability
appropriately reflects the prospects of the Group and covers an
appropriate period of time.
The Committee considered whether management’s viability
statement assessment adequately reflected the Group’s key risks
as disclosed on pages 70 to 73, whether the period covered by
the statement was reasonable given the strategy of the Group, the
risk scenarios selected by management and the environment in
which the Group operates, along with the impact of the ECP
transaction.
As a result of the assessment undertaken, the Committee was
satisfied with the approach taken for the viability assessment and
that the going concern basis of preparation is appropriate.
Climate-related financial disclosures
The Group is required to make certain disclosures in relation to
the TCFD recommendations and makes additional recommended
disclosures within the Annual Report on how the Group
integrates climate risks and opportunities into business and
investment decisions, and data on direct greenhouse gas
emissions.
The Committee reviewed the way in which the Group’s ESG
strategy has been articulated within the Annual Report, including
TCFD disclosures.
The Committee concluded that it was satisfied with the
disclosures included.
2023 Annual Report
Under the Corporate Governance Code, the Board should
establish arrangements to ensure that the Annual Report presents
a fair, balanced and understandable assessment of the Group’s
position and prospects.
The Committee was provided with drafts of the Annual Report
and provided feedback on areas where further clarity or
information was required to provide a complete picture of the
Group’s performance.
The Committee members were also provided with the final draft
for review as part of the final sign-off.
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Bridgepoint – 2023 Annual Report & Accounts Governance
Risk management and internal controls
Details of the Group’s risk management process and the management and mitigation of key risks can be found on pages 70 to 73.
The Board, through the Committee, has carried out a review of the principal risks facing the Group and agreed with how they have been
represented within the Annual Report.
Areas of focus considered by the Committee in relation to risk management and internal controls, and the actions in respect of these
matters, are set out in the following table:
Matter Work undertaken
Acquisition of ECP
The Committee received a number of papers which set out
theintegration risks that management had identified in respect
ofthe transaction in relation to finance, tax, treasury, legal,
compliance and IT matters, along with progress updates on
thestatus of work ongoing.
A paper which summarised the Group’s pro forma exposure to
foreign exchange risk following the transaction and the mitigating
risk management techniques was also reviewed by the Committee.
Risk management framework
An update was provided to the Committee on revisions to the
Group’s enterprise risk management framework.
Compliance monitoring plan
The Committee received a paper which set out details of the
Group’s compliance monitoring plan. This had been
recommended as part of the internal audit review of this topic.
The paper provided detail of the geographic coverage of the plan,
the alignment with enterprise risk management, the systems and
tools used and the approach adopted to testing and reporting.
Cyber security risk
The Committee received a paper which updated it on the status
of the results of a cyber crisis management exercise which was
performed during the year, along with the proposed actions in
response to recommendations. The paper also provided details of
how cyber risks are monitored within the investment portfolio.
Data management and governance
The Committee received papers from internal audit and
management during the year that summarised the progress of
data management and governance.
The paper from internal audit benchmarked the Group against
the Deloitte Data and Control Framework and provided
recommendations to enhance and develop the data platform in
line with good practices.
In addition to providing an update and response to the
recommendations from internal audit, management’s paper set
out the Group’s data strategy. This included detail of how
standards and frameworks, data collection, management, quality
control and self-service reporting were being developed across
different functional areas, and how newer technologies such as
GenAI and ChatGPT were being trialled and appraised.
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GovernanceBridgepoint – 2023 Annual Report & Accounts
External and internal audit
External audit
Mazars LLP were appointed as the Group’s external auditor for the
financial year ended 31 December 2023. They have now served
for three years as appointed auditor.
The Committee’s responsibilities include making a
recommendation on the appointment, re-appointment and
removal of the external auditor and overseeing their effectiveness
and independence.
The Committee discussed and agreed the scope of the audit prior
to it commencing. This included a review of the:
− audit scope and approach, including the entities that would be in
the scope of the audit for the consolidated financial statements;
− timeline for the audit, including the audit of subsidiary companies;
− external auditor’s view of significant and enhanced risks of
misstatement in the financial statements;
− materiality levels used to plan and perform audit testing;
− key audit matters and other judgement areas within the
financial statements; and
− engagement terms, including the proposed audit fees.
The Committee subsequently reviewed reports from the external
auditor setting out the status of:
− interim audit testing, including a review of technical accounting
matters and areas of estimates and judgements;
− final audit testing, including conclusions in respect of the
adequacy of disclosures within the financial statements;
− unadjusted misstatements that they had found in the course of
their work, which were immaterial; and
− work performed over the Directors’ viability and going
concernstatements.
In order to assess the quality and effectiveness of the external audit,
the Committee has reviewed the audit process and the quality and
experience of the audit team engaged in the audit, including the
extent to which they had demonstrated competence, objectivity
and professional scepticism. The Committee noted the receipt of
quality reports with detailed information on the scope and results
of their work, including challenges to management judgements.
Non-audit services provided by the external auditor
Mazars LLP are primarily engaged to carry out statutory audit
work. There may be other services where the external auditor is
considered to be the most suitable supplier by reference to its skills
and experience. A policy is in place for the provision of non-audit
services by the external auditor, to ensure that the provision of
such services does not impair the external auditor’s independence
or objectivity, in accordance with the FRC’s Revised Ethical Standard.
Total fees for non-audit services amounted to £0.5 million, which
represents 36 per cent of the total fees for audit services for the
year ended 31 December 2023. Details of all fees charged by the
external auditor during the year are set out on page 152.
The Statutory Audit Services for Large Companies
Market Investigation (Mandatory Use of Competitive
Tender Processes and Audit Committee Responsibilities)
Order 2014 (the “Order”)
Mazars LLP were first appointed as statutory auditor of the
Company following a competitive tender process, and the
Company confirms its compliance with the Order. Any
recommendation by the Audit and Risk Committee in relation to
the (re-)appointment of the statutory auditors will take account of
the statutory auditor’s skills, experience and performance and the
value for money offered.
Internal audit
Deloitte LLP were appointed in 2022. They are accountable to the
Audit and Risk Committee and use a risk-based approach to
provide independent assurance over the adequacy and
effectiveness of the control environment.
Following their appointment, Deloitte developed an audit plan for
a three-year period, which envisaged approximately four audits
per year across the Group’s various business units, and was subject
to review and challenge by the Committee before being approved.
Each review evaluates the design and operational effectiveness of
the controls in place to address the risks identified.
During the year Deloitte completed the first of their annual plans
for the 2022-23 period, which included:
− credit investment governance;
− a review of data management and governance; and
− a review of the Group’s compliance monitoring programme.
In addition, Deloitte commenced audits from their 2023-24 plan,
which included the completion of a review of ESG, cyber security
and private equity investment governance, and the
commencement of a review of the Group’s risk management
framework and Luxembourg regulatory compliance, which have
not yet concluded.
Progress of management action plans is reported to the Committee
at each meeting.
Audit and Risk Committee report continued
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Bridgepoint – 2023 Annual Report & Accounts Governance
ESG Committee
report
→
Carolyn McCall DBE
Chair of the ESG Committee
The ESG Committee was set up in March
2023 and I was very pleased to be asked to
take the Chair role, given the increased
attention and focus on ESG matters
industry-wide and as ECP joins the
Bridgepoint Group. I hope to bring my
experience of a variety of different
organisations to add value to what we are
already doing. In its first year, the
Committee has focused on developing an
understanding of Bridgepoint’s ESG and
DEIB activities and initiating a review of
Bridgepoint’s sustainability strategy.
Committee establishment
The Bridgepoint Group plc ESG Committee replaced a previous
executive level committee.The Committee’spurpose isto oversee
the implementation of the Group’s ESG and DEIB policies, and
more generally help the Board to fulfil its oversight responsibilities
in relation to ESG matters. It also monitorssustainability
performance and risk indicators across the Group and the
investment portfolio. It aims to provide useful input and challenge
into the overall ambitions in respect of ESG and DEIB matters as
well as the management activities that support these ambitions.
The ESG Committee comprises two independent Non-Executive
Directors, being myself and Angeles Garcia-Poveda. Angelesisa
member of theadvisory board of the Climate Governance
Initiative, a global initiative in collaboration with the World
Economic Forum, which aims to enable effective climate corporate
governance and mobilise boards to act. Her expertise and
involvement inthe ESG Committeewill help ensure that the
Board stays up to date on industry best performance.
The Committee is supported by Edward Woods, who is a longtime
partner at Bridgepoint with executive responsibility for ESG
matters and Emma Watford, a partner and co-head of the UK
private equity team who has overall responsibility for DEIB.
Work of the ESG Committee in 2023
In the Committee’s inaugural year,its focus was onundertaking
areview of the ESG and DEIB activities of Bridgepoint,
andunderstanding how ESG and DEIB considerations are
integrated into decision making (both within the Group, and
within the portfolio).In addition,the Committee discussedthe
ESG and DEIB priorities for the Group, the charitable giving
strategy aswellas the Group’s DEIBstrategy (which you can
readmore about in the People section of this Annual Report.)
Priorities for 2024
For 2024, our focus will continue to be on the ongoing application
of our responsible investment practices across the life-cycle of each
investment and on continuing to achieve a high level of ESG
performance at a Group level.
In relation to DEIB, in 2024 we will formalise an initiative focused
on senior female representation, with the ultimate aim of ensuring
we have female representation in key decision-making forums
across the Group. We will also complete a diversity census to
better understand the diversity profile of our organisation today.
We will use the results of this survey to conclude on the next steps
of our programme outside of gender. See people report on pages
34 and 35 for more information on our DEIB targets.
During 2024 wealso intend to undertake aBridgepoint materiality
assessment which will inform our strategy for subsequent years.
Finally, the closing of the ECP transaction will mean that
Bridgepoint will be able toleverage ECP’s expertise in energy
transition to the benefit of the Group’s approach to sustainability.
Carolyn McCall DBE
Chair of the ESG Committee
Find out more: bridgepoint.eu
99
GovernanceBridgepoint – 2023 Annual Report & Accounts
Remuneration
Committee report
→
Angeles Garcia-Poveda
Chair of the Remuneration Committee
Financial performance
Business performance in year ended 31 December 2023 has
beenstrong, with underlying EBITDA and underlying profit
before tax increasing by 7% and 12% to £149 million and
£134 million respectively, translating to underlying earnings
pershare of 15 pence.
In 2023, Bridgepoint announced that ECP will be joining the
Bridgepoint platform as detailed earlier in the Report. This is a
significant step forward in delivering Bridgepoint’s stated strategy
of scaling through both product and geographical diversification.
Governance evolution
In September, the Company announced that Raoul Hughes would
become Chief Executive and a Director of the Company with
William Jackson continuing in his role as Chairman.
The remuneration payable to Raoul Hughes in relation to 2023 is
set out on page 103 of this report. When setting his remuneration
arrangements the Committee had regard to internal relativities, his
pay as Group Managing Partner and market benchmarks. His
annual base salary was set at £850,000, but no bonus or grants
under the Restricted Share Plan (“RSP”) have been made in respect
of his time as Chief Executive in 2023. In 2024, he will be eligible
to receive an annual bonus, with a maximum bonus opportunity of
200% of salary and a restricted share award of 100% of salary.
Remuneration payable in respect of 2023
The base salary of the Group Chief Financial Officer and Chief
Operating Officer (“CFO”) remained unchanged from that set at
the time of the IPO. During the year, the CFO received his second
grant under the RSP which equated to 50% of his salary. This will
vest after three years subject to continued employment and
achievement of the underpin as set out in the Remuneration Policy.
When considering the annual bonus outcome for the CFO,
Bridgepoint uses a scorecard of measures that reflect the Group’s
business strategy, and which align with the interests of our
stakeholders. In 2023, the annual bonus outcome was measured
against FRE, PRE and cash conversion as well as other strategic
performance and capital measures and ESG criteria.
As Chair of the Bridgepoint Remuneration
Committee, I am pleased to present on
behalf of the Remuneration Committee
the Directors’ Remuneration Report for
the year ended 31 December 2023.
Remuneration philosophy
At Bridgepoint, we firmly believe that our people are our greatest
asset. This is reflected in the way that we conduct our business and
also in how we value and reward our employees. We recruit
diverse and talented professionals who exhibit a passion for
performance and drive, we offer development opportunities to our
colleagues through hands-on learning and extensive training, and
we strive to foster a collaborative and inclusive environment.
Since Bridgepoint’s inception, our differentiated culture has always
been reflected in our incentive and remuneration structures which
recognise and reward performance whilst providing strong
alignment with the interests of our external stakeholders. Discretionary
bonus structures reflect individual and company performance and
are paid in addition to market competitive salaries and benefits.
Employee share ownership is a key part of Bridgepoint’s culture
and currently employees and former employees (as well as certain
related persons) hold over 50% of our issued share capital. Over
65% of our current permanent employees are shareholders.
Our Directors’ Remuneration Policy (the “Remuneration Policy”),
which was approved by shareholders at the 2022 AGM with over
99% support, aims to reflect our internal culture of share
ownership, rewards for strong performance (a partnership ethos),
and alignment with our fund investors as well as our shareholders.
It reflects best practice within our regulatory framework.
Our Executive Directors have a simple remuneration structure
operated within the Remuneration Policy. In each case, their
remuneration structure has been adapted to take account of their
individual roles within Bridgepoint.
As a Committee, we are pleased to confirm that during 2023,
remuneration arrangements both for Executive Directors and the
wider workforce have continued to operate in line with the
Bridgepoint remuneration policy and philosophy.
100
Bridgepoint – 2023 Annual Report & Accounts Governance
Annual report on remuneration
Our CFO has performed well in relation to both the strategic and
financial objectives we set for the year, with FRE and PRE
delivering around the mid-point for the range of targets set by the
Committee and cash conversion delivering at stretch. The
announcement of the ECP transaction and our continued focus on
ESG has resulted in a bonus of approximately 35% of his salary
being earned in total. Further details of his performance against
financial and non-financial performance measures can be found on
pages 104 to 105.
The Committee reviewed the formulaic result and considered
whether any discretion should be applied to adjust the bonus
outcome. Based on the performance achieved against targets, the
experience of the stakeholders and wider assessment of
performance during the year, the Committee was comfortable that
the outcome was appropriate and should not be adjusted.
Approach to remuneration for 2024
A number of factors were considered including performance,
theincreased size and complexity of the business following the
completion of the ECP transaction, the market environment, the
wider stakeholder context, and the position of Executive Director
remuneration relative to the market.
Base salary
The base salary of the Chairman, Chief Executive and CFO will
remain unchanged in 2024.
Variable pay
In line with the Remuneration Policy, the CFO will be eligible
toreceive an annual bonus for 2024, with his maximum bonus
opportunity remaining at 50% of salary. The Chief Executive
willalso be eligible to receive a bonus with a maximum bonus
opportunity of 200% of salary.
The Committee has reviewed the ongoing appropriateness and
balance of metrics used for the 2023 bonus award and determined
that both the Chief Executive and CFO should be aligned to the same
metrics focussing on FRE, PRE and cash conversion which provide
a view of underlying business performance to our stakeholders as
well as key strategic and ESG measures. The weighting of these
measures has been adjusted to reflect the priorities and drivers
ofeach role, with strategic measures including capital measures
and ESG having a weighting of 30% for the CFO and 40% for
theChief Executive.
An RSP award will be made to the Chief Executive and CFO
following the announcement of annual results. The award will
bevalued at 100% and 50% of salary respectively and will vest
after three years subject to continued employment and the
performance underpin.
The Committee has been closely monitoring recent share price and
market movements. We will keep this under review in the lead up
to the grant of shares under the RSP and will have discretion at the
time of vesting to adjust the outcomes if we feel that management
have benefited from factors outside of their control, creating a
windfall gain and meaning that the vesting of the award does not
reflect the performance achieved over the period.
William Jackson will not receive an RSP award or an annual bonus.
Remuneration arrangements elsewhere
in the Group
During 2023 we launched our latest employee engagement survey,
maintaining high levels of engagement with a participation rate of
over 80% and a strong overall engagement score. We continue to
monitor this survey which enables colleagues, on a confidential
basis, to provide feedback on a full range of employment issues,
including remuneration. An average salary increase of 4.6% was
approved for the wider workforce.
Conclusion
The Committee has satisfied itself that the remuneration outcomes
for 2023 are appropriate and that the Remuneration Policy has
operated as intended.
On behalf of the Committee thank you for reading this report and
we look forward to receiving your support at the AGM on 15 May
2024 in relation to the approval of the Directors’ Remuneration
Report for 2023.
Angeles Garcia-Poveda
Chair of the Remuneration Committee
Find out more: bridgepoint.eu
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GovernanceBridgepoint – 2023 Annual Report & Accounts
The above chart includes all those undertaking the role of Executive Director for the full year of 2023.
Component
& purpose
Operation under
the Policy
Maximum opportunity
under the Policy
Outcomes for
2023
Operation
in 2024
Base Salary
To help recruit, reward and
retain the calibre of talent
required to deliver
Bridgepoint's strategy.
Reviewed annually with any
changes normally effective
from the beginning of the
financial year.
In considering increases, the
Committee assesses the
increases applying to the
wider workforce as well as
local market levels.
The Chairman and CFO's
salary remained unchanged
during 2023. From
appointment, the Chief
Executive received a salary
of £850,000.
The salary of the Chairman,
the Chief Executive and the
CFO will remain unchanged.
Benefits
To provide market competitive
benefits and to support the
health and wellbeing of
Executive Directors.
Benefits currently received
by Executive Directors
include life assurance,
private medical insurance
and income protection.
The opportunity is set at the
cost of providing the
benefits described.
There have been no changes
to the Executive Directors'
benefit provision this year.
Benefits to operate in line
with the Remuneration
Policy and align to those
available to UK colleagues.
Pension
To provide market
competitive retirement
benefits.
A contribution to the Group
Pension Plan or a cash
allowance in lieu of pension.
A pension contribution rate
in line with the rate
applicable to the majority of
the workforce in the
appropriate country.
The pension contribution
rate is currently 10% of
salary up to a notional salary
of £112,500. There have
been no changes this year.
Pension to operate in line
with the Remuneration
Policy and align to those
available to UK colleagues.
Annual Bonus
To encourage the improved
financial and non-financial
performance of the business
and to provide alignment
with shareholders through
the partial deferral of
payment into shares.
The annual bonus is
determined after the
year-end based on
performance against targets
during the year.
The overall maximum
annual bonus opportunity
under the policy is 200%
ofsalary.
The annual bonus payable to
the CFO was £176,675 of
which £25,838 was deferred
under the terms of the
Deferred Bonus Plan. The
Chairman does not receive
variable compensation. The
Chief Executive received no
annual bonus in relation to
his time in this role.
Annual bonus opportunity
for the CFO remains
unchanged from 2023 at
50% of salary. The Chief
Executive will have a bonus
opportunity of 200% of salary.
The Chairman will continue
to not receive variable
compensation.
Restricted Share Plan
Provides alignment of the
Executive Directors to
shareholders by increasing
share ownership and
promoting long-term
valuecreation.
An annual award of
Bridgepoint shares which are
subject to a performance
underpin. Shares normally
vest after 3 years and are
subject to a further 2 year
holding period.
The overall maximum
annual award level is 100%
of salary.
The annual award made to
the CFO was 50% of salary.
The Chairman does not
receive variable
compensation. The Chief
Executive did not receive a
grant in relation to his time
in this role.
Annual award opportunity
for the CFO remains
unchanged from 2023. The
Chief Executive will receive
a grant of 100% of salary.
The Chairman will continue
to not receive variable
compensation.
Remuneration at a glance
Executive remuneration framework and Policy summary
Single figure remuneration
0 ₤0.5m ₤1.0m
₤1.5m
Salary
Benefits
Pension
Annual Bonus
LTIPs (nil)
Other (nil)
William Jackson
Max
Adam Jones
Max
Adam Jones
Actual
William Jackson
Actual
Annual report on remuneration continued
102
Bridgepoint – 2023 Annual Report & Accounts Governance
Remuneration Policy
During 2023, we operated under the Directors’ Remuneration Policy approved at the AGM on 12 May 2022. The full Remuneration
Policy can be found on our corporate website bridgepoint.eu.
Audited information
Total remuneration payable for the year to 31 December 2023
The following table sets out the total remuneration for the Executive Directors and the Non-Executive Directors for the year ended
31 December 2023.
All figures shown in £000
Financial
year ended
31 December
Salary and
fees
Taxable
Benefits
2
Pension
3
Bonus RSP
Total Fixed
Remuneration
Total Variable
Remuneration Total
William Jackson
2023 800.0 8.6 9.9 – – 818.5 – 818.5
2022 860.0 6.8 9.8 – – 876.6 – 876.6
Raoul Hughes
1
2023 212.5 1.7 2.5 – – 216.7 – 216.7
2022 n/a n/a n/a n/a n/a n/a n/a n/a
Adam Jones
2023 500.0 5.3 9.9 176.7 – 515.2 176.7 691.9
2022 500.0 3.0 9.8 124.9 – 512.8 124.9 637.7
Angeles Garcia-Poveda
2023 108.4 – – – – 108.4 – 108.4
2022 95.0 – – – – 95.0 – 95.0
Archie Norman
2023 221.0 – – – – 221.0 – 221.0
2022 200.0 – – – – 200.0 – 200.0
Dame Carolyn McCall
2023 107.3 – – – – 107.3 – 107.3
2022 75.0 – – – – 75.0 – 75.0
Tim Score
2023 102.0 – – – – 102.0 – 102.0
2022 95.0 – – – – 95.0 – 95.0
2023 89.0 – – – – 89.0 – 89.0
Cyrus Taraporevala 2022 n/a n/a n/a n/a n/a n/a n/a n/a
Notes to the table
1. Remuneration is shown from the date of appointment as a Director.
2. Executive Directors receive family private medical insurance, life assurance and income protection. William Jackson and Raoul Hughes also participate in a legacy
spousespensionarrangement.
3. Executive Directors have elected to receive a cash allowance in lieu of pension. No Executive Director participates in a defined benefit pension arrangement.
Annual bonus plan
Raoul Hughes received a bonus in relation to his performance in 2023 prior to becoming Chief Executive in line with normal practice.
He received no bonus in relation to his time as Chief Executive during 2023.
Details of the 2023 bonus calculation for Adam Jones are set out on pages 104 to 105.
Restricted Share Plan (“RSP”) vesting during the year
There are no awards under the RSP which vested during the year or are due to vest based on performance to 31 December 2023.
103
GovernanceBridgepoint – 2023 Annual Report & Accounts
Awards in respect of annual performance
Measure % Weighting
Threshold (20%
vesting)
Intermediate
(50% vesting)
Stretch (100%
vesting) Achievement Outcome as a % of max
Underlying FRE 45% £80.0m £94.0m £106.0m £95.0m 24.4%
PRE 10% £40.0m £60.0m £75.0m £55.3m 4.3%
Cash Conversion 15% 50% 70% 95% 124% 15.0%
Employee Engagement, Diversity & ESG 15%
See tables below for a detailed summary
ofperformance achieved against objectives
set by the Committee for the performance
period.
90% of max 13.5%
Business Strategy 15% 90% of max 13.5%
Total Outcome 70.7%
Amount payable £176,675
The annual bonus payable to the CFO is £176,675 of which £25,838 will be deferred under the terms of the Deferred Bonus Plan.
The Committee determines the annual bonus award for the CFO using a balanced scorecard. At the beginning of 2023, measures that
were 70% financial and 30% non-financial were selected, aligned to the Group’s KPIs and APMs, see pages 50 to 53 for further details.
The Board has reviewed the commercial sensitivity of capital raised targets in respect of 2022. Upon review the Board remains of the
view that these targets remain commercially sensitive given the business’ current strategy.
Underlying FRE - Bridgepoint generated management fees of £265 million in 2023, a 10% increase from 2022. This was driven by a
11% increase in fee paying AUM benefiting from further fundraising in BE VII, the launch of two new CLOs and deployment in the
direct lending and credit opportunities funds. Combined with careful cost control, Bridgepoint was able to deliver a 28% increase in
underlying FRE to £95m, ahead of market expectations.
PRE - Bridgepoint delivered PRE of £55 million for the full year following a step up in activity in H2 (2022: £65 million), with the latest
vintage of fully invested funds in private equity ahead of plan whilst deployment activity was also strong with BE VII now 31% of
primary capital deployed based on the target fund size and BDC IV 79% of primary capital deployed.
Cash Conversion – The normal cycle for cash flow from operations includes periodic invoicing and receipt of management fees and
monthly payment of personnel related costs and operating expenses as they fall due, with variable compensation typically paid annually.
As such, FRE should largely convert to cash over the financial year. In 2023, excluding exceptional costs relating to the ECP transaction
and the receipt of deferred proceeds from the sale of Bridgepoint’s stake in the BC II fund, the Group achieved a cash conversion ratio of
124%, including the receipt of certain receivables relating to 2022 in 2023.
Non-financial objectives
Developing and engaging with the Group’s workforce through ESG, diversity and employee engagement initiatives:
ESG - A new Bridgepoint Group plc ESG Committee, comprising Non-Executive Directors Carolyn McCall (Chair) and Angeles
Garcia- Poveda, was set up in early 2023, replacing a previous executive committee. The Committee’s purpose is to oversee the
implementation of the Group’s ESG and DEIB policies, and assist the Board in fulfilling its oversight responsibilities in relation to ESG
matters. It also monitors sustainability performance and risk indicators across the Group and the investment portfolio. During the year,
the Sustainability team continued to progress with supporting the investment teams to incorporate climate risk into due diligence
processes and support portfolio companies in addressing ESG matters.
Annual report on remuneration continued
104
Bridgepoint – 2023 Annual Report & Accounts Governance
Diversity - In 2023 Bridgepoint has maintained its focus on gender diversity, raising its targets for investment and non-investment
teams. In addition, the Group has agreed its first sustainability linked loan facility with margins related to improving performance in
gender diversity and implementation of emissions reduction strategies.
Employee Engagement - During 2023 we launched our latest employee engagement survey, maintaining high levels of engagement
with a participation rate of over 80% and a strong overall engagement score. Management have enhanced internal communications over
the course of the year and along with the continued development of other engagement forums such as our Town Hall meetings, we have
been well placed to ensure that we receive regular employee feedback to inform decisions at Board level and guide our efforts to retain
and attract top talent.
The Committee weighted these objectives equally and assessed that the CFO’s performance in advancing these three core objectives
warranted a 90% of maximum score.
Support the growth and development of the business through strategic and operational initiatives:
Operational Initiatives – Throughout 2023 Bridgepoint has maintained its focus on building out post IPO operational capabilities. A
number of systems projects across the specialist functions have been completed to timescale and budget which are delivering an
improved platform for investor information and real time access to our fund and portfolio performance information, enhancing our
investor communications.
Business Development – As noted previously during 2023 Bridgepoint announced that ECP will be joining the Bridgepoint platform.
Once completed, the addition of ECP to the Group represents a major step forward in implementing the strategy set out at IPO of scaling
through product and geographical diversification.
The Committee assessed that the CFO’s performance in relation to advancing these operational initiatives and business development
warranted a 90% of maximum score.
Combining the financial and non-financial results gives a total bonus outcome of 70.7% of maximum bonus opportunity for the CFO.
The Committee has determined that the balanced scorecard outcome appropriately reflects the financial and strategic performance delivered.
Incentive awards granted during the year
The following table provides details of the incentive awards granted during the year ended 31 December 2023:
Director Award Award Date Vesting Date Face Value at Grant Number of Shares Awarded
Adam Jones Restricted Share Plan 31 Mar 2023 31 Mar 2026 £250,000 114,953
The Company closely monitored the share price in advance of granting this incentive award and will have discretion at the time of
vesting to adjust the outcomes if it is felt that management have benefited from factors outside of their control and that vesting of the
award does not reflect performance achieved over the period.
Awards under the Restricted Share Plan will vest subject to the achievement of suitable financial and non-financial performance against
the performance underpin as detailed in the Directors’ Remuneration Policy.
The Company’s share plans comply with the Investment Association guidance on dilution limits and awards issued will not exceed a
limit of 5% in any ten years under all executive share plans and 10% in any ten years under all share plans.
Payments to former Directors and for loss of office
No payments were made to former Directors of the Company or in relation to loss of office during the year.
105
GovernanceBridgepoint – 2023 Annual Report & Accounts
Directors’ interests
The interests of the Directors and their connected persons in the shares in the Company as at 31 December 2023 are set out below.
Director
Shares held outright at
31 December 2023
Vested shares subject to
holding period
Unvested shares
subject to holding
period
Shareholding
requirement (% of
salary) Requirement met
1
William Jackson
2
822,856 10,630,980 5,488,194 300% Yes
Raoul Hughes
2
400,000 10,630,982 4,708,193 300% Yes
Adam Jones
2
189,143 4,133,851 300% Yes
Angeles Garcia-Poveda 94,286
Dame Carolyn McCall 75,714
Archie Norman 275,000
Tim Score 75,714
Cyrus Taraporevala 100,000
1. Based on closing share price on 31 December 2023 of £2.79 per share.
2. Including shares held by connected persons, but excluding shares held by Burgundy Investments Holdings LP
Adam Jones vested 2,648,775 shares on 31 January 2024 which remain subject to a holding period. Otherwise, between 31 December
2023 and 20 March 2024, being the latest practicable date before publication of this Annual Report, there have been no changes in the
Directors’ interest in shares, or those of their connected persons. Raoul Hughes, William Jackson and Adam Jones acquired shares under
legacy share purchase arrangements in June 2021 which will normally have to be sold for nominal consideration if they leave
employment prior to various dates that end in July 2026.
During employment, Executive Directors are required to build and maintain a shareholding equivalent to 300% of their base salary.
Theshareholdings of the Chief Executive, Chairman and CFO exceed this requirement significantly. Post-cessation of employment,
Executive Directors must retain shares to the value of 300% of salary (or the number of shares held at cessation if lower than 300%) for a
period of two years in accordance with the Remuneration Policy.
Performance graph and table
Bridgepoint Group plc shares began unconditional trading on the London Stock Exchange’s main market on 26 July 2021. The chart
below shows the Total Shareholder Return performance of £100 invested in Bridgepoint from 26 July 2021 to 31 December 2023
against the FTSE 250 index. The FTSE 250 index is considered an appropriate comparison as Bridgepoint is a constituent of the index.
50
60
70
80
90
100
110
120
130
140
150
160
170
Bridgepoint
23 July
2021
31 December
2021
31 December
2022
31 December
2023
FTSE 250
*2022 *2023 **2023
Lead Executive single figure total remuneration (£000s) 876.6 818.5 216.7
Bonus as a % of maximum opportunity N/A N/A N/A
Long-term incentive vesting (as % of maximum opportunity) N/A N/A N/A
Figures reflect remuneration to 31 December 2023. No long-term incentives have been granted or bonuses awarded to the Chairman
under the Directors’ Remuneration Policy to date.
* William Jackson ** Raoul Hughes
Annual report on remuneration continued
106
Bridgepoint – 2023 Annual Report & Accounts Governance
Percentage change in remuneration of Directors
The table below shows the percentage change in each Director’s salary/fees, taxable benefits and annual bonus between 2022 and 2023
compared with the average percentage change in each of those components of pay for the employees of Bridgepoint as a whole. The
information in this table will build up to show a five-year history as required under the reporting regulations.
% Change
2022/2023
Salaries/fees Taxable Benefits Short-Term Incentives
Raoul Hughes N/A N/A N/A
William Jackson -7.0% 26.9% N/A
Adam Jones 0.0% 74.0% 41.5%
Archie Norman 10.5% N/A N/A
Angeles Garcia-Poveda 14.1% N/A N/A
Dame Carolyn McCall 43.1% N/A N/A
Tim Score 7.4% N/A N/A
Cyrus Taraporevala N/A N/A N/A
All employees 4.6% 16.3% 1.5%
The year-on-year increase in fees for the NEDs reflects various movements in roles in addition to underlying fee rate changes. Further
details on fees paid to NEDs can be found on page 109. Significant increases in taxable benefits are due to changes in coverage levels and
premiums for medical insurance, whilst movements in short-term incentives are reflective of demographic and performance changes.
Chief Executive pay ratio
UK regulations require companies with more than 250 UK employees to publish the ratio of the Chief Executive versus that of the
Group’s UK employees. Whilst Bridgepoint does not yet have more than 250 employees in the UK, we have elected to calculate this
ratio. In the calculation, we have used Option A because this is the most statistically accurate approach.
Financial year Method Lower Quartile Median Upper Quartile
2023 A 8:1 4:1 2:1
2022 A 8:1 5:1 3:1
The pay for the Chairman/Chief Executive and the employees at the requisite percentiles are set out below:
Figures shown in £000s
Chairman/Chief
Executive Lower Quartile Median Upper Quartile
Base salary 812.5 68.8 95.0 165.8
Total pay 822.4 103.4 188.3 361.8
The Chairman/Chief Executive pay figures were calculated by reference to William Jackson until 1 October 2023 and Raoul Hughes
thereafter. The employee pay figures were calculated by reference to the year to 31 December 2023, which is consistent with the period
used for the Single Total Figure of Remuneration for the Directors. The total pay and taxable benefits were determined for all UK
permanent and fixed term employees as at 31 December 2023. No components have been omitted in calculating total pay and taxable
benefits on a single total figure of remuneration (STFR) basis. Necessary adjustments were made in determining full time pay and
benefits so that salaries, cash bonuses, share awards, taxable benefits and pensions were annualised for employees who have not been
with the Company for the full financial year or grossed up on a full-time equivalent basis for employees who work on a part time basis.
The Committee is comfortable that the pay ratio shown above is consistent with our pay, reward and progression policies for the
Company’s UK employees as a whole.
Relative importance of the spend on pay
The table below shows the Company’s expenditure on employee pay compared to distributions to shareholders in the year ended
31 December 2022 and 2023.
2022
£ m
2023
£ m % Change
Distributions to shareholders 62.8 128.2 104%
Aggregate personnel expenses 126.9 132.5 4%
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Executive Director remuneration
Base salary
Base salary levels will be as follows:
− Chairman: £800,000
− Chief Executive £850,000
− Chief Financial Officer: £500,000
Pension and benefits
Executive Directors are eligible to participate in benefits in line with all other UK employees. They will receive a pension contribution of
10% of salary (up to a salary cap of £112,500) in line with the rate applying to the rest of the UK employees. Other benefits include
family private health cover, life assurance and group income protection. William Jackson and Raoul Hughes also participate in the group
spouses pension scheme which is a legacy benefit provided to other employees of similar tenure.
Annual bonus plan
Adam Jones, the Chief Financial Officer, and Raoul Hughes, the Chief Executive, will be eligible to participate in the annual bonus plan
for 2024. The Chairman will not receive a bonus. The maximum bonus opportunity for Adam Jones will be 50% of salary and for Raoul
Hughes it will be 200% of salary.
Performance will be based on a mix of financial and non-financial metrics, weighted at 70% and 30% of the bonus opportunity
respectively for the CFO and 60% and 40% respectively for the Chief Executive. These metrics take account of the key business
priorities focussing on FRE, PRE and a cash measure. Part of the variable pay will be based on strategic and operational metrics
includingESG measures.
The Committee considers the prospective disclosure of target ranges to be commercially sensitive, but there will be retrospective
disclosure in next year’s Annual Report. The Remuneration Committee has the discretion to adjust the formulaic annual bonus outcome
or waive specific metrics and replace them in determining the annual outcome if it believes that pursuing such metrics would not be in
the best interests of the business based on the prevailing circumstances during the year.
50% of any bonus earned in excess of 25% of salary will be deferred into shares under the Deferred Bonus Plan. Deferred bonus shares
will vest after three years subject to continued employment.
Malus and clawback provisions apply in line with the Remuneration Policy, available on our corporate website Bridgepoint.eu.
Implementation of policy in 2024
108
Bridgepoint – 2023 Annual Report & Accounts Governance
Restricted share awards
A restricted share award will be made to Adam Jones and Raoul Hughes following the announcement of the annual results. The award
will be valued at 50% of salary for Adam Jones and 100% of salary for Raoul Hughes and will vest after three years subject to continued
employment and the underpin contained in the Remuneration Policy.
William Jackson will not be eligible to receive a restricted share award.
Non-Executive Director remuneration
A summary of the Non-Executive Directors’ fees is shown below:
Non-Executive Director 2023 Fee 2024 Fee
Senior Independent Director’s fee £125,000 £125,000
Non-Executive Director base fee £75,000 £75,000
Audit and Risk Committee Chair’s fee £20,000 £20,000
ESG Committee Chair’s fee £20,000 £20,000
Remuneration Committee Chair’s fee £20,000 £20,000
Committee membership fee £7,000 £7,000
Directors’ service contracts and letters of appointment
Name Date of appointment Date of current contract Notice from Company
Notice from the
individual
William Jackson 25 June 2021 5 September 2023 12 months 12 months
Raoul Hughes 1 October 2023 5 September 2023 12 months 12 months
Adam Jones 25 June 2021 21 June 2021 12 months 12 months
Angeles Garcia-Poveda 25 June 2021 21 June 2021 3 months 3 months
Dame Carolyn McCall 12 July 2021 22 June 2021 3 months 3 months
Archie Norman 25 June 2021 21 June 2021 3 months 3 months
Tim Score 25 June 2021 21 June 2021 3 months 3 months
Cyrus Taraporevala 1 January 2023 23 November 2022 3 months 3 months
Further details regarding the above can be found in the Directors’ Remuneration Policy.
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Governance of remuneration
Roles and responsibility
The role of the Remuneration Committee is to determine and establish a remuneration policy for the Executive Directors and Executive
Committee and to oversee the remuneration packages for those individuals (including all material risk takers). When determining
remuneration arrangements, the Committee must review remuneration across the whole Group and the alignment of incentives and
rewards with culture and take these into account when determining remuneration of the Executive Directors and Executive Committee.
Further details on the roles and responsibilities of the Committee are disclosed in the Terms of Reference which can be found on the
Company’s corporate website bridgepoint.eu.
The Remuneration Committee is responsible for:
− determining and developing the remuneration policy which applies to the Chairman of the Board, other Executive Directors, members
of senior management, and any other employee of the Group who the Committee is required by regulations tooversee;
− determining the individual remuneration packages of the Directors and relevant senior employees within the terms of the agreed
Remuneration Policy;
− monitoring the remuneration structures and overall levels of remuneration of the Group’s senior management and making
recommendations to the Board where appropriate;
− overseeing the remuneration of the wider Bridgepoint team and ensuring that our policy for the senior team is consistently structured; and
− overseeing the operation of the Group’s employee share schemes.
Remuneration Committee members and meetings
During 2023 the Committee comprised of the three independent Non-Executive Directors listed below. The Remuneration Committee
Chair, Angeles Garcia-Poveda, has nine years’ experience chairing other remuneration committees. The Committee will meet at least
three times a year.
The membership of the Committee changed in January 2023 when Cyrus Taraporevala joined the Committee. Dame Carolyn McCall
stood down from the Committee from 1 January 2023.
Committee Chair Angeles Garcia-Poveda
Committee member Archie Norman
Committee member Cyrus Taraporevala
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Bridgepoint – 2023 Annual Report & Accounts Governance
Key activities during the year
During the year, the Committee has carried out the following activities:
− set the KPIs for the Executive Directors;
− determined Executive Director awards and reviewed awards payable to all material risk takers and control staff;
− reviewed annual bonus metrics ahead of 2024 to ensure they appropriately align with business strategy and promote the correct behaviours;
− received and debated briefings on the operation of remuneration arrangements throughout the Group; and
− planned the cycle of work for 2024.
In addition, the members of the Committee held a number of meetings with key members of the firm as well as office visits.
The Policy has been designed to encourage long-term, sustainable growth and provide Executive Directors with competitive overall
remuneration for the achievement of stretching performance targets aligned to delivering the business strategy.
The Policy has been tested against the six factors listed in Provision 40 of the Corporate Governance Code:
− Clarity: the policy is as clear as possible and full details are described in straightforward concise terms to shareholders and the workforce.
− Simplicity: remuneration structures are as simple as possible and are market typical, whilst at the same time incorporating the
necessary structural features to ensure a strong alignment to performance and strategy and minimising the risk of rewarding failure.
− Risk: the remuneration policy has been shaped to discourage inappropriate risk taking.
− Predictability: elements of the policy are subject to caps and dilution limits. The Remuneration Committee may exercise its discretion
to adjust Directors’ remuneration if a formula-driven incentive pay-out is inappropriate in the circumstances.
− Proportionality: there is a sensible balance between fixed pay and variable pay, and incentive pay is weighted to sustainable long-
term performance. Incentive plans are subject to performance conditions that consider both financial and non-financial performance
linked to strategy, and outcomes will not reward poor performance.
− Alignment to culture: the Remuneration Committee will consider company culture and wider workforce policies when shaping and
developing Executive Director remuneration policies to ensure that there is coherence across the organisation. There will be a strong
emphasis on the fairness of remuneration outcomes across the workforce.
Effectiveness
The operations of the Committee were reviewed as part of an externally facilitated Board evaluation with The Effective Board LLP
during 2023; the Committee was found to be operating effectively. For more details of this exercise, please see page 91.
External advisers
The Remuneration Committee receives independent advice from Korn Ferry, Executive Pay & Governance division, who were
appointed pre-IPO in 2021 following a tender process. Korn Ferry is a signatory to the Remuneration Consultants’ Code of Conduct and
has confirmed to the Committee that it adheres in all respects to the terms of the code. The fees for the advice provided during 2023
were £68,210. Other than Remuneration Consultancy, Korn Ferry provided no other advice or services to the Company during the year.
Resolution Votes for % Votes against %
Total votes cast
(excluding
withheld votes) Votes withheld
Directors’ Remuneration Report for 2022 (2023 AGM) 658,932,317 100% 29,412 0.00% 658,961,729 129,191,512
Directors’ Remuneration Policy (2022 AGM) 747,619,996 99.74% 1,975,439 0.26% 749,595,435 59,712,930
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Directors’ report and additional disclosures
Information Section in Annual Report Page numbers
Likely future developments of the business of the Group Strategic Report 22 – 29
Stakeholder engagement (including employee engagement) Strategic Report 36 – 41
Dividends Strategic Report 9
Carbon and greenhouse gas emissions Strategic Report 74 – 80
Risk management Strategic Report 68 – 73
Board of Directors Governance 82 – 85
Corporate governance report Governance 87 – 90
Financial instruments – risk management objectives and policies Financial Statements 172 – 177
Acquisitions of own shares Financial Statements 181
Events after the reporting period Financial Statements 193
The Directors present their report for the year ended 31 December 2023.
TheDirectors’ report comprises this report and the entire Governance section.
Inaccordance with the FCA’s Listing Rules, the information to be included in the
2023 Annual Report, where applicable, under LR 9.8.4, is set out in thisDirectors’
report. Particular information that is relevant to this report, andwhichis incorporated
by reference, can be located asfollows:
The Directors’ report, together with the Strategic Report on pages
2 to 81, represent the management report for the purposes of
compliance with Rule 4.1 of the FCA’s Disclosure Guidance and
Transparency Rules.
Directors’ liability insurance and indemnity
The Company has purchased and maintains Directors’ and
Officers’ insurance cover against certain legal liabilities and costs
for claims in connection with any act or omission by such
Directors and officers in the execution of their duties.
The Company has also indemnified each Director to the extent
permitted by law against any liability incurred in relation to acts or
omissions arising in the ordinary course of their duties. The
indemnity arrangements are qualifying third-party indemnity
provisions under section 234 of the Companies Act 2006. All
such indemnities were in force during 2023, other than that for
Raoul Hughes, which took effect upon his appointment.
Political donations
It is not the policy of the Company to make political donations
ascontemplated by the Companies Act 2006 and, during 2023,
nodonations were made to political parties or organisations, or
independent election candidates, and no political expenditure
wasincurred.
DEIB
It’s our ambition to better reflect the communities in which we
operate by creating an environment where the best have an
opportunity to thrive, regardless of background. Our approach to
DEIB is about our diversity of thought and collective intelligence
and the impact they can bring on the quality of our decision-
making, outcomes and performance. It is not about tokenism or
ticking boxes.
We recognise that we still have a way to go but we’re proud of what
we’ve achieved so far. We have a balanced team when it comes to
gender, with women representing close to half our collective
workforce and occupying half of the leadership roles in our specialist
teams. On the investment side, we’ve effected real change with
25% of our investment professionals now being women, a marked
development since 2016 when that figure was closer to 5%.
Further details on our DEIB strategy are included in the people
section of the Strategic Report on pages 34 and 35.
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Bridgepoint – 2023 Annual Report & Accounts Governance
The Group treats applicants and employees with disabilities fairly
and provides facilities, equipment and training to assist disabled
employees to do their jobs. Arrangements are made as necessary
toprovide support to job applicants who happen to be disabled.
Should an employee become disabled during their employment,
efforts are made to retain them in their current employment or
toexplore the opportunities for their retraining or redeployment
within the Group.
Financial support is also provided by the Group to support
disabled employees who are unable to work, as appropriate
tolocalmarket conditions.
The Group has clear grievance and disciplinary procedures
inplace, and also has an employee assistance programme which
provides a confidential, free and independent counselling service
and is available to employees in a number of locations.
Numerical diversity data as at 31 December 2023
Gender identity and ethnicity diversity data in accordance with Listing Rule 9.8.6R(10) is set out below:
Gender identity
Number of
Board members
Percentage of
the Board
Number of senior positions
on the Board (CEO, CFO,
SID and Chair)
Number in
executive
management
Percentage of
executive
management
Men 6 75% 4 11 91.7%
Women 2 25% 0 1 8.3%
Not specified/prefer not to say – – – – –
Ethnic background
Number of
Board members
Percentage of
the Board
Number of senior positions
on the Board (CEO, CFO,
SID and Chair)
Number
in executive
management
Percentage
of executive
management
White British or other White (including minority-White groups) 7 87.5% 4 11 92%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British 1 12.5% 0 – –
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab – – – – –
Not specified/prefer not to say – – – 1 8%
Following the appointment of Cyrus Taraporevala to the Board,
the Company has satisfied the Parker Review target and the target
set by Listing Rule 9.8.6(9)(a)(iii). However, there are only two
women on the Board out of eight directors, which does not meet
the target set by Listing Rule 9.8.6(9)(a)(i). The Company is in
active discussions to appoint a further female Director. The
positions of Chair, Chief Executive, Senior Independent Director
and CFO are all currently filled by men, which does not meet the
target set by Listing Rule 9.8.6(9)(a)(ii), but following any vacancy
the need for appropriate diversity would be taken into account.
Share capital
As at 20 March 2024, the issued share capital was 793,733,543
ordinary shares of £0.00005 each, 500 deferred shares of £81
each, 1 deferred share of £1, and 1 deferred share of £0.01.
Significant shareholdings
As at 31 December 2023, the Company had been notified
pursuant to DTR 5 or otherwise was aware at the time of the IPO
of the following interests representing 3% or more of the voting
rights of the Company’s ordinary shares:
Shareholder
Number of
ordinary shares
Percentage of
total voting rights
Blue Owl GP Stakes IV (C) LP
(formerly Dyal Capital Partners IV
(C) LP) 124,531,939 15.69%
Burgundy Investments Holdings LP 78,424,917 9.88%
T. Rowe Price Associates, Inc. 45,130,992 5.69%
The Capital Group Companies, Inc. 41,939,868 5.28%
Between 31 December 2023 and 20 March 2024, being the latest
practicable date before the publication of this Annual Report, the
Company received no further notifications under DTR 5.
Rights and restrictions attaching to
ordinaryshares
Holders of ordinary shares are entitled to attend, speak and vote
atgeneral meetings and to appoint proxies and, in the case
ofcorporations, corporate representatives are entitled to attend,
speak and vote at such meetings on their behalf.
To attend and vote at a general meeting a shareholder must be
entered on the register of members at such time (not being earlier
than 48 hours before the meeting) as stated in the notice of general
meeting. All resolutions at a general meeting are voted on by poll,
with holders of ordinary shares having one vote for each share held.
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Where a shareholder has been duly served notice under section
793 of the Companies Act 2006 (which confers upon public
companies the right to require information with respect to interests
in their voting shares) and the shareholder is in default of the
notice for a period of 14 days, unless the Directors determine
otherwise the shareholder (and any transferee) will not be entitled
to attend or vote at a general meeting. Where the relevant shares
represent 0.25% or more of the issued ordinary shares, the
Directors may direct that no transfer of shares that are the subject
of the default be registered until the default is remedied, provided
that where the shares are in uncertificated form, the Directors may
only exercise their discretion not to register a transfer if permitted
to do so by applicable legislation.
Ordinary shares have attached to them full dividend and capital
distribution (including on winding up) rights, but do not confer
any rights of redemption.
Holders of deferred shares shall not be entitled to vote or receive
any notice convening a general meeting of the Company, and shall
not be entitled to receive any dividends or other distributions or to
participate in any return of capital (other than to receive the
nominal value of such shares in a liquidation after all other shares
have received £1 million per share). They do not confer any rights
of redemption.
All issued share capital of the Company at the date of this Annual
Report is fully paid.
The Articles of the Company do not contain any restrictions on
the transfer of shares in the capital of the Company, other than an
ability of the Directors to refuse to register a transfer:
− of shares that are not fully paid;
− in respect of more than one class of shares;
− which is not accompanied by the relevant share certificate (or,
where requested, other evidence of right to transfer is not
provided);
− which is not duly stamped in circumstances where a duly
stamped instrument is required (or where requested, evidence
that the transfer is not subject to stamp duty is not provided);
− of shares over which the Company has a lien; or
− in favour of more than four persons jointly.
Certain restrictions may from time to time be imposed by laws and
regulations (for example, insider trading laws and the UK Takeover
Code) and requirements of the Company’s share dealing code
whereby the Directors and employees of the Group require prior
clearance to deal in the Company’s securities.
In the event the Company is deemed to be an investment
company as defined in the Investment Company Act or the
Company’s assets may be considered “plan assets” within the
meaning of the US Employee Retirement Income Security Act of
1974 (as amended), the Directors may restrict ownership in the
Company by: (i) “U.S. persons” (as defined in Regulation S under
the U.S. Securities Act) that are not a “qualified purchaser” (as
defined under the Investment Company Act); or (ii) a person that
is a benefit plan investor (including directly or through or as a
nominee). In such circumstances, the Articles give the Directors
the power to require a transfer of shares by ineligible persons.
Pursuant to a reorganisation agreement entered into by, among
others, Burgundy A1 Nominees Limited, Burgundy A2 Nominees
Limited, Burgundy A3 Nominees Limited, Burgundy A4
Nominees Limited, Burgundy A5 Nominees Limited, Burgundy
B1 Nominees Limited, Burgundy B2 Nominees Limited, Burgundy
C Nominees Limited (the foregoing being the “Nominee
Companies”), the Company and various pre-IPO shareholders
(being current or former employees of the Group or certain related
persons of such persons) (the “Management Shareholders”), the
Nominee Companies hold shares in the Company on behalf of the
Management Shareholders. Pursuant to the terms of the
agreement, the Management Shareholders are subject to
restrictions on their ability to dispose of their underlying shares for
a period of up to five years from the IPO.
As at 31 December 2023, below is the schedule for the remaining
releases of shares from the IPO lock-up restrictions:
Date Shares released from lock-up
July 2024 81,329,463
July 2025 81,329,463
July 2026 186,891,591
Pursuant to the Company’s Long-Term Incentive Plan and the
relevant terms of grant, Company shares granted to Executive
Directors on vesting of existing awards are subject to a holding
period of two years.
Save as described above and within this Directors’ report, the
Company is not aware of any agreements between holders of its
securities that may restrict the transfer of shares or exercise of
voting rights.
Authority to purchase own shares
At the annual general meeting held on 18 May 2023, shareholders
passed a special resolution to authorise the Company, subject to
certain conditions, to purchase on the market a maximum of
81,999,850 ordinary shares, representing approximately 10%
ofthe Company’s issued ordinary share capital. As at 20 March
2024, 19,439,178 shares have been purchased under this
authority, and the authority will expire at the conclusion of the
2024 AGMor, if earlier, at the close of business on 31 July 2024.
TheDirectors are seeking the renewal of this authority at the
2024AGM.
Directors’ report and additional disclosures continued
114
Bridgepoint – 2023 Annual Report & Accounts Governance
Employee benefit trust
The Company has established an employee benefit trust (“EBT”)
to hold and acquire shares for the potential benefit of employees.
Pursuant to the terms of the EBT, the trustee is required to refrain
from exercising any voting rights attached to shares held by it,
unless the Company directs otherwise.
Dividend waiver
A dividend waiver is in place from the trustee of the EBT in
respect of all dividends payable by the Company on shares which
it holds in trust.
Powers of Directors and Director appointments
The Directors manage the business and affairs of the Company
and may exercise all powers of the Company other than those that
are required by applicable legislation or by the Articles to be
exercised by the Company in general meeting.
The appointment and replacement of Directors is governed by the
Company’s Articles, the Companies Act 2006 and other applicable
legislation. The Directors may appoint any person to be a Director
so long as the total number of Directors does not exceed the limit
prescribed in the Articles (the maximum number of Directors
under the Articles is 20, save that the Company may vary this
maximum from time to time by ordinary resolution).
The Articles provide that the Company may, by ordinary
resolution at a general meeting, appoint any person to act as
aDirector, provided that such person is recommended by the
Directors, or the Company has received from the person
confirmation in writing, no later than seven days before the
relevant general meeting, of that person’s willingness to be elected
as a Director.
The Company may, by ordinary resolution (of which special notice
has been given), remove any Director from office. The Articles
alsoset out the circumstances in which a person shall cease
tobeaDirector.
The Articles require that at each annual general meeting each
person who is then a Director shall retire from office. A Director
who retires at an annual general meeting shall be eligible for
re-election by shareholders.
The Board considers all Directors to be effective and committed
totheir roles, and to have sufficient time to perform their duties.
All Directors are required to seek the prior approval of the Board
before taking on any significant external appointments.
Articles
The Articles may only be amended by special resolution at a
general meeting of shareholders.
Change of control
There are no significant agreements to which the Group is a party
that take effect, alter or terminate upon a change of control of the
Group, other than the following:
− the governing documents of various Bridgepoint funds
(including the flagship Bridgepoint Europe funds) include
change of control provisions triggered by Bridgepoint
personnel/former personnel (and their related parties) ceasing to
control certain Group members. In such circumstances, there is a
consultation process, and following the change of control
investors holding a majority of the commitments in the fund
may suspend the investment period, prohibiting the drawdown
of commitments. If such suspension is not lifted within a
6-12 month period (varying by fund), the investment period will
be permanently terminated;
− the revolving facilities agreements entered into by the Group
include change of control provisions whereby on a change of
control each lender shall be entitled to issue a prepayment notice
requiring prepayment by the Company to such lender of any
amounts payable under such agreements and the cancellation of
any undrawn commitments provided by such lender;
− awards under the Group’s Deferred Annual Bonus Plan
generally vest in full (to the extent not already vested) on a
change of control of the Company; and
− awards under the Group’s Long-Term Incentive Plan and All
Employee Share Plan generally vest upon a change of control,
subject to the extent to which the performance conditions have
been satisfied at the time and time pro-rating unless and to the
extent that the Remuneration Committee disapplies or reduces
time pro-rating.
There are no agreements between the Group and its Directors or
employees providing for compensation for loss of office or
employment that occurs because of a takeover bid, apart from the
usual provisions for payment in lieu of notice.
By order of the Board:
David Plant
Group Company Secretary
Bridgepoint Group plc
Company number: 11443992
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GovernanceBridgepoint – 2023 Annual Report & Accounts
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law, the Directors
have prepared the Group and Company financial statements in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006.
Additionally, the FCA’s Disclosure Guidance and Transparency
Rules require the Directors to prepare the Group financial
statements in accordance with international financial reporting
standards adopted in the United Kingdom.
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 of the Group and Company for that period. In
preparing the financial statements, the Directors are required to:
− select suitable accounting policies and then apply them
consistently;
− make judgements and accounting estimates that are reasonable,
relevant, reliable and prudent;
− for the Group financial statements, state whether they have been
prepared in accordance with international accounting standards
in conformity with the requirements of the Companies Act
2006 and International Financial Reporting Standards as
adopted in the United Kingdom;
− for the Company financial statements, state whether applicable
UK accounting standards have been followed, subject to any
material departures disclosed and explained in the Company
financial statements;
− assess the Group and Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern; and
− use the going concern basis of accounting unless they either
intend to liquidate the Group or the Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the Company and enable them to ensure that
the financial statements comply with the Companies Act 2006.
The Directors are also responsible for safeguarding the assets of the
Company and for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
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.
The Directors consider that the Annual Report, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the Group
and the Company’s position and performance, business model
and strategy.
Each of the Directors, whose names and functions are listed
on pages82 to 85, confirm that, to the best of their knowledge:
− the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, financial position and profit or loss of the
Company and the undertakings included in the consolidated
Group taken as a whole; and
− 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 consolidated
Group taken as a whole, together with a description of the
principal risks and uncertainties that they face.
In accordance with Section 418 of the Companies Act 2006, the
Directors confirm that, so far as they are each aware, there is no
relevant audit information of which the Company’s auditor is
unaware; and the Directors have taken all 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 Company’s
auditor is aware of that information.
The Board has conducted a review of the effectiveness of the
Group’s systems of risk management and internal controls
including financial, operational and compliance controls, for the
year ended 31December2023.
In the opinion of the Board, the Company has complied with the
internal control requirements of the Corporate Governance Code
throughout the year, maintaining an ongoing process for
identifying, evaluating and minimising risk.
By order of the Board
Adam Jones
Group Chief Financial Officer
and Chief Operating Officer
116
Bridgepoint – 2023 Annual Report & Accounts Governance
Independent auditor’s report to the members of
Bridgepoint Group plc
Opinion
We have audited the financial statements of Bridgepoint Group plc
(the “Parent Company”) and its subsidiaries (together the “Group”)
for the year ended 31 December 2023 which comprise the
Consolidated Statement of Profit or Loss, the Consolidated
Statement of Comprehensive Income, the Consolidated and
Company Statement of Financial Position, the Consolidated and
Company Statement of Changes in Equity, the Consolidated and
Company Statement of Cash Flows, and notes 1 to 30 to the
financial statements, including material accounting policy
information.
The financial reporting framework that has been applied in their
preparation is applicable law and UK-adopted international
accounting standards and, as regards the Parent Company financial
statements, in accordance with the provisions of the Companies
Act 2006.
In our opinion, the financial statements:
− give a true and fair view of the state of the Group’s and of the
Parent Company’s affairs as at 31 December 2023 and of the
Group’s profit for the year then ended;
− have been properly prepared in accordance with UK-adopted
international accounting standards and, as regards the Parent
Company financial statements, as applied in accordance with the
provisions of the Companies Act 2006; and
− have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our
responsibilities under those standards are further described in the
“Auditor’s responsibilities for the audit of the financial statements
section” of our report. We are independent of the Group and the
Parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed entities
and public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our audit procedures to evaluate the Directors’ assessment of the
Group’s and the Parent Company's ability to continue to adopt the
going concern basis of accounting included but were not limited to:
− undertaking an initial assessment at the planning stage of the
audit to identify events or conditions that may cast significant
doubt on the Group’s and the Parent Company’s ability to
continue as a going concern;
− obtaining an understanding of the relevant controls relating to
the Directors’ going concern assessment;
− making enquiries of the Directors to understand the period of
assessment considered by them, the assumptions they considered
and the implication of those when assessing the Group’s and the
Parent Company’s future financial performance;
− identifying and testing key assumptions within the going concern
assessment, considering in particular the impact of the
anticipated acquisition of Energy Capital Partners;
− testing the mechanical and arithmetical accuracy of the model
used to prepare the Group’s cash flow forecasts;
− considering the consistency of Management’s forecasts with
other areas of the audit;
− obtaining an understanding of the financing facilities available to
the Group and reviewing the compliance with related covenants;
− assessing the sensitivity of the forecasts and conclusions to key
assumptions including critically reviewing stressed scenarios; and
− assessing the appropriateness of risk factors disclosed in the
Group’s going concern statement by comparison to the
understanding gained in our audit procedures.
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 Parent 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.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections of
this report.
In relation to Bridgepoint Group plc’s reporting on how it has applied
the UK Corporate Governance Code, we have nothing material to
add or draw attention to in relation to the Directors’ statement in
the financial statements about whether the Directors considered it
appropriate to adopt the going concern basis of accounting.
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Financial statementsBridgepoint – 2023 Annual Report & Accounts
Independent auditor’s report to the members of
Bridgepoint Group plc
continued
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements
of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified,
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 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.
We summarise below the key audit matters in forming our opinion above, together with an overview of the principal audit procedures
performed to address each matter and our key observations arising from those procedures.
These matters, together with our findings, were communicated to those charged with governance through our Audit Completion Report.
Key Audit Matter How our scope addressed this matter
Recognition of revenue arising from management and
other fees
In the Consolidated Statement of Profit or Loss,
management and other fees total £265.3 million
(2022: £241.5 million).
Refer to the accounting policies (page 136); and Note 5
of the Financial Statements (page 149).
The Group is entitled to management and other fees
arising from its performance of investment management
and related services to Bridgepoint funds and third
parties. Management fees are based on an agreed
percentage of either committed or invested capital,
depending on the fund and its life stage. Other fees
include fees and commissions relating to services
provided to third parties.
Auditing standards presume there is a risk of fraud
associated to revenue recognition. We have concluded
that due to the manual nature of the process, that risk is
associated to the incorrect calculation of management
and other fees.
Our audit procedures included, but were not limited to:
− performing walkthroughs to develop an understanding of the procedures
associated with revenue recognition and evaluating the design and
implementation of the relevant controls in place;
− selecting a sample of funds and:
− agreeing the fee terms used in the calculation to the relevant legal
agreements;
− validating key inputs such as committed capital or investment cost to
supporting evidence;
− testing the arithmetical accuracy of the calculations prepared by
Management or the third-party administrator by performing
independent recalculations; and
− tracing management fees received during the year to bank statements.
The sample selected represent 89% of the management and other fee
balances for the year.
− assessing the appropriateness of the accounting policy associated with
the recognition of management and other fees.
Our observations
Our audit procedures did not identify any material matters regarding the
calculation and recognition of management and other fees. Management
and other fees have been recorded in accordance with UK-adopted
international accounting standards.
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Bridgepoint – 2023 Annual Report & Accounts Financial statements
Key Audit Matter How our scope addressed this matter
Valuation of private equity
and credit funds
In the Consolidated Statement of Financial Position, the
fair value of fund investments, excluding
unconsolidated CLOs, is £286.2 million
(2022: £257.9 million).
Refer to the accounting policies (pages 140-141); and
Notes 3, 16 and 19 of the Financial Statements (pages
146, 158-159 and pages 167-171).
The Group holds investments in private equity and
credit funds. These are measured at fair value based on
the net asset value determined by Bridgepoint, acting as
the manager of the underlying funds.
The valuation techniques used to determine the fair
value of investments held by the funds involve a high
degree of estimation uncertainty, including the impact
of climate change. Therefore, there is a risk of error in
the determination of the fair value of these investments
that could lead to a misstatement in the fair value of the
investments in those funds.
Our audit procedures included, but were not limited to:
− performing walkthroughs to develop an understanding of the procedures
and controls associated with valuation of investments and evaluating the
design and implementation of the relevant controls in place. This
included inquiry of Management regarding the valuation governance
structure and their oversight of the valuation process, including
evidencing the oversight from the Audit and Risk Committee and the
relevant Valuation Committees;
− for a sample of investments in funds, agreeing the balance to capital
statements and reconciling the capital statements to audited financial
statements of the funds; and
− for a sample of underlying portfolio companies held by the funds
(look-through procedures), with the assistance of our valuation
specialists:
− evaluating the appropriateness of the valuation methodology used and
obtaining an understanding of the key assumptions (including the
impact of climate change);
− agreeing key inputs into the valuation models to source data; and
− assessing the mathematical accuracy of the valuation models.
Our observations
For the sample of valuations subject to our audit procedures, we concluded
that the methodology applied in the valuations and the assumptions
adopted therein are in line with IPEV guidelines and generally accepted
valuation practices and comply with the fair value principles outlined in
IFRS 13 “Fair Value Measurement” (“IFRS 13”).
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Financial statementsBridgepoint – 2023 Annual Report & Accounts
Independent auditor’s report to the members of
Bridgepoint Group plc
continued
Key Audit Matter How our scope addressed this matter
Valuation of financial liabilities at fairvalue arising
from the consolidatedCLOs
In the Consolidated Statement of Financial Position, the
fair value of consolidated CLO liabilities is
£1,152.0 million (2022: £597.5 million).
Refer to the accounting policies (page 142); and Notes
3, 17 and 19 of the Financial Statements (pages
146-147, 162-165 and pages 167-171).
The Group consolidates its investment in certain CLO
vehicles. As a result, the CLO notes held by third parties
are consolidated as financial liabilities at fair value
through profit or loss. The valuation techniques used
involve a higher degree of estimation uncertainty,
which we assessed has a risk of material error. The
Group applies the residual valuation approach to
account for the inherent asymmetry between the assets
and liabilities resulting from the consolidation of the
CLO notes.
Our audit procedures included, but were not limited to:
− performing walkthroughs to develop an understanding of the procedures
and controls associated with the valuation of CLO notes and evaluating
the design and implementation of the relevant controls in place. This
included inquiry of Management about the valuation governance
structure and their oversight of the valuation process, including
evidencing oversight from the Audit and Risk Committee and the
relevant Valuation Committee;
− with the assistance of our valuation specialists, challenging the valuations of
the CLO notes held by the Group, through a series of tests which included:
− assessing the methodology used in determining fair value;
− comparing Management’s cash flow modelling with one of the market
standard tools set up based on CLO documentation and trustee
reports; and
− assessing the assumptions used in Management’s model (recovery rate,
prepayments, default and yield).
− assessing whether Management has consistently applied the residual
value approach in valuing the CLO Notes; and
− verifying the inputs in the residual value approach to the audit work
performed on the consolidated CLO assets and liabilities.
Our observations
Based on the results of audit work performed, we concluded that the
valuation of the financial liabilities arising from the consolidated CLOs is
materially in accordance with the fair value principles outlined in IFRS 13.
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Bridgepoint – 2023 Annual Report & Accounts Financial statements
Key Audit Matter How our scope addressed this matter
Recognition of carried interest income and
measurement of carried interest receivable
In the Consolidated Statement of Profit or Loss, carried
interest income totals £30.0 million
(2022: £24.2 million). In the Consolidated Statement of
Financial Position, carried interest receivable amounts
to £67.3 million (2022: £42.0 million).
Refer to the accounting policies (page 136); and Notes
3, 5 and 15 of the Financial Statements (pages 145, 149
and 157).
The carried interest receivable represents the expected
income that the Group will receive from those funds
where the fund performance has exceeded the relevant
thresholds based upon the net asset value of the
underlying fund. Carried interest is calculated as a
contractual percentage of a fund’s return, once a
specified hurdle rate is expected to be met. These
amounts are specified in the underlying contract
between the fund and the Group in its capacity as
investment manager. Carried interest is only received
when a triggering event, such as a realisation of a fund’s
investment, occurs. In respect of carried interest, in
accordance with IFRS 15 “Revenue from Contracts
with Customers” (“IFRS 15”), Management must apply
judgment to determine whether it is highly probable
that the performance above the hurdle of each fund will
not reverse after the reporting date.
During the year, Management has updated its
estimation process to align the discounts applied to the
different levels of uncertainty associated to the different
stages of life of each fund.
The following are identified as the key risks or judgments
in respect to the recognition of carried interest:
− inappropriate judgments are made by Management in
the calculations, including whether an appropriate
discount is applied;
− errors made in complex manual calculation models;
and
− inappropriate inputs used by Management in the
calculations.
The accuracy and recognition of revenue is important
to the Group’s financial statements. Stakeholder
expectations may place pressure on Management to
influence the recognition of revenue. This may result in
overstatement or deferral of revenue to assist in meeting
current or future revenue targets or expectations.
Our audit procedures included, but were not limited to:
− performing walkthroughs to develop an understanding of the procedures
associated with recognition and measurement of carried interest and
evaluating the design and implementation of the relevant controls;
− assessing the appropriateness of the accounting policy associated with
the recognition of carried interest;
− assessing the appropriateness of the underlying updated methodology
applied in determining the discount of each fund and the related disclosures;
− for a sample of managed funds:
− agreeing the inputs used in the carried interest calculations to supporting
evidence, including legal agreements, verifying the applicable hurdle and
triggers for the contractual right to carried interest;
− recalculating the value of the carried interest receivable; and
− inquiring about any ongoing negotiations on investment exits and
assessing their impact on the discount applied for the recognition of
related carried interest accruals.
− ensuring Management included appropriate disclosures in relation to
significant assumptions and sensitivities.
Our observations
Based on the results of audit procedures performed we concluded the
recognition of carried interest is materially in accordance with IFRS 15.
121
Financial statementsBridgepoint – 2023 Annual Report & Accounts
Independent auditor’s report to the members of
Bridgepoint Group plc
continued
Our application of materiality and an overview of the scope of our audit
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 on the financial statements as a whole. Based on our professional judgement, we determined materiality for the financial
statements as a whole as follows:
Group materiality
Overall materiality £6.4 million
How we determined it 5% of profit before tax excluding exceptional income and expenses, as reported in the Consolidated
Statement of Profit or Loss
Rationale for
benchmark applied
We have considered that the profitability of the business is the key focus of the users of the financial
statements, and as such, we have based our materiality around this benchmark.
Performance
materiality
Performance materiality is set to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements in the financial statements exceeds materiality for the financial
statements as a whole.
Having considered the knowledge of the Group’s operations and controls in the prior year’s audit, we set
performance materiality at £3.8 million, which represents 60% of overall materiality.
Reporting threshold We agreed with the Directors that we would report to them misstatements identified during our audit
above £0.2 million, as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
The range of overall materiality across significant components, audited to the lower of statutory audit materiality and materiality set for
Group audit purposes, was between £0.1 million and £5.1 million, all being below the level of overall materiality that was set for the Group.
Parent Company materiality
Overall materiality £6.4 million
How we
determinedit
1% of total assets (capped at 0.54% so as not to exceed Group materiality)
Rationale for
benchmark applied
We have considered that total assets is the most appropriate benchmark as the Parent Company is a
holding entity with no material liabilities.
Performance
materiality
Performance materiality is set to reduce to an appropriately low level the probability that the aggregate of
uncorrected and undetected misstatements in the financial statements exceeds materiality for the financial
statements as a whole.
Based on our risk assessment, together with our assessment of the overall control environment, our
performance materiality is set at £3.8 million, which represents 60% of overall materiality.
Reporting threshold We agreed with the Directors that we would report to them misstatements identified during our audit
above £0.2 million, as well as misstatements below that amount that, in our view, warranted reporting for
qualitative reasons.
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Bridgepoint – 2023 Annual Report & Accounts Financial statements
As part of designing our audit, we assessed the risk of material
misstatement in the financial statements, whether due to fraud or
error, and then designed and performed audit procedures
responsive to those risks. In particular, we looked at where the
Directors made subjective judgements, such as assumptions on
significant accounting estimates.
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to give an opinion on the financial
statements as a whole. We used the outputs of our risk assessment,
our understanding of the Group and the Parent Company, their
environment, controls, and critical business processes, to consider
qualitative factors to ensure that we obtained sufficient coverage
across all financial statement line items.
Our Group audit scope included an audit of the Group and the
Parent Company financial statements. Based on our risk
assessment, Bridgepoint Advisers Holdings, Bridgepoint Credit
Holdings Limited, Bridgepoint Advisers Limited, Bridgepoint
Advisers II Limited, Bridgepoint Advisers UK Limited, Bridgepoint
Credit Advisers UK Limited, Bridgepoint Direct Lending II GP S.à
r.l., Bridgepoint Direct Lending III GP S.à r.l., BCLO Credit
Investments I S.à r.l., BP Credit Opportunities IV GP S.à r.l.,
Bridgepoint CLO 1 DAC, Bridgepoint CLO 3 DAC, Bridgepoint
CLO IV DAC, Bridgepoint CLO V DAC, Bridgepoint CLO VI
DAC and the Parent Company, Bridgepoint Group plc, were
subject to a full scope audit performed by the Group audit team. In
addition, Mazars component auditors performed a full scope audit
of Bridgepoint SAS, and specified scope procedures on
Bridgepoint LLC.
At the Parent Company level, the Group audit team also tested the
consolidation process and carried out analytical procedures to
confirm our conclusion that there were no significant risks of
material misstatement of the aggregated financial information.
Other information
The other information comprises the information included in the
Annual Report other than the financial statements and our
auditor’s report thereon. The Directors are responsible for the
other information. Our opinion on the financial statements does
not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
course of audit or otherwise appears to be materially misstated. If
we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed
bytheCompanies Act 2006
In our opinion, the part of the Directors’ remuneration report to
beaudited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course
of the audit:
− the information given in the Strategic Report and the Directors’
Report for the financial year for which the financial statements
are prepared is consistent with the financial statements and
those reports have been prepared in accordance with applicable
legal requirements;
− the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 in the Disclosure Guidance and Transparency Rules
sourcebook made by the Financial Conduct Authority (the FCA
Rules), is consistent with the financial statements and has been
prepared in accordance with applicable legal requirements; and
− information about the Parent Company’s corporate governance
code and practices and about its administrative, management
and supervisory bodies and their committees complies with rules
7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matters on which we are required
toreportbyexception
In light of the knowledge and understanding of the Group and the
Parent Company and their environment obtained in the course of
the audit, we have not identified material misstatements in the:
− Strategic Report or the Directors’ Report; or
− information about internal control and risk management systems
in relation to financial reporting processes and about share
capital structures given in compliance with rules 7.2.5 and 7.2.6
of the FCA Rules.
We have nothing to report in respect of the following matters in
relation to which the Companies Act 2006 requires us to report to
you if, in our opinion:
− adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been
received from branches not visited by us; or
− the Parent Company financial statements and the part of the
Directors’ remuneration report to be audited are not in
agreement with the accounting records and returns; or
− certain disclosures of Directors’ remuneration specified by law
are not made; or
− we have not received all the information and explanations we
require for our audit; or
− a corporate governance statement has not been prepared by the
Parent Company.
123
Financial statementsBridgepoint – 2023 Annual Report & Accounts
Independent auditor’s report to the members of
Bridgepoint Group plc
continued
Corporate governance statement
The Listing Rules require us to review the Directors' statement in
relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to Bridgepoint Group
plc's compliance with the provisions of the UK Corporate
Governance Statement specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit:
− Directors' statement with regards the appropriateness of
adopting the going concern basis of accounting and any material
uncertainties identified, set out on page 67;
− Directors’ explanation as to its assessment of the entity’s
prospects, the period this assessment covers and why they
period is appropriate, set out on pages 65-67;
− Directors' statement on fair, balanced and understandable, set
out on page 116;
− Board’s confirmation that it has carried out a robust assessment
of the emerging and principal risks, set out on page 97;
− the section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems,
set out on page 97; and
− the section describing the work of the Audit and Risk
Committee, set out on pages 92-98.
Responsibilities of Directors
As explained more fully in the Statement of Directors’
Responsibilities set out on page 116, the Directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal
control as the Directors determine is necessary to enable the
preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible
for assessing the Group’s and the Parent 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 Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
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.
Based on our understanding of the Group and the Parent
Company and their industry, we considered that non-compliance
with the following laws and regulations might have a material
effect on the financial statements: UK Bribery Act, UK Corporate
Governance Code, Financial Services and Markets Act,
Streamlined Energy and Carbon Reporting, tax legislation and
anti-money laundering regulation.
To help us identify instances of non-compliance with these laws
and regulations, and in identifying and assessing the risks of
material misstatement in respect to non-compliance, our
procedures included, but were not limited to:
− gaining an understanding of the legal and regulatory framework
applicable to the Group and the Parent Company, the industry
in which they operate, and the structure of the Group, and
considering the risk of acts by the Group and the Parent
Company which were contrary to the applicable laws and
regulations, including fraud;
− inquiring of the Directors, Management and, where appropriate,
those charged with governance, as to whether the Group and the
Parent Company are in compliance with laws and regulations,
and discussing their policies and procedures regarding
compliance with laws and regulations;
− inspecting correspondence with relevant licensing or regulatory
authorities including the Financial Conduct Authority;
− reviewing minutes of Directors’ meetings in the year; and
− discussing amongst the engagement team the laws and
regulations listed above, and remaining alert to any indications
of non-compliance.
We also considered those laws and regulations that have a direct
effect on the preparation of the financial statements, such as the
Companies Act 2006.
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Bridgepoint – 2023 Annual Report & Accounts Financial statements
In addition, we evaluated the Directors’ and Management’s
incentives and opportunities for fraudulent manipulation of the
financial statements, including the risk of management override of
controls, and determined that the principal risks related to
manipulating accounting records and preparing fraudulent financial
statements by overriding controls that otherwise appear to be
operating effectively. Due to the unpredictable way in which such
override could occur there is a risk of material misstatement due to
fraud on all audits.
Our procedures in relation to fraud included but were not limited to:
− making enquiries of the Directors and Management on whether
they had knowledge of any actual, suspected or alleged fraud;
− gaining an understanding of the internal controls established to
mitigate risks related to fraud;
− discussing amongst the engagement team the risks of fraud;
− addressing the risks of fraud through management override of
controls by performing journal entry testing;
− critically assessing accounting estimates impacting amounts
included in the financial statements for evidence of management
bias;
− considering significant transactions outside of the normal course
of business. Our approach included Management inquiry,
review of the Board minutes, review of correspondences with
regulators and analytical review to identify significant
movements on transactions and balances and substantively
testing the transaction and related disclosure, where applicable;
− reviewing the journal entry process to evaluate its effectiveness
and appropriateness, including an assessment of the level of
segregation of duties and a risk-based selection of journals based
on what we considered as high-risk criteria using a data analytics
tool and testing these against supporting documentation and
obtaining Management explanations; and
− obtaining an understanding of the rationale for and testing
related party transactions and balances.
The primary responsibility for the prevention and detection of
irregularities, including fraud, rests with both those charged with
governance and Management. As with any audit, there remained a
risk of non-detection of irregularities, as these may involve
collusion, forgery, intentional omissions, misrepresentations or the
override of internal controls.
The risks of material misstatement that had the greatest effect on
our audit are discussed in the “Key audit matters” section of this
report.
A further description of our responsibilities is available on the
Financial Reporting Council’s website at www.frc.org.uk/
auditorsresponsibilities. This description forms part of our
auditor’s report.
Other matters which we are required to address
Following the recommendation of the Audit and Risk Committee,
we were appointed by Bridgepoint Group plc on 4 October 2021
to audit the financial statements for the year ending 31 December
2021 and subsequent financial periods. The period of total
uninterrupted engagement is three years, covering the years ended
31 December 2021 to 31 December 2023.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the Group or the Parent Company and we
remain independent of the Group and the Parent Company in
conducting our audit.
Our audit opinion is consistent with our additional report to the
Audit and Risk Committee.
Use of the audit report
This report is made solely to the Parent Company’s members as a
body in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent
Company and the Parent Company’s members as a body for our
audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority Disclosure
Guidance and Transparency Rule 4.1.14R, these financial
statements form part of the ESEF-prepared Annual Financial
Reportfiled on the National Storage Mechanism of the Financial
Conduct Authority in accordance with the ESEF Regulatory
Technical Standard (“ESEF RTS”). This auditor’s report provides
noassurance over whether the Annual Financial Report has been
prepared using the single electronic format specified in the ESEF RTS.
David Herbinet (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
30 Old Bailey
London
EC4M 7AU
20 March 2024
125
Financial statementsBridgepoint – 2023 Annual Report & Accounts
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Consolidated Statement ofProfitorLoss
for the year ended 31 December
| (Restated) | |||
| 2023 | 2022** | ||
| Note | £ m | £ m | |
Management and other fees | 5 | ||
Carried interest | 5 | ||
Fair value remeasurement of investments | 5 | ||
Other operating income | |||
Total operating income | |||
Personnel expenses | 6 | ( | ( |
Other operating expenses | 7 | ( | ( |
EBITDA* | |||
Depreciation and amortisation expense | 9 | ( | ( |
Finance and other income | 10 | ||
Finance and other expenses | 10 | ( | ( |
Profit before tax* | |||
Tax | 11 | ( | ( |
Profit after tax | |||
| Attributable to: | |||
Equity holders of the parent | |||
£ | £ | ||
Basic and diluted earnings per share | 12 |
* Exceptional expenses of £47.7 m (2022: £3.2 m) are included in EBITDA. Profit before tax includes exceptional expenses of £47.7 m (2022: £3.2 m) and exceptional income of £6.9 m
(2022: £13.6 m). Details of exceptional items are included in note 8 on page 152.
** The Group has changed the presentation of the Consolidated Statement of Profit or Loss for the year ended 31 December 2022 to reclassify foreign exchange gains and losses from
EBITDA to finance and other income and expenses with nil impact in profit before tax or profit after tax. Further details are provided in note 1 on page 134.
The notes to the accounts form an integral part of these financial statements.
126
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Consolidated Statement of Comprehensive Income
for the year ended 31 December
| 2023 | 2022 | ||
| Note | £ m | £ m | |
Profit after tax | |||
| Items that may be reclassified to the statement of profit or loss in subsequent years: | |||
Exchange differences on translation of foreign operations | ( | ||
Change in the fair value of hedging instruments | 20 (b) | ( | |
Change in the time value of foreign exchange options | 20 (b) | ||
Reclassifications to the Consolidated Statement of Profit or Loss | 20 (b) | ( | |
Total tax on components of other comprehensive income | 11 (c) | ( | |
Other comprehensive income/(loss) net of tax | ( | ||
Total comprehensive income net of tax | |||
| Total comprehensive income attributable to: | |||
Equity holders of the parent |
The notes to the accounts form an integral part of these financial statements.
127
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Consolidated Statement of Financial Position
as at 31 December
| 2023 | 2022 | ||
| Note | £ m | £ m | |
| Assets | |||
| Non-current assets | |||
Property, plant and equipment | 13 | ||
Goodwill and intangible assets | 14 | ||
Carried interest receivable | 15 | ||
Fair value of fund investments | 16 (a), (b) | ||
Trade and other receivables | 16 (a), (f) | ||
Total non-current assets | |||
| Current assets | |||
Consolidated CLO assets* | 16 (a), (d) | ||
Trade and other receivables | 16 (a), (f) | ||
Derivative financial assets | 16 (a), (e) | ||
Other investments | 16 (a), (c) | ||
Cash and cash equivalents | 16 (a), (g) | ||
Term deposits with original maturities of more than three months | 16 (g) | ||
Consolidated CLO cash* | 16 (a), (g) | ||
Total current assets | |||
Total assets | |||
| Liabilities | |||
| Non-current liabilities | |||
Trade and other payables | 17 (a), (b) | ||
Other financial liabilities | 17 (a), (d) | ||
Fair value of consolidated CLO liabilities* | 17 (a), (e) | ||
Lease liabilities | 17 (a),18 | ||
Deferred tax liabilities | 22 | ||
Total non-current liabilities | |||
| Current liabilities | |||
Trade and other payables | 17 (a), (b) | ||
Lease liabilities | 17 (a),18 | ||
Derivative financial liabilities | 17 (a), (g) | ||
Consolidated CLO liabilities* | 17 (a), (e) | ||
Consolidated CLO purchases awaiting settlement* | 17 (a), (f) | ||
Total current liabilities | |||
Total liabilities | |||
Net assets | |||
| Equity | |||
Share capital | 21, 23 (a) | ||
Share premium | 21, 23 (a) | ||
Retained earnings | |||
Other reserves** | 21, 23 (c) | ||
Total equity |
* Details of the Group’s interest in consolidated Collateralised Loan Obligations (“CLOs”) are included in note 16 (d). The equity holders’ exposure in the consolidated CLOs is £81.1m at
31 December 2023 (2022: £45.2m). The Group’s investment in CLOs which are not consolidated is £15.2m (2022: £15.1m) and are included within fair value of fund investments. A
non-statutory Consolidated Statement of Financial Position, excluding consolidated CLOs is presented on page 194.
** The Group has changed the presentation of equity to aggregate other reserves. A breakdown of other reserves is included in note 23 (c).
128
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Consolidated Statement ofChangesin Equity
for the year ended 31 December
| Share | Share | Other | Retained | Total | ||
| capital | premium | reserves* | earnings | equity | ||
| Note | £ m | £ m | £ m | £ m | £ m | |
At 1 January 2023 | ||||||
Profit for the year | ||||||
Other comprehensive income | ( | |||||
Total comprehensive income | ||||||
Vested share-based payments | 23 (c) | ( | ||||
Share-based payments | 6 (a) | |||||
Share buyback | 23 (c) | ( | ( | |||
Dividends | 24 | ( | ( | |||
At 31 December 2023 |
| Share | Share | Other | Retained | Total | ||
| capital | premium | reserves* | earnings | equity | ||
| Note | £ m | £ m | £ m | £ m | £ m | |
At 1 January 2022 | ||||||
Profit for the year | ||||||
Other comprehensive loss | ( | ( | ||||
Total comprehensive income | ( | |||||
Share-based payments | 6 (a) | |||||
Dividends | 24 | ( | ( | |||
At 31 December 2022 |
* The Group has changed the presentation of equity to aggregate other reserves. A breakdown of other reserves is included in note 23 (c).
The notes to the accounts form an integral part of these financial statements.
129
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Consolidated Statement ofCashFlows
for the year ended 31 December
| 2023 | 2022 | ||
| Note | £ m | £ m | |
| Cash flows from operating activities | |||
Cash generated from operations | 25 (a) | ||
Tax paid | ( | ( | |
Net cash inflow from operating activities | |||
| Cash flows from investing activities | |||
Investment in term deposits with original maturities of more than three months | 16 (g) | ( | |
Receipts from investments (non-CLO) | |||
Purchase of investments (non-CLO) | ( | ( | |
Purchase of other investments (non-CLO) | 16 (c) | ( | |
Interest received (non-CLO) | |||
Payment for foreign exchange option premium | ( | ||
Investments in non-consolidated CLOs | ( | ||
Cash acquired on consolidation of intermediate fund holding entities | |||
Receipts from investments (consolidated CLOs) | |||
Purchase of investments (consolidated CLOs) | ( | ( | |
Cash movements from the consolidated CLOs | |||
Payments for property, plant and equipment and intangible assets | 13 | ( | ( |
Net cash outflow from investing activities | ( | ( | |
| Cash flows from financing activities | |||
IPO costs | ( | ||
Dividends paid to shareholders of the Company | 24 | ( | ( |
Share buyback | 23 (c) | ( | |
Drawings from related party investors in intermediate fund holding entities | |||
Principal elements of lease payments | ( | ( | |
Drawn funding (consolidated CLOs) | |||
Repayment of CLO borrowings (consolidated CLOs) | ( | ( | |
Cash from/(paid to) CLO investors (consolidated CLOs) | ( | ||
Interest paid (non-CLO) | ( | ( | |
Net cash inflow/(outflow) from financing activities | ( | ||
Net increase/(decrease) in cash and cash equivalents | ( | ||
Total cash and cash equivalents at the beginning of the year | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ||
Total cash and cash equivalents at the end of year | |||
Cash and cash equivalents (for use within the Group) | 16 (g) | ||
Consolidated CLO cash (restricted for use within relevant CLO) | 16 (g) | ||
Total cash and cash equivalents at the end of year |
1. The Consolidated Statement of Cash Flows includes the cash flows of consolidated CLOs. A non-statutory Consolidated Statement of Cash Flows excluding the impact of
consolidating CLOs, which has not been audited, is included on page 195.
The notes to the accounts form an integral part of these financial statements.
130
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Company Statement ofFinancialPosition
as at 31 December
Note
2023
£ m
2022
£ m
Assets
Non-current assets
Investments in subsidiaries and other Group affiliates 28 1,026.9 1,023.0
Deferred tax assets 22 – 0.4
Total non-current assets 1,026.9 1,023.4
Current assets
Trade and other receivables 16 (a), (f) 8.4 20.3
Cash and cash equivalents 16 (a), (g) 139.7 114.0
Derivative financial assets 16 (a), (e) 3.9 –
Term deposits with original maturities of more than three months 16 (a), (g) – 50.0
Total current assets 152.0 184.3
Total assets 1,178.9 1,207.7
Liabilities
Current liabilities
Trade and other payables 17 (a), (b) 131.7 1.1
Total liabilities 131.7 1.1
Net assets 1,047.2 1,206.6
Equity
Share capital 23 (a) 0.1 0.1
Share premium 23 (a) 289.8 289.8
Retained earnings 182.9 341.7
Other reserves* 23 (c) 574.4 575.0
Total equity 1,047.2 1,206.6
* The Company has changed the presentation of equity to aggregate other reserves. A breakdown of other reserves is included in note 23 (c).
The Company’s total loss for the year was £35.3m (2022: profit of £2.9m), reflecting the exceptional transaction costs associated with
the ECP acquisition. Details of exceptional items are included in note 8 on page 152.
The notes to the accounts form an integral part of these financial statements.
131
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Company Statement ofChangesinEquity
for the year ended 31 December
Note
Share
capital
£ m
Share
premium
£ m
Other
reserves*
£ m
Retained
earnings
£ m
Total
equity
£ m
At 1 January 2023 0.1 289.8 575.0 341.7 1,206.6
Loss for the year – – – (35.3) (35.3)
Other comprehensive income 20 (b) – – 0.1 – 0.1
Total comprehensive loss – – 0.1 (35.3) (35.2)
Share-based payments 6 (a) – – 4.0 – 4.0
Vested share-based payments 23 (c) – – (4.7) 4.7 –
Share buyback 23 (c) – – – (60.2) (60.2)
Dividends 24 – – – (68.0) (68.0)
At 31 December 2023 0.1 289.8 574.4 182.9 1,047.2
Note
Share
capital
£ m
Share
premium
£ m
Other
reserves*
£ m
Retained
earnings
£ m
Total
equity
£ m
At 1 January 2022 0.1 289.8 574.6 401.6 1,266.1
Profit for the year – – – 2.9 2.9
Other comprehensive income – – – – –
Total comprehensive income – – – 2.9 2.9
Share-based payments 6 (a) – – 0.4 – 0.4
Dividends 24 – – – (62.8) (62.8)
At 31 December 2022 0.1 289.8 575.0 341.7 1,206.6
* The Company has changed the presentation of equity to aggregate other reserves. A breakdown of other reserves is included in note 23 (c).
The notes to the accounts form an integral part of these financial statements.
132
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Company Statement of Cash Flows
for the year ended 31 December
Note
2023
£ m
2022
£ m
Cash flows from operating activities
Cash generated from operations 25 107.2 66.3
Net cash inflow from operating activities 107.2 66.3
Cash flows from investing activities
Investment in term deposits with original maturities of more than three months 16 (g) 50.0 (50.0)
Interest received (non-CLO) 4.7 1.5
Payment for foreign exchange option premium (3.8) –
Net cash inflow/(outflow) from investing activities 50.9 (48.5)
Cash flows from financing activities
Dividends paid to shareholders of the Company
Share buy-back
Interest paid
24
23 (c)
(68.0)
(60.2)
(1.0)
(62.8)
–
Net cash (outflow) from financing activities (129.2) (62.8)
Net increase/(decrease) in cash and cash equivalents 28.9 (45.0)
Cash and cash equivalents at the beginning of the year 114.0 159.0
Effect of exchange rate changes on cash and cash equivalents (3.2) –
Cash and cash equivalents at the end of year 16 (g) 139.7 114.0
The notes to the accounts form an integral part of these financial statements.
133
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Notes to the consolidated and Company
financial statements
1 General information and basis of preparation
General information
International accounting standards and interpretations | Effective date |
| Amendments to IAS 1 “Presentation of Financial Statements” and IFRS Practice Statement 2 “Disclosure of | |
Accounting Policies” | 1 January 2023 |
Amendments to IAS 8 “Definition of Accounting Estimates” | 1 January 2023 |
IFRS 17 “Insurance Contracts” | 1 January 2023 |
Amendments to IAS 12 “Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction” | 1 January 2023 |
International Tax Reform – Pillar Two Model Rules – Amendments to IAS 12 | 23 May 2023 |
International accounting standards and interpretations | Effective date |
Amendments to IFRS 16 “Leases”: lease liability in a sale and leaseback | 1 January 2024 |
Amendments to IAS 1: non-current liabilities with covenants and classification of liabilities as current or non-current | 1 January 2024 |
Changes to comparative period financial information
The presentation of foreign exchange gains and losses has been changed in the Consolidated Statement of Profit or Loss as it primarily
relates to non-operating activities. As a result, the comparative information for the affected line items for the year ended 31 December
2022 has been restated to reclassify foreign exchange gains of £1.1m into finance and other income. The restatement also impacts the
comparative period EBITDA and FRE metrics throughout the annual report. There is no impact on net profit in either year.
134
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Company financial statements
As permitted by section 408 of the Companies Act 2006, the Company Statement of Profit or Loss and the Statement of
Comprehensive Income are not presented as part of these financial statements. The Company‘s loss for the year amounted to £35.3m
(2022: profit of £2.9m).
2 Accounting policies
(b) Foreign currencies
135
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Notes to the consolidated and Company
financialstatements
continued
136
Bridgepoint – 2023 Annual Report & Accounts Financial statements
137
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Notes to the consolidated and Company
financialstatements
continued
138
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Asset class | Useful life |
Computers, furniture and other | 3 to 6 years |
Leasehold improvements | Over the shorter of their useful economic life or the lease term |
Property right-of-use assets | Over the contractual lease term |
139
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Notes to the consolidated and Company
financialstatements
continued
140
Bridgepoint – 2023 Annual Report & Accounts Financial statements
141
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Notes to the consolidated and Company
financialstatements
continued
142
Bridgepoint – 2023 Annual Report & Accounts Financial statements
3 Critical judgements in the application of accounting policies and key sources of estimation
uncertainty
The judgements and other key sources of estimation uncertainty at the reporting date, which may have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within the next financial year, are summarised below. The Group’s
estimates and assumptions are based on historical experience and expectation of future events and are reviewed periodically. The actual
outcome may be materially different from that anticipated.
(a) Judgements
Consolidation of fund investments
The Directors have considered whether the Group should consolidate investments in funds into the results of the Group. Control is
determined by the extent of decision-making authority, rights held by other parties, remuneration and exposure to returns.
The Directors have assessed the legal nature of the relationships between the Group, the relevant fund and fund investors and have
determined that as the manager, the Group has the power to influence the returns generated by the fund, but that the Group’s interests
typically represent only a small proportion of the total capital within each fund (c. 2% of commitments). The Directors have therefore
concluded that the Group acts as an agent which is primarily engaged to act on behalf, and for the benefit, of the fund investors rather
than act for its own benefit.
Bridgepoint funds are not consolidated into the results of the Group.
Consolidation of CLOs
The Group holds investments in the senior and subordinated notes of CLOs that it manages, predominantly driven by risk-retention
regulations. As the Group has power as the asset manager to impact the returns of the vehicles, the level of exposure to variable returns
from its involvement as an investor in the notes requires assessment to whether this indicates that the Group has a principal or agent
relationship and therefore whether the CLO should be consolidated under IFRS 10 “Consolidated Financial Statements”. The
subordinated notes of CLOs are the tranche that is most exposed to the risk of portfolio assets failing to pay as they are the first to absorb
any losses. As a result, the Group’s consideration of exposure to variable returns focuses on its interest in the equity tranches.
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Bridgepoint – 2023 Annual Report & Accounts Financial statements
The assets and liabilities of the CLO are held within separate legal entities and, as a result, the liabilities of the CLO are non-recourse to
the Group. The consolidation of the CLO results in a significant gross-up on the Group’s assets and liabilities, which is shown gross on
the face of the Consolidated Statement of Financial Position and Consolidated Statement of Cash Flows as separate lines but has no net
effect on the profit or loss or net assets. Details of the assets and liabilities are included in notes 16 and 17 and a non-statutory and
unaudited Consolidated Statement of Financial Position and Consolidated Statement of Cash Flows excluding the consolidation of CLOs
is included on pages 194 and 195 respectively.
| Bridgepoint interest in | Bridgepoint share | |||
| Name of CLOs | the subordinated notes | of CLO | Consolidation treatment at YE23 | Nature of the entity |
Bridgepoint CLO 1 DAC | 55.2% | 5.0% | Consolidated | Subordinated notes in the residual class |
Bridgepoint CLO 2 DAC | 5.0% | 5.0% | Not consolidated | Subordinated notes in the residual class |
Bridgepoint CLO 3 DAC | 51.0% | 8.9% | Consolidated | Subordinated notes in the residual class |
Bridgepoint CLO IV DAC | 61.0% | 7.0% | Consolidated | Subordinated notes in the residual class |
Bridgepoint CLO V DAC | 51.8% | 5.1% | Consolidated | Subordinated notes in the residual class |
Bridgepoint CLO VI DAC | 50.0% | 50.0% | Consolidated | Warehouse entity |
The Group consolidates Bridgepoint CLO 1 DAC (“CLO 1”), Bridgepoint CLO 3 DAC (“CLO 3”), Bridgepoint CLO IV DAC (“CLO 4”)
and Bridgepoint CLO V DAC (“CLO 5”) as the Group has exposure to variable returns as an investor in the subordinated notes. The
Group holds the majority of the subordinated notes in CLO 1, CLO 3, CLO 4 and CLO 5 and the Directors have therefore concluded
that the Group acts as principal and should consolidate. The construction of Bridgepoint CLO VI DAC (“CLO 6”) commenced during
the year and remained in warehousing as at 31 December 2023. As the Group held a majority interest in the warehouse equity, the
Group also fully consolidates CLO 6.
Bridgepoint CLO 2 DAC (“CLO 2”) is not consolidated in the financial statements of the Group at 31 December 2023 as the Group’s
exposure to variable returns is only 5% of the subordinated notes.
The Group designates the amounts attributable to the third-party investors as financial liabilities at fair value through profit and loss.
Consolidation of Carried Interest Partnerships
As a fund manager to its private equity and credit funds, the Group participates in Carried Interest Partnerships (“CIP”), the participants
of which are the Group, certain Group employees and others connected to the underlying fund. These vehicles have two purposes: to
facilitate payments of carried interest from the fund to carried interest participants, and to facilitate individual co-investment into the
funds.
The Directors have undertaken a control assessment of each CIP in accordance with IFRS 10 “Consolidated Financial Statements” to
consider whether they should consolidate the CIP.
The Directors have considered the contractual nature of the relationships between the relevant fund, the CIP and the CIP participants.
The purpose and design of the CIP and the carry rights in the fund are generally determined at the outset by the fund’s limited
partnership agreement (“LPA”) which requires investor agreement and incentivises individuals to enhance performance of the
underlying fund in line with investor expectations.
The Group has limited power over the Adjudication Committees of the CIP, which makes decisions about allocation of the carried
interest, but these powers do not give the Group control.
In addition, the Directors have also considered the variability of returns of the CIPs. The variable returns are shared between the carried
interest participants and the Group is exposed to limited variable returns of below 50%.
The Directors concluded that the Group does not control the CIP because of the predetermined contractual nature of the CIP, the
Group’s limited powers over the Adjudication Committees and limited exposure to the variable returns of the CIP. However, when the
Group has a share of 20% or more of the rights to the carried interest, the Group is considered to have significant influence and in this
case the CIP is accounted for as an associate. Details of the associates are set out within note 28 (d).
Consolidation of employee share partnership
On listing, the founder employee shareholders created a separate ring-fenced vehicle, Burgundy Investments Holdings LP (the
“Burgundy Partnership”). The Burgundy Partnership is a pool of assets, comprising the Company’s shares. The shares were contributed
by founder employee shareholders electing to donate a portion of their shares to the partnership. This pool is ring-fenced for allocation
to current and future partners in the business, as a means of allowing them to build a meaningful long-term shareholding in Bridgepoint
and reflect the opportunities that previous partners were offered.
Notes to the consolidated and Company
financialstatements
continued
144
Bridgepoint – 2023 Annual Report & Accounts Financial statements
The existing employee shareholders prior to listing, and certain employee partners, will wholly own the interest in the
Burgundy Partnership.
The Group does not have any direct economic interest in the Burgundy Partnership, and awards of new points to existing and future
employees will be made by the Advisory Committee of the Burgundy Partnership, which is made up of some of the largest founder
employee shareholders. As such, the Group does not have power over the allocation of the points and to affect those returns through
its power.
The Directors have considered the requirements of IFRS 10 “Consolidated Financial Statements” to determine whether they should
consolidate the Burgundy Partnership. As the Group does not have power over the Burgundy Partnership and no exposure to variable
returns from its involvement with the Burgundy partnership, the Directors have concluded that the Burgundy Partnership should not be
consolidated.
(b) Estimates
Recognition and measurement of carried interest revenue
Carried interest revenue is only recognised to the extent it is highly probable that there would not be a significant reversal of any
accumulated revenue recognised on the completion of a fund.
In determining the amount of revenue to be recognised the Group is required to make assumptions and estimates when determining 1)
whether or not revenue should be recognised and 2) the timing and measurement of such amounts.
The Group bases its assessment on the best available information pertaining to the funds and the activity of the underlying assets within
that fund. This includes the current fund valuation and internal forecasts on the expected timing and disposal of fund assets.
For private equity funds, the constraints on estimating the revenue are incorporated through the application of discounts of 15% to 40%
(2022: 30% to 50%) to the unrealised fair values of investments where the cumulative value of the distributions to investors and
unrealised fair value of investments of a fund exceeds the relevant carried interest hurdle (being the contractual minimum return for
fund investors).
For credit funds, which are more sensitive to the performance of individual investments within the portfolio, only funds that have either
reached their hurdle or are expected to do so imminently are modelled on the same basis.
The discount applied for each fund depends on the stage and maturity profile of each fund, and therefore recognises the de-risking of the
income over time, taking into account diversity of assets, whether there has been a recent market correction (and whether this has been
already factored into the valuation of the fund) and the expected average remaining holding period. Reasons for a higher discount may
include where the fund has not yet completed its construction, has not yet returned its original capital commitments and there is the
potential for the hurdle to grow further, or there is a higher level of perceived risk (fund specific or macro-economic). Reasons for a lower
discount include where a fund has returned its capital commitments and the hurdle has stopped or where the fund has already started to
pay carry. The levels of discounts applied are reassessed annually.
The weighted average discount at 31 December 2023 to the notional carried interest due to the Group based on unrealised fair value of
investments in relevant funds is 51% (2022: 62%) resulting in a carried interest receivable of £67.3m (2022: £42.0m). If the same
weighted average discount of 62% from 2022 had been applied to the notional carried interest receivable at 31 December 2023, the
carried interest receivable asset would be £53.0m.
If the average discount was to increase by 10% this would reduce carried interest income by £13.2m. If the average discount was to
decrease by 10% this would increase carried interest income by £13.2m.
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Bridgepoint – 2023 Annual Report & Accounts Financial statements
Valuation of fund investments at fair value
Fund investments at fair value consist of investments in private equity and credit funds. The investments are fair valued using the net
asset value of each fund, determined by the fund manager. These funds are invested into direct and indirect equity and debt investments.
Portfolio assets within each fund are stated at fair value as determined in good faith by the fund manager in accordance with the terms of
the LPA of each fund and the International Private Equity and Venture Capital Valuation Guidelines (“IPEV”) and are reviewed and
approved by the relevant Bridgepoint Valuation Committee. The valuations provided by the fund manager typically reflect the fair value
of the Group’s proportionate share of the capital account balance of each investment as at the reporting date or the latest available date.
The market approach is typically used for the valuation of the assets held by the funds. This comprises valuation techniques such as
market comparable companies and multiples. A market comparable approach uses quoted market prices or third-party quotes for similar
instruments to determine the fair value of a financial asset. A multiples approach can be used in the valuation of less liquid securities,
which typically form the majority of assets within a private equity or credit fund.
Comparable companies and multiples techniques assume that the valuation of unquoted direct investments can be assessed by
comparing performance measure multiples of similar quoted assets for which observable market prices are readily available. Comparable
public companies are selected based on factors such as industry, size, stage of development and strategy. The most appropriate
performance measure for determining the valuation of the relevant investment is selected (which may include EBITDA, price/earnings
ratios for earnings or price/book ratios for book values). Trading multiples for each comparable company identified are calculated by
dividing the value of the comparable company by the defined performance measure. The relevant trading multiples might be subject to
adjustment for general qualitative differences such as liquidity, growth rate or quality of customer base between the valued direct
investment and the group of comparable companies. The fair value of the direct investment is determined by applying the relevant
adjusted trading multiple to the identified performance measure of the valued company. Where available, valuation techniques use
market-observable assumptions and inputs. If such information is not available, inputs may be derived by reference to similar assets and
active markets, from recent prices for comparable transactions or from other observable market data. When measuring fair value, the
fund manager selects the non-market-observable inputs to be used in its valuation techniques based on a combination of historical
experience, deviation of input levels based upon similar investments with observable price levels and knowledge of current market
conditions and valuation approaches.
Within its valuation techniques the fund manager typically uses different unobservable input factors. Significant unobservable inputs
include EBITDA multiples (based on budget/forward-looking EBITDA or historical EBITDA of the issuer and EBITDA multiples of
comparable listed companies for an equivalent period), discount rates, price/earnings ratios and enterprise value/sales multiples. The
fund manager also considers the original transaction prices, recent transactions in the same or similar instruments and completed third
party transactions in comparable instruments and adjusts the model as deemed necessary.
The fund manager takes into account ESG related factors such as climate change into the valuation of investments and, to the extent
necessary, makes adjustments to earnings and multiples where demand or costs for a portfolio company could be impacted. Further
narrative on how ESG impacts our investment process can be found in the Strategic Report on pages 42 to 47.
Debt instruments may be valued using the market approach, independent loan pricing sources or at amortised cost, which requires the
determination of the effective interest rate from a number of inputs, including an estimation of the expected maturity of each loan.
Due to the level of unobservable inputs within the determination of the valuation of individual assets within each fund, and no
observable price for each investment in a fund, fund investments at fair value are classified as level 3 financial assets under IFRS 13
“Fair Value Measurement”.
Further detail on the valuation methodologies, inputs and the number of fund investments valued using each technique, along with a
sensitivity analysis of the impact of a change in the fair value of fund investments is included within note 19 (d) and (e).
Valuation of CLO assets and liabilities
The consolidated CLO assets consisting of loans are valued using independent loan pricing sources. To the extent that the significant
inputs are observable, the Group categorises these investments as level 2. The valuation methodology for the Group’s investment in the
various notes of CLOs is based upon discounted cash flow models with unobservable market data inputs, such as asset coupons, constant
annual default rates, prepayment rates, reinvestment rates, recovery rates and discount rates and they are therefore considered level 3
financial assets.
Notes to the consolidated and Company
financialstatements
continued
146
Bridgepoint – 2023 Annual Report & Accounts Financial statements
The consolidated CLO liabilities consisting of the notes issued to third-party investors are valued in line with the fair value of the CLOs’
loan asset portfolios. The CLO designated activity vehicles which are consolidated are set up to distribute all proceeds generated from
the assets of the CLO to the note holders of the CLO and thus the entity itself does not generate any residual profit. The valuations of
the consolidated liabilities are therefore measured at par and are adjusted in order to match the value of the asset portfolio, with any
adjustment applied to the note liabilities in order of ascending seniority.
The Group's investments in CLO notes of consolidated CLO vehicles are eliminated based on the valuation of the investments as
determined by the discounted cash flow models as described above. A sensitivity analysis has been included within note 19 (e).
Measurement of intangible assets, useful lives and impairment
A customer relationship asset was recognised following the Group’s acquisition of EQT Credit in October 2020, to reflect the value of
current investor relationships to the Group in the future.
At the time of the acquisition, the cost of the acquired customer relationship was measured at fair value by discounting estimated
contractual future cash flows over a period in which the customer was expected to remain invested within the Group’s funds. Key
assumptions in the model included forecast earnings for 2021 to 2025, a growth rate applied from 2025 onwards which was based upon
the long-term operating plan for the business, an investor reinvestment rate from one fund to another, and a pre-tax discount rate of
10.5% which was calculated by using comparable company information.
The useful life of the intangible assets arising from this transaction has been determined as seven years, which represents the period over
which the net present value of cash flows from the acquired customer relationships reduce to nil.
The customer relationship asset is assessed for impairment when there are indicators of impairment. Such indicators would include
fundraising being lower than targets. No impairment has been identified.
Goodwill is assessed for impairment annually or more frequently if events or changes in circumstances indicate potential impairment
loss. Goodwill arose from the acquisition of EQT Credit. It is the Group’s judgement that the lowest level of cash generating unit (“CGU”)
used to determine impairment is the credit business segment for the purposes of monitoring and assessing goodwill for impairment. In
performing the impairment test, management prepares a calculation of the recoverable amount of the goodwill, using the value-in-use
approach and compares this to the carrying value. In order to validate this, a value-in-use forecast based on approved budgets has been
prepared by management to compare the forecast of the Credit business segment to the carrying amount of the goodwill. Key
assumptions in the forecast include forecast earnings for 2024 to 2028 (2022: 2023 to 2027), including new fundraising, and a pre-tax
discount rate of 16.1% (2022: 15.0%), which was calculated by using comparable company information.
A sensitivity analysis of goodwill and the intangible asset has been included within note 14.
4 Operating segments
Operating segments are the components of the Group whose results are regularly reviewed by the Group’s chief operating decision
maker to make decisions about resources to be allocated to the segment and assess its performance.
The Executive Directors are considered to be the chief operating decision maker of the Group, which is divided into operating segments
based on how key management reviews and evaluates the operation and performance of the business.
The Group’s operations are divided into two groups, the Core business, consisting of the Private Equity and Private Credit fund
management and associated Central support, and Other. Other includes the Group’s procurement consulting business, PEPCO Services
LLP, and costs relating to strategic projects.
The Group’s core operations are divided into two business segments: Private Equity and Private Credit. The operations of both business
segments consist of providing investment management services to the relevant funds and their investors. The investment management
services comprise identification and structuring of new investments, the monitoring of investments and the sale and exit from
investments. The two business segments are supported by the Central support functions which include investor relations, head office,
finance, human resources, IT and marketing.
Segmental income and profit before tax analysis
The Executive Directors assess the operating segments based on the line items below, primarily on operating income and underlying
EBITDA. The EBITDA for each segment, together with depreciation and amortisation and net finance and other income or expenses,
forms profit before tax. Depreciation, finance and other income, finance and other expenses, exceptional items and the share-based
payment expenses excluded from underlying EBITDA are not allocated to operating segments and are included in the Group total.
147
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Group
| Private Equity | Private Credit | Central | Total Core | Total Other | Total Group | |
| Year ended 31 December 2023 | £ m | £ m | £ m | £ m | £ m | £ m |
Management and other fees | 205.0 | 56.5 | 3.8 | 265.3 | – | 265.3 |
Carried interest | 30.0 | – | – | 30.0 | – | 30.0 |
Fair value remeasurement of investments | 17.3 | 8.0 | – | 25.3 | – | 25.3 |
Other operating income | 0.2 | – | – | 0.2 | 0.8 | 1.0 |
Total operating income | 252.5 | 64.5 | 3.8 | 320.8 | 0.8 | 321.6 |
Personnel expenses | (69.3) | (21.3) | (36.0) | (126.6) | (1.0) | (127.6) |
Other operating expenses | (18.3) | (8.8) | (18.0) | (45.1) | (0.1) | (45.2) |
| Underlying EBITDA (excluding exceptional expenses | ||||||
and certain share-based payment expenses) | 164.9 | 34.4 | (50.2) | 149.1 | (0.3) | 148.8 |
Exceptional expenses | (47.7) | |||||
Certain excluded share-based payment expenses | (4.0) | |||||
EBITDA | 97.1 | |||||
Depreciation and amortisation | (18.7) | |||||
Finance and other income and expenses | 7.6 | |||||
Profit before tax | 86.0 |
Group
| (Restated) | (Restated) | (Restated) | ||||
| Private Equity | Private Credit | Central | Total Core | Total Other | Total Group | |
| Year ended 31 December 2022 | £ m | £ m | £ m | £ m | £ m | £ m |
Management and other fees | 187.8 | 50.8 | 2.9 | 241.5 | – | 241.5 |
Carried interest | 24.2 | – | – | 24.2 | – | 24.2 |
Fair value remeasurement of investments | 32.1 | 8.6 | – | 40.7 | – | 40.7 |
Other operating income | 0.2 | – | – | 0.2 | 0.8 | 1.0 |
Total operating income | 244.3 | 59.4 | 2.9 | 306.6 | 0.8 | 307.4 |
Personnel expenses | (67.6) | (21.2) | (35.9) | (124.7) | (1.1) | (125.8) |
Other operating expenses | (16.2) | (8.4) | (17.6) | (42.2) | (0.2) | (42.4) |
| Underlying EBITDA* (excluding exceptional | ||||||
expenses) | 160.5 | 29.8 | (50.6) | 139.7 | (0.5) | 139.2 |
Exceptional expenses | (3.2) | |||||
EBITDA* | 136.0 | |||||
Depreciation and amortisation | (18.3) | |||||
Finance and other income and expenses* | 9.7 | |||||
Profit before tax | 127.4 |
* 2022 finance and other income and expenses, EBITDA and Underlying EBITDA have been restated to include or exclude non-operating foreign exchange gains and losses.
Notes to the consolidated and Company
financialstatements
continued
148
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Assets and liabilities analysis
The Group’s Consolidated Statement of Financial Position is managed as a single unit rather than by segment. The only distinction for
the business segments relates to the Group’s investments in funds, carried interest receivable and other investments, which can be split
between Private Equity and Private Credit (further split between investments attributable to the Group and to third party investors).
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Investments: | ||
Private Equity | 260.9 | 241.3 |
Private Equity - other investments | 7.5 | – |
Private Credit (assets attributable to the Group) | 121.6 | 76.9 |
Private Credit (CLO assets attributable to third-party investors) | 1,267.7 | 696.1 |
Total investments | 1,657.7 | 1,014.3 |
| Carried interest receivable: | ||
Private Equity | 64.7 | 39.4 |
Private Credit | 2.6 | 2.6 |
Total carried interest receivable | 67.3 | 42.0 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Management and other fees before settlement of foreign exchange hedges | 264.2 | 239.1 |
Settlement of foreign exchange hedges | 1.1 | 2.4 |
Total management and other fees | 265.3 | 241.5 |
149
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Fair value remeasurement of investments before remeasurement of foreign exchange hedges | 23.8 | 47.0 |
Remeasurement of foreign exchange hedges | 1.5 | (6.3) |
Fair value remeasurement of investments | 25.3 | 40.7 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
CLO investment income | 66.7 | 14.9 |
CLO investment expense | (58.5) | (13.0) |
CLO investment income, net | 8.2 | 1.9 |
6 Personnel expenses
Aggregate personnel expenses (including Directors’ remuneration) in each year were as follows:
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Wages and bonuses | 95.7 | 97.6 |
Social security | 19.2 | 16.1 |
Pensions | 1.9 | 2.0 |
Share-based payments | 4.5 | 0.4 |
Other employee expenses | 11.2 | 10.8 |
Total personnel expenses | 132.5 | 126.9 |
Total personnel expenses include £0.9m (2022: £1.1m) of exceptional expenses, and accordingly are excluded from the calculation of
underlying profitability measures. See note 8 for further details.
Notes to the consolidated and Company
financialstatements
continued
150
Bridgepoint – 2023 Annual Report & Accounts Financial statements
A3 Share Award | A3 Share Award (£ per share) | |||
Group and Company | 2023 | 2022 | 2023 | 2022 |
Opening | 528,975 | 602,000 | 3.96 | 3.96 |
Vested | (56,550) | (60,200) | 3.96 | 3.96 |
Forfeited | (32,025) | (12,825) | 3.96 | 3.96 |
Outstanding at year end | 440,400 | 528,975 | 3.96 | 3.96 |
| Weighted average fair value | ||||
| Number of shares | per share granted (£) | |||
| Group and Company | 2023 | 2022 | 2023 | 2022 |
Rights outstanding at beginning of the period | – | – | N/A | N/A |
Granted | 2,619,773 | – | 2.15 | – |
Granted - dividend equivalents | 75,571 | – | 2.17 | – |
Forfeited | (91,298) | – | 2.17 | – |
Forfeited - dividend equivalents | (1,225) | – | 2.17 | – |
Vested | (730,302) | – | 2.17 | – |
Vested - dividend equivalents | (13,171) | – | 2.17 | – |
Rights outstanding (unvested) at the end of the period | 1,859,348 | – | 2.14 | – |
b) Other employee expenses
Other employee expenses include insurance, healthcare, training and recruitment costs.
Staff numbers
The monthly average number of persons, including Directors, employed by the Group during the year split by geography was as follows:
| Group | ||
| 2023 | 2022 | |
| No. | No. | |
UK | 226 | 221 |
Other | 152 | 145 |
Total | 378 | 366 |
The Company has five employees (2022: four).
151
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Audit fees | ||
Fees payable to the external auditor for the audit of the Company and the consolidated financial statements | 0.5 | 0.5 |
Fees payable to the external auditor for the audit of the accounts of the Company’s consolidated subsidiaries | 0.9 | 0.9 |
Total audit fees | 1.4 | 1.4 |
| Non-audit fees | ||
Audit-related assurance services | 0.2 | 0.2 |
Other non-audit services | 0.3 | – |
Total non-audit fees | 0.5 | 0.2 |
Total auditor’s remuneration | 1.9 | 1.6 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Expense relating to low-value asset leases | ||
Low-value asset leases | 0.4 | 0.3 |
8 Exceptional items
Exceptional items in the year ended 31 December 2023 principally relate to costs associated with the Group’s acquisition of EQT Credit
and costs incurred in relation to the acquisition of Energy Capital Partners Holdings LP and affiliated entities (“ECP”). Exceptional other
income relates to the remeasurement and revaluation of the EQT deferred consideration payable.
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Personnel expenses | (0.9) | (1.1) |
Other operating expenses | (46.8) | (2.1) |
Total exceptional expenses within EBITDA | (47.7) | (3.2) |
Finance and other expenses | – | – |
Total exceptional expenses | (47.7) | (3.2) |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Finance and other income | 6.9 | 13.6 |
Total exceptional income | 6.9 | 13.6 |
a) Exceptional personnel expenses
In 2023 and 2022, exceptional personnel expenses include deferred transaction related bonuses and associated social security costs from
the acquisition of EQT Credit in 2020. Specific bonus payments payable to employees in relation to the EQT acquisition are exceptional
as such awards were only granted once. The awards incentivise employees to align their goals with those of the business through being
awarded over multiple periods, hence such expenses will continue to be recognised until 2025.
Notes to the consolidated and Company
financialstatements
continued
152
Bridgepoint – 2023 Annual Report & Accounts Financial statements
b) Exceptional other operating expenses
In 2023, exceptional other operating expenses include costs incurred in relation to the acquisition of ECP. Costs include completion fees
for the sponsoring banks on the transaction, structuring and other accounting and tax advisory costs, documentation costs and costs
associated with the preparation of the shareholder circular in respect of the ECP transaction and audit of the associated workstreams.
Such costs would have not been incurred if no transaction had taken place and therefore have been classified as exceptional. See note 30
(a) for further details of the ECP transaction.
2022 exceptional other operating expenses relate to costs incurred in relation to other potential acquisitions.
c) Exceptional other income
Exceptional other income of £6.9m (2022: £13.6m) relates to the remeasurement and revaluation of the deferred contingent
consideration payable and unwind of discount of the associated liability to EQT AB in relation to the acquisition of EQT Credit in 2020.
The deferred consideration was settled on 13 September 2023 for an amount of £9.4m or €11.0m and was based on the outcome of
certain fundraisings.
The deferred consideration payable was recognised upon acquisition and is considered exceptional as there are no similar contractual
liabilities to EQT AB. Due to the contractual arrangement underlying the deferred consideration, there have been exceptional items
related to the valuation in multiple periods.
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Depreciation on property, plant and equipment | 14.9 | 15.3 |
Amortisation of intangible assets | 3.8 | 3.0 |
Total depreciation and amortisation expense | 18.7 | 18.3 |
| Group | ||
| (Restated) | ||
| 2023 | 2022 | |
| £ m | £ m | |
Interest income on term deposits | 9.0 | 2.3 |
Finance income on subleases | 0.7 | 0.6 |
| Net foreign exchange gains | – | 1.1 |
| Finance income on amounts receivable from related party investors | 0.1 | – |
Other income | 6.9 | 13.6 |
Total finance and other income | 16.7 | 17.6 |
Interest expense on bank overdrafts and borrowings | (1.8) | (1.3) |
Interest expense on lease liabilities | (3.5) | (3.4) |
Net foreign exchange losses | (2.4) | – |
Finance expense on amounts payable to related party investors | (0.4) | (2.3) |
Other expenses | (1.0) | (0.9) |
Total finance and other expenses | (9.1) | (7.9) |
Net finance and other income, including exceptional items | 7.6 | 9.7 |
153
Bridgepoint – 2023 Annual Report & Accounts Financial statements
11 Tax expense
(a) Tax expense
Tax charged in the Consolidated Statement of Profit or Loss:
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Current taxation | ||
Current tax – current year | 3.2 | 3.4 |
Current tax – prior year | (0.2) | 0.4 |
Total current tax expense | 3.0 | 3.8 |
| Deferred tax | ||
Deferred tax – current year | 14.9 | 4.7 |
Deferred tax – prior year | (2.6) | (1.7) |
Total deferred tax expense | 12.3 | 3.0 |
Total tax expense for the year | 15.3 | 6.8 |
(b) Reconciliation of tax expense
The effective tax rate for the year ended 31 December 2023 is 17.8% (2022: 5.4%). The tax on profit before tax is different to the
standard rate of corporation tax in the UK of 23.5% (2022: 19.0%) primarily due to timing differences on taxation of management fee
income and tax losses carried forward in the UK due to certain forms of income that are not subject to UK corporation tax.
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Profit before tax | 86.0 | 127.4 |
Tax on profit before taxation at the standard rate of corporation tax in the UK of 23.5% (2022: 19.0%) | 20.2 | 24.2 |
Non-taxable and non-deductible items | 11.4 | (23.7) |
Adjustments regarding management fee income and investments | (16.2) | 2.5 |
Effect of foreign tax rates | (1.1) | 0.2 |
Deferred tax not recognised | 3.8 | 5.0 |
Prior year adjustment | (2.8) | (1.4) |
Total tax expense for the year | 15.3 | 6.8 |
Notes to the consolidated and Company
financialstatements
continued
154
Bridgepoint – 2023 Annual Report & Accounts Financial statements
(c) Tax on amounts recognised directly in other comprehensive income
Tax on amounts recognised in other comprehensive income relate to deferred tax timing differences on foreign exchange forward
contracts used for hedging purposes.
| Group | ||
| 2023 | 2022 | |
| £m | £m | |
Tax on amounts recognised in other comprehensive income | (2.2) | 3.3 |
(d) Tax losses not recognised
The Group has carried forward losses of £487.5m (2022: £498.8m) as at 31 December 2023 which have not been recognised due to the
uncertainty of future taxable profits against which the asset can be utilised.
The Group has an asset of £50.0m (2022: £33.4m) and the Company an asset of £nil (2022: £0.4m) that have been recognised where
there is an expectation that the tax losses can be utilised against future profits. See note 22 for further detail on deferred tax assets recognised.
12 Earnings per share
| Group | ||
2023 | 2022 | |
Profit attributable to equity holders of the Company (£ m) | 70.7 | 120.6 |
Weighted average number of ordinary shares for purposes of basic and diluted EPS (m) | 808.5 | 823.3 |
Basic and diluted earnings per share (£) | 0.09 | 0.15 |
The adjusted earnings per share on underlying profit after tax of £118.5m (2022: £113.2m) based on the number of shares in issue at
31 December 2023 is £0.15 (2022: £0.14 on underlying profit after tax of £113.2m based on the number of shares in issue at
31 December 2022).
The underlying profit after tax is calculated by excluding exceptional items and the amortisation of intangible assets from within profit
after tax.
The number of ordinary shares included in the calculation of earnings per share excludes shares held by the Group itself and those
subject to the ongoing share buyback programme. Further detail is included in note 23.
13 Property, plant and equipment
| Group | ||||
| Computers, | ||||
| Right-of-use | Leasehold | furniture and | ||
| assets | improvements | other | Total | |
| £ m | £ m | £ m | £ m | |
| Cost | ||||
Balance at 1 January 2023 | 73.1 | 29.8 | 10.5 | 113.4 |
Foreign exchange | – | (0.2) | (0.1) | (0.3) |
Additions | 5.0 | 0.9 | 2.3 | 8.2 |
Disposals | (6.2) | (0.3) | (0.7) | (7.2) |
Balance at 31 December 2023 | 71.9 | 30.2 | 12.0 | 114.1 |
| Accumulated depreciation | ||||
Balance at 1 January 2023 | (17.6) | (4.2) | (6.1) | (27.9) |
Foreign exchange | – | 0.1 | 0.1 | 0.2 |
Depreciation | (9.6) | (3.4) | (1.9) | (14.9) |
Disposals | 1.2 | 0.3 | 0.7 | 2.2 |
Balance at 31 December 2023 | (26.0) | (7.2) | (7.2) | (40.4) |
Carrying value at 31 December 2023 | 45.9 | 23.0 | 4.8 | 73.7 |
155
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||||
| Computers, | ||||
| Right-of-use | Leasehold | furniture and | ||
| assets | improvements | other | Total | |
| £ m | £ m | £ m | £ m | |
| Cost | ||||
Balance at 1 January 2022 | 77.4 | 15.2 | 10.8 | 103.4 |
Foreign exchange | – | 0.4 | 0.1 | 0.5 |
Additions | 3.4 | 18.9 | 3.4 | 25.7 |
Disposals | (7.7) | (4.7) | (3.8) | (16.2) |
Balance at 31 December 2022 | 73.1 | 29.8 | 10.5 | 113.4 |
| Accumulated depreciation | ||||
Balance at 1 January 2022 | (14.2) | (5.6) | (7.8) | (27.6) |
Foreign exchange | – | (0.1) | (0.1) | (0.2) |
Depreciation | (10.6) | (2.7) | (2.0) | (15.3) |
Disposals | 7.2 | 4.2 | 3.8 | 15.2 |
Balance at 31 December 2022 | (17.6) | (4.2) | (6.1) | (27.9) |
Carrying value at 31 December 2022 | 55.5 | 25.6 | 4.4 | 85.5 |
The Company has no plant, property or equipment at 31 December 2023 (2022: nil).
| Group | |||
| Customer | |||
| Goodwill | relationship asset | Total | |
| £ m | £ m | £ m | |
| Cost | |||
Balance at 1 January 2023 | 105.1 | 21.2 | 126.3 |
Balance at 31 December 2023 | 105.1 | 21.2 | 126.3 |
| Accumulated amortisation and impairment | |||
Balance at 1 January 2023 | – | (6.7) | (6.7) |
Amortisation | – | (3.0) | (3.0) |
Balance at 31 December 2023 | – | (9.7) | (9.7) |
| Carrying value | |||
Balance at 1 January 2023 | 105.1 | 14.5 | 119.6 |
Balance at 31 December 2023 | 105.1 | 11.5 | 116.6 |
| Group | |||
| Customer | |||
| Goodwill | relationship asset | Total | |
| £ m | £ m | £ m | |
| Cost | |||
Balance at 1 January 2022 | 105.1 | 21.2 | 126.3 |
Balance at 31 December 2022 | 105.1 | 21.2 | 126.3 |
| Accumulated amortisation and impairment | |||
Balance at 1 January 2022 | – | (3.7) | (3.7) |
Amortisation | – | (3.0) | (3.0) |
Balance at 31 December 2022 | – | (6.7) | (6.7) |
| Carrying value | |||
Balance at 1 January 2022 | 105.1 | 17.5 | 122.6 |
Balance at 31 December 2022 | 105.1 | 14.5 | 119.6 |
Notes to the consolidated and Company
financialstatements
continued
156
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Opening balance | 42.0 | 38.9 |
Income recognised in the year | 29.8 | 23.1 |
Foreign exchange movements recognised as profit or loss | (0.4) | 1.1 |
Foreign exchange movements recognised as other comprehensive income | (0.1) | 0.1 |
Receipts of carried interest | (4.0) | (21.2) |
Closing balance | 67.3 | 42.0 |
157
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | |||||
| Fair value | Financial assets | Assets which | |||
| through profit | Hedging | at amortised | are not financial | ||
| or loss | derivatives | cost | assets | Total | |
| As at 31 December 2023 | £ m | £ m | £ m | £ m | £ m |
Fair value of fund investments | 301.4 | – | – | – | 301.4 |
Consolidated CLO assets | 1,313.0 | – | 35.8 | – | 1,348.8 |
Trade and other receivables | – | – | 124.4 | 17.0 | 141.4 |
Derivative financial instruments | – | 6.2 | – | – | 6.2 |
Other investment | – | – | 7.5 | – | 7.5 |
Cash and cash equivalents | – | – | 238.8 | – | 238.8 |
Consolidated CLO cash | – | – | 76.0 | – | 76.0 |
Total | 1,614.4 | 6.2 | 482.5 | 17.0 | 2,120.1 |
| Group | |||||
| Fair value | Financial assets | Assets which are | |||
| through profit | Hedging | at amortised | not financial | ||
| or loss | derivatives | cost | assets | Total | |
| As at 31 December 2022 | £ m | £ m | £ m | £ m | £ m |
Fair value of fund investments | 273.0 | – | – | – | 273.0 |
Consolidated CLO assets | 726.3 | – | 15.0 | – | 741.3 |
Trade and other receivables | – | – | 181.6 | 23.2 | 204.8 |
Derivative financial instruments | – | 1.0 | – | – | 1.0 |
Cash and cash equivalents | – | – | 196.0 | – | 196.0 |
Term deposits with original maturities of more than three months | – | – | 100.0 | – | 100.0 |
Consolidated CLO cash | – | – | 24.6 | – | 24.6 |
Total | 999.3 | 1.0 | 517.2 | 23.2 | 1,540.7 |
| Company | |||||
| Fair value | Financial assets | Assets which | |||
| through profit | Hedging | at amortised | are not financial | ||
| or loss | derivatives | cost | assets | Total | |
| As at 31 December 2023 | £ m | £ m | £ m | £ m | £ m |
Trade and other receivables | – | – | 8.0 | 0.4 | 8.4 |
Cash and cash equivalents | – | – | 139.7 | – | 139.7 |
Derivative financial instruments | – | 3.9 | – | – | 3.9 |
Total | – | 3.9 | 147.7 | 0.4 | 152.0 |
| Company | |||||
| Fair value | Financial assets | Assets which are | |||
| through profit | Hedging | at amortised | not financial | ||
| or loss | derivatives | cost | assets | Total | |
| As at 31 December 2022 | £ m | £ m | £ m | £ m | £ m |
Trade and other receivables | – | – | 20.3 | – | 20.3 |
Cash and cash equivalents | – | – | 114.0 | – | 114.0 |
Term deposits with original maturities of more than three months | – | – | 50.0 | – | 50.0 |
Total | – | – | 184.3 | – | 184.3 |
Notes to the consolidated and Company
financialstatements
continued
158
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Opening balance | 273.0 | 313.7 |
Additions | 36.3 | 38.5 |
Change in fair value | 18.5 | 32.9 |
Foreign exchange movements recognised in profit or loss | (1.3) | 5.8 |
Foreign exchange movements recognised in other comprehensive income | (5.1) | 8.2 |
Disposals | (20.0) | (126.1) |
Closing balance | 301.4 | 273.0 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Consolidated CLO assets held by the Group | 1,424.8 | 765.9 |
Consolidated CLO assets attributable to third-party investors | (1,343.7) | (720.7) |
Group’s exposure to consolidated CLO assets | 81.1 | 45.2 |
159
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Derivative financial assets | ||
Forward contracts | 2.3 | 1.0 |
Foreign currency options | 3.9 | – |
Total derivative financial assets | 6.2 | 1.0 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £ m | £ m | £ m | £ m | |
| Non-current | ||||
Prepayments | 1.7 | 1.6 | – | – |
Trade and other receivables | 21.5 | 18.3 | – | – |
23.2 | 19.9 | – | – | |
| Current | ||||
Trade receivables | 17.5 | 12.2 | 4.7 | – |
Accrued income | 20.6 | 19.0 | – | – |
Prepayments | 11.4 | 6.2 | – | – |
Deferred investment receipts | – | 52.8 | – | – |
Other receivables | 68.7 | 94.7 | 3.7 | 20.3 |
118.2 | 184.9 | 8.4 | 20.3 | |
Total trade and other receivables | 141.4 | 204.8 | 8.4 | 20.3 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Opening balance | 2.8 | 0.1 |
Additions | 4.0 | 3.6 |
Amortisation | (1.9) | (0.9) |
Closing balance | 4.9 | 2.8 |
Notes to the consolidated and Company
financialstatements
continued
160
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| Lease receivables | £ m | £ m |
Due within 1 year | 3.1 | 2.5 |
Due between 1 and 2 years | 3.6 | 2.5 |
Due between 2 and 3 years | 3.6 | 2.5 |
Due between 3 and 4 years | 3.6 | 2.5 |
Due between 4 and 5 years | 2.0 | 2.5 |
Due after more than 5 years | 6.0 | 5.2 |
Total undiscounted lease payments receivables | 21.9 | 17.7 |
Unearned finance income | (3.4) | (2.3) |
Net investment in leases | 18.5 | 15.4 |
Current | 2.2 | 2.0 |
Non-current | 16.3 | 13.4 |
18.5 | 15.4 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £ m | £ m | £ m | £ m | |
Cash at bank and in hand | 67.0 | 78.3 | 4.7 | 1.4 |
Money market funds | 170.9 | 17.7 | 135.0 | 12.6 |
Term deposits with original maturities of less than three months | 0.9 | 100.0 | – | 100.0 |
Total cash and cash equivalents | 238.8 | 196.0 | 139.7 | 114.0 |
Term deposits with original maturities of more than three months | – | 100.0 | – | 50.0 |
Consolidated CLO cash | 76.0 | 24.6 | – | – |
Total cash and term deposits | 314.8 | 320.6 | 139.7 | 164.0 |
161
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | |||||
| Liabilities | |||||
| Fair value | Financial | which are not | |||
| through profit | Hedging | liabilities at | financial | ||
| or loss | derivatives | amortised cost | liabilities | Total | |
| As at 31 December 2023 | £ m | £ m | £ m | £ m | £ m |
Trade and other payables | – | – | 47.6 | 98.0 | 145.6 |
Other financial liabilities | 50.1 | – | – | – | 50.1 |
Lease liabilities | – | – | 81.6 | – | 81.6 |
Derivative financial instruments | – | 1.6 | – | – | 1.6 |
Consolidated CLO liabilities | 1,152.0 | – | 14.9 | – | 1,166.9 |
Consolidated CLO purchases awaiting settlement | – | – | 176.8 | – | 176.8 |
Total | 1,202.1 | 1.6 | 320.9 | 98.0 | 1,622.6 |
| Group | |||||
| Fair value | Financial | Liabilities which | |||
| through profit | Hedging | liabilities at | are not financial | ||
| or loss | derivatives | amortised cost | liabilities | Total | |
| As at 31 December 2022 | £ m | £ m | £ m | £ m | £ m |
Trade and other payables | 16.7 | – | 51.8 | 60.6 | 129.1 |
Other financial liabilities | 49.5 | – | – | – | 49.5 |
Lease liabilities | – | – | 83.2 | – | 83.2 |
Derivative financial instruments | – | 13.2 | – | – | 13.2 |
Consolidated CLO liabilities | 597.5 | – | 2.6 | – | 600.1 |
Consolidated CLO purchases awaiting settlement | – | – | 120.6 | – | 120.6 |
Total | 663.7 | 13.2 | 258.2 | 60.6 | 995.7 |
| Company | |||||
| Liabilities | |||||
| Fair value | Financial | which are not | |||
| through profit | Hedging | liabilities at | financial | ||
| or loss | derivatives | amortised cost | liabilities | Total | |
| As at 31 December 2023 | £ m | £ m | £ m | £ m | £ m |
Trade and other payables | – | – | 112.2 | 19.5 | 131.7 |
Total financial liabilities | – | – | 112.2 | 19.5 | 131.7 |
| Company | |||||
| Fair value | Financial | Liabilities which | |||
| through profit | Hedging | liabilities at | are not financial | ||
| or loss | derivatives | amortised cost | liabilities | Total | |
| As at 31 December 2022 | £ m | £ m | £ m | £ m | £ m |
Trade and other payables | – | – | 1.1 | – | 1.1 |
Total financial liabilities | – | – | 1.1 | – | 1.1 |
Notes to the consolidated and Company
financialstatements
continued
162
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| (b) Trade and other payables | ||||
163
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Liabilities held at fair value through profit and loss: | ||
CLO repurchase agreements | 28.5 | 28.1 |
Amount payable to related party investors in Opal Investments LP | 8.4 | 10.0 |
Amount payable to related party investors in intermediate fund holding entities | 13.2 | 11.4 |
Total | 50.1 | 49.5 |
Notes to the consolidated and Company
financialstatements
continued
164
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Liabilities of CLOs consolidated by the Group (non-current) | 1,152.0 | 597.5 |
Liabilities of CLOs consolidated by the Group (current) | 14.9 | 2.6 |
Total | 1,166.9 | 600.1 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Consolidated CLO purchases awaiting settlement | 176.8 | 120.6 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Derivative financial liabilities: | ||
Forward contracts | 1.6 | 13.2 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Private equity funds | 257.0 | 255.3 |
Credit funds | 30.3 | 34.4 |
Total commitments | 287.3 | 289.7 |
165
Bridgepoint – 2023 Annual Report & Accounts Financial statements
18 Lease liabilities
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Lease liabilities | ||
Current | 11.9 | 6.1 |
Non-current | 69.7 | 77.1 |
Total | 81.6 | 83.2 |
The lease liabilities relate to rental payments in respect of the Group’s rented offices. The lease contracts range from 5 to 10 years.
The lease contracts include either inflationary increases to the rent payable or periodic review of the rent payable. The liability has been
determined at each period end, based upon expected changes in the contractual rent payable, as well as any planned exercise of any
break or early exit.
The lease liability is sensitive to assumptions relating to the selection and application of the IBR and those relating to the exercise or
non-exercise of lease break clauses.
The determination of the lease term for each lease involves the Group assessing any extension and termination options, the
enforceability of such options, and judging whether it is reasonably certain that they will be exercised. A number of leases contain such
clauses. The Group periodically reassesses the lease term and this assessment is based on all relevant facts and circumstances. Should a
change occur, the Group modifies the lease liability and associated right of use asset to reflect the remaining expected cash flows.
For each lease, a conclusion was reached on the overall likelihood of the option being exercised. The potential future cash outflows
relating to extension options not included in the measurement of lease liabilities are approximately £3.3m (2022: £1.6m).
The IBR has been determined by combining the relevant reference risk free rate for each currency, consideration of adjustments for
country specific risks and applying a financing spread observable to comparable companies. In order to validate the reasonableness of the
IBR, it has been compared to the margin payable on the Group’s revolving credit facility, and was found to be comparable. If the IBR had
been 1% higher or lower, the impact on the lease liability would be:
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Increase of 1% | (2.5) | (3.0) |
Decrease of 1% | 2.6 | 3.2 |
The lease payments are allocated between principal and finance expense. The finance expense is charged to the profit or loss over the
lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability.
The Consolidated Statement of Profit or Loss includes the following amounts relating to the lease liabilities:
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Interest on lease liability | 3.5 | 3.4 |
The Company has no lease liabilities (2022: nil).
Notes to the consolidated and Company
financialstatements
continued
166
Bridgepoint – 2023 Annual Report & Accounts Financial statements
2023 | 2022 | |||||||
Group | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Financial assets | ||||||||
| Fair value of fund | ||||||||
investments | – | – | 301.4 | 301.4 | – | – | 273.0 | 273.0 |
Consolidated CLO assets | – | 1,313.0 | – | 1,313.0 | – | 726.3 | – | 726.3 |
Derivative financial assets | – | 6.2 | – | 6.2 | – | 1.0 | – | 1.0 |
Total | – | 1,319.2 | 301.4 | 1,620.6 | – | 727.3 | 273.0 | 1,000.3 |
| Financial Liabilities | ||||||||
| Deferred contingent | ||||||||
consideration payable | – | – | – | – | – | – | 16.7 | 16.7 |
Other financial liabilities | – | – | 50.1 | 50.1 | – | – | 49.5 | 49.5 |
Consolidated CLO liabilities | – | – | 1,152.0 | 1,152.0 | – | – | 597.5 | 597.5 |
Derivative financial liabilities | – | 1.6 | – | 1.6 | – | 13.2 | – | 13.2 |
Total | – | 1.6 | 1,202.1 | 1,203.7 | – | 13.2 | 663.7 | 676.9 |
2023 | 2022 | |||||||
Company | Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total |
| Financial assets | ||||||||
Derivative financial assets | – | 3.9 | – | 3.9 | – | – | – | – |
Total | – | 3.9 | – | 3.9 | – | – | – | – |
| Financial Liabilities | ||||||||
Derivative financial liabilities | – | – | – | – | – | – | – | – |
Total | – | – | – | – | – | – | – | – |
167
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| Group | £m | £m |
| Level 3 financial assets at fair value through profit or loss: | ||
Opening balance | 273.0 | 313.7 |
Additions | 36.3 | 38.5 |
Change in fair value | 18.5 | 32.9 |
Foreign exchange movements recognised as profit or loss | (1.3) | 5.8 |
Foreign exchange movements recognised as other comprehensive income | (5.1) | 8.2 |
Disposals | (20.0) | (126.1) |
Transfer (to)/from level 1 or 2 | – | – |
Closing balance | 301.4 | 273.0 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| Movement in CLO liabilities at fair value through profit or loss which are level 3: | ||
Opening balance | 597.5 | 29.7 |
On acquisition | – | 287.9 |
Repayment | (52.6) | – |
Drawn | 582.5 | 52.8 |
Foreign exchange movements | (14.0) | 24.2 |
Change in fair value | 38.6 | (9.0) |
Transfers (to)/from level 1 or 2 | – | 211.9 |
Closing balance | 1,152.0 | 597.5 |
Notes to the consolidated and Company
financialstatements
continued
168
Bridgepoint – 2023 Annual Report & Accounts Financial statements
2023 | 2022 | |
| Movement in other financial liabilities at fair value through profit or loss which are level 3 | ||
Opening balance | 21.4 | 9.1 |
Additions | 1.3 | 11.1 |
Change in fair value | 0.5 | 0.3 |
Foreign exchange movements | (0.7) | 0.9 |
Disposals | (0.9) | – |
Transfers (to)/from level 1 or 2 | – | – |
Closing | 21.6 | 21.4 |
| Valuation Approach | |
Earnings | The Group primarily uses an earnings approach where a set of relevant listed companies and precedent transactions are |
| available. | |
| Earnings multiples are applied to the earnings of each portfolio company to determine the enterprise value. The most | |
| common measure of earnings is EBITDA. Earnings are adjusted for non-recurring items and run-rate adjustments to | |
| arrive at maintainable earnings. Earnings are usually obtained from portfolio company management accounts or | |
| forecast/budgeted earnings, as considered appropriate. When selecting earning multiples consideration is given to: | |
| − the original transaction price/entry multiple; | |
| − recent transactions in the same or similar instruments; | |
| − relevant comparable listed company multiples; and | |
| − exit expectations and other company specific factors. | |
| The resulting enterprise value is then adjusted to take into account the capital structure of the portfolio company, | |
| including any assets or liabilities such as cash or debt that should be included. The fund’s share of the value is calculated | |
| by calculating its holding. |
169
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Valuation Approach | |
| Amortising to | Where a performing loan has been originated is valued based upon its amortised cost. Provided that there are no |
| par method | circumstances which indicate material underperformance or inability of the borrower to pay interest or repay the |
| principal, the valuation of loans that have been originated is determined by apportioning any arrangement fees, similar | |
| fees or discount on a linear basis over the anticipated holding period (which is typically three years). | |
Market price | Where a loan is traded in the market, market prices can be obtained for use in pricing. Market prices can be |
| obtained from third-party market price aggregation services or broker quotes where there is an active market. | |
| The extent to which a market is active will depend on the ‘depth’ of the pricing (being the number of distinct price | |
| quotations available from different sources). Before the use of market pricing, consideration is given to anomalies | |
| or other inaccuracies in market pricing and whether there are other factors that should be considered (for example, | |
| recent transactions). | |
Earnings | Where a loan may be impaired an earnings basis is typically used to determine the enterprise value of the borrower, |
| following which a waterfall approach is used to determine the value of the loan. Where there are circumstances which | |
| indicate there is risk of non-performance of the borrower, the enterprise value of the borrower will typically be | |
| determined in accordance with an earnings methodology (as described above), following which a waterfall approach | |
| is used to determine the value of the loan. | |
| Discounted cash | Where the Group holds an interest in the note of a CLO, a discounted cash flow analysis is used to determine the |
| flows | valuation. Inputs used in the discounted cash flow analysis include discount rates and those used to project the |
| expected cash flows relating to the CLO’s underlying asset portfolio including annual loan default rates and associated | |
| recovery rates, prepayment rates, reinvestment rates and spreads. | |
| Other | Considering the broad array of debt instruments that may be held by the funds, it may be deemed appropriate for |
| approaches | other valuation techniques to be utilised in certain cases. |
Notes to the consolidated and Company
financialstatements
continued
170
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Upside case** | 0.9 | |||||||
Downside case** | (0.7) | |||||||
Upside case** | 23.0 | |||||||
Downside case** | (18.5) | |||||||
171
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Notes to the consolidated and Company
financialstatements
continued
172
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Nominal value of forward trades and swap agreements in pound sterling | 362.7 | 294.2 |
Mark-to-market value at year end | 0.2 | (9.6) |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Ineffective portion recognised as profit or loss | – | – |
Effective portion recognised as other comprehensive income | 8.6 | (10.5) |
Reclassified to profit or loss upon settlement of hedges | 1.3 | (5.9) |
| Group | ||
2023 | 2022 | |
Euro denominated investments (€m) | 400.7 | 330.7 |
Borrowings (€m) | – | – |
Investment hedges (€m) | (83.3) | (176.7) |
EUR denominated investments, net (€m) | 317.4 | 154.0 |
+/- 5% sensitivity (£m) impact on profit and net assets | 13.7 | 6.8 |
173
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Nominal value of forward trades and swap agreements in pound sterling | 74.7 | 156.7 |
Mark-to-market value at year end | 0.6 | (2.6) |
| Group and the Company | ||
| 2023 | 2022 | |
| £ m | £ m | |
Nominal value of foreign exchange options in pound sterling | 103.3 | – |
Mark-to-market value at year end | 3.9 | – |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Ineffective portion recognised as profit or loss | – | – |
Effective portion recognised as cash flow hedge reserve in other comprehensive income | – | – |
Effective portion recognised as time value in other comprehensive income | 0.1 | – |
Reclassified as a basis adjustment | – | – |
Notes to the consolidated and Company
financialstatements
continued
174
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
| (+/-) | (+/-) | |
Increase or decrease of 1% | – | – |
175
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Notes to the consolidated and Company
financialstatements
continued
176
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | |||||
| Due within | Due between | Due within | Due more than | ||
| 1 year | 1 and 2 years | 2 and 5 years | 5 years | Total | |
| As at 31 December 2023 | £ m | £ m | £ m | £ m | £ m |
Other financial liabilities | – | 21.6 | – | 29.0 | 50.6 |
Derivative financial liabilities | 1.2 | 0.4 | – | – | 1.6 |
Trade and other payables | 47.6 | – | – | – | 47.6 |
Lease liabilities | 15.0 | 14.1 | 38.7 | 25.7 | 93.5 |
Consolidated CLO liabilities | 96.4 | 63.6 | 1,271.5 | – | 1,431.5 |
Consolidated CLO purchases awaiting settlement | 176.8 | – | – | – | 176.8 |
337.0 | 99.7 | 1,310.2 | 54.7 | 1,801.6 |
| Group | |||||
| Due within | Due between | Due within | Due more than | ||
| 1 year | 1 and 2 years | 2 and 5 years | 5 years | Total | |
| As at 31 December 2022 | £ m | £ m | £ m | £ m | £ m |
Other financial liabilities | – | 21.4 | – | 29.7 | 51.1 |
Derivative financial liabilities | 5.2 | 4.8 | 3.2 | – | 13.2 |
Trade and other payables | 51.8 | – | – | – | 51.8 |
Deferred contingent consideration | 16.7 | – | – | – | 16.7 |
Lease liabilities | 9.4 | 13.6 | 39.7 | 34.9 | 97.6 |
Consolidated CLO liabilities | 84.5 | 48.3 | 397.2 | 249.5 | 779.5 |
Consolidated CLO purchases awaiting settlement | 120.6 | – | – | – | 120.6 |
288.2 | 88.1 | 440.1 | 314.1 | 1,130.5 |
| Company | |||||
| Due within | Due between | Due within | Due more than | ||
| 1 year | 1 and 2 years | 2 and 5 years | 5 years | Total | |
| £ m | £ m | £ m | £ m | £ m | |
Trade and other payables | 131.7 | – | – | – | 131.7 |
| Company | |||||
| Due within | Due between | Due within | Due more than | ||
| 1 year | 1 and 2 years | 2 and 5 years | 5 years | Total | |
| As at 31 December 2022 | £ m | £ m | £ m | £ m | £ m |
Trade and other payables | 1.1 | – | – | – | 1.1 |
1.1 | – | – | – | 1.1 |
177
Bridgepoint – 2023 Annual Report & Accounts Financial statements
21 Capital management
The primary objective of the Group’s capital management is to ensure that the Company and its subsidiaries have sufficient capital both
now and in the future, having considered risks in the business and mitigants to those risks, while managing returns to the Group’s
shareholders. The Group also manages its capital position to ensure compliance with capital requirements imposed by the Financial
Conduct Authority (“FCA”) and other regulatory authorities on individual regulated entities.
The Investment Firms Prudential Regime (“IFPR”) applies to Markets in Financial Instruments Directive (“MiFID”) investment firms,
collective portfolio management investment firms and regulated and unregulated holding companies of groups that contain one or more
of the aforementioned firms. The Group and certain regulated subsidiaries report to the FCA on own funds, the own funds requirement
and a basic liquid asset requirement.
The capital structure comprises cash and cash equivalents, borrowings and the capital and reserves of the Company. Capital and reserves
comprise share capital, share premium, capital contributions, other reserves and retained earnings. These as set out below.
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Cash and cash equivalents (for use within the Group) | 238.8 | 196.0 |
Term deposits with original maturities of more than three months | – | 100.0 |
Net cash | 238.8 | 296.0 |
Share capital | 0.1 | 0.1 |
Share premium | 289.8 | 289.8 |
Capital redemption reserve | 0.0 | – |
Share-based payment reserve | 3.0 | 3.6 |
Cash flow hedge reserve | 0.9 | (8.9) |
Foreign exchange option time value reserve | 0.1 | – |
Net exchange differences reserve | 8.6 | 14.4 |
Retained earnings | 418.7 | 473.7 |
Equity attributable to equity holders | 721.2 | 772.7 |
The Group’s financing facilities are subject to financial covenants. The Group and the Company’s borrowing facility agreements are
subject to a ratio of adjusted EBITDA to net finance charges and ratio of total net debt to adjusted EBITDA on a rolling annual period.
During the year the Group and the Company were fully compliant with regulatory capital requirements and banking covenants.
Notes to the consolidated and Company
financialstatements
continued
178
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Deferred tax assets | 74.6 | 57.9 |
Deferred tax liabilities | (108.5) | (77.3) |
Net deferred tax liability | (33.9) | (19.4) |
| Other timing | Management | Losses carried | ||
| Deferred tax assets | differences | fee hedges | forward | Total |
As at 1 January 2022 | 22.8 | – | 25.0 | 47.8 |
Credit to other comprehensive income | – | 2.0 | – | 2.0 |
(Charge)/credit to the Consolidated Statement of Profit or Loss | (0.3) | – | 8.4 | 8.1 |
As at 31 December 2022 | 22.5 | 2.0 | 33.4 | 57.9 |
(Charge) to other comprehensive income | – | (2.0) | – | (2.0) |
Credit to the Consolidated Statement of Profit or Loss | 2.1 | – | 16.6 | 18.7 |
As at 31 December 2023 | 24.6 | – | 50.0 | 74.6 |
| Management | |||||
| Other timing | Management | fee income and | Capital | ||
| Deferred tax liabilities | differences | fee hedges | investments | allowance | Total |
As at 1 January 2022 | (20.9) | (1.3) | (42.8) | (2.5) | (67.5) |
Credit to other comprehensive income | – | 1.3 | – | – | 1.3 |
Credit/(charge) to the Consolidated Statement of Profit or Loss | 1.9 | – | (10.8) | (2.2) | (11.1) |
As at 31 December 2022 | (19.0) | – | (53.6) | (4.7) | (77.3) |
(Charge) to other comprehensive income | – | (0.2) | – | – | (0.2) |
Credit/(charge) to the Consolidated Statement of Profit or Loss | 4.7 | – | (37.4) | 1.7 | (31.0) |
As at 31 December 2023 | (14.3) | (0.2) | (91.0) | (3.0) | (108.5) |
179
Bridgepoint – 2023 Annual Report & Accounts Financial statements
23 Equity
| Company | ||||
2023 | 2022 | |||
No. | £ | No. | £ | |
Ordinary of £0.00005 each | 794,637,730 | 39,732 | 823,268,774 | 41,163 |
Deferred of £81 each | 500 | 40,500 | 500 | 40,500 |
Deferred of £1 each | 1 | 1 | 1 | 1 |
Deferred of £0.01 each | 1 | 1 | 1 | 0.01 |
Total | 794,638,232 | 80,234 | 823,269,276 | 81,664 |
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £ m | £ m | £ m | £ m | |
Cash flow hedge reserve | 0.9 | (8.9) | – | – |
Foreign exchange option time value reserve | 0.1 | – | 0.1 | – |
Net exchange differences reserve | 8.6 | 14.4 | – | – |
Share-based payment reserve | 3.0 | 3.6 | 2.9 | 3.6 |
Merger reserve | – | – | 571.4 | 571.4 |
Capital redemption reserve | 0.0 | – | – | – |
Total | 12.6 | 9.1 | 574.4 | 575.0 |
Notes to the consolidated and Company
financialstatements
continued
180
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Company | ||||
2023 | 2022 | |||
Ordinary dividends | £ m | Pence per share | £ m | Pence per share |
Prior interim dividends paid | 35.3 | 32.8 | ||
Proposed final dividends | 34.9 | 33.0 |
25 Cash flow information
(a) Cash generated from operations
Group | Company | |||
| 2023 | 2022 | 2023 | 2022 | |
| £ m | £ m | £ m | £ m | |
Profit/(loss) before tax | 86.0 | 127.4 | (34.6) | 2.9 |
| Adjustments for: | ||||
Exceptional expenses | 3.3 | 3.2 | – | 0.1 |
Share-based payments | 4.2 | 0.4 | – | – |
Loss on disposal of right-of-use asset | 1.2 | 0.4 | – | – |
Depreciation and amortisation expense | 17.5 | 18.3 | – | – |
Net other income | (10.0) | (8.6) | (2.7) | (1.7) |
Carried interest | (30.0) | (24.2) | – | – |
Fair value remeasurement of investments | (25.3) | (40.7) | – | – |
Net exchange losses/(gains) | 2.4 | (1.1) | 3.4 | 0.1 |
(Increase)/decrease in trade and other receivables | (5.6) | (46.4) | 117.3 | 86.9 |
Increase/(decrease) in trade and other payables | 56.0 | 6.9 | 23.8 | (22.0) |
Cash generated from operations | 99.7 | 35.6 | 107.2 | 66.3 |
181
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| (b) Cash outflows from leases | ||
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Financing | 10.1 | 7.6 |
Operating | 0.3 | 0.3 |
Cash outflows from leases | 10.4 | 7.9 |
The Company has no leases (2022: nil).
(c) Reconciliation of liabilities arising from financing activities
| Group | ||||||
| Foreign | ||||||
| Net additions/ | Fair value | exchange | 31 December | |||
| 1 January 2023 | Cash flows | (disposals) | movements | movements | 2023 | |
| £ m | £ m | £ m | £ m | £ m | £ m | |
Borrowings | – | – | – | – | – | – |
Fair value of consolidated CLO liabilities | 597.5 | – | 529.9 | 38.6 | (14.0) | 1,152.0 |
Lease liabilities | 83.2 | (10.1) | 8.5 | – | – | 81.6 |
Total | 680.7 | (10.1) | 538.4 | 38.6 | (14.0) | 1,233.6 |
| Group | ||||||
| Foreign | ||||||
| Net additions/ | Fair value | exchange | 31 December | |||
| 1 January 2022 | Cash flows | (disposals) | movements | movements | 2022 | |
| £ m | £ m | £ m | £ m | £ m | £ m | |
Borrowings | – | – | – | – | – | – |
Fair value of consolidated CLO liabilities | 241.4 | – | 340.7 | (9.0) | 24.2 | 597.5 |
Lease liabilities | 84.8 | (7.6) | 6.0 | – | – | 83.2 |
Total | 326.2 | (7.6) | 346.7 | (9.0) | 24.2 | 680.7 |
The Company has no borrowings or lease liabilities (2022: nil).
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Salary, bonus and other benefits | 1.9 | 1.6 |
Total | 1.9 | 1.6 |
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Salary, bonus and other benefits | 2.4 | 2.1 |
Total | 2.4 | 2.1 |
Notes to the consolidated and Company
financialstatements
continued
182
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||
| 2023 | 2022 | |
| £ m | £ m | |
Amounts received from funds | 298.2 | 264.3 |
Amounts paid on behalf of the funds | 28.4 | 19.0 |
Amounts receivable from funds | 41.2 | 49.7 |
27 Parent and ultimate controlling party
The Company is owned by a number of natural persons and corporates, none of whom own more than 20% of the issued share capital of
the Company. Accordingly, there is no parent entity nor ultimate controlling party.
| Company | ||
| 2023 | 2022 | |
| £ m | £ m | |
Balance as at 1 January | 1,023.0 | 1,022.6 |
Increase in investment in subsidiary and other Group affiliates | 3.9 | 0.4 |
At 31 December | 1,026.9 | 1,023.0 |
| Company’s | |||||
| proportion of | |||||
| Country of | ownership | ||||
Name of subsidiary | Ref | incorporation | Principal activity | Share class | interest |
Bridgepoint Group Holdings Limited | 1 | UK | Holding company | Ordinary shares | 100% |
183
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Company’s | ||||||
| proportion of | ||||||
| Country of | ownership | |||||
Name of subsidiary | Ref | incorporation | Principal activity | Share class | interest | |
101 | Investments (GP) Limited | 1 | UK | General Partner | Ordinary shares | 100% |
Atlantic GP 1 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
Atlantic GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
Atlantic GP LLP | 1 | UK | General Partner | N/A | – | |
BBTPS GP Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
BBTPS FP GP Limited | 2 | UK | General Partner | Ordinary shares | 100% | |
BBTPS Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% | |
BC II FP Limited | 1 | UK | Dormant entity | Ordinary shares | 100% | |
BC II FP SGP Limited | 2 | UK | General Partner | Ordinary shares | 100% | |
BC GP 1 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
BC GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
BC II GP LLP | 2 | UK | General Partner | N/A | – | |
BC II GP LP | 2 | UK | General Partner | N/A | – | |
BC II MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% | |
BC MLP UK Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% | |
BC SMA Carry GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% | |
BC SMA II Carry GP LLP | 2 | UK | General Partner | N/A | – | |
BC SMA II FP Limited | 1 | UK | Limited Partner | Ordinary shares | 100% | |
BCLO Credit Investments I S.à r.l. | 3 | Luxembourg | CLO management company | Ordinary shares | 100% | |
BCO II Carry GP LLP | 2 | UK | General Partner | N/A | – | |
BCO III Carry GP LLP | 2 | UK | General Partner | N/A | – | |
BCO IV Carry GP LLP | 2 | UK | General Partner | N/A | – | |
BCO IV FP Limited | 1 | UK | Limited Partner | Ordinary shares | 100% | |
BCO IV LORAC Limited | 1 | UK | Dormant entity | Ordinary shares | 100% | |
BDC GP LP | 2 | UK | General Partner | N/A | – | |
BDC II (SGP) Limited | 2 | UK | General Partner | Ordinary shares | 100% | |
BDC II FP GP Limited | 2 | UK | General Partner | Ordinary shares | 100% | |
BDC II GP LP | 2 | UK | General Partner | N/A | – | |
BDC II Limited | 1 | UK | Limited Partner | Ordinary shares | 100% | |
BDC II Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% | |
BDC III GP 1 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
BDC III GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
BDC III GP LLP | 1 | UK | General Partner | N/A | – | |
BDC III Limited | 1 | UK | Limited Partner | Ordinary shares | 100% | |
BDC III Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% | |
BDC III SFP GP Limited | 2 | UK | General Partner | Ordinary shares | 100% | |
BDC IV Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% | |
BDC IV Limited | 1 | UK | Dormant entity | Ordinary shares | 100% | |
BDC GP 1 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
BDC IV GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% | |
BDC IV MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% | |
BDC IV GP LLP | 2 | UK | General Partner | N/A | – | |
BDC IV GP LP | 2 | UK | General Partner | N/A | – | |
| BDC IV SFP GP Limited | 2 | UK | General Partner | Ordinary shares | 100% | |
| BDC V GP LLP | 1 | UK | General Partner | N/A | – | |
| BDC V MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% | |
| BDC V GP SCSp | 3 | Luxembourg | General Partner | N/A | – |
Notes to the consolidated and Company
financialstatements
continued
184
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Company’s | |||||
| proportion of | |||||
| Country of | ownership | ||||
Name of subsidiary | Ref | incorporation | Principal activity | Share class | interest |
| BDC V GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
| BDC Special 1 Limited | 2 | UK | General Partner | Ordinary shares | 100% |
BDC Special 2 Limited | 2 | UK | General Partner | Ordinary shares | 100% |
BDC Special GP LLP | 2 | UK | General Partner | N/A | – |
BDCP II (Nominees) Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
BDCP II GP 1 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
BDCP II GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
BDCP II GP LLP | 2 | UK | General Partner | N/A | – |
BDCP II GP LP | 2 | UK | General Partner | N/A | – |
BDCP II Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
BDCP II MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% |
BDCP II SFP GP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
BDL I Carry GP LLP | 2 | UK | General Partner | N/A | – |
BDL II Carry GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
BDL III Carry GP LLP | 2 | UK | General Partner | N/A | – |
BDL III FP Limited | 1 | UK | Limited Partner | Ordinary shares | 100% |
BDL III LORAC Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
BEP IV (Nominees) Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
BEP IV FP Limited | 1 | UK | Limited Partner | Ordinary shares | 100% |
BEP IV FP SGP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
BEP IV GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
BEP IV GP LLP | 2 | UK | General Partner | N/A | – |
BEP IV GP LP | 2 | UK | General Partner | N/A | – |
BEP IV MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% |
BEV Germany GP Co Limited | 4 | Guernsey | General Partner | Ordinary shares | 100% |
BEV FP Limited | 1 | UK | Limited Partner | Ordinary shares | 100% |
BEV GP LLP | 1 | UK | General Partner | N/A | – |
BEV FP SGP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
BEV GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
BEV GPC Limited | 1 | UK | General Partner | Ordinary shares | 100% |
BEV MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% |
BEV Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
BEV Nominees II Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
BE VI FP Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
BE VI FP SGP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
BE VI GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
BE VI GP LLP | 2 | UK | General Partner | N/A | – |
BE VI GP LP | 2 | UK | General Partner | N/A | – |
BE VI MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% |
BE VI Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
| BE VI Nominees II Limited | 1 | UK | Nominee company | Ordinary Shares | 100% |
| BE VII GP SCSp | 3 | Luxembourg | General Partner | N/A | – |
BG II GP LLP | 1 | UK | General Partner | N/A | – |
| BG II Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
| Bridgepoint Advisers Singapore Pte. Ltd | 16 | Singapore | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint AB | 5 | Sweden | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint Advantage Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
185
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Company’s | |||||
| proportion | |||||
| Country of | of ownership | ||||
Name of subsidiary | Ref | incorporation | Principal activity | Share class | interest |
Bridgepoint Advantage MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% |
Bridgepoint Advantage FP Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Advantage FP SGP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Advantage GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Advantage GP LLP | 2 | UK | General Partner | N/A | – |
Bridgepoint Advantage GP LP | 2 | UK | General Partner | N/A | – |
Bridgepoint Advantage Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
Bridgepoint Advisers Europe Limited | 1 | UK | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint Advisers Group Limited | 1 | UK | Investment holding company | Ordinary shares | 100% |
Bridgepoint Advisers Holdings | 1 | UK | Investment holding company | Ordinary shares | 100% |
Bridgepoint Advisers II Limited | 1 | UK | Private equity management company | Ordinary shares | 100% |
Bridgepoint Advisers Limited | 1 | UK | Private equity management company | Ordinary shares | 100% |
Bridgepoint Advisers UK Limited | 1 | UK | Private equity management company | Ordinary shares | 100% |
Bridgepoint Capital (Doolittle) Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Capital (Nominees) Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
Bridgepoint Capital Directorships Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Capital General Partner LP | 2 | UK | General Partner | N/A | – |
Bridgepoint Capital Group Limited Employee Benefit Trust | 1 | UK | Employee Benefit Trust | N/A | – |
Bridgepoint Capital Scottish GP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Capital Partners Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Capital Verwaltungs GmbH | 6 | Germany | General Partner | Ordinary shares | 100% |
Bridgepoint Credit AD GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Advisers UK Limited | 1 | UK | Credit fund advisory company | Ordinary shares | 100% |
Bridgepoint Credit BOCPIF GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Carry LP | 2 | UK | Investment holding company | N/A | – |
| Bridgepoint Credit Carry GP LLP | 2 | UK | General Partner | N/A | – |
| Bridgepoint Credit CLO GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Co-Invest GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Empire GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit France SAS | 12 | France | Credit fund management company | Ordinary shares | 100% |
Bridgepoint Credit GP Verwaltungs GmbH | 13 | Germany | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Holdings Limited | 1 | UK | Investment holding company | Ordinary shares | 100% |
Bridgepoint Credit Limited | 1 | UK | Credit fund management company | Ordinary shares | 100% |
Bridgepoint Credit Management Limited | 1 | UK | Credit fund management company | Ordinary shares | 100% |
Bridgepoint Credit MSPD GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit MPD GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
Bridgepoint Credit Opportunities II GP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Opportunities II GP LP | 2 | UK | General Partner | N/A | – |
Bridgepoint Credit Opportunities II GP GmbH & Co. KG | 13 | Germany | General Partner | N/A | – |
Notes to the consolidated and Company
financialstatements
continued
186
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Company’s | |||||
| proportion of | |||||
| Country of | ownership | ||||
Name of subsidiary | Ref | incorporation | Principal activity | Share class | interest |
Bridgepoint Credit Opportunities III GP LP | 2 | UK | General Partner | N/A | – |
Bridgepoint Credit Opportunities III GP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Opportunities IV GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Opportunities SICAV GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Partners Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint Credit PPF GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
| Bridgepoint Credit PS GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Credit Services S.à r.l. | 3 | Luxembourg | Credit fund advisory company | Ordinary shares | 100% |
Bridgepoint Credit UK Limited | 1 | UK | Credit fund advisory company | Ordinary shares | 100% |
Bridgepoint Debt Funding Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Debt Management Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Debt Managers Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint Development Capital Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint Development Capital V GP S.a r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Direct Lending II GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
| Bridgepoint Direct Lending III GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
| Bridgepoint Direct Lending IV GP S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Europe (SGP) Ltd | 2 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Europe III FP (GP) Limited | 2 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Europe III (GP) Limited | 1 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Europe III GP LP | 2 | UK | General Partner | N/A | – |
Bridgepoint Europe IV (Nominees) 1 Limited | 1 | UK | Nominee entity | Ordinary shares | 100% |
Bridgepoint Europe IV (Nominees) Limited | 1 | UK | Nominee entity | Ordinary shares | 100% |
Bridgepoint Europe IV FP (GP) Limited | 2 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Europe IV General Partner L.P. | 2 | UK | General Partner | N/A | – |
Bridgepoint Europe IV General Partner ‘F’ L.P. | 2 | UK | General Partner | N/A | – |
Bridgepoint Europe Limited | 1 | UK | Limited Partner | Ordinary shares | 100% |
Bridgepoint Europe Managerial LLP | 1 | UK | Limited Partner | N/A | – |
| Bridgepoint Europe V Finance 1 Limited | 1 | UK | Dormant entity | Ordinary Shares | 100% |
| Bridgepoint Europe V Finance GP LLP | 1 | UK | General Partner | N/A | 100% |
Bridgepoint Europe VII (GP) S.à r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
Bridgepoint Europe VII FP Limited | 1 | UK | Limited Partner | Ordinary shares | 100% |
Bridgepoint Europe VII FP SGP Limited | 2 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Europe VII GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
Bridgepoint Europe VII GP LLP | 1 | UK | General Partner | N/A | – |
Bridgepoint Europe VII Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
Bridgepoint Europe VII MLP Limited | 1 | UK | Managing Limited Partner | Ordinary shares | 100% |
Bridgepoint Finance Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Fund Management S.à r.l. | 3 | Luxembourg | Private equity management company | Ordinary Shares | 100% |
Bridgepoint GmbH | 6 | Germany | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint GP2 LLP | 2 | UK | General Partner | N/A | – |
| Bridgepoint Growth I GP LLP | 1 | UK | General Partner | N/A | – |
| BDC V Nominees Limited | 1 | UK | Nominee entity | Ordinary shares | 100% |
Bridgepoint Growth Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
187
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Company’s | |||||
| proportion of | |||||
| Country of | ownership | ||||
Name of subsidiary | Ref | incorporation | Principal activity | Share class | interest |
Bridgepoint Growth Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
Bridgepoint Holdco 1 Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Holdings Group Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Holdings Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Infrastructure Advisers Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Infrastructure Development Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Infrastructure Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint International Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint Investment Consultants (Shanghai) Co Ltd | 8 | China | Private equity advisory company | Ordinary shares | 100% |
| Bridgepoint Loan Fund GP GmbH & Co. KG | 13 | Germany | General Partner | N/A | – |
Bridgepoint Loan Fund GP S.à.r.l. | 3 | Luxembourg | General Partner | Ordinary shares | 100% |
| Bridgepoint Netherlands B.V. | 9 | Netherlands | Private equity advisory company | Ordinary shares | 100% |
| Bridgepoint OP GP Limited | 1 | UK | General Partner | Ordinary shares | 100% |
| Bridgepoint OP LP | 1 | UK | Investment holding partnership | N/A | – |
Bridgepoint Partners Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint SAS | 7 | France | Private equity advisory company | Ordinary shares | 100% |
| Bridgepoint Services France SAS | 12 | France | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint Private Equity Group Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Private Equity Growth Fund Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Private Equity Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Property Advisers Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Property Development Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Real Estate Advisers Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Real Estate Development Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Real Estate Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint Real Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint SA | 10 | Spain | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint Services Sàrl | 3 | Luxembourg | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint Sp Zoo (in liquidation) | 11 | Poland | Private equity advisory company | Ordinary shares | 100% |
Bridgepoint Sp Zoo sp.k (in liquidation) | 11 | Poland | General Partner | N/A | – |
| Bridgepoint Structured Credit Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint UK Holdco Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint UK Midco Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint US Holdings Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
| Bridgepoint US Holdco Limited | 14 | United States | Investment holding company | Ordinary shares | 100% |
| Bridgepoint US Holdco 2 Limited | 14 | United States | Investment holding company | Ordinary shares | 100% |
Bridgepoint Ventures Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Bridgepoint, LLC | 14 | United States | Private equity advisory company | Ordinary shares | 100% |
Burgundy GP LLP | 1 | UK | General Partner | N/A | – |
Burgundy GP 2 Limited | 1 | UK | General Partner | Ordinary shares | 100% |
GeorgeTown (Nominees) Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Horninghaven Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Horningway Limited | 1 | UK | General Partner | Ordinary shares | 100% |
HPE II GP LP | 2 | UK | General Partner | N/A | – |
HPE SGP Limited | 2 | UK | General Partner | Ordinary shares | 100% |
LORAC 5 Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC 6 Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Notes to the consolidated and Company
financialstatements
continued
188
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Company’s | |||||
| proportion of | |||||
| Country of | ownership | ||||
Name of subsidiary | Ref | incorporation | Principal activity | Share class | interest |
LORAC BC Co-Investment Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BC II Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BDC III Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BDC IV Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BDC Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BDCP II Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BEP IV Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BE VI Co-investment Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC BG I Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC Carry BC SMA II Limited | 1 | UK | Investment holding company | Ordinary Shares | 100% |
LORAC Carry BCO IV Limited | 1 | UK | Investment holding company | Ordinary Shares | 100% |
LORAC Carry BDL III Limited | 1 | UK | Investment holding company | Ordinary Shares | 100% |
LORAC Eagle Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
LORAC KITE Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
New HPE II GP LP | 2 | UK | General Partner | N/A | – |
Opal Investments LP | 2 | UK | Investment holding partnership | N/A | – |
PEPCO Services LLP | 1 | UK | Collective purchasing negotiator | N/A | – |
Ruby Investments (UK) Limited | 1 | UK | Dormant entity | Ordinary shares | 100% |
Sapphire Investments (Guernsey) Limited | 4 | Guernsey | Investment holding company | Ordinary shares | 100% |
Throttle Nominees Limited | 1 | UK | Nominee company | Ordinary shares | 100% |
Vigny Advisory | 15 | France | Dormant entity | Ordinary shares | 100% |
Vigny Participation | 15 | France | Dormant entity | Ordinary shares | 100% |
Vigny Holding | 15 | France | Dormant entity | Ordinary shares | 100% |
Ref | Registered office | |
1 | 5 Marble Arch, London, W1H 7EJ, United Kingdom | |
2 | 50 Lothian Road, Festival Square, Edinburgh, EH3 9WJ, Scotland, United Kingdom | |
3 | 6B Rue du Fort Niedergrünewald, Luxembourg, L-2226, Luxembourg | |
4 | 1 Royal Plaza, Royal Avenue, St Peter Port, Guernsey, GY1 2HL, Guernsey | |
5 | Mäster Samuelsgatan 1, S-111 44 Stockholm , Sweden | |
6 | Nextower, Thurn-und-Taxis-Platz 6, 60313 Frankfurt, Germany | |
7 | 21 Avenue Kleber, 75116, Paris, France | |
8 | Unit 2103-05, ONE ICC, No 999 Middle Huaihai Road, Shanghai, Xuhui District, China | |
9 | Paulus Potterstraat 22A, 1071 DA, Amsterdam, Netherlands | |
10 | Calle Rafael Calvo, 39A-4° - 28010 Madrid , Spain | |
11 | ul. Rondo ONZ 1, 00-124, Warsaw, Poland | |
12 | 21 rue La Pérouse, 75116, Paris, France | |
13 | C/O Steigmaier Steuerberatungsgesellschaft mbH, Schleissheimer Str. 12, 85221, Dachau, Germany | |
14 | 251 | Little Falls Drive, City of Wilmington 19808, County of New Castle |
15 | 21 rue La Pérouse, 75017, Paris, France | |
16 | 10 Anson Road, #22-02, International Plaza, Singapore (079903) |
189
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Country of | Proportion of | ||||
Name of subsidiary: | Ref | incorporation | Principal activity | Share class | ownership interest |
Bridgepoint PE CI Limited | 1 | UK | Investment holding company | Ordinary shares | 49.1% |
Sapphire Sub II A Limited* | 4 | Guernsey | Investment holding company | Ordinary shares | 100% |
Sapphire Sub II B Limited* | 4 | Guernsey | Investment holding company | Ordinary shares | 100% |
Sapphire Sub III A Limited* | 4 | Guernsey | Investment holding company | Ordinary shares | 100% |
Sapphire Sub III B Limited* | 4 | Guernsey | Investment holding company | Ordinary shares | 100% |
Sapphire Sub III C Limited* | 4 | Guernsey | Investment holding company | Ordinary shares | 100% |
Sapphire Sub South Limited* | 4 | Guernsey | Investment holding company | Ordinary shares | 25% |
| Group’s | ||||
| Country of | proportion of | |||
| incorporation | ownership interest | Nature of interest | Periods consolidated | |
| Name of structured entities: | ||||
BE VI (French) Co-Invest LP | United Kingdom | 86.2% | Limited partner | All periods |
BDC IV (French) Co-Investment LP | United Kingdom | 51.9% | Limited partner | All periods |
Bridgepoint CLO 1 DAC | Ireland | 55.2% | Subordinated note in the residual class | All periods |
Bridgepoint CLO 3 DAC | Ireland | 51.0% | Subordinated note in the residual class | All periods |
Bridgepoint CLO IV DAC | Ireland | 61.0% | Subordinated note in the residual class | All periods |
Bridgepoint CLO V DAC | Ireland | 51.8% | Subordinated note in the residual class | Year ended 31 December 2023 |
Bridgepoint CLO VI DAC | Ireland | 50.0% | Warehouse entity | Year ended 31 December 2023 |
Opal Investments LP | United Kingdom | 85.0% | Limited partner | All periods |
Maple Tree VII LP | United Kingdom | 21.7%* | Limited partner | All periods |
| 31 December | ||
| 2023 | 2022 | |
| £ m | £ m | |
Carried interest receivable | 13.6 | – |
Carried interest payable | (13.5) | – |
Net assets | 0.1 | – |
Result for the year | – | – |
Group’s interest in the associate | 35.0% | 35.0% |
Notes to the consolidated and Company
financialstatements
continued
190
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| 31 December | ||
| 2023 | 2022 | |
| £ m | £ m | |
Carried interest receivable | 228.1 | 136.4 |
Carried interest payable | (228.0) | (136.2) |
Net assets | 0.1 | 0.2 |
Result for the year | – | – |
Group’s interest in the associate | 25.9% | 25.9% |
| 31 December | ||
| 2023 | 2022 | |
| £ m | £ m | |
Investments at fair value | 35.7 | 39.5 |
Other assets | 2.5 | 3.2 |
Total liabilities | (2.5) | (2.1) |
Net assets | 35.7 | 40.6 |
Profit for the year | 1.9 | 0.7 |
Group’s interest in the associate | 49.7% | 49.7% |
| 31 December | ||
| 2023 | 2022 | |
| £ m | £ m | |
Investments at fair value | 14.5 | 12.4 |
Other assets | 0.1 | 1.5 |
Total liabilities | (0.2) | (0.1) |
Net assets | 14.4 | 13.8 |
Profit for the year | 0.9 | 2.8 |
Group’s interest in the associate | 45.2% | 45.6% |
191
Bridgepoint – 2023 Annual Report & Accounts Financial statements
101 | Investments (GP) Limited | BDC III GP 2 Limited | BDCP II MLP Limited | Bridgepoint Europe III FP (GP) Limited |
Atlantic GP 1 Limited | BDC III Limited | BDCP II SFP GP Limited | Bridgepoint Europe IV FP (GP) Limited | |
Atlantic GP LLP | BDC III SFP GP Limited | BE VI FP SGP Limited | Bridgepoint Europe Managerial LLP | |
BBTPS FP GP Limited | BDC IV MLP Limited | BE VI GP 2 Limited | Bridgepoint Europe VII FP Limited | |
BC GP 2 Limited | BDC IV SFP GP Limited | BE VI MLP Limited | Bridgepoint Europe VII FP SGP Limited | |
BC II FP SGP Limited | BDC Special 1 Limited | BEP IV FP SGP Limited | Bridgepoint Europe VII GP 2 Limited | |
BC II MLP Limited | BDC Special 2 Limited | BEP IV GP 2 Limited | Bridgepoint Europe VII MLP Limited | |
BDC II FP GP Limited | BDC Special GP LLP | BEP IV MLP Limited | Burgundy GP LLP | |
BDC II Limited | BDCP II GP 2 Limited | BEV FP SGP Limited |
| Group | ||||||||||
| Value of the | accrued | Group | ||||||||
| Group’s | Typical | Net asset | Typical | carried | maximum | |||||
| co- | Group | value of the | Management | Typical | Group share | interest | exposure to | |||
| investments | commitment | Total investor | funds at year | fees received | management | Carried interest rate | of carried | receivable | loss at | |
| at year end | to the fund as | commitments | end | by the Group | fee range | % | interest | at year end | year end | |
| at 31 December | £ m | % | £ bn | £ bn | £ m | % | (where applicable) | % | £ m | £ m |
| 2023 | Generally up to | |||||||||
| Private equity | 0.75 to | 20% of profits | Up to | |||||||
funds | 260.9 | <2% | 28.9 | 16.7 | 205.0 | 2.00% | over threshold | 35% | 64.7 | 325.6 |
| Generally up to | ||||||||||
| 0.50 to | 20% of profits | Up to | ||||||||
Credit funds | 121.6 | <9% | 6.9 | 4.4 | 56.5 | 1.75% | over threshold | 35% | 2.6 | 124.2 |
382.5 | 35.8 | 21.1 | 261.5 | 67.3 | 449.8 |
Notes to the consolidated and Company
financialstatements
continued
192
Bridgepoint – 2023 Annual Report & Accounts Financial statements
| Group | ||||||||||
| Value of the | accrued | Group | ||||||||
| Group’s | Typical | Net asset | Typical | carried | maximum | |||||
| co- | Group | value of the | Management | Typical | Group share | interest | exposure to | |||
| investments | commitment | Total investor | funds at year | fees received | management | Carried interest rate | of carried | receivable | loss at | |
| at year end | to the fund as | commitments | end | by the Group | fee range | % | interest | at year end | year end | |
| at 31 December | £ m | % | £ bn | £ bn | £ m | % | (where applicable) | % | £ m | £ m |
| 2022 | Generally up to | |||||||||
| Private equity | 0.75 to | 20% of profits | Up to | |||||||
funds | 241.3 | <2% | 28.2 | 15.5 | 179.5 | 2.00% | over threshold | 35% | 39.4 | 280.7 |
| Generally up to | ||||||||||
| 0.50 to | 20% of profits | Up to | ||||||||
Credit funds | 76.9 | <9% | 6.0 | 2.8 | 50.8 | 1.75% | over threshold | 35% | 2.6 | 79.5 |
318.2 | 34.2 | 18.3 | 230.3 | 42.0 | 360.2 |
30 Events after the reporting period
(a) ECP transaction
On 6 September 2023, the Group announced a transaction to add ECP to the Group to accelerate Bridgepoint’s strategic diversification.
The transaction establishes a third and complementary growth pillar for the Group. ECP is a leading North American infrastructure
investor with a market-leading position in the highly sought-after energy transition and sustainability focussed investing ecosystem.
Further details of the transaction were set out in the shareholder circular dated 2 October 2023, which can be found at our website:
www.bridgepoint.eu/shareholders.
The transaction was approved by the Company’s shareholders on 19 October 2023 and it was announced on 20 October 2023 that
required investor consents to the transaction had been received in respect of ECP Fund III, IV and V. As announced on 4 March 2024,
the sole outstanding regulatory clearance in respect of the transaction is a clearance applied for by ECP ControlCo, LLC from the
Federal Energy Regulatory Commission, and closing of the transaction is expected to occur in Q2 2024.
As the transaction was not completed before 31 December 2023, the Group’s Consolidated Statement of Profit or Loss for the year
ended 31 December 2023 does not include any revenue, profit or loss relating to the ECP business, other than transaction costs of
£43.5m recognised by the Group during the year, which have been recognised as other operating expenses and personnel expenses.
Such transaction costs are classified as exceptional and so are excluded from underlying performance metrics. Further details on
exceptionals are included in note 8.
The Group will apply the acquisition method to account for the transaction in accordance with IFRS 3 “Business Combinations”. The
Group is required to determine what is part of the business combination transaction, to recognise and measure the identified net assets
acquired, and to determine the consideration transferred. As the transaction had not yet completed when the Annual Report was
authorised for issue, the Group is unable to reasonably estimate the fair value of net assets acquired, the fair value of consideration
transferred and the resulting goodwill and intangible assets.
(b) Share buyback programme
On 2 October 2023, the Company announced a second share buyback programme of up to £50.0m. The share buyback programme
commenced on 12 October 2023 following completion of the previous programme, and is expected to complete on or before 31 July
2024. Between 31 December 2023 and 20 March 2024, being the latest practicable date before the publication of these financial
statements, a further 904,187 ordinary shares have been bought back in aggregate for £2.4m pursuant to the share buyback programme.
Of these shares, in aggregate 904,187 have been cancelled as at 20 March 2024.
(c) US private placement notes
On 7 March 2024, the Group priced $430.0m of new US private placement notes. The proceeds from the new notes will be used to
provide additional resources to deliver the Group’s strategic growth plans. The proceeds will also be used to refinance any portion of the
$225.0m private placement notes that will transfer to the Group as part of the ECP transaction perimeter. Under a change of control
process in these existing notes, note holders can opt for repayment from completion of the ECP transaction. The new notes will be
structured in four tranches with maturities of 3, 5, 7 and 10 years and an average coupon of 6.17 per cent. The receipt of funding for the
new notes is expected during Q2 2024, subject to the completion of the ECP transaction and customary conditions.
There have been no other material subsequent events since 31 December 2023.
193
Bridgepoint – 2023 Annual Report & Accounts Financial statements
Non-statutory Consolidated Statement
of Financial Position, excluding CLOs
as at 31 December
(Unaudited)
2023
£ m
(Unaudited)
2022
£ m
Assets
Non-current assets
Property, plant and equipment 73.7 85.5
Goodwill and intangible assets 116.6 119.6
Carried interest receivable 67.3 42.0
Fair value of fund investments* 382.5 318.2
Trade and other receivables 23.2 19.9
Total non-current assets 663.3 585.2
Current assets
Trade and other receivables 118.2 184.9
Derivative financial assets 6.2 1.0
Other investments, at fair value 7.5 –
Cash and cash equivalents 238.8 196.0
Term deposits with original maturities of more than three months – 100.0
Total current assets 370.7 481.9
Total assets 1,034.0 1,067.1
Liabilities
Non-current liabilities
Trade and other payables 13.1 13.6
Other financial liabilities 50.1 49.5
Lease liabilities 69.7 77.1
Deferred tax liabilities 33.9 19.4
Total non-current liabilities 166.8 159.6
Current liabilities
Trade and other payables 132.5 115.5
Lease liabilities 11.9 6.1
Derivative financial liabilities 1.6 13.2
Total current liabilities 146.0 134.8
Total liabilities 312.8 294.4
Net assets 721.2 772.7
Equity
Share capital 0.1 0.1
Share premium 289.8 289.8
Retained earnings 418.7 473.7
Other reserves** 12.6 9.1
Total equity 721.2 772.7
* The fair value of fund investments includes the Group’s own exposures in consolidated CLOs 1, 3, 4, 5 and 6 of £81.1m (2022: CLOs 1, 3 and 4 of £45.2m) as at 31 December 2023.
** The Group has changed the presentation of equity to aggregate other reserves. A breakdown of other reserves is included in note 23 (c).
This unaudited non-statutory consolidated statement of financial position applies all of the measurement and recognition requirements
of IFRS and the accounting policies of the Group, except for the requirement to consolidate CLOs. CLOs are presented as an investment
held at fair value in line with how they are managed by the Group, rather than being consolidated in accordance with IFRS 10
“Consolidated Financial Statements”.
194
Bridgepoint – 2023 Annual Report & Accounts Other information
Non-statutory Consolidated Statement
of Cash Flows, excluding CLOs
for the year ended 31 December
Unaudited
2023
£ m
Unaudited
2022
£ m
Cash flows from operating activities
Cash generated from operations 99.7 35.6
Tax paid (4.7) (1.7)
Net cash inflow from operating activities 95.0 33.9
Cash flows from investing activities
Investment in term deposits with original maturities of more than three months 100.0 (100.0)
Receipts from investments 83.6 74.3
Purchase of investments (46.9) (41.2)
Purchase of other investments (7.5) –
Interest received 8.5 3.3
Payment for foreign exchange option premium (3.8) –
Investments in CLOs (35.6) (8.7)
Cash acquired on consolidation of intermediate fund holding entities – 1.2
Payments for property, plant and equipment and intangible assets (4.0) (22.6)
Net cash flows from investing activities 94.3 (93.7)
Cash flows from financing activities
IPO costs – (1.8)
Dividends paid to shareholders of the Company (68.0) (62.8)
Share buyback (60.2) –
Drawings from related party investors in intermediate fund holding entities 1.2 3.8
Principal elements of lease payments (6.6) (4.1)
Interest paid (7.2) (4.7)
Net cash flows from financing activities (140.8) (69.6)
Net increase/(decrease) in cash and cash equivalents 48.5 (129.4)
Cash and cash equivalents at the beginning of the year 196.0 323.1
Effect of exchange rate changes on cash and cash equivalents (5.7) 2.3
Cash and cash equivalents at the end of the year 238.8 196.0
This unaudited non-statutory consolidated statement of cash flows applies all of the measurement and recognition requirements of IFRS
and the accounting policies of the Group, except for the requirement to consolidate CLOs. Consolidated CLO cash is not presented in
the opening or closing cash positions in this statement and all cash flows relate to the non-CLO activities of the Group.
195
Bridgepoint – 2023 Annual Report & Accounts Other information
Shareholder information
Corporate website
The Company’s website at bridgepoint.eu contains various
information which may be useful to shareholders, including the
current share price and press releases. It is possible to sign up on
the website to receive email alerts for press releases.
Shareview
Equiniti is the Company’s share registrar. www.shareview.co.uk
is Equiniti’s free, self-service website where shareholders can
manage their interests online.
The website enables shareholders to:
− view share balances;
− change address details;
− view payment and tax information;
− update payment instructions; and
− update communication instructions.
Shareholders can register their email address at www.shareview.
co.uk to be notified electronically of events such as AGMs, and can
receive shareholder communications such as the Annual Report
and the Notice of Meeting online.
Enquiries and notifications concerning dividends, share certificates
or transfers and address changes should be sent to the registrar.
Registered office and principal place of business
Bridgepoint Group plc
5 Marble Arch
London, W1H 7EJ.
Telephone: +44 (0) 20 7034 3500
Registered in England and Wales
Company No. 11443992
Corporate brokers
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London, E14 5JP.
Morgan Stanley
25 Cabot Square
Canary Wharf
London, E14 4QA.
BNP Paribas
10 Harewood Avenue
London, NW1 6AA.
Auditor
Mazars LLP
30 Old Bailey
London, EC4M 7AU.
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing, West Sussex, BN99 6DA.
Financial calendar
Ex-dividend date 18 April 2024
Record date 19 April 2024
Annual General Meeting 15 May 2024
Payment date for dividend 21 May 2024
Half-year results 17 July 2024
Use the QR code
to register for FREE
at www.shareview.co.uk
196
Bridgepoint – 2023 Annual Report & Accounts Other information
Glossary
Annual Report this annual report and accounts;
APM alternative performance measure;
Articles the Articles of Association of the Company;
AUM assets under management;
Board the board of directors of the Company;
BREEAM Building Research Establishment Environmental Assessment Method;
BVCA British Private Equity & Venture Capital Association;
CLO collateralised loan obligations;
Companies Act 2006 the UK Companies Act 2006, as amended from time to time;
Company Bridgepoint Group plc;
Corporate Governance Code the UK Corporate Governance Code published in July 2018 by the FinancialReporting Council,
asamendedfrom time to time;
DACH the countries of Germany, Austria and Switzerland
EBITDA earnings before interest, tax, depreciation and amortisation;
EPS earnings per share;
FCA the Financial Conduct Authority;
FRC Financial Reporting Council;
FRE fee related earnings;
Group or Bridgepoint the Company and each of its direct and indirect subsidiaries;
IFRS International Financial Reporting Standards;
IPO the initial public offering of the Company’s ordinary shares;
KPI key performance indicator;
PCAF Partnership for Carbon Accounting Financials;
PRE performance related earnings;
SECR Streamlined Energy and Carbon Reporting;
SFDR Sustainable Finance Disclosure Regulation;
SMID Cap small and medium capitalisation companies;
subsidiary has the meaning given to it in the Companies Act 2006;
TCFD Task Force on Climate-Related Financial Disclosures;
UN PRI United Nations Principles for Responsible Investment; and
UN SDGs United Nations Sustainable Development Goals.
197