1
Bridgepoint
2021 Annual Report & Accounts
Bridgepoint 2021 Annual Report & Accounts
2021
Bridgepoint Group plc
Annual Report and Accounts
Bridgepoint Group plc 2021 Annual Report and Accounts
Financial Highlights
Assets under management (AUM)
€
32.9bn
(2020: €26.6bn)
Underlying proit before tax
£
90.5m
(2020: £52.6m)
Reported proit before tax
£
62.6m
(2020: £48.5m)
Underlying proforma earnings per share
10.41p
(2020: 6.29p)
Total operating income
£
270.6m
(2020: £191.8m)
Reported proforma earnings per share
7.02p
(2020: 5.79p)
Underlying EBITDA
£
113.9m
(+71.5%)
An explanation of the alternative performance measures (“APMs”) used by the Group, including underlying proit before tax, underlying EBITDA and reported and
underlying proforma earnings per share, is set out on pages 36 to 37 along with a reconciliation to the statutory measures.
Front cover image:
To mark Bridgepoint’s admission to the London Stock Exchange, the irm planted a tree for every colleague in partnership with the Queen’s Green Canopy.
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Bridgepoint
2021 Annual Report & Accounts
Introduction
Bridgepoint is an international
alternative asset fund
management group with ofices
in Europe, the US and China.
We support growth businesses
with a European focus and seek
to create value by helping to
build companies with greatly
enhanced long-term potential.
The 2021 Annual Report and Accounts for Bridgepoint Group plc (the “Group”) incorporates:
− the Strategic Report;
− the Directors’ Report, the Corporate Governance Statement
and the Directors’ Remuneration Report; and
− the Financial Statements
each of which has been approved by the board of directors of Bridgepoint Group plc.
Sandra Dadd
Company Secretary
29 March 2022
Find out more
www.bridgepoint.eu
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Bridgepoint
2021 Annual Report & Accounts
Strategic Report
Bridgepoint at a glance 4
Executive Chairman’s statement 6
Market 12
Business Model 14
Strategy 24
Stakeholder engagement 30
Section 172(1) statement 33
Key Performance Indicators 34
Alternative Performance Measures 36
CFO statement 38
Viability and going concern statements 48
How we approach ESG 50
TCFD disclosures 61
Non-inancial information statement 66
Risk management 68
Principal risks and uncertainties 69
Contents
Governance
Board of Directors 76
Senior independent director’s governance review 80
Corporate governance report 82
Nomination committee report 86
Audit and risk committee report 87
Remuneration committee report 92
Annual report on remuneration 101
Director’s report and additional disclosures 106
Statement of directors’ responsibilities 110
Financial Statements
Independent Auditor’s report 111
Consolidated inancial statements 118
Notes to the consolidated inancial statements 126
Other information
Shareholder information 183
Glossary 184
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Bridgepoint
2021 Annual Report & Accounts
Bridgepoint at a glance
Track record of growth in the capital we manage
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2020 20212019
€26.6bn
Total
AUM
€32.9bn
Total
AUM
€9bn
Total
AUM
€3bn
Total
AUM
Private Equity
Private Credit
1
Total assets under management (AUM)
€32.9bn
(2020: €26.6bn)
Who we are
Bridgepoint Group plc is one of the world’s leading
quoted private assets growth investors with over
€32 billion AUM and local presence in Europe,
the US and China. We specialise in private equity
and private credit and invest internationally across
sixprincipal sectors – business services, consumer,
inancial services, healthcare, advanced industrials,
and technology.
Led by a team of partners who have a long history
of working together and underpinned by a set of
core values, Bridgepoint has a well invested platform
that provides a strong foundation for future growth.
Bridgepoint has a differentiated and sustainable
investment approach underpinned by a longstanding
commitment to investing responsibly. Environmental,
social and governance principles are part of
Bridgepoint’s DNA with a set of speciic goals
set and measured for every investment.
1. Pro forma for the acquisition of EQT Credit
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Bridgepoint
2021 Annual Report & Accounts
Our year in numbers
Our fund investors
By type
By location
Pension plans
Asset manager
Insurance
Endowment & foundation
Sovereign entity
Corporate pension
Family oice
Financial institution
52%
23%
9%
5%
4%
4%
1%
1%
Europe
North America
MEA
APAC
LatAM
45%
44%
6%
5%
<1%
Bridgepoint
creates lasting sustainable positive impact
The Environment
Well governed businesses perform
better and are more resilient
Climate change is an investment risk,
and an opportunity
Society
Diversity
and Inclusion
Diverse groups
make better
decisions
Growing
businesses
beneit their
communities
Communities
Governance
Effective measurement is the foundation of improved performance
Measurement
Total operating income
£270.6m
(2020: £191.8m)
Number of investment professionals
>170
Underlying EBITDA
£113.9m
(+71.5%)
Employees of portfolio companies
>300,000
Underlying proit before tax
£90.5m
(2020: £52.6m)
Reported proit before tax
£62.6m
(2020: £48.5m)
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Bridgepoint
2021 Annual Report & Accounts
Using the local insights we have in individual markets,
along with the sector expertise and the deep industrial
knowledge of our investment and credit teams, we
identify, invest and support growth companies and
work closely with management teams tobuild stronger,
broader-based businesses with greatlyenhanced
long-term potential. This is what drives long-term
returns for both our fundinvestors and consequently for
shareholders inBridgepoint itself. As I stated during our
IPO, ifBridgepoint performs for its fund investors our
shareholders will also do well.
Generating inancial returns across our funds,
however,is not the sum of our ambitions. We seek
to create non-inancial value too. Our duty to invest
responsibly to achieve positive impacts on the
environment and society lies at the heart of our ethos.
It underscores everything we do. It is my longstanding
view that inancial and non-inancial value endeavours
are not mutually exclusive, instead, they are mutually
reinforcing – businesses that adopt sustainable and
inclusive practices across their operations and have
diverse workforces are proven to perform better and,
ultimately, deliver higher returns for shareholders.
We work closely with our investee companies to achieve
these outcomes and on occasions when we don’t get
things right we tryagain.
We are mindful, however, that, as a progressive
investor, we must do as we say. In line with this,
Bridgepoint is committed to a diverse and inclusive
working environment both within the Group itself and
its portfolio companies. We are a signatory to ILPA’s
‘Diversity in Action’ initiative which aims to advance
diversity, equality and inclusion, and we are actively
involved in a range of other programmes including
‘Level 20’, which aims to promote gender diversity
in the European private equity industry. Bridgepoint
commits to initiatives such as the above because all
of us are driven by a shared set of values and beliefs
regarding how we should do business: performance-
driven, thoughtful, straightforward.
These are fundamental to our professional and personal
conduct. They help us to try and maintain the highest
levels of corporate governance and apply the highest
standards of professionalism across the Group.
These shared values have come to the fore during the
last 24 months during a period of greater uncertainty
than many of us have ever known. How we worked and
lived changed completely. Like many, Bridgepoint’s
priority was to ensure that our people were safe, that
the companies in which we are invested were properly
supported and that we, as a group, played our part in
helping the communities in which we operate. I am
proud of how our people rallied together during such
a disruptive period – the strong set of inancial results
reported here speaks for itself.
Continued growth in a challengingenvironment
In this our irst Annual Report and Accounts to our new
shareholders I’m pleased to report that Bridgepoint
delivered strong performance in 2021 ahead of the
expectations that we set when we sought to raise
capital from new investors in July 2021. The Group
performed consistently well over the course of the year
as the economic recovery from Covid has gathered
pace: increasing assets under management to
€32.9 billion; deploying funds on new and follow-on
investments; and returning €3.3 billion of capital to our
equity and credit investors and the30 million
beneiciaries theyrepresent.
Importantly the fund investment returns that we have
generated across our funds in 2021 have also exceeded
the expectations that we set at our Funds Annual
meetings in 2020 by some measure. Indeed our most
mature lagship Fund, Bridgepoint Europe V, saw an
exceptional 87% increase in the value of its underlying
unrealised assets during the year.
Creating value
As an international fund management group,
Bridgepoint aims to deliver compelling and sustainable
returns for our fund investors and our shareholders.
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Bridgepoint
2021 Annual Report & Accounts
Executive chairman’s statement
William Jackson
Our strong overall inancial performance has enabled
us to declare our irst dividend in our debut year as a
quoted company. This excellent set of results shows
that our decision to list Bridgepoint on the London
Stock Exchange, our landmark corporate event in 2021,
did not distract us from our day-to-day operations.
We took the decision to list so that we can continue to
build our business from a position of strength as we
have done over the last 20 years and especially since
2018, when we raised our irst external capital which
saw Dyal Capital become a shareholder. Back then
we used the funds to inance the successful acquisition
of EQT Credit and open new Bridgepoint Europe ofices.
Similarly, whilst Bridgepoint remains “asset light” from
a balance sheet perspective, the capital raised from
the IPO strengthens our resources and provides us
with a platform for future growth. This single event
sets us further down the road to achieve our long-term
ambitions of continuing to successfully build and
develop our business.
We are delighted to welcome our new shareholders
for this next stage in Bridgepoint’s journey as we do
our new PLC Board. We’ve already begun to beneit
from valuable insights from our new Board members
and this contribution will be further strengthened
during the year ahead with our intention to add two
further directors to the Board following anon going
recruitment process. Importantly these new
appointments will also increase our diversity
at Board level in line with best practice.
Assets under management
€32.9bn
(+23.7%)
Revenues
£197.7m
(+33.0%)
Underlying EBITDA
£113.9m
(+71.5%)
Proit before tax
£62.6m
(+29.1%)
Underlying FRE margin
24.3%
(2020: 16.7%)
An explanation of the alternative performance measures (“APMs”) used by the
Group, including underlying EBITDA, underlying FRE margin, underlying proit
before tax and reported and underlying proforma earnings per share, is set out
on pages 36 to 37 along with a reconciliation to the statutory measures.
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Bridgepoint
2021 Annual Report & Accounts
Delivering on our promises
Our focus over the last 12 months has been on
drivingreturns for our fund investors and shareholders.
Thecontinued success of our funds and the resultant
strong Group inancial performance we are reporting
today is testament to the full depth of business
experience and professionalism of our team.
For the year ended 31 December 2021, Bridgepoint
Group plc delivered underlying EBITDA and proits
before tax of £113.9 million and £90.5 million
respectively.
This translated into earnings per share of 7 pence,
and reported proits of £62.6 million before tax and
earnings per share of 10 pence (excluding exceptional
items andamortisation of intangible assets). Assets
under management also grew by 23.7% to €32.9 billion.
These results, which were in line or ahead of
expectations, were driven by our two main
strategies – private equity and private debt.
Private Equity
Over the course of the year under review, Bridgepoint’s
main private equity funds committed €1.9 billion to new
investments, completed 72 add-on acquisitions, and
returned €2.9 billion to our fund investors. This strong
progress has continued during the irst quarter of 2022.
During the year Bridgepoint Europe fund investments
collectively generated 24% and 31% year-on-year
average revenue and EBITDA growth – an indication
of the underlying strength of our portfolio companies.
Importantly, over 7,000 jobs were added by Bridgepoint
portfolio companies during the year – an indication of
the contribution middle market businesses make to
both the economy and society.
Drilling down to the individual fund level, Bridgepoint
Europe VI, our current lagship €5.8 billion buyout fund,
committed €1.5 billion in 5 new investments and at the
year-end had committed 88% of its primary capital,
bringing the total number of investments to 16.
During 2021, Bridgepoint Europe V, a €4 billion fully
invested fund completed or agreed the sale of
4 of its 16 investments at an average multiple of 19.0x,
generating total gross proceeds of €4.4 billion from
these assets.
Bridgepoint Development Capital (‘BDC’), our lower
mid-market business, also had a very strong year:
BDC III completed it’s inal investment and the team
successfully raised a successor fund – their largest to
date – Bridgepoint Development Capital IV, a £1.6 billion
fund, which completed 4 investments in the year.
Relecting our continuing drive to invest responsibly,
in 2021 we actively committed to aligning all our new
private equity funds to Article 8 of the Sustainable
Financial Disclosure Regulation (‘SFDR’). As a result,
our most recently launched Funds (Bridgepoint
EuropeVII and Bridgepoint Growth II) will be SFDR
Article 8 aligned. The oficial journal of the European
Union deines an Article 8 fund as one that ‘promotes,
among other characteristics, environmental or social
characteristics, or a combination of those
characteristics, provided that the companies in which
the investments are made follow good governance
practices.’ During the year, we also became a signatory
to Initiative Climat International (iCI), recognising that
climate change is having an adverse effect on all of us.
Private Debt
Bridgepoint’s second core strategy, our private
debt business known as Bridgepoint Credit, also
enjoyed a strong year across the board. Our Direct
Lending and Credit Opportunities fund invested
€3.5 billion across 46 companies whilst our CLOs
(‘collateralised loan obligations’) invested €0.7 billion
across 96 companies.
“ …we also became a signatory to Initiative Climate
International (iCI), recognising that climate change
is having an adverse effect on all of us”
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Bridgepoint
2021 Annual Report & Accounts
Executive chairman’s statement continued
During the year, Bridgepoint Credit also announced
the pricing of its second and third European CLO funds,
the €355 million Bridgepoint CLO 2 DAC (“Bridgepoint
CLO 2”) and €408 million Bridgepoint CLO 3 DAC
(“Bridgepoint CLO 3”). In line with Bridgepoint’s
continued commitment to responsible investing,
Bridgepoint CLO 2 and CLO 3 contains speciic
ESG eligibility criteria as well as an enhanced level
of reporting transparency with respect to the ESG
proile of the portfolio.
Capital Raising
As already noted, Bridgepoint continued to grow its
AUM during 2021 with its main Direct Lending Fund,
Bridgepoint Direct Lending III (“BDL III”), being launched
during the middle of the year and Bridgepoint Europe
VII (“BE VII”) being launched towards the end of the
year. Both fund raisings are making progress towards
their targets despite busy capital raising markets and
recent market volatility arising from the conlict in
Ukraine. These fund raisings will continue during 2022
with Bridgepoint Credit now already committing capital
from BDL III and our new lagship equity Fund, BE VII,
expected to start committing capital by the end of the
irst half of 2022 in line with previous expectations.
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Bridgepoint
2021 Annual Report & Accounts
The right kind of returns
Bridgepoint provides capital to companies to help
themto grow. To achieve this, we look to support
growth businesses that have the potential to lourish,
throughinternational expansion, operational
improvement or acquisitions.
But it is no longer good enough to focus solely on
inancial returns. The climate crisis and the Covid-19
pandemic underscore the need for all of us to act in
order to protect our environment and have a positive
impact on society and, for Bridgepoint speciically,
to ensure our partner businesses are governed
according to high standards in order to foster
success. Bridgepoint’s capacity and reach
to support great businesses gives us both
the means and responsibility to act.
Taking a proactive approach to societal and
environmental issues is not just a social responsibility;
it is also a matter of good guardianship. Businesses
that do good, grow both faster and sustainably.
Our ambition is to create lasting, sustainable and
positive impacts so that our investors, shareholders
and employees are proud of how we generate returns.
It is imperative that we set an example and this year
Bridgepoint Group plc became a carbon-neutral
company. Recognising the broader role we can play,
we also became a founding member of the Private
Equity Sustainable Markets Initiative Task Force
launched by HRH The Prince of Wales at the World
Economic Forum 2020 ahead of COP26.
Outlook
We have all been shocked and hugely concerned by the
conlict in Ukraine. I can conirm that we have no
material direct exposure. We have no material portfolio
assets in either country, nor do we have any Russian
investors in our funds.
Bridgepoint’s market focus, the private equity and credit
markets, nevertheless remain attractive investment
arenas, which are capable of delivering excellent
returns as these last 24 months have shown.
Bridgepoint’s prime geographic focus, Europe,
continues to be the home of multiple world-leading
domestic and exporting enterprises (accounting for
one third of global exports) and supports a high-quality
spectrum of growth businesses operating within
areas that exhibit compelling sector and geographic
growth prospects.
Bridgepoint’s business focus, the alternative investment
market, has expanded rapidly in recent years, with
assets under management having grown by more than
50 per cent from 2015 to 2020. Importantly, growth is
forecast to continue with privateequity and private
credit markets AUM expected to grow atacompound
annual growth rate (CAGR) of 15.9% and 17.4%
respectively between 2021 and 2026.
We recognise the opportunity before us. As our
performance in 2021 shows, Bridgepoint’s operational
model and people demonstrated a capacity to
absorb new business, continue to grow funds under
management and to increase proitability. As a team
we are all committed to delivering strong returns for our
fund investors and shareholders and continuing to build
our business eficiently and effectively and having a
positive inluence on the environment and communities
around us. Our people remain our greatest asset and I
thank all our stakeholders for their support in 2021.
Together with the platform we have gained following
our IPO, I am conident in our ability to continue to
build on our achievements to date.
The Strategic Report, on pages 4 to 75 has been
approved by the Board of Directors and is signed by:
William Jackson
Executive Chairman
“ Our people remain our greatest asset and, together with the
platform we have gained following our IPO, I am conident
in our ability to build on last year’s achievements and at the
same time to effect change.”
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Bridgepoint
2021 Annual Report & Accounts
Executive chairman’s statement continued
“ In 2021 we delivered strong investment performance for our
investors in our equity and credit funds. This is good news
because, as I stated at the time of our IPO, if we make sure
Bridgepoint performs for its fund investors, our shareholders
will also do well.”
Total AUM
€
32.9bn
(2020: €26.6bn)
As an international fund management group,
Bridgepoint aims to deliver attractive and sustainable
returns for our fund investors and our shareholders.
For the year ended 31 December 2021, Bridgepoint
Group plc recorded proits of £62.6m before tax
and earnings per share of 7 pence. Assets under
management also grew by 23.7% to €32.9 billion.
Total operating income
£
270.6m
(2020: £191.8m)
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Bridgepoint
2021 Annual Report & Accounts
A highly attractive and growing industry: Private market asset management continues
to grow rapidly as investors increase allocations to the asset class as a result of strong
and consistent performance.
One of the leading middle market private markets irms in the world: Bridgepoint
is the leader in middle market investing, with a global reach that leverages its strong
pan-European footprint and track record of delivering returns to investors in
Bridgepoint funds across multiple economic cycles over more than 30 years.
Bridgepoint is strongly placed to capitalise on forecast double-digit market growth
in the alternative asset management market from 2020 to 2025 and to continue the
Group’s strategic diversiication.
Asset management sector
The asset management sector has expanded rapidly, with global
assets under management in the industry having grown by
50 per cent from 2015 to 2020. The aggregate amount of global
assets under management held or managed by asset management
companies in 2020 was estimated to be US$103.1 trillion. Further net
inlows to the sector are likely to be driven by increased pools of
wealth, ageing populations and mounting pension funding gaps.
Within the asset management sector, global assets under
management in private markets are forecast to grow at a higher rate
than global savings, with private equity and private credit expected to
grow, from 2021 to 2026, at a CAGR of 15.9 per cent and 17.4 per cent,
respectively, and total assets under management for alternatives
(comprising private equity, private credit, real estate and infrastructure)
expected to grow at a CAGR of 12.6 per cent over the same period.
Continued growth in Private Markets
Private market investments are an increasingly important asset class
both for investors seeking returns and for asset management irms.
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 eight to 10 years.
Preqin estimates that the assets under management of global private
markets (excluding hedge funds and natural resources) will total
US$17.5 trillion in 2026 compared to US$8.7 trillion today. We believe
that this expected growth is supported by a number of the underlying
trends outlined below.
− Relative long-term outperformance of private markets versus
public markets – Research by Hamilton Lane indicates that private
equity and private credit strategies have outperformed their
equivalent public benchmarks in 19 of the past 20 years
− Search for higher, differentiated returns – as the gap between
pension assets and liabilities continues to widen, pension funds
have increased allocations to private markets in an attempt to meet
long-term return obligations and given the generally higher returns
relative to public markets, as outlined above
− Increased allocations to private markets by institutional investors –
Almost 80 per cent of investors surveyed as part of Private Equity
International’s “LP Perspectives 2021 Study” were conident that
private equity performance will either meet or exceed relevant
benchmarks over the next 12 months. Close to 40 per cent of
these investors believed that they were under-allocated to the
asset class and the vast majority planned to either increase or
maintain their commitments
− Concentration of capital allocations towards fewer managers –
Thegrowing allocation of funds to private equity has been
accompanied by a concentration of these allocations towards more
established irms. This trend is driven by multiple factors, including
the ability of broader investment platforms to source attractive
deals and deliver returns; increasing investor demands with
respect to servicing and reporting and a desire from limited
partners to manage fewer general partner relationships
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Bridgepoint
2021 Annual Report & Accounts
Market
The European Middle Market
Bridgepoint considers the middle market as comprising investments
made by private asset managers in businesses with an enterprise
value of typically up to €1.5 billion. The majority of these businesses
are small to medium-sized companies, which represent a large part
of the economy in many European countries. For example, there were
approximately 24,500 companies in Europe with revenue between
€200 million and €1.5 billion as of 15 June 2021.
The European middle market, in particular, offers a vast pool of
investment opportunities for middle market investors. Europe is the
world’s single largest trading area, generating 24 per cent of global
GDP, as well as largest exporting region with 39 per cent of the
world’s exports, and home to over 700 million people, as well
as many world-leading businesses.
The middle market of the private equity sector has remained resilient
even through periods of disruption and in Europe, investments in
middle market businesses have consistently accounted for the
majority of private equity deals from 2007 to 2021. From 2017 to 2021,
there were over three times more European middle market
transactions than European large-cap transactions.
Many of these businesses have outgrown their existing shareholder
structure (often founders, smaller investors or larger conglomerates)
and typically require signicant investments in people, systems and
infrastructure, giving asset management irms an opportunity to put
the capital of their investors to work.
However, equity commitments for middle market businesses
of between €150 million and €350 million are often too large for
individual country funds and too small for rms that concentrate
on larger buyouts, limiting competition in the space. The ability to
create and then exploit a platform able to sustain growth over the
long-term represents a barrier to less well-established investors,
requiring proactive portfolio management and a sufciently large and
experienced investment team. Meanwhile, the Bridgepoint Growth
and Bridgepoint Development Capital funds beneit from the scale
of the wider Bridgepoint platform and the associated support teams
to drive value creation, representing resources that are typically
unavailable at smaller irms.
Read more on Bridgepoint’s market position on page 18.
Increasing importance of ESG
ESG factors are becoming an increasingly important topic in the
private asset management industry. Although ESG has been growing
in signiicance over the past ive years for both the public and private
markets, this trend has accelerated rapidly in recent years within the
private asset management industry, with ESG becoming an ever-
increasingly important consideration for both fund managers
and investors.
You can ind more on Bridgepoint’s approach to ESG on pages 50 to 65.
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Bridgepoint
2021 Annual Report & Accounts
Business Model
Bridgepoint is a global leader in middle market private
assets investing. Operating in a fast-growing market, the
Grouphas a 30-yeartrack record of delivering compelling
returns with an attractive risk proile to a blue-chip base
of over 300investors globally.
We raise capital from, and invest on behalf of, a long-
standing and growing blue-chip client base, which
includes many of the world’s leading investors, and is
diverse across regions, with particular strength in North
America. Indeed, the Group’s global base of more than
300 long-term institutional investors includes many of
the top 20 U.S. state pension funds (by assets under
management), and across the investor base, the
average relationship length with Bridgepoint is 14 years.
A diverse client base
In terms of the institutions that invest in our funds,
the top three categories are public pension plans (52%),
asset managers (23%) and insurance companies (9%).
The remaining 16% is split between endowments,
foundations, sovereign entities, family ofices,
corporate pensions and inancial institutions.
Regionally, Europe, at 45%, is our largest source of
capital followed by North America (44%), the Middle
East (6%), Asia Paciic (5%) and Latin America (<1%).
Capital raised from our client base is invested in our
private equity and private credit strategies to capture
the strong growth potential of the middle market
segment.
As our 30-year track record demonstrates, strong
returns attract new investors to our funds, result in
more capital raised for deployment in middle market
opportunities and lead to further growth in total assets
under management.
In addition to clients investments our balance sheet
capital is invested alongside our funds and is both an
enabler and accelerator of the growth of our business.
We raise capital from a large
and diverse client base
We use Bridgepoint’s
dierentiated market position
to create strong consistent
returns on capital deployed
We invest in middle market
private assets
We receive fee income for
managing clients’ investments
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Bridgepoint
2021 Annual Report & Accounts
Throughout Bridgepoint’s history, the Bridgepoint private
equity funds have made investments in over 400 businesses
and the Bridgepoint private credit funds have provided
inancing to over 250businesses.
We oer institutional investors a
range of strategies to invest for
the long term in the European
middlemarket
Through all of our activities we take
a responsible approach, looking to
support and build sustainable and
stable growth businesses that are
beneicial to society
A 30-year track
record of delivering
compelling returns
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Bridgepoint
2021 Annual Report & Accounts
Business Model continued
Value Creating Activities
How we create value
Bridgepoint delivers returns through a differentiated and
proven investment approach, consistently applied across
all investment strategies.
Differentiated and sustainable approach delivering high-quality returns
The Bridgepoint funds’ investment approach has delivered strong
andconsistent returns. At 31 December 2021, all Bridgepoint Europe,
Bridgepoint Development Capital and Bridgepoint Credit Opportunities
funds raised after the global inancial crisis of 2008 to 2009 are irst
orsecond quartile performers and Bridgepoint Direct Lending funds
(not subject to equivalent industry benchmarks) continue to deliver
against their target returns with no realisedlosses.
Bridgepoint has delivered these high-quality returns through careful
portfolio construction, sensible use of leverage and asset selection
focused on high margin, cash generative businesses, contributing
to low realised loss ratios. These returns have been delivered by
the application of the Group’s differentiated and proven investment
approach, consistently applied across all investment strategies.
Thekey principles of this differentiated approach are summarised
over the following pages.
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Bridgepoint
2021 Annual Report & Accounts
1
Mid-market focus
Typically up to €1.5bn enterprise value
2
Local presence
Over 170 investment professionals across
10 ofices globally
3
Sector specialists
High-quality companies with sustainable
growth potential
4
Differentiated sourcing
Focus on bilateral deals and limited auctions
5
High quality risk adjusted returns
Compelling absolute returns with high
quality risk-return proile
6
Bridgepoint toolbox
Hands-on value creation e.g. buy-and-build
focus and operational improvement
7
Responsible Investment
Sustainable business practices to make
a positive impact
8
Data driven
Mining data to guide investment decisions
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2021 Annual Report & Accounts
1 2 3 4 5 6 7 8
1
A leader in
middle market
growth investing
The Group has one of the best invested private market platforms
directed at growth investing.
The local presence provided by the Group’s 10 ofices is untypical
of middle market irms and drives origination, value creation and fund
investor returns. This wide network provides Bridgepoint with “on the
ground” local expertise across Europe, which works in conjunction with
sector teams to produce material competitive advantage.
2
Evolving and
well-invested
oice network
Bridgepoint believes the middle market is a highly
attractive investment proposition for clients given
the large number of possible investment opportunities,
andthe signiicant potential for hands-on value creation,
including through operational improvement and
add-on acquisitions.
As a leader in middle market investing, Bridgepoint
offers investors a differentiated approach arising
from its global reach and ability to deploy capital
across multiple middle market strategies.
Attractions of the middle market for clients
− Scale of opportunity
Contributes €1 trillion to the European economy
− Number of opportunities
4.5x more transactions in the middle market than
the large buyout market since the beginning of
Bridgepoint Europe IV
− Ownership
Often outgrowing founder or smaller investor base
− Capital
Firms require signiicant investment in people,
systems and infrastructure
− Expertise
Greater scope to drive step-change in growth
− Consolidation
Substantial opportunity to consolidate fragmented
markets via add-on acquisitions
See a map of our ofice network on page 4
Read more about the middle market on page 12
18
Bridgepoint
2021 Annual Report & Accounts
1 2 3 4 5 6 7 8
3
Deep and
long-standing
sector focus
Both private equity and credit teams are organised
into sector teams which operate on an international
group-wide basis. The investment strategy focuses
on long-term thematic trends which are constantly
evolving. For example, within Bridgepoint’s private
equity sector, this was illustrated in healthcare by
the migration from investing in services businesses
to medical technology and pharma.
Knowledge Sharing
Business
Services
Media &
Sports Rights
Consumer Financial
Services
Healthcare Advanced
Industrials
Technology
This thematic approach in combination with industrial
relationships developed over years and supported
by Bridgepoint’s local ofice presence contribute
to Bridgepoint’s strength in proprietary pre-emptive
dealsourcing.
19
Bridgepoint
2021 Annual Report & Accounts
1 2 3 4 5 6 7 8
4
Dierentiated
sourcing and
origination
Bridgepoint’s private equity business typically focuses
on primary transactions and has been successful in
sourcing assets in bilateral deals or limited auctions,
avoiding full auction processes. Bridgepoint’s strategic
origination capabilities allow it to make its investments
at competitive entry valuations, with many investments
being made at the lower end of long-term valuation
ranges of peers with similar geographic and
sector exposures.
20
Bridgepoint
2021 Annual Report & Accounts
1 2 3 4 5 6 7 8
5
Disciplined asset
selection and portfolio
construction
Core to Bridgepoint’s investment performance and
its strong positioning with investors is a focus on
fundamental metrics for each new investment and
careful portfolio construction to generate attractive
risk adjusted returns. Potential targets are selected
based on criteria such as:
− Market leadership
− ESG
− Exceptional revenue visibility
− High EBITDA margins
− Strong cash conversion
− Platforms for consolidation at accretive valuations
− Repeatable business models
− International expansion potential
− Attractive relative value
− Clear sector thematics & high growth niches
Every Bridgepoint fund is deliberately diversiied
by vintage year, sector, geography and number of
investments, with, for example, typically no asset
accounting for greater than 10 per cent of a fund’s
capital. Combined with prudent opening capital
structures and a sensible mix of value and growth-
themed investing, this diversiication strategy leads to
funds with a consistent performance proile, high cash
generation, average operating margins and revenue
visibility, low standard deviation of returns and low
lossratios.
Bridgepoint drives value from investment to exit through a toolbox
of strategic and operational improvement measures. This typically
includes the improvement of systems, organic growth through new
product launches or international expansion and the optimisation of
costs. Bridgepoint also has a strong focus on delivering value-accretive
add-on acquisitions for portfolio companies across its private equity
strategies. For example, Bridgepoint Europe V portfolio companies
have completed 72 add-on acquisitions as of 31 December 2021.
6
Hands-on
value creation
philosophy
21
Bridgepoint
2021 Annual Report & Accounts
7
Responsible
investing
Bridgepoint has embedded ESG criteria across
its investment process and portfolio management.
We are hands-on in driving businesses’ ESG performance
and aim for constant improvement. Bridgepoint has
an institutionalised ESG governance framework that
includes an ESG committee and an in-house ESG team.
Speciic ESG key performance indicators are reported
by portfolio companies on a quarterly basis and portfolio
companies are expected to meet the criteria set
out below:
− Create New Employment
Approximately 60,000 employees in Bridgepoint
PE fund companies and 10 per cent annual employee
growth in employees
− Reduce Environmental Impact
Portfolio-wide review: aim to reduce energy
consumption and cut carbon emissions
− Promote Diversity and Inclusivity
All of Bridgepoint Europe VI’s companies have
incorporated diversity, equity and inclusion into their
HR policies
− Engage with Local Communities
Portfolio companies regularly engage in charitable
and volunteering initiatives
− Contribute to Local Economies
All portfolio companies are expected to be fair
tax payers
− Ensure Fair Pay and Focus on Welfare
Bridgepoint’s policies request portfolio companies to
comply with wage regulations and to aim to improve
working conditions
For more detail on ESG, please see pages 50 to 65
1 2 3 4 5 6 7 8
22
Bridgepoint
2021 Annual Report & Accounts
8
Data-
driven
approach
The Group believes the breadth of data it holds
from more than 30 years of investing and a long
track record of successful fundraisings is an additional
source of potential competitive advantage. Performance
information from more than 300 current and historic
private equity investments, provide the Group with a
deep and continuously growing track record of nearly
ive million data points of past performance to support
decision making.
We expect to continue to develop our capabilities in
this respect, including by adding additional external
data and building more eficient tools for capturing
data at the portfolio company level.
1 2 3 4 5 6 7 8
23
Bridgepoint
2021 Annual Report & Accounts
Strategy
The continued organic scaling of existing strategies, product strategy extension
and adding a third vertical over time through acquisition-led expansion.
The three pillars of our strategy are focused on growing and diversifying
Bridgepoint’s business and creating value for clients and shareholders.
Bridgepoint is strongly positioned to continue
to deliver signiicant growth in three ways:
Activity Opportunity
1
Scaling of existing strategies
Continue the track record of strong AUM growth established over
the past two decades through scaling existing Private Equity and
Credit strategies
Exploit the combination of continued market growth
and Bridgepoint’s strong position as the leader in the
middle market to continue scaling existing strategies
Enhance our middle market positioning and further
deepen market insights without materially expanding
Bridgepoint’s central platform cost base.
Utilise excess origination, the strength of our sector
knowledge and other competitive advantages (see
business model section on pages 14 to 23) to launch
funds that complement our core strategies
2
New products within existing
investment strategies
Continue to launch new credit and equity products within existing
investment strategies
3
Building new investment
strategies
Continue to successfully acquire and integrate new businesses
in other private market asset classes
Our key strategic pillars
24
Bridgepoint
2021 Annual Report & Accounts
Delivering on our strategy 1
Scaling of existing strategies
The middle market of the private markets industry has consistently
expanded as private markets have grown, with the enterprise value
range of targeted assets moving up in size as larger buyout irms have
continued to shift their focus to higher enterprise value businesses.
This is illustrated by the evolving deinition of the middle market.
Bridgepoint currently deines the market as being comprised of
businesses with an enterprise value of typically up to €1.5 billion.
This has increased in each successive fund raise from 2000
to 2020 as private markets have grown. For example, the size of the
middle market was deined as capturing businesses with an enterprise
value of typically up to €600 million and €1 billion at the times of
raising Bridgepoint Europe V and Bridgepoint Europe VI, respectively.
As a result of the growth in private markets and the ability to raise
capital to support growth across the life cycle of a company,
companies are on average staying private for longer, further adding
to the market opportunity.
The combination of market growth and Bridgepoint’s position as the
leader in the middle market mean the group is well positioned to scale
its existing strategies over time.
Incremental to this is the potential for each of the Group’s core
products to expand irrespective of market growth:
− Bridgepoint Europe: scope to deepen its presence in existing
geographies, for example in the UK, where activity levels had been
intentionally lower following Brexit, and in Germany, where the
Group has signiicantly expanded the investment team. In parallel,
origination has been expanded into the United States, focusing
on businesses with European reach or potential.
− Bridgepoint Development Capital: similarly placed to deepen
scale in existing geographies. This is evidenced by the size
of more country speciic funds in its markets even before further
expanding its geographic reach in Europe, leveraging the Group’s
ofice footprint and the existing strength of Bridgepoint’s business
across Europe to grow beyond its current focus on the UK,
France and the Nordics.
− Bridgepoint Credit: further geographic expansion is underway,
with launches in the Netherlands in summer 2021 and in Spain in
2022, alongside continuing efforts to build the track record of its
Bridgepoint Credit Opportunities strategy in the United States.
2021
IPO
Provides capital for
accelerated growth and
value to Bridgepoint equity
in potential acquisitions
2016
Bridgepoint
Growth
Third pillar of
Bridgepoint PE
2018
Dyal minority
transaction
Provided
capital for
accelerated
growth
A track record of expansion
2009 BDC
Hermes & Edmund de
Rothschild Acquisitions
Takes Bridgepoint’s
institutionalised approach
and Platform to the
SMid cap market
2016
US Presence
Develops Bridgepoint’s global
presence, increases deployment
capability, therefore potential fund
growth and reinforces existing
activities in North America
2016, 2020
Bridgepoint Credit (organic,
EQT acquisition)
Creates material presence in
the second largest alternative
asset class, providing diversity,
scale and growth potential
The three pillars of our strategy are focused on
growing and diversifying Bridgepoint’s business
and creating value for clients and shareholders.
25
Bridgepoint
2021 Annual Report & Accounts
Activity Opportunity
1
Scaling of existing strategies
Continue the track record of strong AUM growth established over
the past two decades through scaling existing Private Equity and
Credit strategies
Exploit the combination of continued market growth
and Bridgepoint’s strong position as the leader in the
middle market to continue scaling existing strategies
Enhance our middle market positioning and further
deepen market insights without materially expanding
Bridgepoint’s central platform cost base.
Utilise excess origination, the strength of our sector
knowledge and other competitive advantages (see
business model section on pages 14 to 23) to launch
funds that complement our core strategies
2
New products within existing
investment strategies
Continue to launch new credit and equity products within existing
investment strategies
3
Building new investment
strategies
Continue to successfully acquire and integrate new businesses
in other private market asset classes
Our key strategic pillars
Strategy continued
26
Bridgepoint
2021 Annual Report & Accounts
New products within existing investment strategies
Potential exists for new equity and credit products, focusing on those
that would complement the current offering. Possible avenues include
broadening the Bridgepoint Private Credit offering to adjacent
verticals, such as real estate debt.
Key to any such expansion would be ensuring excellent origination
and alignment with Bridgepoint’s expertise, competitive advantage
and values.
Bridgepoint’s ability to grow organically was demonstrated by the
greenield launch of Bridgepoint private credit in 2016 (prior to the
acceleration of the strategy via the acquisition of EQT Credit in 2020),
comprising successfully building an investment team, raising capital
and establishing a track record and further by the development of
the Senior Debt strategy directly following the 2020 EQT acquisition.
Bridgepoint has also successfully added multiple complementary
ancillary funds within its existing investment strategies. This is
illustrated by the sizeable continuation funds raised for lagship
Bridgepoint Europe funds and Bridgepoint Development Capital funds
which drive further value creation in the assets transferred and create
additional value for fund investors. The Group sees further accretive
growth potential via this channel.
The Directors believe that the Group can continue to signiicantly
scale its strategies organically in the future.
2Delivering on our strategy
27
Bridgepoint
2021 Annual Report & Accounts
Activity Opportunity
1
Scaling of existing strategies
Continue the track record of strong AUM growth established over
the past two decades through scaling existing Private Equity and
Credit strategies
Exploit the combination of continued market growth
and Bridgepoint’s strong position as the leader in the
middle market to continue scaling existing strategies
Enhance our middle market positioning and further
deepen market insights without materially expanding
Bridgepoint’s central platform cost base.
Utilise excess origination, the strength of our sector
knowledge and other competitive advantages (see
business model section on pages 14 to 23) to launch
funds that complement our core strategies
2
New products within existing
investment strategies
Continue to launch new credit and equity products within existing
investment strategies
3
Building new investment
strategies
Continue to successfully acquire and integrate new businesses
in other private market asset classes
Our key strategic pillars
28
Bridgepoint
2021 Annual Report & Accounts
Strategy continued
New investment strategies
There is scope to signiicantly enhance Bridgepoint’s middle market
positioning and further deepen its market insights and platform
synergies with the addition of a third core product strategy alongside
private equity and private credit. It is expected that this could be
delivered without materially expanding Bridgepoint’s central and
platform cost bases.
The Group has a strong track record of successfully acquiring and
integrating new businesses alongside organic development in both
current verticals. In 2009, the direct investment platform of Hermes
Private Equity was acquired, forming the original base for Bridgepoint
Development Capital. 2014 saw the acquisition of the management
company for two Edmond de Rothschild lower middle market funds in
France. In 2020, the acquisition of EQT Credit accelerated Bridgepoint
Credit’s growth materially adding multiple new strategies, with the
business being integrated into Bridgepoint without any material loss
of clients, assets or investment professionals.
In the medium term, Bridgepoint sees scope for similar acquisitions
within other private markets asset classes, such as real estate or
infrastructure. Also under consideration are other areas where the
Group’s well-invested operating platform, capital raising capabilities
and reputation would enable acquired businesses to more
successfully scale their operations than as a standalone entity.
All potential opportunities are assessed within a structured and
consistent framework, that applies the Group’s strong investment
discipline and rigor, and focuses on delivering sustainable returns
for shareholders.
Both Real Estate and Infrastructure offer the opportunity to create a
third leg of global scale and the Group aims to build out one of these
strategies to become its third core asset class in the medium-term.
3Delivering on our strategy
Key gatekeeping criteria to determine strategic
growth opportunities
Returns for
shareholders
Returns for
fund investors
Competitive
advantage
Complementary
to existing
strategies
Run by a
standalone
team/resource
eficiency
Longevity and
scalability
Alignment with
Bridgepoint
brand
29
Bridgepoint
2021 Annual Report & Accounts
How Bridgepoint engages with its stakeholders
and Section 172(1) statement
The Board has identiied its key stakeholders as colleagues,
fund investors, shareholders, employees, portfolio companies,
the community, regulators, and suppliers.
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 beneit 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.
The key considerations in respect of these stakeholders and the
Board’s approach to engaging with them are explained below.
Stakeholder engagement
30
Bridgepoint
2021 Annual Report & Accounts
Stakeholder Key considerations How key stakeholders are engaged
Colleagues
Bridgepoint is a people business.
Its employees are integral to the
continued success of the Group,
and therefore the Group’s retention
and motivation of employees is key.
The Board actively engages with colleagues through a variety of
channels, including town hall brieings, videos, team meetings
and conferences.
On an annual basis, the Group conducts an employee
engagement survey to obtain feedback from employees.
Members of the Board meet with various members of senior
management, to enable them to continue to build relationships
with the senior management team.
A designated non-executive director (Angeles Garcia-Poveda) is
responsible for gathering employee feedback.
All-employee share awards were made in connection with
the IPO, to reward employees’ contributions to the business
and to further align their interests with those of the Group.
The Group continuously invests in its people with internal
career development initiatives, such as the Bridgepoint Core
Training Programme, the International Associate Programme,
new Partner coaching, international and cross-function
rotations, and mutual mentoring programmes.
The Bridgepoint Core Training Programme offers
all Bridgepoint employees the opportunity to develop
their personal and professional skills through both internal
and external training. In addition to professional development,
colleague wellbeing is a core focus with employee support
programmes, a mental resilience speaker series and
an annual wellness allowance.
Fund investors
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 to whom the Group
owes regulatory duties.
The Group has a dedicated investor relations function, which
manages the Group’s long-standing relationships with leading
fund investors and seeks to develop new relationships with
prospective clients.
The Board has looked to strengthen its understanding of key
fund investor relationships during the year through discussions
with members of the investor relations team.
Fund investors receive regular updates through calls, meetings
and various forms of written reports which focus on the
provision of high-quality and timely information and data.
Shareholders
Shareholders provide the Group’s
permanent capital. A strong
relationship with shareholders is
essential for the long-term success
of the Group.
The Executive Directors engaged extensively with investors during
the Company’s IPO, including existing and new shareholders.
Members of the Board regularly engage with shareholders
of the Company, and encourage feedback as part of this
engagement process. This helps the Board to understand the,
at times, conlicting interests of different shareholders,
and to make decisions in a way that treats members fairly.
The Board will engage with shareholders at the AGM, which will
give shareholders the opportunity to ask questions and engage
with the Board.
During the year, a half-year update was provided to
shareholders, and management held a webcast at the
same time to answer questions from analysts and investors.
31
Bridgepoint
2021 Annual Report & Accounts
Stakeholder Key considerations How key stakeholders are engaged
Portfolio
companies
The companies in which the Group
invests are the source of returns to
its shareholders and fund investors.
Employing over 80,000 people,
portfolio companies have a signiicant
role in the wider community.
The Group is focused on constant improvement of the portfolio
companies of the Bridgepoint funds, both in inancial and
non-inancial terms, and the building of sustainable businesses.
Bridgepoint integrates ESG criteria in its investment approach
and works with the management teams of portfolio companies
to create value. For more information on ESG see pages 50
to 66.
The principal engagement with portfolio companies is through
the Group’s investment teams. One or more of the Group’s
investment professionals are usually appointed as directors
of each portfolio company.
Engagement with portfolio companies takes place both
formally at the portfolio company board level and informally
by investment teams on an ongoing basis.
Community
The Group recognises the responsibility
it has to wider society and is committed
to contributing positively to the
communities in which it operates.
The Group has a long history of charitable activity. During 2021,
the Group, including the Bridgepoint Charitable Trust and the
Hardship Fund, made charitable donations of over £650,000.
The Board actively encourages, supports and monitors progress
on initiatives that it believes will have a positive impact on the
environment and communities in which the Group operates.
Regulators
Regulators provide key oversight in
respect of how the Group operates
its business. The interests of fund
investors are served by Bridgepoint
engaging constructively
with regulators.
The Group contributes to industry bodies such as the British
Private Equity & Venture Capital Association and through these
and other channels the Group participates in regulator
consultations and provides other input.
Suppliers
Good relations with suppliers
are important to the Group’s
day-to-day functioning.
The Group regularly engages with key suppliers to ensure
that each party understands the requirements of the other.
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.
32
Bridgepoint
2021 Annual Report & Accounts
Stakeholder engagement continued
The Board’s approach during 2021 to the matters set out in section 172 of the Companies Act 2006 are set out below.
Relevant consideration
undersection 172(1) of
theCompanies Act 2006 The Board’s approach in 2021
(a) Long-term consequences
of decisions
The Board maintains oversight of the Group’s performance, and reserves to itself speciic 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.
The Board approved the Group’s strategy, which is set out in the Prospectus and at pages 24 to 29
of this report, and the Board spends considerable time discussing the long-term strategic direction
of the Group.
The Board approved the Company’s application for admission of its ordinary shares to the premium
listing segment of the Oficial List of the FCA and to trading on the main market for listed securities
of the London Stock Exchange, to support the Group’s strategy.
The Board recognised that a listing would result in greater costs and scrutiny. However, there were
signiicant beneits associated with a listing such as the provision of capital to support growth, the
strategic lexibility achieved (including with respect to potential M&A opportunities), and the
enhancement of the Group’s standing as a trusted counterparty.
(b) Interests of employees The Board approved an all-employee share award in connection with the IPO.
The Board designated Angeles Garcia-Poveda as the non-executive director responsible
for gathering workforce feedback.
The Board recognises the importance of employee engagement and diversity, equity and inclusion,
and has incorporated them as measures of Executive Director performance.
(c) Fostering business relationships with
suppliers, customers and others
The Board has looked to strengthen its understanding of key fund investor relationships during the
year through discussions with members of the investor relations team.
The Board was and continues to be kept regularly updated as to the progress of discussions with
investors in connection with the raising of new funds.
The Board considered and approved the Group’s anti-corruption policy and anti-inancial crime policy.
The Group ensures appropriate monitoring and oversight of appointed third-party service providers
occurs on a periodic basis. As part of this process, feedback from third parties on matters of
concern to them is encouraged.
(d) Impact of operations on the
community and the environment
The Board actively encourages, supports and monitors progress on initiatives that it believes will
have a positive impact on the environment and communities in which the Group operates.
In 2021 Bridgepoint became carbon neutral and continued drive DEI initiatives at both the Group
and portfolio company levels.
(e) Desirability of maintaining a
reputation for high standards of
business conduct
Ahead of the IPO, the Board established a comprehensive corporate governance framework,
which is summarised at pages 82 to 84.
The Board has pursued compliance with substantially all of the Corporate Governance Code
following the IPO.
The Board has approved a range of policies and procedures which promote corporate responsibility
and ethical behaviour.
Prior to completion of the IPO, the Company’s external advisers provided all Directors with training
in respect of their legal and governance duties, responsibilities and obligations.
(f) The need to act fairly as between
members of the Company
Executive directors spent considerable time engaging with the Group’s new shareholders during
the course of the IPO.
Members of the Board regularly engage with shareholders of the Company, and encourage
feedback as part of this engagement process. This engagement process helps the Board to
understand the sometimes conlicting interests of different shareholders,
and to make decisions in a way that treat members fairly.
33
Bridgepoint
2021 Annual Report & Accounts
KPIs: tracking our performance
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
Description
A measure of proitability prior
to depreciation of property
leases, amortisation of
intangible assets, the cost
of inancing and taxation
Description
EBITDA excluding expenses
related to the IPO and the
acquisition of the EQT Credit
business which were not incurred
in the normal course of business
and are not expected to reoccur
Deinition
See page 36 for a detailed
deinition
Link to strategy
All three pillars of our
strategy aim to grow EBITDA
(see page 24)
Remuneration linkage
Links to the ‘EBITDA’ element
of the annual bonus plan
Deinition
See page 36 for a detailed
deinition
Link to strategy
All three pillars of our
strategy aim to grow EBITDA
(see page 24)
Remuneration linkage
Links to the ‘EBITDA’ element
of the annual bonus plan
Description
The amount of capital held in
funds, excluding CLOs, which
the Group manages on behalf
of investors and on which
it charges fees
Total AUM
(€bn)
Fee Paying AUM
(€bn)
EBITDA
(£m)
Underlying EBITDA
(£m)
€32.9bn
£85.3m
€18.3bn
£113.9m
Deinition
See page 37 for a detailed
deinition
Link to strategy
All three pillars of our strategy
aim to grow AUM (see page 24)
Remuneration linkage
Links to ‘capital raised’ element
of the annual bonus plan
Deinition
See page 37 for a detailed
deinition
Link to strategy
All three pillars of our strategy
aim to grow AUM (see page 24)
Remuneration linkage
Links to ‘capital deployed’
element of the annual
bonus plan
18.3
16.1
12.7
2019 2020 2021
85.3
58.7
53.1
2019 2020 2021
113.9
66.4
53.1
2019 2020 2021
32.9
26.6
19.3
2019 2020 2021
34
Bridgepoint
2021 Annual Report & Accounts
Description
A measure of proit after
expenses, depreciation and
amortisation, and inancing,
before tax, but excluding
exceptional items and
amortisation of intangibles
Description
A measure of statutory proit
after expenses, depreciation
and amortisation and inancing
but before taxation
Description
Underlying FRE margin is
a measure of underlying
proitability, excluding
investment income
Description
Fee Related Earnings (FRE)
is a measure of underlying
proitability, excluding
investment income
Deinition
See page 37 for deinition
Deinition
Proit for the year
attributable to equity
shareholders prior to taxation
Underlying FRE
(£m)
Underlying FRE margin
(%)
Underlying proit before tax
(£m)
Proit before tax
(£m)
£90.5m £62.6m
24.3%£48.5m
Deinition
See page 36 for deinition
Target
4550% in the longer term
Deinition
See page 36 for deinition
48.5
24.9
29.1
2019 2020 2021
24.3
16.7
20.1
2019 2020 2021
90.5
52.6
47.5
2019 2020 2021
62.6
48.5
47.5
2019 2020 2021
35
Bridgepoint
2021 Annual Report & Accounts
These full-year results include several measures which are not deined or recognised under IFRS (“International Financial Reporting Standards”),
including inancial and operating measures relating to the Group such as EBITDA, Underlying EBITDA, Underlying EBITDA Margin, Underlying
PBT, Underlying FRE, Underlying FRE Margin, Total AUM and 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 business and inancial 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 deine and calculate such measures differently from the Group.
APMs should not be considered in isolation and investors should not consider such information as alternatives to total operating income,
proit/(loss) before tax or cash lows from operating activities calculated in accordance with IFRS, as indications of operating performance or
as measures of the Group’s proitability or liquidity. Such inancial information must be considered only in addition to, and not as a substitute
for or superior to, inancial information prepared in accordance with IFRS included elsewhere in this Annual Report and Accounts.
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
expenses as well as foreign exchange gains/(losses).
Underlying EBITDA Calculated by excluding exceptional items from EBITDA. Exceptional items are items of income or
expense that are material by size and/or nature, are not considered to be incurred in the normal course
of business and are not expected to reoccur. Examples include costs directly resulting from substantial
corporate business acquisitions or capital raising for the Group.
A breakdown is included within note 8 of the inancial statements, on page 143. Underlying EBITDA for
2020 has been updated from the numbers included within the Company’s prospectus to exclude
additional cost items of £0.3m, as explained in note 1 of the inancial statements under the heading,
‘Changes to comparatives’, on page 126.
Underlying EBITDA
2021
£m
2020
£m
EBITDA 85.3 58.7
Add back: exceptional items 28.6 7.7
Underlying EBITDA 113.9 66.4
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 proits. Underlying FRE for 2020 has been
updated from the numbers included within the Company’s prospectus to exclude investment linked
bonuses of £0.8m, in line with the revised deinition of the APM.
Underlying FRE
2021
£m
2020
£m
Underlying EBITDA 113.9 66.4
Less: carried interest and income from fair value remeasurement of
investments (71.2) (42.3)
Add back: investment linked bonuses 5.8 0.8
Underlying FRE 48.5 24.9
Underlying FRE Margin Underlying FRE as a percentage of total operating income, excluding carried interest and income from the
fair value remeasurement of investments and adding back the cost of bonuses linked to investment proits.
36
Bridgepoint
2021 Annual Report & Accounts
Alternative Performance Measures (APMs)
Underlying operating proit Calculated by excluding exceptional items and the amortisation of intangible assets from within
operating proit.
Underlying operating proit
2021
£m
2020
£m
Operating proit 70.3 49.9
Add back: exceptional items within EBITDA 28.6 7.7
Add back: amortisation of intangible assets 3.1 0.6
Total underlying operating proit 102.0 58.2
Underlying operating proit margin Underlying operating proit as a percentage of total operating income.
Underlying proit before tax Calculated by excluding exceptional items and the amortisation of intangible assets from within proit
before income tax.
Underlying proit before tax
2021
£m
2020
£m
Proit before tax 62.6 48.5
Add back: exceptional items within EBITDA 28.6 7.7
Add back: amortisation of intangible assets 3.1 0.6
Less: exceptional net inance income (3.8) (4.2)
Total underlying proit before tax 90.5 52.6
Underlying proit before
tax margin
Underlying operating proit as a percentage of total operating income.
Underlying proit after tax Calculated by excluding exceptional items and the amortisation of intangible assets from within proit
after tax.
Underlying proit after tax margin Underlying operating proit as a percentage of total operating income.
Underlying pro forma basic and
diluted earnings per share
Calculated by dividing underlying proit after tax gross of non-controlling
interests by the number of shares in issue after the IPO.
Underlying pro forma basic and diluted EPS
2021
£m
2020
£m
Proit after tax 57.8 47.7
Add back: exceptional items within EBITDA 28.6 7.7
Add back: amortisation of intangible assets 3.1 0.6
Less: exceptional net inance income (3.8) (4.2)
Tax adjusted 0.0 0.0
Total underlying proit after tax 85.7 51.8
Pro forma number of shares 823.3 823.3
Underlying pro forma basic and diluted EPS (£) 0.10 0.06
Fee Paying AUM Assets under management, excluding CLOs, upon which management fees are charged by the Group.
For all funds with private equity strategies and the Bridgepoint Credit Opportunities funds I to III, Fee
Paying 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.
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.
37
Bridgepoint
2021 Annual Report & Accounts
Find out more
www.bridgepoint.eu
Adam Jones
Group Chief Financial Oficer & COO
Group inancial performance in
2021 beneited from a irst full year’s
contribution from the EQT Credit
business and also from increased
investment proits as a result of
strong fund returns. Primary capital
raised in the IPO allowed the Group
to pay down external borrowing,
leaving the balance sheet with a net
cash position at year end and well
positioned to support the execution
of the Group’s strategy.
Group inancial performance in 2021 was
underpinned by 23.7 per cent growth in
Total AUM to reach €32.9 billion at year end.
The increase in Total AUM in turn drove an
increase in management fee income and the
operational leverage which is a feature of our
business model was clearly demonstrated by
94.8 per cent growth in underlying FRE.
Underlying proit before tax of £90.5 million
was £37.9 million or 72.1 per cent higher than
the previous year, driven by a full year
of contribution from the acquired EQT Credit
business and increased investment proits.
Reported proit after tax of £57.8 million
was £10.1 million or 21.2 per cent higher
than the previous year due to increased
underlying proits, partially offset by
£27.9 million of exceptional items
which related predominately to the IPO
and amortisation of intangibles.
Proceeds from issuance of new shares in the
IPO of £300 million, before costs, allowed
the Group to pay down its borrowings under
the Group’s Revolving Credit Facility (“RCF”).
Combined with the inal instalment of
the deferred cash consideration from Dyal
of £114.3 million which was received in
December 2021, the Group had a net cash
position on its balance sheet (excluding
consolidated CLO fund cash) at
31 December 2021 of £323.1 million.
Throughout the course of this section
reference is made to adjusted measures
which the Company considers to be
alternative performance measures (“APMs”)
or key performance indicators (“KPIs”).
These are not deined or recognised under
IFRS but are used by the Directors and
management to analyse the business and
inancial performance, track the Group’s
progress and help develop long-term
strategic plans. Pages 36 and 37 set
out deinitions of each of the APMs
used within the CFO statement and
how they can be reconciled back
to the inancial statements.
38
Bridgepoint
2021 Annual Report & Accounts
CFO Statement
Summary
Financial summary
Year ended
31 December
2021
Year ended
31 December
2020 Change (%)
Total AUM (€bn) 32.9 26.6 23.7%
Fee paying AUM (€bn) 18.3 16.1 13.7%
Management fee margin on fee paying AUM (%) 1.23% 1.22% +0.01ppt
Management fees (£m) 197.7 148.6 33.0%
Investment income (£m) 71.2 42.3 68.3%
Total expenses (excluding exceptional items) (£m) (156.7) (125.4) 25.0%
Underlying EBITDA (£m) 113.9 66.4 71.5%
Underlying EBITDA margin (%) 42.1% 34.6% +7.5ppt
Underlying FRE (£m) 48.5 24.9 94.8%
Underlying FRE margin (%) 24.3% 16.7% +7.6ppt
Underlying proit before tax (£m) 90.5 52.6 72.1%
Reported proit before tax (£m) 62.6 48.5 29.1%
Reported proit after tax (£m) 57.8 47.7 21.2%
Reported pro forma basic and diluted EPS (pence) 7.02 5.79 21.2%
Adjusted pro forma basic and diluted EPS (pence) 10.41 6.29 65.5%
Fundraising
Bridgepoint Europe VII (“BE VII”) was launched in late 2021 with a target size of €7.0 billion. Private Equity AUM at 31 December 2021 amounted
to €22.9 billion.
Bridgepoint Credit Opportunities IV (“BCO IV”) held a irst closing in October 2021, raising €0.2 billion and in November Bridgepoint Direct
Lending III (“BDL III”) held a irst closing at €1.2 billion. Bridgepoint CLO 2 (“CLO 2”) closed in July at €355 million and in November Bridgepoint
CLO 3 (“CLO 3”) closed, raising €408 million. As a result of these fundraisings, Credit AUM ended the year at €10.0 billion.
Total AUM development during the last twelve months
EURbn Private equity Credit Total
31 December 2020 19.2 7.4 26.6
Fundraising 1.3 2.8 4.1
Divestments (2.9) (0.6) (3.5)
Revaluations 5.3 0.4 5.7
31 December 2021 22.9 10.0 32.9
Total AUM at 31 December 2021 was €32.9 billion compared to €26.6 billion at the end of the 2020. The 23.7 per cent increase is due to
revaluations of fund investments and the impact of successful fundraises for our Credit strategies.
39
Bridgepoint
2021 Annual Report & Accounts
Total Fee Paying AUM development during the last twelve months
EURbn Private equity Credit Total
31 December 2020 11.9 4.2 16.1
Fundraising/invested 2.1 2.5 4.6
Divestments (0.2) (1.7) (1.9)
Step down (0.1) (0.4) (0.5)
31 December 2021 13.7 4.6 18.3
Fee paying AUM at 31 December 2021 was €18.3 billion compared to €16.1 billion at the end of 2020 with the 13.7 per cent increase primarily due
to BDC IV becoming fee paying during the year as well as the increase in invested capital in our credit strategies.
Abbreviated Income Statement
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Management fees 197.7 148.6 33.0%
Investment income 71.2 42.3 68.3%
Total operating income 270.6 191.8 41.1%
Total expenses (185.3) (133.1) 39.2%
Total expenses (excluding exceptional expenses) (156.7) (125.4) 25.0%
EBITDA 85.3 58.7 45.3%
Underlying EBITDA 113.9 66.4 71.5%
Underlying FRE 48.5 24.9 94.8%
Depreciation (11.9) (8.2) 45.1%
Underlying operating proit 102.0 58.2 75.3%
Reported operating proit 70.3 49.9 40.9%
Net inance expense (excluding exceptional net income) (11.5) (5.6) 105.4%
Net inance expense (7.7) (1.4) 450.0%
Underlying proit before tax 90.5 52.6 72.1%
Reported proit before tax 62.6 48.5 29.1%
Tax (4.8) (0.8) 500.0%
Reported proit after tax 57.8 47.7 21.2%
The Group’s consolidated income statement has two key components: the irst is the income generated from management fees, which
are from long term fund management contracts. The second component is the variable income from investments in funds and carried interest.
Management fee income plus other operating income less costs is expressed as Fee Related Earnings (“FRE”). Underlying FRE excludes
exceptional expenses and bonuses linked to investment returns from the calculation. Proits from co-investment and carried interest together
with FRE form the EBITDA of the business.
In the year ended 31 December 2021, exceptional expenses were recorded relating the Company’s IPO as well as further costs relating to the
acquisition of the EQT Credit business. In the year ended 31 December 2020, exceptional expenses were recorded relating to the acquisition
of the EQT Credit business. Exceptional items are items of income or expense that are material by size and/or nature, are not considered to be
incurred in the normal course of business and are not expected to reoccur. Exceptional items are classiied as “exceptional” within the Group’s
consolidated income statement and disclosed separately to give a clearer presentation of the Group’s results.
Underlying operating proit excludes exceptional expenses within EBITDA and the amortisation of intangible assets arising from the acquisition
of EQT Credit. Underlying proit before tax excludes the aforementioned expenses and also certain inance income and expenses which
have also been classiied as exceptional. These relate to the acquisition of EQT Credit and the investment by Dyal Capital Partners.
Further explanation of these items is included within note 8 of the inancial statements (see page 143).
40
Bridgepoint
2021 Annual Report & Accounts
CFO Statement continued
Total operating income
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Management fees 197.7 148.6 33.0%
Carried interest 14.3 12.9 10.9%
Income from the fair value remeasurement of investments 56.9 29.4 93.5%
Other operating income 1.7 0.9 88.9%
Total operating income 270.6 191.8 41.1%
Total operating income grew strongly and increased by 41.1 per cent from £191.8 million in 2020 to £270.6 million in 2021 relecting
an increase in management fees, carried interest and income from the fair value remeasurement of investments.
Management fees increased by £49.1 million, or 33.0 per cent, from £148.6 million for the year ended 31 December 2020 to £197.7 million
for the year ended 31 December 2021.
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Private equity 157.3 136.6 15.2%
Credit 37.9 10.2 271.6%
Central 2.5 1.8 38.9%
Total management fees 197.7 148.6 33.0%
This increase was primarily due to the full year impact of the enlarged Credit business following its acquisition in the fourth quarter of 2020.
Private equity fees increased due to BDC IV, which started charging management fees on 1 January 2021, partially offset by reduced fees on
older funds which are in their divestment phase, when fees are based upon the remaining invested capital.
Income from the Group’s share of carried interest income of £14.3 million in 2021 was driven by Bridgepoint Europe V (“BE V”) and Bridgepoint
Development Capital III (“BDC III”) portfolios. Income recognised as a result of increases in the value of co-investments increased by 93.5 per
cent from £29.4 million in 2020 to £56.9 million in 2021, relecting the increase in valuation of assets across the private equity fund range,
but particularly within the Bridgepoint Europe V and VI portfolios (“BE V” and “BE VI”).
Other operating income includes fees and commissions receivable by the Group’s procurement consulting business, PEPCO.
Its income continued to be impacted by COVID through a reduction in the number of projects being undertaken.
Operating and other expenses
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Personnel expenses (121.4) (96.0) 26.5%
Other expenses (36.4) (29.2) 24.7%
Foreign exchange gains/(losses) 1.1 (0.2) (650.0)%
Total expenses before exceptional expenses (156.7) (125.4) 25.0%
Exceptional expenses (28.6) (7.7) 271.4%
Total expenses (185.3) (133.1) 39.2%
Personnel expenses (excluding exceptional expenses) increased by 26.5 per cent, from £96.0 million in 2020 to £121.4 million in 2021.
This increase was primarily due to the increase of the number of employees following the acquisition of EQT Credit, as well as continuing
investment in the Group’s operating platform and bonuses linked to the BE V carried interest income recognised by the Group during 2021.
Other expenses (excluding exceptional expenses) increased by 24.7 per cent, from £29.2 million in 2020 to £36.4 million in 2021. The increase
relects predominantly the annualised impact of the acquisition of EQT Credit. Whilst the Group realised some COVID-related savings such as
reduced travel, corporate hospitality and staff expenses, these were offset by higher legal and regulatory spend to support the growth of the
Group and costs incurred relating to the Group’s exit from its current London premises.
41
Bridgepoint
2021 Annual Report & Accounts
Foreign exchange gains/(losses) changed by £1.3 million from a loss of £0.2 million in 2020 to a gain of £1.1 million in 2021. This change was
primarily due to the strengthening of sterling versus the euro, and the corresponding remeasurement of the Group’s euro borrowings up to
the point at which they were repaid following the IPO.
Personnel expenses (excluding exceptional expenses) as a percentage of total operating income was 44.9 per cent for the year ended
31 December 2021, compared to 50.1 per cent for the year ended 31 December 2020 and would have been lower but for the £5.8 million
of non-recurring BE V carried interest linked bonuses incurred in 2021. The percentage decrease in 2021 compared to 2020 was due to the
increase in operating income being greater than the increase in personnel expenses. Other expenses (excluding exceptional expenses) as
a percentage of total operating income reduced to 13.5 per cent for the year ended 31 December 2021, compared to 15.2 per cent for the year
ended 31 December 2020 for the same reason.
EBITDA
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Underlying EBITDA 113.9 66.4 71.5%
Exceptional expenses (28.6) (7.7) 271.4%
EBITDA 85.3 58.7 45.3%
Underlying EBITDA increased strongly by 71.5 per cent from £66.4 million in 2020 to £113.9 million in 2021, excluding exceptional expenses
associated with the IPO of the Group in 2021 and the acquisition of EQT Credit in 2020. This was largely driven by the operational leverage
resulting from the growth in total operating income of 41.1 per cent representing a multiple of 1.65x the growth in total expenses, excluding
exceptional expenses, of 25.0 per cent.
Exceptional expenses of £28.6 million in 2021 related to the costs associated with the Group’s IPO of £27.1 million, costs of £1.0 million relating
to the acquisition of EQT Credit and £0.5 million relating to potential strategic M&A costs. A further £18.4 million of expenses relating to the
Group’s IPO have been recognised as issuance costs and are included within equity. The £7.7 million of exceptional expenses recorded in 2020
related only to expenses associated with the acquisition of EQT Credit.
EBITDA, including exceptional expenses, increased by 45.3 per cent as exceptional expenses recorded in 2021 offset the majority of the
increase in total operating income.
Depreciation and amortisation expense
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Depreciation (11.9) (8.2) 45.1%
Amortisation of intangibles (3.1) (0.6) 416.7%
Total depreciation and amortisation expense (15.0) (8.8) 70.5%
Depreciation and amortisation expense increased by 70.5 per cent from £8.8 million in 2020 to £15.0 million in 2021. This increase was primarily
due to two factors, irstly the start of the lease of the Group’s new London headquarters, 5 Marble Arch, in July 2021 resulting in an increased
depreciation charge from that date onwards and, secondly, the full year of amortisation of the intangible assets acquired with the EQT Credit
business (fund customer relationships) which are being expensed over seven years. The amortisation of intangibles has been excluded from
the adjusted proitability measures in order to enable a clearer analysis of underlying proitability.
42
Bridgepoint
2021 Annual Report & Accounts
CFO Statement continued
Total operating proit
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Underlying operating proit 102.0 58.2 75.3%
Exceptional expenses (28.6) (7.7) 271.4%
Amortisation of intangibles (3.1) (0.6) 416.7%
Reported operating proit 70.3 49.9 40.9%
Underlying operating proit margin 37.7% 30.3% +7.4ppt
Underlying operating proit increased by 75.3 per cent or £43.8 million from a proit of £58.2 million in 2020 to a proit of £102.0 million in 2021,
relecting the £47.5 million increase in underlying EBITDA, partially offset by the £2.5 million increase in amortisation expenses.
Reported operating proit increased by 40.9 per cent from £49.9 million in 2020 to £70.3 million in 2021.
The underlying operating proit margin increased from 30.3 per cent for the year ended 31 December 2020 to 37.7 per cent for the year ended
31 December 2021. This increase was primarily due to increased total operating income which outpaced the growth in operating expenses
Finance income and expense
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Net inance expense, excluding exceptional items (11.5) (5.6) 105.4%
Exceptional net inance income 3.8 4.2 (9.5%)
Net inance expense, including exceptional items (7.7) (1.4) 450.0%
Net inance expenses, excluding exceptional items, increased by £5.9 million to £11.5 million, from a net expense of £5.6 million for the year
ended 31 December 2020. This movement was primarily due to:
− an increase in amounts payable to investors who have a 15 per cent interest in the proits of the BE V co-investment vehicle;
− increased interest expense from borrowings under the Group’s Revolving Credit Facility, which was used, in part, for inancing the acquisition
of the EQT Credit business. The borrowings were repaid in July 2021 following the IPO; and
− increased inance charge relating to the 5 Marble Arch lease.
Exceptional net inance income includes the unwind of the discount applied to amounts due following the investment by Dyal Capital Partners
and the impact of the remeasurement, discount unwind and re-translation into Sterling of the deferred contingent consideration payable to
EQT AB in relation to the acquisition of the EQT Credit business.
43
Bridgepoint
2021 Annual Report & Accounts
Proit before tax
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Underlying proit before tax 90.5 52.6 72.1%
Exceptional expenses (28.6) (7.7) 271.4%
Exceptional net inance income 3.8 4.2 (9.5)%
Amortisation of intangible assets (3.1) (0.6) 416.7%
Reported proit before tax 62.6 48.5 29.1%
Underlying proit before tax margin 33.4% 27.4% +6.0ppt
Underlying proit before tax increased by 72.1 per cent from £52.6 million in 2020 to £90.5 million in 2021.
Reported proit before tax increased by 29.1 per cent from £48.5 million in 2020 to £62.6 million in 2021, relecting increased underlying
operating proits, partially offset by the IPO and other exceptional expenses and amortisation of intangibles of £27.9 million.
The underlying proit before tax margin increased from 27.4 per cent for the year ended 31 December 2020 to 33.4 per cent for the year ended
31 December 2021.
Tax
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Tax (4.8) (0.8) 500.0%
Tax increased from £0.8 million in 2020 to £4.8 million in 2021. This was primarily due to movements in deferred tax liabilities.
The effective tax rate for the year ended 31 December 2021 was 7.7 per cent compared to 1.6 per cent for the year ended 31 December 2020.
As detailed in note 11 to the inancial statements (see page 145), 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 signiicant tax loss carry-forwards in the UK where certain forms of
income are not subject to UK corporation tax.
Proit after tax
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Proit after tax 57.8 47.7 21.2%
Proit after tax increased by 21.2 per cent from £47.7 million in 2020 to £57.8 million in 2021 which relected the higher tax charge in 2021.
44
Bridgepoint
2021 Annual Report & Accounts
CFO Statement continued
Earnings per share and dividend per share
£ pence
Year ended
31 December
2021
Year ended
31 December
2020
2
Change
Reported Pro forma Earnings per share 7.02 5.79 1.23
Adjusted Pro forma Earnings per share 10.41 6.29 4.12
Dividend per share 3.64 0.79 2.85
Adjusted earnings per share grew by 4.12 pence per share, relecting the increase in proit after tax and the use of the number of shares in issue
following the IPO at the end of 2021 to calculate proforma earnings per share for the comparative period.
A dividend of £30 million, or 3.64 pence per pro forma share, was paid prior to listing to shareholders on the register as of 20 July 2021.
The Directors are proposing a inal dividend of £30 million, or 3.64 pence per share, in respect of the second half of 2021, relecting the period
for which the Group was listed.
Consolidated balance sheet
Summarised consolidated balance sheet (statutory basis)
£ million
As at
31 December
2021
As at
31 December
2020
Change
(%)
Assets
Non-current assets 567.9 438.0 29.7%
Current assets 712.2 607.0 17.3%
Total Assets 1,280.1 1,045.0 22.5%
Liabilities
Non-current liabilities 432.3 346.8 24.7%
Current liabilities 131.5 307.7 (57.3)%
Total Liabilities 563.8 654.5 (13.9)%
Net Assets 716.3 390.5 83.4%
Equity
Share capital and premium 289.9 241.4 20.1%
Other reserves 13.8 27.7 (50.2)%
Retained earnings 412.6 39.7 939.3%
Non-controlling interests – 81.7 (100.0)%
Total Equity 716.3 390.5 83.4%
2. 2020 earnings per share and dividend per share are presented on a pro forma basis using the number of shares in issue at 31 December 2021
45
Bridgepoint
2021 Annual Report & Accounts
Net assets principally comprise cash, 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.
The Group’s balance sheet, notably the structure of its liabilities and equity, changed in 2021 as a result of the IPO which saw additional equity
raised and all bank borrowings subsequently repaid from the proceeds of the issuance of new shares.
The Group’s total assets grew by 22.5 per cent from £1,045.0 million at 31 December 2020 to £1,280.1 million at 31 December 2021. Non-current
assets increased by 29.7 per cent from £438.0 million at 31 December 2020 to £567.9 million at 31 December 2021 predominantly due to
increases in the value and investment into the Bridgepoint funds. Current assets increased by 17.3 per cent from £607.0 million at 31 December
2020 to £712.2 million at 31 December 2021 primarily due to increased cash and cash equivalents.
The IPO provided the Group with £300 million of new primary proceeds, before costs, which were used to repay borrowings under the Group’s
RCF. As a result, total liabilities decreased by 13.9 per cent from £654.5 million at 31 December 2020 to £563.8 million at 31 December 2021.
Within that total, current liabilities decreased by 57.3 per cent from £307.7 million at 31 December 2020 to £131.5 million at 31 December
2021 mostly due to the repayment of bank debt following the IPO and a reduction in the value of CLO purchases awaiting settlement, within
consolidated CLO vehicles. Non-current liabilities increased from £346.8 million at 31 December 2020 to £432.3 million at 31 December 2021
primarily due to the recognition of the lease liability associated with the 5 Marble Arch property.
Total equity beneitted from the proceeds of the new issue of shares at IPO of £300 million, before costs, resulting in total equity of
£390.5 million at 31 December 2020 increasing to total equity of £716.3 million at 31 December 2021.
The consolidated balance sheet includes the assets and liabilities of certain CLOs which are required under IFRS to be presented gross on the
balance sheet. This could distort how a reader of the inancial 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 2021 was
£12.3 million (2020: £19.5 million).
Summarised consolidated balance sheet (excluding third party CLO assets and liabilities, non-statutory)
£ million
As at
31 December
2021
As at
31 December
2020
Change
(%)
Total Assets (excluding third party CLO assets) 1,001.4 677.3 47.9%
Total Liabilities (excluding third party CLO liabilities) (285.1) (286.8) (0.6)%
Net Assets 716.3 390.5 83.4%
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 diversiication strategy. The Group funds its business using cash from its operations (retained proits), capital from shareholders and
third-party debt.
Total inancial debt and net cash position
£ million
As at
31 December
2021
As at
31 December
2020
Change
(%)
Bank borrowings – (99.7) NM
Cash and cash equivalents (excluding CLO cash) 323.1 42.3 663.8%
Net cash/(debt) 323.1 (57.4) 662.9%
At 31 December 2021, the Group had net cash of £323.1 million compared with net debt of £57.4 million at 31 December 2020.
The increase in net cash of £380.5 million since 31 December 2020 resulted from the IPO which raised £300 million of gross primary capital,
before costs, the receipt of £114.3m of deferred investment proceeds from Dyal Capital Partners IV (C) LP and cash generated from operating
activities and investment activities.
Cash from the IPO was also used to repay borrowings under the RCF, which had been used, in part, to inance the acquisition of the EQT Credit
business. The borrowings were repaid in July 2021 following the IPO. At 31 December 2021, the Group had no debt, but still has in place the
£125m revolving credit facility, which remains available for re-drawing until October 2023.
As at 31 December 2021, in addition to the liabilities shown on the balance sheet, the Group had approximately £113.7 million and £28.5 million
of remaining undrawn capital commitments to the Bridgepoint funds in each of the private equity and private credit segments, respectively.
46
Bridgepoint
2021 Annual Report & Accounts
CFO Statement continued
Consolidated cash lows
Summarised consolidated cash low statement (statutory basis)
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Net cash lows from operating activities 23.1 28.4 (18.7)%
Net cash lows from investing activities (163.0) (111.5) 46.2%
Net cash lows from inancing activities 318.6 225.2 41.5%
Net increase in cash and cash equivalents 178.7 142.1 25.8%
Cash and cash equivalents at beginning of the year 157.1 12.1 1198.3%
Effect of exchange rate changes (8.5) 2.9 (393.1)%
Cash and cash equivalents at the end of the year 327.3 157.1 108.3%
of which: cash and cash equivalents at the end of the year (for use within the Group) 323.1 42.3 663.8%
of which: CLO cash (restricted) 4.2 114.8 (96.3)%
Total cash at the end of the year 327.3 157.1 108.3%
Cash lows from operating activities for the year ended 31 December 2021 was £23.1 million. The decrease of £5.3 million in the cash lows
from operating activities compared to the twelve months ended 31 December 2020 was primarily due to the payment of IPO related costs
and adverse movements in the Group’s working capital.
Cash lows from investing activities primarily relates to investments in the Bridgepoint funds. The timing of investments and divestments
in Bridgepoint funds, which impacts carried interest and investment income, depends on the investment activity of the Bridgepoint funds.
For the year ended 31 December 2021 cash outlows from investing activities of £163.0 million primarily relate to investments by the
consolidated Bridgepoint CLO vehicles with £281.2 million of cash outlows, partially offset by £113.3 million of receipts. Receipts from
investments in the Bridgepoint funds broadly offset investment into the funds. Receipts from sale and repurchase agreements relating
to the Group’s holding in CLOs generated £28.1m.
Cash lows from inancing activities for the year ended 31 December 2021 of £318.6 million primarily resulted from the £300m of gross primary
capital from the IPO, the receipt of £114.3m of deferred investment proceeds from Dyal Capital Partners IV (C) LP, offset by the repayment of
borrowings under the Group’s RCF.
In addition, at 31 December 2021 the Group had £4.2 million recorded on the balance sheet as CLO Cash which was held by the consolidated
CLO vehicles, legally ringfenced and not available for use by the Group.
The consolidated cash low statement includes the gross cash inlows and outlows for the period to and cash held at the 31 December 2021
for those CLOs which are required to be consolidated. This could distort how a reader of the inancial statements interprets the cash lows
of the Group, therefore a cash low statement without the consolidated CLO vehicles is presented below.
Summarised consolidated cash low statement (excluding cash lows relating to consolidated CLOs, non-statutory)
£ million
Year ended
31 December
2021
Year ended
31 December
2020
Change
(%)
Net cash lows from operating activities (excluding consolidated CLOs) 23.1 28.4 (18.7)%
Net cash lows from investing activities (excluding consolidated CLOs) 10.6 (109.3) (109.7)%
Net cash lows from inancing activities (excluding consolidated CLOs) 251.3 108.1 132.5%
Net increase in cash and cash equivalents (excluding consolidated CLOs) 285.0 27.2 947.8%
Cash and cash equivalents at beginning of the year (excluding consolidated CLOs) 42.3 12.1 249.6%
Effect of exchange rate changes on cash and cash equivalents (excluding consolidated CLOs) (4.2) 3.0 (240.0)%
Cash and cash equivalents at the end of the year (excluding consolidated CLOs) 323.1 42.3 663.8%
Guidance
Transition guidance for BE VI to BE VII: 30 June 2022
Management fee rates expected to continue to remain stable across our businesses
Investment income guidance unchanged
Target of 23% co-investments in future funds
Expect modest growth in headcount and personnel costs (relative to fee rate growth) over near term after 2022
FRE margin expected to reach 4550% in longer term
Effective tax rate guidance remains unchanged
47
Bridgepoint
2021 Annual Report & Accounts
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 69 to 75.
Whilst all the risks identiied could have an impact on the Group’s
performance, the speciic 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 performance – A prolonged and/or signiicantfund
underperformance may adversely affect the Group’s business,
brand and reputation, income received by the Group,
itsgrowthand its ability to raise capital for future funds
− Fundraising – 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 lows 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 viability requires consideration from the perspective
of capital for solvency, adequacy of regulatory capital and 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 severe but plausible
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
performance
Scenario 2: Delay or no new fundraising
Assumptions: 50% reduction in
target fund size
− Fundraising
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 suficient capital and liquid
resources in the respective scenarios so that the Group’s ongoing
viability would be sustained.
The assumptions behind the stress scenarios include maintaining
the Group’s dividend policy but this, and other assumptions, could be
reassessed if the circumstances determined this to be necessary over
the longer term. Primary management actions to relieve stresses on
the Group’s ability to operate during these scenarios include:
− reducing variable compensation costs (which represent
circa 40% of payroll costs); and
− utilisation and/or extension of debt facilities.
The Group’s future
viability and prospects
are underpinned by the following:
− A large proportion of revenue (73% in 2021) is made up of income
from long-term fund management contracts
− A largely predictable cost base, of which over three quarters
is personnel related
− Good visibility of income, expenditure and future proitability
during and beyond the period covered by this assessment
− A strong balance sheet post IPO, with net cash of £323.1m,
no borrowings and an undrawn £125m banking facility
Available levers to operate during stress events include reduced
variable compensation costs.
Viability statement
In accordance with the UK Corporate Governance Code, the Directors
are required to undertake a robust 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 2024 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.
The Strategic Plan relects the Group’s strategy, which is summarised
on pages 24 to 29, 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 lows and proit recognition.
− Changes in the cost base, primarily in relation to people costs
and inlation.
Progress against the current year’s budget, which underpins the
Strategic Plan, is monitored through the year.
48
Bridgepoint
2021 Annual Report & Accounts
Viability and going concern statements
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 COVID19, 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 100%, whilst maintaining all of the forecast investing
activity in full during the same period, whereas such as macro-
economic event is also likely to constrain investment activity.
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.
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.
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 at
least the next 12 months.
Assessment of going concern
In carrying out their assessment on going concern, the Directors
considered a wide range of information, taking into account both the
Company and the Group’s current performance and outlook, using
information available up to the date of the issue of the inancial
statements. This included:
− The Group’s business and operating models and strategy
− The risk appetite and details of the approach to managing risk
− A summary of the current inancial position and resources
Business model
As shown by the table below, a high proportion of the Group’s
revenue is made up of management fees, which are under long-term
fund management contracts. When taken 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 proitability when projected for
and beyond the next 12 months.
Year ended
31 December
2021
Year ended
31 December
2020
Underlying FRE (£m) 48.5 24.9
Management fees as % of total operating
income (%) 73.1 77.5
Underlying FRE margin (%) 24.3 16.7
Personnel expenses as % of expenses
(excluding exceptional costs) (%) 77.5 76.6
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, timing and level
of returns from funds and changes in the cost base from hiring
and inlation.
Liquidity and resources
As at 31 December 2021, the Group had a strong balance sheet with
net cash of £323.1m (2020: net debt of £57.4m), no borrowings and
an undrawn £125m banking facility). During the year, the Group’s IPO
raised £300m of gross primary capital and the Group received
£114.3m of deferred investment from Dyal Capital Partners IV (C) LP.
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 low of the Group. The Directors are
satisied that, even under these stressed scenarios, the Company and
the Group would remain a going concern.
Conclusion
After making their assessment the Directors considered it appropriate
to prepare the inancial statements of the Company and the Group on
a going concern basis for at least twelve months from the date of the
approval of the inancial statements.
49
Bridgepoint
2021 Annual Report & Accounts
This is our platform for making
a difference.
We want to help businesses do good and grow faster and we
believe sustainable, resilient businesses deliver superior returns
and a bettersociety.
When we invest, we invest to grow. Bridgepoint looks to support
strong-performing, good quality, well-managed businesses that have
the potential to lourish, either via international expansion, operational
improvement, acquisitions or through a combination of all three.
But that’s not all we look for. The 30 million beneiciaries of Bridgepoint
funds want us to generate attractive returns in a manner they can be
proud of. From the outset, this is what we have strived to achieve.
Since Bridgepoint was founded in 1985, our ambition has
remainedconsistent:
To create lasting and sustainable positive impacts
Beneath that ambition lie four key ESG beliefs that guide our
investment decision-making:
1. We believe we must invest in our world.
Environmental action is ushering in a new era of innovation,
productivity and sustainable growth. Climate change represents
both an investment risk and opportunity.
2. We believe in the power of the individual.
By bringing diverse teams together that relect the world in which
we live, we can deliver better performance.
3. We believe that business can and should be a force for good.
Growing businesses should beneit the communities in which
theyoperate.
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
How we approach ESG
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 weoperate.
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2021 Annual Report & Accounts
51
Bridgepoint
2021 Annual Report & Accounts
We are committed to a journey of constant
improvement.
Environmental, social and governance principles are part of
Bridgepoint’s DNA. They are embedded into our own business and
they are integrated into the full life-cycle of our funds’ investments.
We consider each of the four ESG beliefs across four key areas
of activity:
Bridgepoint’s Group operations – as opposed to the businesses
that Bridgepoint funds support
Investment decision-making – the processes and approach that
Bridgepoint takes when assessing potential investments
Portfolio operations – the products and services that investee
companies provide and how they might support the UN Sustainable
Development Goals
Portfolio practices – investee companies’ internal ESG policies
and performance
ESG at the Group level
We aim to set the standard in corporate responsibility.
Moving towards net zero, having a more representative workforce,
supporting our communities and leading governance are headline
ambitions. We have the structures, policies and people in place to
deliver these ambitions and support our broader beliefs.
Sustainable and resilient businesses deliver stronger performance.
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. As a group,
when we achieve our goals, we set ourselves higher targets:
− Carbon neutrality – we became carbon-neutral in 2021,
and are now progressing towards net zero
− Increasing gender diversity – we met an initial target of 25% female
representation in investment teams in 2019, and have since raised
this to 40% by 2025. We also have a 20% target for female
representation in senior investment team roles by 2025.
Governance
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
ofinterest between the Company and third-party fund investors.
During 2022, Bridgepoint will introduce a ESG Committee at the
Company Board level, supported by executive-level ESG and Diversity,
Equity & Inclusion groups. The Company also participates in key
industry associations and initiatives, becoming an active member
of Invest Europe’s Responsible Investment Roundtable, for example,
and having a seat on Level 20’s Advisory Council which focuses
on the promotion of women in private equity.
We also have a close relationship with third-party specialists
who are leaders in ESG, including ERM, the world’s largest global
pure-play sustainability consultancy and previously a Bridgepoint
portfolio company.
Training
All our investment professionals are asked to complete compulsory
ESG training, delivered by the British Private Equity & Venture Capital
Association (BVCA). Bridgepoint and the BVCA worked closely to
develop a pioneering ESG training course in 2016 which has since
become one of the leading industry courses. Although delivered by
the UK’s industry body, the course is designed to suit professionals
working in all the jurisdictions in which we operate.
Diversity, equity and inclusion (DE&I)
Bridgepoint is an international business: our employees come from
more than 25 countries and speak over 20 languages. But nationalities
and languages are just the start. We are working hard to enrich the
diversity of our organisation on every level including gender, ethnicity
and social background.
In 2015 we recognised that Bridgepoint and the wider alternative asset
management industry needed to do more to develop greater gender
diversity. Our response was to launch a ten-year programme to
increase the representation of women in our business.
An initial target of 25% female representation in the investment team
was met in 2019, and then raised to 40% by 2025. Progress has been
driven by a gender-balanced recruitment policy and our International
Associate Programme, which has a 50:50 gender split.
In 2020, our DE&I Committee widened its focus to include ethnic and
social diversity: Bridgepoint became a member of the 10,000 Black
Interns programme, which aims to address the under-representation
of black talent in the inancial sector and we joined Out Investors,
a global network for LGBTQ+ investment professionals.
Internal DE&I initiatives include:
− Creation of DE&I groups for each Bridgepoint geography
− Women’s Leadership development programme
− Formal DE&I objectives for partners and directors
− Diversity risk and unconscious bias training for all employees
− ‘Working at Bridgepoint’: a new families and formal diversity policy
− Maternity coaching
− Gender-neutral parental leave
Bridgepoint is now a carbon neutral company
Bridgepoint recognises the key role we have as an investor to
address climate change at both the management company level
and portfolio level. As a Firm, we support the goals of the 2015
Paris Agreement and its goal to limit global warming to 1.5
o
C
above pre-industrial levels.
We set a short-term target to become a carbon neutral company
by the end of 2021 through the purchase of carbon offsets, in
partnership with ACT Commodities (a Bridgepoint portfolio
company).
We are conscious that our largest impact comes from the
emissions of our funds portfolio companies and therefore in 2022,
we will continue to engage and support those businesses with
their sustainability programs including outlining plans to achieve
net zero by 2040.
52
Bridgepoint
2021 Annual Report & Accounts
How we approach ESG continued
Bridgepoint
creates lasting, sustainable
positive impact
The Environment
Climate change is
an investment risk and
an opportunity
Well governed businesses
perform better and are
more resilient
Society
Growing businesses beneit
their communities
Diverse groups make
better decisions
Communities
Diversity, Equity and Inclusion
Governance
Measurement
Effective measurement is the foundation
of improved performance
53
Bridgepoint
2021 Annual Report & Accounts
ESG in the investment process – Before, during, after
Pre-investment
First and foremost, we don’t invest in companies whose
products, services or practices cause environmental or social
harm, and where there is no path to transform the business
into a positive contributor to society.
1 2 3 4
When we irst consider a potential investment,
our team will identify any potential ESG red lags
or opportunities as part of our early transaction
screening, this early screening process includes the
use of exclusion lists, highlighting sectors and activities
that we will not support. An opportunity can be rejected
on ESG grounds at this or any later stage.
As the opportunity moves into full due diligence,
the investment team is responsible for ensuring that
any ESG-related issues are identiied and assessed.
The indings from the ESG due diligence and any
recommended remedial actions form a key part of
the analysis presented to Bridgepoint’s Investment
AdvisoryCommittee.
For more information on origination see page 20
We align all investment decisions in support of
achieving the United Nations Sustainable Development
Goals (SDGs). We assess:
− the company’s performance against the SDGs;
− any ESG considerations related to the company’s
business model;
− its existing ESG policies and programmes; and
− opportunities for improvement.
1
We carry out thorough ESG due diligence before we
invest. We are proactive in working with our portfolio
companies to raise their ESG ambitions in line with
our beliefs. We help them deliver their targets.
By embedding ESG in the DNA of our portfolio
companies, we set them up for sustainable success
both during and after the investment period.
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Bridgepoint
2021 Annual Report & Accounts
ESG in the investment process – Before, during, after
Directly post-investment
We aim to discuss ESG collaboratively with portfolio
companies as early as possible – at the due diligence stage
before we have made the investment and between signing
and closing the investment.
Following completion, as part of a value creation
100-day plan, the deal team will work with management
to appoint a senior executive to take responsibility for
ESG on a day-to-day basis, if there isn’t already one
inplace.
As part of this early engagement period, we will share
our ‘ESG guidelines for Bridgepoint-backed companies’
and outline our expectations, as well as introduce the
lead executive to our ESG monitoring programme.
The portfolio company will then be asked to complete
our comprehensive ESG survey. This builds on the due
diligence indings to generate a detailed understanding
of current ESG performance. Once this initial discovery
phase is complete a roadmap will be agreed with
management that includes company-speciic ESG
initiatives and corresponding KPIs, all of which will
be consistent with our own beliefs.
2
55
Bridgepoint
2021 Annual Report & Accounts
During the investment period
Throughout the fund investment period, we ensure
management teams regularly review their ESG policies,
ensuring they remain aligned with industry-speciic good
practice and deliver against the UN SDGs.
1 2 3 4
Bridgepoint provides guidance and support to
management teams via the Bridgepoint board
representative and/or the dedicated ESG team.
ExternalESG advisers may also be engaged.
Bridgepoint also convenes ESG workshops with
third-party specialists to refresh thinking and
import the latest best practice.
Tracking performance is a vital and evolving element
of improving ESG practices during fund investment.
At the portfolio company level, management teams
regularly report on key KPIs. At the industry level,
we are actively engaged in driving greater consistency
in performance monitoring.
For more information on creating value during the
investment period, see page 56
3
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Bridgepoint
2021 Annual Report & Accounts
ESG in the investment process – Before, during, after
3
At divestment
Our goal is to set up businesses for
sustainable success following the
Bridgepoint investment period.
That is why we ensure that, like Bridgepoint, ESG is in
the DNA of our portfolio companies.
We also 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.
4
57
Bridgepoint
2021 Annual Report & Accounts
How integrating ESG considerations into
decision-making, both before and during
the investment period, works in practice:
Zenith
Zenith, a leading UK-based leet management company, has a
well-established apprenticeship programme and has forged strong
links with the local community in Yorkshire where it is based, including
visiting school careers fairs to promote apprenticeships and careers
in the automotive industry. Apprentices at the company receive
in-house training with support from an advisor and dedicated mentor.
Zenith was named as one of the UK’s top 100 apprenticeship
employers by the National Apprenticeship Scheme, and in 2020,
it appointed a record number of apprentices (68, equivalent to 10%
of its totalworkforce).
The business is also playing a key role in helping to transition
customer leets from carbon to electric and hybrid through customer
consultations, highlighting the beneits of moving to electric and
hybrid vehicles (c.80% of new vehicle orders are now electric
orhybrid).
Of new vehicles electric or hybrid
80%
A top
100
apprenticeship employer
58
Bridgepoint
2021 Annual Report & Accounts
ESG
Evac
Evac, is a global cleantech business and a leader in the provision
of fresh water and waste sanitation systems to the marine industry.
Environmental sustainability is a cornerstone of Evac’s operations.
Itstechnologies address the increasing need for sustainable solutions
that optimise the handling of scarce fresh water and minimise
customers’ environmental footprint.
Evac is a signatory to the Finnish government’s ‘Commitment 2050’
initiative and has committed to help reduce marine litter and increase
dry waste recycling by cruise ships from 25% to 50% by 2025
(and70% by 2050).
Rovensa
Rovensa is a global leader in the provision of crop lifecycle
management solutions. Under Bridgepoint fund ownership, Rovensa
has shifted its emphasis towards Bio Control products with the
acquisition of Idai Nature, who received the ‘Product and Service’
award from the European Commission in the Annual European
Business Awards for the Environment 2020.
Rovensa has also signiicantly enhanced its ESG policies and
procedures and produced its irst sustainability report in 2021.
Alongside stringent environmental controls at its facilities,
including state-of-the-art ire and dust suppression systems
and waste-water recycling, Rovensa has continued to reduce
waste and has signiicantly reduced cardboard box usage at its
Tradecorp subsidiary.
Lending weight
ESG lies at the core of our Credit strategy.
Regardless of the investment strategy, we always strive to improve
environmental and social outcomes in line with our beliefs.
Where we make credit investments, we apply an ESG-centred due
diligence framework and incentivised loan pricing.
Consistent with Bridgepoint’s overall ambitions but relective of the
relationship between Credit funds and their portfolio investments,
ESGis embedded in our credit strategy.
During the investment period, the credit opportunities strategy often
follows a private equity-like approach to value creation, including in
relation to ESG. Direct lending funds, on the other hand, typically have
less inluence over their portfolio companies’ strategies. Steps can still
be taken to ensure ESG plays a key role in the portfolio, through:
Pre-investment screening
We look to invest in businesses that support the UN Sustainable
Development Goals. As a result, the credit team regularly rejects
investment opportunities that either carry ESG risk or operate in
harmful industries. In addition to assessing the company, we also
assess the shareholders (typically, a private equity irm) to understand
how ESG issues will be supported during the life of the investment.
Incentivisation
Bridgepoint Credit is at the forefront of a new market centred around
actively incentivising ESG performance through the pricing of loans.
Margin ratchets linked to ESG outcomes are incorporated into loan
documentation, enabling the interest rate on a loan to vary, based
on ESG performance against speciic targets.
2019
Consistent
ESG
reporting
across the
portfolio
2014
ESG topics
become
embedded in
investment
decision-
making
2016
ESG
incorporated into
our Governance
with the
inaugural ESG
Committee
meeting
2016
BVCA training
on responsible
investment rolled
out to all deal
team members
2009
Launched the
Bridgepoint
Charitable Trust
2013
Joined the UN PRI
2013
Published our
irst Responsible
Investment Policy
2021
BE VII and BG II
become
Bridgepoint’s irst
SFDR article 8
aligned funds
2020
Bridgepoint
Hardship Fund
launched to help
support our
communities
through Covid
2017
Dedicated
ESG team
launched
2007
Founder member
and contributor to
Walker Guidelines
for Disclosure and
Transparency
A track record of industry leadership
59
Bridgepoint
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Bridgepoint drives positive change in the
investment industry
We publicly advocate and champion responsible investment and
share our experiences and practices with the wider investment
community through our engagement in the following industry-wide
associations and initiatives:
Industry associations
PRI – Bridgepoint became a signatory to the UN-backed Principles for
Responsible Investment (“PRI”) in 2013.
BVCA – Bridgepoint is a member of the British Private Equity and
Venture Capital Association and hence follows the Walker Guidelines
for Disclosure and Transparency in Private Equity.
Invest Europe – Invest Europe, formerly known as EVCA, European
Private Equity & Venture Capital Association, represents the private
equity community across Europe. Bridgepoint is a member of its
Responsible Investment Roundtable.
European Leveraged Finance Association – ELFA is a trade body that
seeks a more transparent, eficient and resilient leveraged inance
market.
Diversity, Equity and Inclusion (DE&I) initiatives
Level 20 – Level 20, a not-for-proit organisation which promotes
gender equality and diversity in private equity. Bridgepoint’s co-head
of UK investment activities and Emma Watford (partner and co-chair
of the Diversity, Equity and Inclusion Committee), sits on Level 20’s
Advisory Committee.
ILPA’s Diversity in Action – Bridgepoint is a signatory to ILPA’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 inancial sector.
Out Investors – We are a member of Out Investors, a global
organisation that was founded with the mission to make the
direct investing industry more welcoming for LGBTQ+ individuals.
Sustainability initiatives
iCI – In 2021, Bridgepoint joined the Initiative Climat International (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.
Data Convergence Project – We are a founding and Steering
Committee member of the ESG data convergence project which
was set up by a group of GPs and LPs, led by CalPERS and Carlyle,
who have convened to form the private equity industry’s irst-ever
collaboration to align on a standardised set of ESG metrics and
mechanism for comparative reporting.
Sustainable Markets Initiative (SMI): We are members of the SMI’s
private equity roundtable. The SMI which was launched by HRH The
Prince of Wales at the World Economic Forum2020. It is a global
coalition of leading companies who share the vision around the need
to accelerate global progress towards a sustainable future and to
tackle climate change and biodiversity loss.
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ESG Industry Associations
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. We are at the beginning of this journey
and the following voluntary disclosures detail our irst
responses in line with the TCFD recommendations and
recommended disclosures.
They summarise how we integrate climate risks and
opportunities into our key business and investment
decisions and includes data on our direct greenhouse
gas (GHG) emissions.
Whilst the direct environmental impact from
Bridgepoint’s own operations is considered limited,
we are offsetting these to be carbon neutral and have
developed a strategy to progress towards net zero.
See ‘Metrics and Target’ for further details on the
initiatives we are implementing to achieve these goals.
We consider our biggest exposure to climate issues
to be in our investment portfolio and this is where
we continue to focus our attention.
Governance
The organisation’s governance around climate related risks and opportunities.
Description of the Board’s
oversight of climate-
related risks and
opportunities
The Executive Committee, on behalf of the Board, is responsible for overseeing the implementation
of the Group’s responsible investment policies and procedures which have been established to
manage ESG, including climate-related matters, across the Company. In 2022 our intent is to reine this
approach, and create a Board level ESG committee. Recognising the importance of ESG to the Group’s
day-to-day operations and investment activities, our Group CFO has been appointed as the board-level
executive sponsor for ESG matters. The Executive Committee is supported by an executive-level ESG
Committee, which is responsible for developing and monitoring the implementation of the Group’s ESG
policies and procedures, including those relating to climate change. It meets on a quarterly basis.
The Investment Advisory Committee and Portfolio Management Committee, comprising senior
investment Partners from across the Group, considers and reviews material ESG risks and opportunities
as they relate to investee companies.
Description of
management’s role in
assessing and managing
climate-related risks and
opportunities.
The Group’s in-house ESG team is responsible for supporting the relevant committees in the discharge
of their responsibilities and in the development and implementation of the Group’s climate policies.
As and when necessary, the team will utilise the knowledge and expertise of external ESG advisers and
climate experts to support the implementation of the Firm’s ESG programme. The team reports to the
Group CFO and the ESG Committee.
With respect to Bridgepoint’s investment activities, the Investment teams and Investment Advisory
Committees are responsible for assessing and integrating ESG considerations into pre-investment
and ownership/stewardship practices, supported by the ESG team as appropriate.
Strategy
The actual and potential impacts of climate-related risks and opportunities on the organisation’s businesses,
strategy, and inancial planning where such information is material.
Description of the climate-
related risks and
opportunities the
organisation has identiied
over the short, medium,
and long term.
Given the nature of the Group’s day-to-day activities across our (leased) ofice network, spanning 10
countries, the impacts of both transition and physical climate-related risks are considered negligible.
In our investment practice, whilst we aim to avoid investing in companies whose products, services or
practices cause environmental harm, we recognise that our portfolio companies have ESG risks and
opportunities, which vary by company, sector, and jurisdiction.
Short, medium and long-term climate-related issues are considered as part of our pre-investment due
diligence processes and are factored into our ownership practices, as appropriate. During due diligence,
in collaboration with external ESG advisers, we will identify material climate-related risks and
opportunities, which will be summarised, along with any relevant remedial actions/recommendations,
in the investment papers issued to the Investment Advisory Committee before any investment is made.
Both transition and physical climate issues are considered and can include, but are not limited to, policy/
regulation requiring measurement and reduction of carbon emissions, compliance with country-speciic
emission trading schemes, risks of looding to key operations, and associated impacts to supply chains.
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TCFD
Strategy continued
In terms of the current Private Equity Fund portfolio, in 2021, we concluded our irst high-level assessment
of climate-related inancial risk and opportunity across our private equity portfolio, with support from ERM,
a leading international ESG consultancy. The assessment considered several forward-looking temperature
increase scenarios across short, medium and longer term time frames and the associated physical and
transition implications. The report concluded that the portfolio was subject to relatively low levels of
physical and transition risk. We will look to build upon this work and broaden its application to all our
investment strategies going forwards.
Description of the
impact of climate-
related risks and
opportunities on
the organisation’s
businesses, strategy,
and inancial planning.
As noted above, at a Group level we consider the impact of climate related issues on the Firm’s operations
to be limited.
However, as an organisation ESG plays a signiicant role in our thinking. For example, within the Credit
business the team have invested in creating a proprietary approach to rating potential investments ESG
performance and within Private Equity, we have been investing in dedicated reporting tools that enable us
to track performance against ESG KPIs across investments. We have also taken the strategic decision that
BE VII will be aligned with SFDR article 8, which provides the opportunity for us to more formally integrate
ESG into the workings of our Funds.
Description of the
resilience of the
organisation’s strategy,
taking into
consideration different
climate-related
scenarios, including a
2°C or lower scenario.
We consider the risk of signiicant effects of climate change associated with a 2°C or lower scenario on the
Group’s direct operations to be limited. Relevant disaster recovery policies are in place to ensure the safe
and continued operation of our ofice and IT infrastructure, which are overseen by the Executive
Committee supported by relevant departments such as IT and ESG.
With respect to our investment activities, we acknowledge that climate change represents both an
investment risk and opportunity. This is why we have established rigorous processes to assess climate-
related and broader ESG issues in our portfolio, before we make an investment and during our ownership
period. This includes an assessment of the company’s resilience and approach to future prooing,
with key indings included in the investment papers reviewed by the Investment Advisory Committee.
If material climate-risks are identiied that could impact the viability and future growth of the company,
we will work with management to address these appropriately and progress is monitored by our Portfolio
Management Committee.
Risk management
How the organisation identiies, assesses, and manages climate-related risks.
Description of the
organisation’s processes
for identifying and
assessing climate-related
risks.
At a Group level, climate-related risks are integrated into Bridgepoint’s ESG framework, which is
monitored by the ESG Committee. The ESG team is responsible for tracking relevant developments in
climate-related policy and regulation and reports this to the committee. Any material issues identiied
will be escalated to the Executive Committee as appropriate.
We typically do not invest in energy intensive sectors or have direct exposure to the fossil fuel sector,
and therefore consider our exposure to climate risks to be limited. However, we do recognise that the
companies we invest in are subject to certain ESG and climate-related risks and opportunities.
Our ESG framework enables us to systematically identify, manage and report on material climate issues
across the whole investment lifecycle from pre-investment, ownership and exit. As noted above, our due
diligence processes include the identiication and analysis of ESG risks and opportunities, and before an
investment can be made, the Investment Advisory Committee must be satisied that all material issues
have been appropriately considered by the investment teams and any remedial actions factored into
post-investment planning. Investment teams are given training and guidance materials to help identify
and assess ESG factors during due diligence.
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TCFD continued
Risk management continued
Description of the
organisation’s processes
for managing climate-
related risks.
Any material climate-related risks that could impact the Group directly are managed by the ESG team
with support from other parts of the business as appropriate. Where speciic technical or legal expertise
is required, the team will draw upon its extensive network of ESG and legal advisers, as well as leverage
the relevant ESG industry associations and working groups, such as iC International and Invest Europe’s
Responsible Investment Roundtable, which has recently published private equity climate guidance.
Across our investment strategies, post-investment, ESG forms a key part of our active ownership and
engagement activities. We work closely with the company’s management teams, using our inluence
to support them implement appropriate ESG policies, initiatives and KPIs. This will include material
climate-related risks as appropriate, including measurement of carbon emissions.
We ensure that each portfolio company board of directors is accountable for ESG and that it regularly
reviews progress against agreed ESG roadmaps. A board-level executive is assigned as the ESG point of
contact and when necessary, we will introduce the company to climate change experts to support them
identify and manage material risks.
Description of the
organisation’s processes
for managing climate-
related risks.
Any material climate-related risks that could impact the Group directly are managed by the ESG team
with support from other parts of the business as appropriate. Where speciic technical or legal expertise
is required, the team will draw upon its extensive network of ESG and legal advisers, as well as leverage
the relevant ESG industry associations and working groups, such as iCI and Invest Europe’s Responsible
Investment Roundtable, which has recently published private equity climate guidance.
Across our investment strategies, post-investment, ESG forms a key part of our active ownership and
engagement activities. We work closely with the company’s management teams, using our inluence
to support them implement appropriate ESG policies, initiatives and KPIs. This includes material
climate-related risks as appropriate, including measurement of carbon emissions.
We ensure that each portfolio company board of directors is accountable for ESG and that it regularly
reviews progress against agreed ESG roadmaps. A board-level executive is assigned as the ESG point of
contact and when necessary, we will introduce the company to climate change experts to support them
in identifying and managing material risks.
Description of how
processes for identifying,
assessing, and managing
climate-related risks are
integrated into the
organisation’s overall risk
management.
The monitoring of material climate-related risks is integrated into our existing risk management and
investment monitoring processes.
As noted above, the ESG Committee is responsible for monitoring ESG performance and risk across
the Group and its investment portfolio. With respect to individual portfolio companies, any identiied
material climate risks will be monitored by the Portfolio Management Committee on a regular basis,
including progress against ESG roadmaps, initiatives and KPIs. In addition, the ESG team, with support
from the Investment teams, conducts an annual portfolio-wide ESG review which includes climate-
related risks.
Over the last year we have invested in upgrading our ESG KPI data collection with the implementation of
a dedicated ESG software solution, which for the irst time enables portfolio companies to calculate their
carbon footprint. This will further enhance our ability to analyse and track progress against our net zero
targets, as well as to identify further improvement opportunities.
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2021 Annual Report & Accounts
Metrics and targets
The metrics and targets used to assess and manage relevant climate-related risks and opportunities where such
information is material.
Disclosure of the
metrics used by
the organisation
to assess
climate-related
risks and
opportunities in
line with its
strategy and risk
management
process.
At Group level, we have focused on the measurement of our carbon footprint and track the emissions from our
scope 1, 2 and 3
1
(including indirect emissions associated with employee business travel) activity.
In our Private Equity investment activities, we regularly monitor a broad range of climate-related metrics along with
a wider set of ESG measures. The metrics that we track range from standardised KPIs such as the adoption of climate
related policies and appropriate governance through to KPIs speciic to individual portfolio companies. From 2022,
this will include reporting on greenhouse gas emissions from across all private equity portfolio companies.
In our Private Credit business, we have an established portfolio company scoring system where we assess
performance against over 30 ESG KPIs including several environmental metrics. Additionally, we are working with an
ESG adviser to develop an appropriate climate focused monitoring and reporting process to enable the Investment
teams to assess the GHG emissions footprint, identify key transition and physical risks, and the maturity of TCFD
reporting of their investments.
Disclosure of
Scope 1, Scope
2 and, if
appropriate,
Scope 3
greenhouse gas
(GHG) emissions
and the related
risks.
Our scope 1 and scope 2 emissions, and underlying total energy consumption, associated with Group operations are
summarised in the table below. This information has been prepared in accordance with our reporting requirements
under the UK’s Streamlined Energy and Carbon Reporting (SECR) scheme for quoted companies, in accordance with
The Companies (Directors’ Report) and Limited Liability Partnerships (Energy and Carbon Report Regulations) 2018.
Current reporting year 2021 Comparison reporting year 2020
Emissions Scope UK Rest of world Total UK Rest of world Total
Scope 1 (tCO
2
e) 78.7 13.6 92.3 45.1 36.4 81.5
Scope 2 – location-based (tCO
2
e) 68.6 112.4 181.0 76.6 122.3 198.9
Scope 2 – market-based (tCO
2
e) 8.8 31.2 40.0 69.0 126.1 195.1
Total scope 1, 2 (location-based) (tCO
2
e) 147.3 126.0 273.3 121.7 158.7 280.4
Total scope 1, 2 (market-based) (tCO
2
e) 87.5 44.8 132.3 114.2 162.5 276.7
Underlying total energy consumption (kWh) 752,771 640,717 1,393,488 574,294 1,054,795 1,629,089
The scopes 1 and 2 global emissions intensity per full time equivalent (FTE) employee is 0.75 tCO
2
e for a location-
based approach and 0.36 tCO
2
e for a market-based approach, based on an average of 364.7 FTE employees.
This is compared to 0.94 tCO
2
e and 0.93 tCO
2
e respectively in 2020, based on an average of 297.8 FTE employees.
The main reasons for the signiicant decrease are the growth in employee headcount and the purchase of renewable
electricity for our ofices globally.
The method used for calculating GHG emissions is in line with the GHG Protocol Corporate Accounting
and Reporting Standard. We have included all sites and activities which fall within our operational control boundary.
Scope 2 emissions have been calculated using the location-based approach, as required, as well as the market-based
approach to illustrate our efforts to procure renewable electricity.
Scope 1 emissions include consumption of natural gas. Refrigerant loss from cooling systems, and fuel use in
corporate and grey vehicle leets are deemed to be immaterial at less than 25% of total emissions, so have been
omitted from reporting. Scope 2 emissions include purchased electricity and district heating/cooling system use.
Where full energy consumption data was not available, estimates were made using direct comparison, pro-rata
extrapolation or benchmarking approaches. Estimation accounts for a small amount of the overall data and we are
working to reduce this further in future reporting years.
In 2020, our scope 3 emissions totalled 885.9 tCO
2
e, with the largest contributor being emissions related to business
travel (all transport by air, public transport, rented/leased vehicles, and taxis as well as hotel accommodation).
We recognise that business travel is a material source of emissions for us, and an exercise is under way to collect
and reine this information for 2021 and future reporting years.
1. This comprises of business travel (transport and hotel accommodation), waste generated in operations, purchased goods and services (water and consumable
supplies), capital goods, fuel and energy related activities, and for the 2020 GHG emissions footprint calculation also included homeworking emissions.
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2021 Annual Report & Accounts
TCFD continued
Metrics and targets continued
Disclosure of
Scope 1,
Scope 2 and,
if appropriate,
Scope 3
greenhouse
gas (GHG)
emissions and
the related risks
continued
Scope 3 ‘inanced emissions’ (portfolio companies)
At the end of 2021 we launched an initiative to measure the carbon footprint of each of our private equity portfolio
companies on an ongoing basis. Some of our larger investments are already well positioned in this regard, and
during 2022 we will move to reporting carbon emissions for all portfolio companies where we have material control.
As a result, our 2021 scope 3 emissions reporting omits portfolio company ‘inanced emissions’.
Actions taken to reduce emissions
Whilst we have a relatively low carbon footprint, we are committed to reducing our impact wherever possible.
In 2021, we partnered with a leading supplier of market-based environmental solutions to purchase renewable
electricity for 8 ofices, with the remaining 4 already operating on renewable electricity tariffs, and offset the Group’s
overall GHG footprint. We offset the Group’s emission through the purchase of carbon reduction credits from ACT,
a BE VI investment and leading provider of market-based sustainability solutions. We carefully selected four projects
to invest in which are focused on forest preservation and removal of carbon; these were:
1. The Uchindile Mapanda reforestation project to rebuild carbon sinks in Tanzania (veriied carbon standard);
2. The Francis Beidler forestry conservation project in the US (climate action reserve standard);
3. The high impact reforestation project to conserve forests and support communities in Nicaragua (gold standard
for the global goals); and
4. The Rotunda forest project to improve forest management to offset carbon in Romania (veriied carbon standard
and climate, community & biodiversity standards).
In 2022 we anticipate further reducing our environmental footprint and scope 2 emissions when our largest ofice,
based in the UK, is relocated to a new, energy eficient building. The new building is aiming to achieve a BREEAM
‘Outstanding’ rating which includes studies to minimise the operational and embodied carbon emissions produced
by the building throughout its lifecycle.
Description
of the targets
used by the
organisation
to manage
climate-related
risks and
opportunities
and
performance
against targets.
At Group level, we set ourselves the target of becoming a carbon neutral company, by offsetting carbon emissions
associated with our own business activities. We also set a target to procure 100% of the Group’s ofice electricity
consumption from renewable sources. We are pleased to report we achieved both of these goals in 2021.
With respect to our private equity investment activities, we have set an ambitious target for all portfolio companies
to be net zero by 2040 and to have Paris-aligned net zero strategies in place by the end of 2023, or within 12 months
of investment for new acquisitions.
As a irst step in achieving this goal, we require all our portfolio companies to assess their carbon footprint and put in
place measures to start to materially reduce these, if not already in place. As best practice evolves, we will continue to
reine our approach to supporting companies monitor and reduce their emissions.
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2021 Annual Report & Accounts
The Group complies with the Non-Financial Reporting requirements
contained in sections 414CA and 414CB of the Companies Act 2006.
This information is intended to help stakeholders better understand
how we address key non-inancial matters. Further details of the
activities we undertake in supporting these frameworks are available
on our website. Details of our business model are included on pages
14 to 23 and our principal risks and how we manage those risks are
included on pages 69 to 75.
Employee matters
At Bridgepoint we irmly believe that our people are our greatest asset.
From the recruitment of diverse and talented professionals who
exhibit 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
to being 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 December 2021, the Group had 344 permanent employees
of which 187 were women and 157 were men. There are two
Executive Directors both of whom are male. Of the 14 senior
managers, 2 are women.
Board diversity
Biographical details of the Board and information on diversity
are set out on pages 76 to 79. The Board membership is expected
to change during 2022 as new Non-Executive Directors are appointed.
Measurement
The Board approved the targets of achieving a 50:50 gender balance
in entry level recruitment from 2021 and of increasing the number
of women in the investment team to 40 per cent by 2025.
Policies and standards
We are committed to preventing any form of slavery and human
traficking. We seek to ensure there are no such practices in our
business and supply chain. During the year, we have carried out
employee training and awareness raising and continued to include
anti-slavery considerations in supplier selection and due diligence.
We have also conducted a review of our own business, our portfolio
companies that are covered by our statement and material suppliers.
No concerns were raised by any of our due diligence. The Group’s full
policy on Modern Slavery can be found at www.bridgepointplc.com.
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 actively
seek to reduce opportunities for corruption. 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 identiied 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 (SECR) requirements are set out on page 64.
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2021 Annual Report & Accounts
Non-Financial Information Statement
67
Bridgepoint
2021 Annual Report & Accounts
1
Our approach
Risk management
The Group undertakes the following process to identify, monitor
and manage risks:
1. Set strategy – The Board considers and approves the Group’s
strategy, which forms the basis of the Group’s risk identiication
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
the key and emerging risks facing the Group.
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 inancially and in respect of other
matters such as reputation). The relevant risks are categorised
and rated based on the cumulative impact of these two factors.
4. Manage and mitigate risks – Mitigating actions are identiied
for each risk, taking into account the effectiveness of the current
control environment. Where appropriate, changes to the control
environment are identiied and implemented.
5. Monitor and review risks – The Group undertakes ongoing
monitoring of risks identiied and the effectiveness of
mitigants implemented.
2
Risk management
process
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 its funds 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 legal entity level, 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 principal 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 identiication, 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 systems. More details of the Audit and Risk
Committee are set out on pages 87 to 91.
The Group’s risk management framework is underpinned by a strong
control culture with clear oversight responsibilities. The team also
carries out thematic compliance monitoring work. The Group
maintains comprehensive insurance cover with a broad range
of policies covering a number of insurable events. During 2022,
to support the monitoring and review of risks, it is expected
that an internal audit programme will be adopted, supported
by an outsourced internal auditor.
1
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Bridgepoint
2021 Annual Report & Accounts
The Group’s risk management system is designed to identify a broad
range of risks and uncertainties which it believes could adversely
impact the proitability or prospects of the Group, and a similar
process is undertaken with respect to risks facing funds managed by
the Group. As part of this process, ESG-related risks are considered.
The following pages set out the Group’s key risks identiied and the
primary mitigating actions implemented for each risk. These key risks
may change over time as some risks assume greater importance and
others may become less signiicant.
The key risks are identiied based on the Group’s combinedassessment
of the likelihood and impact of each risk eventuating after the Group’s
controls and other mitigating actions are taken into account.
Additional risks and uncertainties 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 inancialcondition.
3
Key risks
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 risk of failing to deliver on the
Group’s strategic objectives or risks from external or broader events,
resulting in a negative impact on the proitability or prospects of the
Group. Investment risks are those associated with investments made
by the Group or the funds managed by it. Operational risks involve
the risk of loss resulting from inadequate or failed internal processes,
people or systems and external events.
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2021 Annual Report & Accounts
Risk Description Mitigation Change in risk during FY21
Fundraising
challenges
Category: Strategic and External
The current Bridgepoint funds have a inite life and a inite 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, over the 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).
Fundraising activities can be affected by a number of factors, including competition for
investments or investors (as described below) and general macroeconomic conditions.
The Group has a number of new fundraises continuing in 2022, however fundraising markets
are more congested than they were earlier in 2021.
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
lows or the ability to retain employees.
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.
Increased
competition
Category: Strategic and External
The investment management industry is intensely competitive, with the Group competing
with a number of other persons for investor funds, including sponsors of public and private
investment funds, and fundraising markets are currently congested. If market conditions for
competing investment products become more favourable and such products begin to offer
rates of return superior to those achieved by the Bridgepoint funds, the attractiveness of
Bridgepoint funds to investors could decrease. In order to remain attractive the Group may
then need to offer fund terms that are less favourable to it than those previously offered.
The Group also competes for investment opportunities for the Bridgepoint funds, and
such competition is based primarily on the ability to source such investment opportunities,
the pricing, terms and structure of a proposed investment and certainty of execution.
An increase in competition for either investors or investments could adversely affect the
Group’s revenue.
As the leader in middle market investing, the Group offers investors a differentiated approach
arising from its global reach and ability to deploy capital across middle market strategies. This
insulates the Group, to some extent, against the competitive pressures arising in respect of
attracting fund investors.
In addition, as mentioned above, 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 respect of investments, the Group’s deal low is driven by its sector strategy which is
continually reined 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 competitive pressures caused by economic cycles.
–
Reputational
damage
Category: Strategic and External
There is a risk that factors such as poor fund performance, negative press, insuficient
sustainability procedures and overriding of ESG factors by any portfolio company of a
Bridgepoint fund, or employees or afiliates thereof, the insolvency, liquidation or bankruptcy
of a portfolio company or non-compliance with applicable laws and regulations could lead to
fund investor dissatisfaction and a decreased ability or inability by the Group to raise capital
for new funds, as well as impair its ability to attract and retain key talent.
The Group’s investment processes are designed to comply with accepted standards of
investment management practice.
The Group has an ESG Committee, composed of a cross-section of senior and appropriately
experienced professionals operating in various geographies. This committee ensures that
senior management gives due consideration and attention to ESG matters.
–
Risk management continued
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2021 Annual Report & Accounts
Risk Description Mitigation Change in risk during FY21
Fundraising
challenges
Category: Strategic and External
The current Bridgepoint funds have a inite life and a inite 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, over the 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).
Fundraising activities can be affected by a number of factors, including competition for
investments or investors (as described below) and general macroeconomic conditions.
The Group has a number of new fundraises continuing in 2022, however fundraising markets
are more congested than they were earlier in 2021.
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
lows or the ability to retain employees.
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.
Increased
competition
Category: Strategic and External
The investment management industry is intensely competitive, with the Group competing
with a number of other persons for investor funds, including sponsors of public and private
investment funds, and fundraising markets are currently congested. If market conditions for
competing investment products become more favourable and such products begin to offer
rates of return superior to those achieved by the Bridgepoint funds, the attractiveness of
Bridgepoint funds to investors could decrease. In order to remain attractive the Group may
then need to offer fund terms that are less favourable to it than those previously offered.
The Group also competes for investment opportunities for the Bridgepoint funds, and
such competition is based primarily on the ability to source such investment opportunities,
the pricing, terms and structure of a proposed investment and certainty of execution.
An increase in competition for either investors or investments could adversely affect the
Group’s revenue.
As the leader in middle market investing, the Group offers investors a differentiated approach
arising from its global reach and ability to deploy capital across middle market strategies. This
insulates the Group, to some extent, against the competitive pressures arising in respect of
attracting fund investors.
In addition, as mentioned above, 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 respect of investments, the Group’s deal low is driven by its sector strategy which is
continually reined 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 competitive pressures caused by economic cycles.
–
Reputational
damage
Category: Strategic and External
There is a risk that factors such as poor fund performance, negative press, insuficient
sustainability procedures and overriding of ESG factors by any portfolio company of a
Bridgepoint fund, or employees or afiliates thereof, the insolvency, liquidation or bankruptcy
of a portfolio company or non-compliance with applicable laws and regulations could lead to
fund investor dissatisfaction and a decreased ability or inability by the Group to raise capital
for new funds, as well as impair its ability to attract and retain key talent.
The Group’s investment processes are designed to comply with accepted standards of
investment management practice.
The Group has an ESG Committee, composed of a cross-section of senior and appropriately
experienced professionals operating in various geographies. This committee ensures that
senior management gives due consideration and attention to ESG matters.
–
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Risk Description Mitigation Change in risk during FY21
Fund under-
performance
Category: Investment
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 lagship fund,
Bridgepoint Europe VI or its successors), this may adversely affect the Group’s business,
brand and reputation and lead to dificulties for the Group in attracting fund investors and
raising capital for new funds in the future.
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. The Portfolio Management 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.
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 the extent of market risk by diversifying portfolio assets held within
the Bridgepoint funds in terms of sector, size and geography.
–
Decreased pace or
size of investments
made by
Bridgepoint funds
Category: Investment
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. The market for private equity transactions,
for example, has at times been characterised by relatively high prices, which can make the
deployment of capital more dificult. In addition, many other factors could cause a decline
in the pace of investment, including the inability of the Group’s investment professionals to
identify attractive investment opportunities, competition for such opportunities among
potential acquirers, decreased availability of capital on attractive terms and the failure to
consummate identiied investment opportunities because of business, regulatory or legal
complexities, new regulations, guidance or other actions provided or taken by regulatory
authorities or uncertainty and adverse developments in the global economy or inancial markets.
A failure to deploy committed capital in a timely manner may also have a negative impact on
investment performance and the ability to raise new funds.
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
responsiblyachievable.
–
Personnel and
key people
Category: Operational
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, retain and motivate new
talented professionals.
In particular, the Group depends on the efforts, skill, reputations and business contacts of its
executive management and other key senior team members and the information and deal
low they generate during the normal course of their activities.
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 in leadership development.
Information
technology and
cyber security
Category: Operational
The Group relies on the secure processing, storage and transmission of conidential and other
information in the 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. 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 the Group’s systems.
Cyber-security failures, technology failures or data security breaches could result in the
conidentiality, integrity or availability of data being negatively affected, or cause disruption
to the Group’s business.
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.
–
Inadequate
control systems
Category: Operational
The Group is dependent on an effective control system to mitigate operational risks. For
example, the Group is dependent both on it and the Bridgepoint funds having suficient
processes in place to prevent money laundering and other regulatory requirements, and
any failures in this regard may result in inancial penalties, fund investor claims or rescission
rights or loss of fund approvals.
Senior management is actively engaged in maintaining an appropriate control environment. The
effectiveness of the control framework for key business processes is subject to periodic review.
–
72
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2021 Annual Report & Accounts
Risk management continued
Risk Description Mitigation Change in risk during FY21
Fund under-
performance
Category: Investment
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 lagship fund,
Bridgepoint Europe VI or its successors), this may adversely affect the Group’s business,
brand and reputation and lead to dificulties for the Group in attracting fund investors and
raising capital for new funds in the future.
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. The Portfolio Management 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.
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 the extent of market risk by diversifying portfolio assets held within
the Bridgepoint funds in terms of sector, size and geography.
–
Decreased pace or
size of investments
made by
Bridgepoint funds
Category: Investment
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. The market for private equity transactions,
for example, has at times been characterised by relatively high prices, which can make the
deployment of capital more dificult. In addition, many other factors could cause a decline
in the pace of investment, including the inability of the Group’s investment professionals to
identify attractive investment opportunities, competition for such opportunities among
potential acquirers, decreased availability of capital on attractive terms and the failure to
consummate identiied investment opportunities because of business, regulatory or legal
complexities, new regulations, guidance or other actions provided or taken by regulatory
authorities or uncertainty and adverse developments in the global economy or inancial markets.
A failure to deploy committed capital in a timely manner may also have a negative impact on
investment performance and the ability to raise new funds.
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
responsiblyachievable.
–
Personnel and
key people
Category: Operational
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, retain and motivate new
talented professionals.
In particular, the Group depends on the efforts, skill, reputations and business contacts of its
executive management and other key senior team members and the information and deal
low they generate during the normal course of their activities.
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 in leadership development.
Information
technology and
cyber security
Category: Operational
The Group relies on the secure processing, storage and transmission of conidential and other
information in the 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. 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 the Group’s systems.
Cyber-security failures, technology failures or data security breaches could result in the
conidentiality, integrity or availability of data being negatively affected, or cause disruption
to the Group’s business.
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.
–
Inadequate
control systems
Category: Operational
The Group is dependent on an effective control system to mitigate operational risks. For
example, the Group is dependent both on it and the Bridgepoint funds having suficient
processes in place to prevent money laundering and other regulatory requirements, and
any failures in this regard may result in inancial penalties, fund investor claims or rescission
rights or loss of fund approvals.
Senior management is actively engaged in maintaining an appropriate control environment. The
effectiveness of the control framework for key business processes is subject to periodic review.
–
73
Bridgepoint
2021 Annual Report & Accounts
Risk Description Mitigation
Change in risk during the year
ended 31 December 2021
Third-party
service providers
Category: Operational
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, information technology,
insurance broking, depository and alternative investment management services. The Group
is subject to the risk of errors and mistakes by such persons, which may be attributed to the
Group and subject it or the Bridgepoint funds to reputational damage, penalties or losses.
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.
–
Increased law
and regulation
Category: Operational
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 regulated by a number of regulators, including (among others) the
Financial Conduct Authority in the UK, the Securities and Exchange Commission in the United
States and the Autorité des Marchés Financiers in France. Failure to comply with these laws
and regulations may put the Group at risk of ines, lawsuits or reputational damage.
Changes in laws and regulations can materially impact the Group or the market in which
it operates.
The Group conducts regular and ongoing compliance monitoring and is supported by an
experienced legal and compliance team. The legal and compliance team has full access to
management information and is represented on the Group’s executive committee.
Employees of the Group are provided with periodic training on the laws and regulations relevant
to the Group.
Horizon scanning for relevant regulatory and legislative change is a key part of the legal and
compliance process and, where appropriate, external advisers are commissioned to support this.
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2021 Annual Report & Accounts
Risk management continued
Risk Description Mitigation
Change in risk during the year
ended 31 December 2021
Third-party
service providers
Category: Operational
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, information technology,
insurance broking, depository and alternative investment management services. The Group
is subject to the risk of errors and mistakes by such persons, which may be attributed to the
Group and subject it or the Bridgepoint funds to reputational damage, penalties or losses.
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.
–
Increased law
and regulation
Category: Operational
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 regulated by a number of regulators, including (among others) the
Financial Conduct Authority in the UK, the Securities and Exchange Commission in the United
States and the Autorité des Marchés Financiers in France. Failure to comply with these laws
and regulations may put the Group at risk of ines, lawsuits or reputational damage.
Changes in laws and regulations can materially impact the Group or the market in which
it operates.
The Group conducts regular and ongoing compliance monitoring and is supported by an
experienced legal and compliance team. The legal and compliance team has full access to
management information and is represented on the Group’s executive committee.
Employees of the Group are provided with periodic training on the laws and regulations relevant
to the Group.
Horizon scanning for relevant regulatory and legislative change is a key part of the legal and
compliance process and, where appropriate, external advisers are commissioned to support this.
75
Bridgepoint
2021 Annual Report & Accounts
William Jackson
Executive Chairman
Appointed Managing Partner in 2003 and
Executive 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. As part of his
role at Bridgepoint, he is currently President of the
Board of Dorna Sports, the international sports
management company which runs the MotoGP World
Motorcycling Championship and is a Bridgepoint fund
portfolio company.
William is also a Non Executive Director of Berkeley
Group Plc, the FTSE 100 property company. He is
a graduate of Oxford University.
Other signiicant appointments
Non-Executive Director, The Berkeley Group
Holdings plc
Archie Norman
Senior Independent Director
Appointed in June 2021.
Skills and experience
Archie Norman 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 has held the position of 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 was Chief Executive
and Chairman of ASDA plc and Finance Director of
Kingisher plc. He has been 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 in the United Kingdom for eight years.
Other signiicant appointments
Chairman, Marks and Spencer plc
76
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2021 Annual Report & Accounts
Board of Directors
Adam Jones
Chief Financial Oficer and Chief Operating Oficer
Joined the Group in 2018.
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 irm 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.
Audit and Risk Committee
Key
Nomination Committee
Remuneration Committee
Committee Chair
77
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2021 Annual Report & Accounts
Angeles Garcia-Poveda
Independent Non-Executive Director
Appointed in June 2021.
Skills and experience
Angeles Garcia-Poveda 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 has chaired the Nominations,
Governance and Remuneration committees. She is also
an independent director at Edenred, listed in the French
SBF 120 index. In her prior career as a partner with
Spencer Stuart, she led its French and EMEA businesses
and served on the global Board of Directors. She is
a member of the Boards Practice and the consumer and
private equity practices. She also spent 14 years with
The Boston Consulting Group (BCG), where she worked
as a consultant in Madrid and Paris.
Other signiicant appointments
Chairperson of the Board, Legrand SA
Non-Executive Director, Edenred SA
Carolyn McCall DBE
Independent Non-Executive Director
Appointed in July 2021.
Skills and experience
Carolyn McCall is a seasoned chief executive with a
strong track record in value creation and business
transformation.
She is currently Chief Executive of ITV plc having been
Chief Executive of easyJet for nearly 8 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. In 2016, Carolyn was awarded a Damehood for
services to the aviation industry having received an OBE
in 2008 for services to women in business. She has
been a NED on the Board of Tesco, Lloyds , New Look,
and Burberry, where she was Senior Independent
Director and has also served on the Business and Energy
government Board for 4 years and 3 Prime Minister’s
Business Council’s (20152021).
Other signiicant appointments
Chief Executive, ITV plc
78
Bridgepoint
2021 Annual Report & Accounts
Board of Directors continued
Tim Score
Independent Non-Executive Director
Appointed in June 2021.
Skills and experience
Tim Score has signiicant experience in the rapidly
evolving global technology landscape as well as many
years of engagement both with mature economies and
emerging markets.
He is Chair of British Land, having been a Non-Executive
Director and Chair of its Audit Committee since 2014.
He is also the Senior Independent Director, Chair of the
Audit Committee and Deputy Chair Designate at
Pearson plc. Tim was formerly a Non-Executive Director
of HM Treasury and CFO of ARM Holdings plc for
13 years and held senior inancial 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 signiicant appointments
Chair, The British Land Company plc
Non-Executive Director, Pearson plc
Audit and Risk Committee
Key
Nomination Committee
Remuneration Committee
Committee Chair
79
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2021 Annual Report & Accounts
Given Bridgepoint’s role as a
responsible investor and owner
of different classes of investment
funds it is important it has a
strong and engaged Board with
independent mindset to ensure
very strong governance. This is
even more important given the
role of the Executive Chairman. For
this reason four experienced Non
Executive Directors were appointed
at the time of the IPO. Our intention
is to further strengthen the non
Executive team in the year ahead.
Breadth of Leadership
Representation
The Board places great emphasis on both
diversity and inclusivity appointments are
based on merit with the objective of ensuring
an appropriate balance of skills and knowledge.
As at the date of this report, the Board meets
the Hampton-Alexander target for female
representation, with 33.3 per cent of the
Board being women.
Stakeholder Engagement
I and other members of the Board
have spent considerable time engaging
with stakeholders and the Group’s new
shareholders in the course of the IPO process
and subsequently to help get to know and
understand their objectives and opinions.
A full review of stakeholder engagement can
be found in the Strategic Report on pages 30
to 32.
Non Executive Involvement
We believe a good Board should have a
close understanding of the business and be
able to act as strategic discussion partner
to the Executive team, alongside their
governance responsibilities. Therefore,
all Non Executives have had an extensive
programme of interaction with Executives
across the business.
Code Compliance
The Governance Report explains the
key features of the Group’s governance
framework. The Board is committed to
maintaining high standards of corporate
governance. We have a clear governance
structure, which ensures that the Board and the
business act responsibly in decision making,
risk management and delivery objectives.
The IPO Prospectus indicated that the
Company complied with substantially all of
the relevant provisions of the Corporate
Governance Code at Admission, and the
Group has continued to do so throughout the
subsequent period. Further details are set out
on page 85.
Annual General Meeting
The Company’s irst AGM is scheduled to
take place at 4.00 pm on 12 May 2022 and will
be held at the Conrad St James Hotel, 2228
Broadway, London SW1H OBH. The notice
of meeting and related explanatory notes
released today contain further details.
Archie Norman
Senior Independent Director
Find out more
www.bridgepoint.eu
Archie Norman
Senior Independent Director
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Bridgepoint
2021 Annual Report & Accounts
Senior Independent Director’s Governance Review
On behalf of the Board,
I am pleased to present
the Group’s irst Corporate
Governance Report since
admission to the premium
listing segment of the Oficial
List and to trading on the Main
Market of the London Stock
Exchange on 26 July 2021.
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Bridgepoint
2021 Annual Report & Accounts
1. Our governance framework
Below is a summary of the Group’s governance structure.
Board
Committees
Audit and Risk Committee
The Audit and Risk Committee oversees external and
internal audits, and the Group’s inancial reporting and
disclosure. It also oversees the Group’s risk management
framework and system of internal controls.
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.
Executive
Chairman &
Executive
Committee
Responsible for providing leadership, including
setting the Group’s purpose, strategy and values,
and promoting its long-term sustainable success.
The Board has established committees to assist it.
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2021 Annual Report & Accounts
Corporate Governance Report
Remuneration Committee
The Remuneration Committee determines the policy
for director remuneration, and sets the remuneration
of executive directors and senior management.
Disclosure Committee
The Disclosure Committee signs off and approves the
release of RNS announcements relating to inancial
results or other material information. The Disclosure
Committee comprises William Jackson, Adam Jones
and Archie Norman.
A full schedule of matters reserved for the
Board is available at bridgepointgroupplc.com
The terms of reference for the Audit and Risk,
Remuneration and Nomination Committees
are available at bridgepointgroupplc.com
Executive Chairman and
Executive Committee
The Board delegates day-to-day responsibility for
running the Group to the Executive Chairman. The
Executive Chairman is assisted in this by the Executive
Committee, which oversees day-to-day operations, and
implements the strategy of the Group as determined by
the Board.
Culture
The Group has a strong and highly inclusive
corporate culture, based on the core values
of being performance-driven, thoughtful and
straightforward. The Board recognises the
contribution of this culture to the success of
the business and is satisied that it is aligned
with the Company’s purpose, values and
strategy. The Board monitors the culture
of the Group through periodic updates
on people, culture, inclusivity and talent
provided by the Head of People, through
the regular attendance of members of senior
management at Board meetings and through
monitoring exercises such as the annual
employee engagement survey. No speciic
corrective action was requested of
management during the year.
Conlicts of interest
In accordance with the Company’s Articles
the Board has a formal system in place for
Directors to declare conlicts of interest and
for such conlicts to be considered for
authorisation.
In circumstances where a potential conlict
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 conlicts 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 conlicts
of interest.
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Bridgepoint
2021 Annual Report & Accounts
Executive Chairman
− Leads the Board and is responsible for the overall effectiveness of the Board and its committees
− Sets the Board’s agenda
− Ensures good governance
− Promotes a culture of openness and debate on the Board, facilitating effective contribution from
non-executive directors
− Develops strategies for consideration by the Board, alongside the Group Chief Financial Oficer and
executive management
− Runs the Group on a day-to-day basis and implements the Board’s decisions
− In conjunction with the Group Chief Financial Oficer, represents the Group to external stakeholders
− Ensures the Board as a whole has a clear understanding of the views of the Company’s shareholders
Group Chief Financial
Oficer and Chief
Operating Oficer
− Provides strategic inancial leadership to the Group and runs the inance function on
a day-to-day basis
− Manages the operating platform of the Group
− Develops strategies for consideration by the Board, alongside the Executive Chairman
and executive management
− In conjunction with the Executive Chairman, represents the Group to external stakeholders
− Leads the development of annual budgets for Board approval
Senior Independent
Director
− Acts as a sounding board for the Executive Chairman
− Is available to shareholders if they have concerns about contact with the Executive
Chairman or Group Chief Financial Oficer 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 Executive
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 inancial reporting, internal controls
and risk management systems
Company Secretary
− Responsible for 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
2. Board roles and responsibilities
The Board provides entrepreneurial leadership and direction to Bridgepoint. The Board promotes the long-term sustainable success of
Bridgepoint, generating value for shareholders and contributing to wider society. The Board is also responsible for oversight of the Group’s
governance and internal control. A full schedule of matters reserved for the Board is available at www.bridgepointgroupplc.com
Broadly, key executive and non-executive responsibilities are divided as follows:
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2021 Annual Report & Accounts
Corporate Governance Report continued
3. Board activities
During the period from Admission until 31 December 2021, the Board met twice and focused on the following key areas:
− regular updates on the performance of each of the Group’s strategies and funds, as well as the fundraising process for new funds;
− inancial reporting matters and approval of the Group’s half-year results update;
− the 2022 budget;
− the long-term strategy of the Group; and
− the calendar of the Board and the committees.
Board meetings have standing agenda items which ensures that key aspects of the business are given due consideration.
The attendance at Board and Committee meetings in 2021 are 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
1
Audit and Risk Remuneration Nomination
William Jackson 2/2 – – 1/2
Adam Jones 2/2 – – –
Angeles Garcia-Poveda 2/2 – 1/1 2/2
Dame Carolyn McCall 2/2 1/1 1/1 2/2
Archie Norman 2/2 1/1 1/1 2/2
Tim Score 2/2 1/1 – 2/2
1. The total number of board meetings listed is from Admission on 26 July 2021 until 31 December 2021. The Board also met on a number of occasions prior
to Admission.
4. Compliance with the Corporate Governance Code
The Company is subject to the 2018 Corporate Governance Code, which is publicly available at www.frc.org.uk. The Company has, from
Admission to 31 December 2021, applied the principles of, and complied with the provisions of, the Corporate Governance Code, subject to the
exceptions set out below:
− Provision 9 of the Corporate Governance Code recommends that, on appointment, the Chairman of a company should be independent when
assessed against the circumstances set out in provision 10, and that the roles of Chairman and Chief Executive should not be exercised by the
same individual. William Jackson, as Executive Chairman, combines the roles of Chairman and Chief Executive and was not independent on
appointment. As disclosed at the time of the IPO, the Nomination Committee and the Board consider that William Jackson taking on such a
role, which is commonplace in the alternative asset management industry, is in the best interests of the Group in order to utilise his proven
leadership qualities and signiicant experience. Furthermore, William Jackson has been engaged with the Group since 2000 and has been
“Managing Partner” since 2003, and therefore provides stability and continuity through his detailed understanding of the Group’s operations
and the sectors in which it operates in the period following Admission. At the time of any future Chief Executive or Chair appointment, it
would be considered whether the separation of these roles is appropriate.
− Provision 21 of the Code recommends that a performance evaluation of the Board, its committees, the chair and individual directors
should take place annually. Given that the Company has only been listed since 26 July 2021, the Board did not carry out an evaluation prior
to 31 December 2021. However, an exercise was undertaken before the IPO to evaluate the skills and experience required from non-executive
directors who would complement existing skillsets and also contribute their listed company experience to promote the effectiveness of the
Board. The performance evaluation recommended by the Corporate Governance Code will be undertaken during 2022 and will be reported
on in next year’s Annual Report.
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Nomination Committee Report
The Nomination Committee was formed at
the time of the IP0 in July 2021, and there
have been two meetings during the reporting
period. In future, the Committee is expected
to meet at least twice each year and as
necessary to review Board composition.
Committee membership is detailed on
pages 76 to 79.
In advance of the IPO process, the Group
appointed Russell Reynolds to advise on the
appointment of the Senior Independent
Director and three further independent NEDs.
Russell Reynolds has no other connection
with the Company or an individual Director.
The search process concentrated on
independence, diversity and ensuring
a combination of skills, including listed
company and company experience, to
complement the executive members of
the Board.
Since the IPO the Nomination Committee has
instigated a search to identify and bring on
board two further Non Executive Directors to
complement further the breadth of expertise
and diversity of thinking around the Board
table. All members of the Committee are
fully engaged with that process.
Archie Norman
Chairman of the Nomination Committee
Find out more
www.bridgepoint.eu
Archie Norman
Chairman of the Nomination Committee
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Audit & Risk Committee Report
I am pleased to present
the report of the Audit and Risk
Committee for the year ended
31 December 2021. This report
outlines how the Committee
discharged the responsibilities
delegated to it by the Board since
Admission, and the key topics it
considered in doing so.
The purpose of the Committee is to assist the
Board in fulilling its oversight responsibilities
related to inancial reporting and the internal
controls and risk management processes of
the business.
The principal responsibilities of the
Committee can be summarised as:
− Financial reporting – monitoring the
integrity and quality of the inancial
statements of the Company, including
any formal announcement relating to
inancial performance, and reviewing and
challenging where necessary major issues
regarding accounting principles, policies,
practices, judgments and presentations
− 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 – considering the need
for an internal audit function, making
recommendations to the Board on the
appointment, re-appointment and removal
of the internal auditor, monitoring and
reviewing the work performed by
the internal auditor, and reviewing
effectiveness including its plans
and resources
− Risk management and internal controls
– monitoring the adequacy and
effectiveness of the Company’s internal
controls and risk management systems
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 focus of the
Committee since Admission has focused on
the inancial reporting processes and the irst
year-end numbers as a listed business. In
addition, the Committee has also discussed
the need for an internal audit function and
agreed a plan for its introduction during the
course of 2022.
The Committee met once in the period, and
has met twice since the year end, to discuss
the inancial statements and receive reports
from the external auditors.
I am grateful to all members of the Committee
for their contributions and I look forward to
continuing our work in 2022.
Tim Score
Chairman of the Audit & Risk Committee
Find out more
www.bridgepoint.eu
Tim Score
Chairman of the Audit & Risk Committee
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2021 Annual Report & Accounts
Committee governance
Meetings
The Committee intends to meet 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.
Composition
Since establishment, the Audit and Risk Committee has comprised
three independent non-executive Directors, all of whom have inancial
and/or related business experience due to the senior positions they
hold or have held in other listed or publicly traded companies and/or
similar large organisations. The Committee possesses a good balance
of skills and knowledge, including inancial sector experience.
The Chair of the Committee, Tim Score, is the Group’s designated
inancial expert, having recent and relevant inancial experience as
Chair of the Audit Committee of Pearson plc, and being an Associate
Chartered Accountant. He has also previously served as Audit
Committee Chair for The British Land Company plc and National
Express Group plc. The qualiications and relevant experience of the
other Committee members are detailed on pages 76 to 79.
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 inance team also
regularly attend meetings.
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 inance 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 www.bridgepointgroupplc.com. The terms of
reference are reviewed by the Board on a regular basis.
Effectiveness
Due to the short period between Admission and the publication of
this Report, a formal evaluation of the performance and effectiveness
of the Committee has not fallen due to be carried out. The annual
evaluation will be undertaken as part of the overall Board evaluation
process during 2022.
Audit & Risk Committee Report continued
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2021 Annual Report & Accounts
Areas of focus in relation to inancial reporting
Areas of focus considered by the Committee in relation to inancial reporting for the year ended 31 December 2021, 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;
− Underlying FRE;
− Underlying FRE margin;
− Underlying proit before tax; and
− Underlying proit before tax margin
A full list can be found on pages 36 and 37.
The Committee discussed the alternative performance measures with
the Executive Directors, considering their appropriateness.
The Committee was satisied 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 identiication
of exceptional items involves judgement.
The Committee reviewed the items selected by management for the treatment
as exceptional items in the inancial statements, which for the year ended
31 December 2021 included IPO costs and items related to the acquisition
of EQTCredit.
The Committee also reviewed the split of the IPO costs between the income
statement and as an issue cost within equity.
The Committee was satisied 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 inancial 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 inancial statements, which for the
year ended 31 December 2021 included consideration of the treatment of CLO 2
and 3, and the Burgundy Investments Holdings LP, which are not consolidated.
The Committee concluded that it was satisied 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 judgment.
The Committee reviewed the recognition of management fees, carried interest
and investment income. In particular, the committee reviewed the methodology
and process of valuing fund investments and understood the accounting policy
over the recognition of earned interest, including the discounts applied to the
fair value of unrealised investments. The Committee concluded it was satisied
that revenue had been properly recognised in the inancial statements.
Investment valuation
The Group’s co-investments represent a signiicant
portion of the consolidated balance sheet. As these are
mainly unquoted and illiquid, considerable professional
judgment is required in determining their valuation.
The Committee reviewed the methodologies used to value the Group’s
investments in private equity and credit funds, including CLOs, the process
and governance over the valuations and the outcome of that process at
31 December 2021.
Having challenged the approach taken by management, the Committee was
satisied with the approach taken to valuation at 31 December 2021 and the
disclosures made within the inancial statements.
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2021 Annual Report & Accounts
External and internal audit
External Audit
Mazars LLP was appointed as the Group’s external auditor for the audit
of the year ended 31 December 2021. PricewaterhouseCoopers LLP
had previously held the role as auditor but were unable to continue
due to independence restrictions following the IPO.
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 inancial statements;
− timeline for the audit, including the audit of subsidiary companies;
− external auditor’s view of signiicant and enhanced risks of
misstatement in the inancial statements;
− materiality levels used to plan and perform audit testing;
− key audit matters and other judgement areas within the
inancial statements; and
− engagement terms, including the proposed audit fees.
The Committee subsequently reviewed reports from the external
auditor setting out the status of:
− the review of predecessor working papers;
− interim audit testing, including a review of technical accounting
matters and areas of estimates and judgements;
− inal audit testing, including conclusions in respect of the adequacy
of disclosures within the inancial 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
concern statements.
The Committee has reviewed the audit process and the quality
and experience of the audit team engaged in the audit, and has also
considered the extent and nature of challenge demonstrated by the
external auditor in its work and interactions with management. The
Committee has considered the objectivity of the auditor including
the nature of other work undertaken for the Group as set out below.
Areas of focus in relation to inancial reporting continued
Matter Work undertaken
Effective tax rate
The Group is subject to normal full tax rates in the UK.
However, its current effective tax rate is lower than the
UK statutory tax rate. This is because of timing
differences on when the Group’s income is taxed and the
Group has signiicant 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 concluded that it was satisied with management’s approach to
the calculation of tax.
Viability statement and going concern
The appropriateness of preparing the Group inancial
statements on a going concern basis, and whether the
assessment undertaken by management regarding the
Group’s long-term viability appropriately relects the
prospects of the Group and covers an appropriate
period of time.
The Committee considered whether management’s viability statement assessment
adequately relected the Group’s principal risks as disclosed on pages 69 to 75,
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 it operates.
As a result of the assessment undertaken, the Committee was satisied with the
approach taken for the viability assessment and that the going concern basis of
preparation is appropriate.
Annual Report
Under the Corporate Governance Code, the Board should
establish arrangements to ensure 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 inal draft for review as part of the inal sign-off.
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Audit & Risk Committee Report continued
Non-audit services provided by the external auditor
Mazars LLP is 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 auditors’ independence
or objectivity, in accordance with the FRC’s Revised Ethical Standard.
Total fees for non-audit services amounted to £0.1m, which represents
7.7 per cent. of the total Group audit fees payable for the year ended
31 December 2021. Details of all fees charged by the external auditor
during the year are set out on pages 142 and 143.
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 was irst appointed as statutory auditor of the Company
following a competitive tender process, and the Company conirms
its compliance with the Order. Any recommendation by the Audit
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
During the period, the Committee considered the need for an internal
audit function and took the decision with management to tender for
an outsourced provider. The tender process is currently underway
with a plan to appoint a irm shortly. The internal audit providers will
be accountable to the Audit and Risk Committee and will use a
risk-based approach to provide independent assurance over
the adequacy and effectiveness of the control environment.
The internal audit plan for 2022 will be approved by the Audit and
Risk Committee during the irst half of 2022 with work commencing
during the second half of the year. It will cover a broad range of
core inancial and operational processes and controls, focusing
on speciic risk areas.
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 69 to 75.
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.
A signiicant amount of activity was undertaken prior to the IPO to
enhance the Group’s control environment, particularly in relation to
the inancial reporting processes. As part of this activity, additional
resources were brought into the inance team. As part of its agenda,
the Committee reviewed the adequacy of resources of the inance
team and is satisied on the executed plans to increase the depth
and skill set of the team to support a listed business.
As part of its agenda going forwards, the Committee will receive
reports from management on the principal risks and responses to
managing those risks.
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2021 Annual Report & Accounts
Remuneration Committee
Report
Chair’s Statement
It was a pleasure to join the Bridgepoint
Board of Directors last Summer and I am
pleased to present the irst Report on
Directors’ Remuneration since our Admission
to the London Stock Exchange on 26 July
2021. This Report includes our irst Directors’
Remuneration Policy which will be subject
to approval from our shareholders at the
2022 Annual General Meeting.
Philosophy of Incentives
at Bridgepoint
At Bridgepoint, we irmly believe that our
people are our greatest asset. This is echoed
not just in the way that we conduct our
business, but also in how we value and
reward our employees. From the recruitment
of diverse and talented professionals who
exhibit a passion for performance and drive,
to the development of our staff through
hands-on learning and extensive training,
we strive to foster a collaborative and
inclusive environment.
Since the creation of Bridgepoint, our unique
culture has always been relected in our
ownership and remuneration structures
which recognise and reward performance
whilst providing strong alignment.
Discretionary bonus structures are aligned
with individual and company performance
and are paid in addition to market
competitive salary and beneits. Employee
share ownership, which currently accounts
for over 50% of our issued share capital,
was reinforced at the time of IPO, when
the irm made a one-off gift of shares
to every employee who was not already
a shareholder.
Bridgepoint’s listing on the London Stock
Exchange in July 2021 marks an exciting new
phase in the Company’s journey. As we move
forward into the post-IPO environment, it is
essential that our Remuneration policies and
structures continue to support our culture,
which has been fundamental to our success
to date. The Committee is currently
considering how our share plans (which were
newly established upon listing) can support
our continued growth and success.
Separately, certain Executives across the irm
participate in carried interest schemes linked
solely to fund performance, which is not
remuneration.
Summary of the Directors’
Remuneration Policy
In developing the Remuneration Policy, the
Committee has considered both external
guidance and factors speciic to Bridgepoint,
including those speciic to the private
equity/credit industry. Full details on the
Remuneration Policy are set out on pages 94
to 100 and this will be put forward for
shareholder approval under Resolution 2 .
Our Remuneration Policy aims to relect both
our internal culture of share ownership and
rewards for strong performance (a partnership
ethos), alignment with our clients as well as
our shareholders and relecting best practice
within our regulatory framework.
Our two Executive Directors have a simple
remuneration structure operated within
the policy framework. In each case, their
remuneration structure has been adapted
to take account of their individual roles
within Bridgepoint.
Find out more
www.bridgepoint.eu
Angeles Garcia-
Poveda
Chair of the Remuneration Committee
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2021 Annual Report & Accounts
William Jackson, as Executive Chairman, will be paid a salary, ancillary
beneits and pension allowance at the same rate as the rest of our UK
colleagues (10% of salary up to a notional salary cap of £112,500) but
will not participate in any variable pay arrangements. This recognises
the substantial inherent alignment with the Group through his
shareholding, and that as Chair of the business it is best practice
not to receive performance-related pay.
In the case of our Chief Financial Oficer, Adam Jones, he will receive
a salary of £500,000, ancillary beneits and pension aligned with the
rest of our UK colleagues. Adam will participate in our variable pay
arrangements, with maximum bonus opportunity of 50% of salary,
and annual Restricted Share Awards of 50% of salary.
Full details of the operation of these plans, and other components
of remuneration for the Executive Directors is set out on pages 102
to105 of the Annual Report on Remuneration.
In electing to operate a Restricted Share Plan, the Committee was
mindful of the strong capital-building culture at Bridgepoint and
our long-term investment focus. However, the Committee is also
conscious of the need to avoid delivering rewards if performance
is poor, and therefore an underpin will be applied at each vesting,
requiring that the Committee consider the inancial performance of
the business over the three year vesting period, to satisfy itself that
there have been no issues that result in material reputational damage
to the Group.
The full Directors’ Remuneration Policy can be found on pages 94
to100.
The Committee has carefully selected measures for eligible Executive
Director bonuses in 2022, to ensure that they align with Company
strategic objectives. They will include 70% inancial/30% non-inancial
criteria. Financial performance criteria will be based on EBITDA,
growth in commitments and capital deployed. Non-inancial metrics
will be a split equally into People/ESG and Strategic initiatives.
These bonus measures would apply for any future Executive Directors.
Remuneration payable to the Executive Directors in
respect of FY21
The Annual Report on Remuneration sets out the remuneration
outcomes for the Directors for the year. Focusing on the period since
our Admission on 26 July 2021, the Executive Directors received only
ixed salary, beneits and pension over the time since Admission to
31 December 2021.
Prior to Admission, the Executive Directors received a discretionary
cash bonus which related to performance prior to the IPO, and not
in respect of qualifying services post IPO.
Non-Executive Director Arrangements
The Non-Executive Directors receive a base fee of £75,000 in respect
of their services to the Company, together with supplementary fees in
respect of carrying out the roles of Senior Independent Director and
Chairs of the Audit and Risk and Remuneration Committees.
On appointment, those Non-Executive Directors who joined the
business prior to IPO were awarded an initial fee in order to allow
them to buy shares in Bridgepoint and hold a stake in the business.
These fees were detailed in the IPO Prospectus. They were paid to the
four individuals who agreed to join the Board in recognition of the
work undertaken in advance of Admission of the Company’s shares to
the London Stock Exchange. This related to preparing the Company’s
Board, its committee structures and their processes for a listed
company environment and ensured that the Company secured the
services of these individuals prior to Admission. The shares acquired
by them must be held for at least three years from Admission, or one
year from leaving (if sooner). This arrangement applied only to those
Non-Executive Directors who joined prior to the IPO, and no further
initial fees will be paid to incoming Non-Executive Directors.
Conclusion
On behalf of the Committee thank you for reading this report and we
look forward to receiving your support at the AGM on 12 May in relation
to the pay-related Resolutions 2 and 3.
Angeles Garcia-Poveda
Chair of the Remuneration Committee
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Directors’ Remuneration Policy
This section sets out Bridgepoint’s irst Directors’ Remuneration Policy
(the ‘Policy’) which has been prepared in accordance with the Large
and Medium-sized Companies and Groups (Accounts and Reports)
Regulations. This Policy applied immediately following Admission
and will be subject to a binding vote at the 2022 AGM. Subject to
shareholder approval, it is intended to apply for the next three years,
however if substantive changes are to be made, it will be put back to
shareholders for reapproval.
Following the 2022 AGM, payments to Directors can only be made
if they are consistent with the shareholder approved policy or
amendment to the policy.
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 ixed pay and
variable pay, and incentive pay is weighted to sustainable long-term
performance. Incentive plans are subject to performance conditions
that consider both inancial and non-inancial 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.
Annual Report on Remuneration
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2021 Annual Report & Accounts
Directors’ Remuneration Policy Table
Pay element
and purpose Operation Opportunity
Performance metrics,
weighting and assessment
Base salary
To help recruit,
reward and retain
talent of the calibre
and experience
required to deliver
Bridgepoint’s strategy.
Base salaries are
to relect market
value of the role
and an individual’s
experience,
performance,
and contribution.
Salaries are reviewed annually, and any
changes will normally be effective from
the beginning of the inancial year.
The review will consider several factors,
including but not limited to:
− The Director’s role, experience and skills;
− The remuneration policies, practices and
philosophy of Bridgepoint;
− Pay conditions within Bridgepoint;
− Market data for similar roles and
comparable companies; and
− The economic environment.
Having been set based on
these relevant factors, base
salaries will normally increase
no higher than the average
increase made to the
wider workforce.
Higher increases may be
permitted where appropriate,
for example where there is a
change to the role or there is
additional responsibility or
complexity, or if the initial
salary was set at a below
market level on appointment.
None
Beneits
To provide market
competitive beneits
and to support the
health and wellbeing
of Executive Directors.
The Executive Directors are to be provided
with beneits which include private medical,
group income protection and life assurance.
The Remuneration Committee retains
the discretion to be able to provide other
beneits including (but not limited to)
relocation expenses, tax equalisation and
support in meeting speciic costs incurred
by Executive Directors.
Any reasonable business-related expenses
can be reimbursed, including the tax thereon
if determined to be a taxable beneit.
The Remuneration Committee reviews
beneit eligibility and cost periodically.
The maximum will be set at
the cost of providing the
beneits described.
None
Pensions
To provide market-
competitive
retirement beneits.
Contribution to the Group Pension Plan or
a cash allowance in lieu of pension.
Pension contribution rate in
line with rate applicable for
the majority of the workforce
in the country where the
individual is based. The rate
in the UK is currently 10% of
salary, up to a notional salary
of £112,500.
None
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Pay element
and purpose Operation Opportunity
Performance metrics,
weighting and assessment
Annual Bonus
To encourage the
improved inancial
and non-inancial
performance of
the business and to
align the interests of
Executive Directors
with shareholders
though the partial
deferral of payment
into shares.
The Remuneration Committee will determine
the Annual Bonus payable to Executive
Directors after the year-end based on
performance against targets during the year.
Any bonus amounts in excess of 25% of salary
will be subject to 50% deferral into shares
which will vest after three years. All other
amounts will be paid upfront in cash following
the end of the performance period. Certain
amounts will be deferred into the Deferred
Bonus Plan with vesting of the shares being
subject to continued employment. These
shares accrue dividends over the vesting
period.
Malus and clawback provisions apply.
The Remuneration Committee has the
discretion to adjust the formulaic Annual
Bonus outcome if the Remuneration
Committee believes that the outcome
is not a fair and accurate relection of
business performance.
William Jackson, as Executive Chair, will
not receive an Annual Bonus award.
The overall maximum Annual
Bonus opportunity under the
Policy is 200% of salary.
Annual Bonus pay-outs are
determined based on the satisfaction
of a range of key inancial and
strategic objectives set by the
Remuneration Committee.
The majority of the performance
measures will be based on inancial
performance. Performance measures
will be set each year in line with the
Bridgepoint strategy.
No more than 25% of the Annual
Bonus will be payable for delivering
threshold performance and no
more than 50% will be payable
for delivering a target level of
performance (where the nature
of the performance metric
allows such an approach).
Restricted Share Plan (‘RSP’)
The RSP provides
a simple structure
which aligns the
interest of Executive
Directors to
shareholders by
increasing share
ownership and
promoting long-term
value creation.
Annual award of Bridgepoint shares which
are subject to a performance underpin. The
performance against the underpin will be
assessed by the Remuneration Committee
and will consider both the inancial and
non-inancial performance of the business.
These shares accrue dividends over the
vesting period.
An additional holding period of two years
will apply following vesting. Upon vesting,
suficient shares may be sold to pay taxes
on the shares.
Malus and clawback provisions apply.
William Jackson, as Executive Chair will
not receive RSP awards.
The maximum annual award
level will be 100% of salary.
Awards vest subject to achievement
of suitable inancial and non-inancial
performance against the performance
underpin.
The performance underpin will
consider a range of inancial/
non-inancial criteria to determine the
overall performance and health of the
business. The Committee will assess
whether any actions (or failure to act)
have occurred that resulted in
signiicant reputational damage
during the 3-year period until vesting.
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2021 Annual Report & Accounts
Annual Report on Remuneration continued
Pay element
and purpose Operation Opportunity
Performance metrics,
weighting and assessment
All-employee share plans
To provide alignment
of group employees
to shareholders, and
to promote share
ownership.
If a broad based “all-employee” share plan
is operated in the future, then Executive
Directors will be eligible to participate on
the same basis that is made available to
employees based in the same country.
The limit that will apply
to employees under the
plan or plans based in
the same country as the
Executive Director.
Performance metrics may be attached
to the operation of the plan and if
that is the case then they will operate
for Executive Directors in the same
manner in which they operate for
employees based in the same country.
Shareholding requirement
To promote
Executive Director
share ownership
and to align
Executive Directors
to the interests of
shareholders both
during employment
and the period
following.
During employment
Executive Directors are required to build
up and retain a shareholding equivalent
to 300% of their base salary.
Until the shareholding requirement is met,
Executive Directors will be required to retain
50% of the net of tax shares they receive
under any incentive plan.
Post-employment
Any Executive Director leaving Bridgepoint
will be expected to retain the lower of the
shares held at cessation of employment that
count towards this limit and shares to the
value of 300% of salary for a period of
two years. The Executive Director is able
to elect that any shares personally held
count towards this limit whilst in and
post-employment.
300% of salary. None
Non-Executive Directors
To enable the
recruitment of
high-calibre Non-
Executive Directors
with the appropriate
skills and experience
to support the
long-term success
of the business.
Non-Executive Directors are paid a base
fee and additional fees for acting as Senior
Independent Director and as Chair of Board
Committees (or to relect other additional
responsibilities including being a member of
a Committee and/or additional/unforeseen
time commitments).
Any future Non-Executive Chair of the Board
would receive an all-inclusive fee.
No Non-Executive Directors (or any future
Non-Executive Chair) participate in any
incentive plans.
The fee for a future
Non-Executive Chair of the
Board would be set by the
Remuneration Committee and
the Non-Executive Directors’
fees are set by the
Board (excluding the
Non-Executive Directors).
In general, base fee level
increases will be in line with
any rise in salaries for the rest
of the workforce. Fees for
additional responsibilities
will relect the time and
responsibility involved in
performing those duties.
Bridgepoint will reimburse any
reasonable expenses incurred
(and related tax if applicable).
The aggregate limit on
Non-Executive Directors’ fees
is set in line with the Articles of
Association of the Company.
None
97
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2021 Annual Report & Accounts
Notes to the Remuneration
Policy table
Choice of performance measures
Each year the Remuneration Committee will select performance
measures for the Annual Bonus which support the business strategy
and link to the key performance indicators.
The performance underpin aims to provide the Remuneration
Committee with the appropriate lexibility to consider a range of
factors which indicate the inancial and non-inancial performance
of the Executive Directors and Bridgepoint.
Remuneration Committee discretion
The Committee retains the right to apply discretion in operating the
Annual Bonus and RSP and, in particular, to adjust the formulaic
outcome of the annual bonus or the RSP to the extent it judges that
the outcomes do not align with results achieved, or in light of
unexpected or unforeseen circumstances. Where discretion has been
applied this will be disclosed within our Annual Report on
Remuneration. The Committee also has the discretion to amend the
Policy with regard to minor or administrative matters where it would
be, in the opinion of the Committee, in the best interests of the
Company, and disproportionate to seek or await shareholder approval.
Malus and clawback
In line with the Corporate Governance Code and FCA regulatory
requirements variable remuneration, both the Annual Bonus and RSP,
are subject to malus and clawback. The Remuneration Committee
may apply malus and/or clawback where:
1. Bridgepoint materially misstated its inancial results for any reason
and that misstatement of results has resulted in or has impacted
the grant or outcome of variable remuneration;
2. any performance condition and/or any other condition is satisied
based on an error, or on inaccurate or misleading information or
assumptions which resulted either directly or indirectly in variable
remuneration being granted or vesting to a materially greater extent
than would have been the case had that error not been made;
3. circumstances arose (or continued to arise) during the vesting
period which would have warranted the summary dismissal of
the individual;
4. any other circumstances have arisen that in the sole opinion of
the Remuneration Committee have (or would have if made public)
a signiicant impact on the reputation of any Group company or
the business in which the holder of the variable remuneration
is employed; and/or
5. there has been a material failure of risk management or
corporate failure.
The period during which the Remuneration Committee will be
entitled to apply the Clawback provisions will be determined by the
Remuneration Committee at grant (and in the absence of any other
determination by the Remuneration Committee shall be two years
from the date of vesting). The malus provisions shall apply for the
vesting periods of the RSP Awards.
Note that these provisions are in addition to the performance underpin
which applies to the RSP.
Consideration of employment conditions elsewhere
in the Group
Bridgepoint provides market competitive levels of ixed and variable
remuneration which are relective of the roles, responsibilities,
experience, skills, and performance of the individual in compliance
with the UK FCA’s Investment Firms Prudential Regime (“IFPR”)
Remuneration Code and the Equality Act 2010. The reward
philosophy applies to all levels of the business.
When developing the Policy, the Remuneration Committee considered
the general workforce remuneration, related policies, and the alignment
of incentives and rewards with Bridgepoint’s culture and values. The
Committee receives regular updates on any changes to the wider
Bridgepoint Remuneration Framework.
The Board actively engages with colleagues through a variety of
channels, including town hall brieings, videos, team meetings and
conferences. On an annual basis the Group conducts an employee
engagement survey to obtain feedback from employees. Further
details on our colleague engagement can be found on page 31.
Consideration of shareholder views
The Policy has been developed mindful of market best practice
and the expectations of shareholders and proxy voting agencies.
The Committee will consult with shareholders, where considered
appropriate, regarding changes to the operation of the Policy or
when the Policy is being reviewed and brought to shareholders for
approval. Additionally, the Committee will consider speciic concerns
or matters raised at any time by shareholders on remuneration.
Legacy arrangements
For the avoidance of doubt, in approving the new Policy, authority
is given to the Directors to honour any commitments previously
entered into with current or former Directors that have been
disclosed previously to shareholders.
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2021 Annual Report & Accounts
Annual Report on Remuneration continued
Recruitment policy
When setting remuneration packages for new Executive Directors, remuneration will be set in line with the Policy as set out above. A number of
factors will be considered, which include but are not limited to the geography in which the role competes or is recruited from, the candidate’s
experience and skills, and the remuneration levels of other Executive Directors and colleagues within the business. The Committee is mindful of
the need to ensure that no more than is necessary is being paid to recruit the desired candidate.
Remuneration
element Policy
Salary Base salary would be set at an appropriate level considering the factors set out in the Policy table.
Relocation If an Executive Director needs to relocate in order to take up the role, the Company may pay to cover the costs of
relocation including (but not limited to) actual relocation costs, temporary accommodation and travel expenses
and tax thereon.
Buy-out awards For external appointments, the Remuneration Committee may (where considered appropriate) provide a buy-out
award equivalent to the value of any outstanding incentive awards that will be forfeited on cessation of previous
employment. To the extent possible, the buy-out award will be made on a like-for-like basis. The award will consider
the performance conditions attached to the vesting of the forfeited incentives, the timing of vesting, the likelihood
of vesting and the nature of the awards (cash or equity). Any such buy-out award may be granted under the RSP
or the provision available under the FCA’s Listing Rule 9.4.2 to enable awards to be made outside the RSP in
exceptional circumstances.
Annual Bonus Joiners may receive a prorated Annual Bonus based on their employment as a proportion of the inancial year and
targets may be different to those set for other Executives.
RSP Grants will be set in line with the Policy in the year of joining.
Other elements Beneits and pension will be set in line with the Policy.
Internal appointment
to the Board
When existing employees are promoted to the Board, the above policy will apply, from the point where they are
appointed to the Board and not retrospectively. In addition, any existing awards will be honoured and form part of
ongoing remuneration arrangements.
Non-Executive
Directors
Fees will be in line with the Remuneration Policy and the fees provided for the other Non-Executive Directors.
Service Agreements and Letters of Appointment
Executive Directors
The Executive Directors have service contracts requiring 12 months’ notice of termination from either party as shown below:
Executive Director Date of appointment Date of current contract Notice from the Company Notice from the individual
William Jackson 25 June 2021 21 June 2021 12 months 12 months
Adam Jones 25 June 2021 21 June 2021 12 months 12 months
The Executive Directors’ service contracts do not allow for termination provisions which would result in a reward for failure, and allow for the
policy on termination of Executive Directors to be fully enforceable. The treatment of the various elements of pay on termination are
summarised below.
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2021 Annual Report & Accounts
Remuneration
element Treatment
Salary, beneits
and pension
− If notice is served by either party, the Executive Director can continue to receive base salary, beneits and pension
for the duration of their notice period. The Executive Director may be asked to perform their normal duties during
their notice period, or they may be put on garden leave. Bridgepoint may, at its sole discretion, terminate the contract
immediately, at any time after notice is served, by making a payment in lieu of notice equivalent to salary, beneits
and pension, with any such payments being paid in monthly instalments over the remaining notice period. The
Executive Director will normally have a duty to seek alternative employment and any outstanding payments will
be subject to offset against earnings from any new role.
Annual incentive − Good Leavers will still be eligible to receive an Annual Bonus pay-out at the usual time with performance measured in
the normal manner. The Annual Bonus will typically be pro-rated for service during the inancial year. Good Leavers
will include where the individual leaves as a result of injury, ill-health or disability, redundancy or retirement (in each
case, as determined by the Committee) and death. The Committee also retains an overall discretion to determine
that an individual be treated as a Good Leaver.
− Bad leavers will not be eligible to receive an Annual Bonus and will lose any amounts subject to deferral within the
Deferred Bonus Plan.
Restricted Shares − Awards are forfeited on cessation of employment save for “Good Leavers” (awards are normally scaled back
pro rata to the proportion of the vesting period served). The Committee will have the ability to allow the awards to
vest in full subject to performance against the performance underpin but with no time pro-rating, in exceptional
circumstances.
− Shares subject to a holding period will be released in line with the normal schedule.
Non-Executive Directors
Non-Executive Directors Date of appointment Date of current letter of appointment Notice from the Company Notice from the individual
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
Scenario chart
The chart below provides an illustration of the level of total annual remuneration that would be received by each Executive Director under the
operation of the Remuneration Policy at: i) minimum performance, ii) target performance and iii) maximum performance. The three performance
scenarios assume the following:
6. Minimum – only ixed pay is awarded as the RSP underpin reduces the RSP award to zero and no Annual Bonus is payable
7. Target – ixed pay, plus 100% of the RSP and 50% of the maximum Annual Bonus
8. Maximum – ixed pay, plus 100% of the RSP and the maximum Annual Bonus
Fixed pay includes illustrative beneits amount of £8,000 for each Executive Director. The maximum scenario includes an additional element
to represent 50% share price growth on the RSP award from the date of grant to vesting.
0
£200,000
£400,000
£600,000
£800,000
£1,000,000
£1,200,000
£1,400,000
Minimum
Executive Chairman Group CFO
Target Maximum Minimum Target Maximum
Fixed Pay
Annual Bonus
LTIP
50% share price
growth on LTIP
100% 100% 100%
£909,250
£519,250
£894,250
£1,144,250
100%
100% 100% 100%
14%
58%
25%
25%
50%
28%
100
Bridgepoint
2021 Annual Report & Accounts
Annual Report on Remuneration continued
This section of the Annual Report describes the operation of the Remuneration Policy.
Remuneration Committee
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. 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.
The Remuneration Committee is responsible for:
− Determining and developing the remuneration policy which applies to the Executive 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 to oversee.
− 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.
− Overseeing the operation of the Group’s employee share schemes
Remuneration Committee members and meetings
The Remuneration Committee was established shortly prior to Admission. The Committee currently comprises the three independent Non-
Executive Directors listed below. The Remuneration Committee Chair, Angeles Garcia-Poveda, has 7 years’ of experience chairing other
remuneration committees. The Committee will meet at least three times a year. The membership of the Committee is expected to change as
new Non-Executive Directors are appointed in 2022 allowing Dame Carolyn McCall to step down from the Committee.
Committee Chair Angeles Garcia-Poveda
Committee Member Archie Norman
Committee Member Dame Carolyn McCall
Following Admission, the Committee met formally in December. At this meeting the Remuneration Policy and how it would operate for 2022
were considered and approved by the Committee. Prior to this, the Committee met a number of times informally to discuss and provide input
to management on proposals.
Key activities during the year
Over the period since it was constituted, the Committee has carried out the following activities:
− Approved the new Remuneration Policy and certain elements of its operation effective from Admission, such as the base salary levels for
the Executive Directors;
− Considered the operation of the Annual Bonus and Restricted Shares for 2022;
− Received brieings on the operation of remuneration arrangements throughout the Group; and
− Planned the cycle of work for 2022.
In addition, the members of the Committee held a number of introductory meetings with key members of the irm as well as ofice visits, where
possible given the travel restrictions.
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. During the year, the Committee received advice prior to listing on the new remuneration policy, its operation
immediately following listing and into 2022 and the drafting of this report. Korn Ferry is a signatory to the Remuneration Consultants’ Code of
Conduct and has conirmed to the Committee that it adheres in all respects to the terms of the code. The fees for the advice provided from
Admission to 31 December 2021 were £65,790. Other than Remuneration Consultancy, Korn Ferry provided no other advice or services to the
Company during the year.
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Audited information
Total remuneration payable for the year to 31 December 2021
The following table sets out the total remuneration for the Executive Directors and the Non-Executive Directors for the year ended 31 December
2021. This comprises, for the Executive Directors, the total remuneration received over the full year from 1 January 2021 to 31 December 2021,
including remuneration received from the Group prior to Admission on 26 July 2021 for work prior to the IPO. No prior year comparison has
been provided as the company was not listed at that time.
All igures shown in
£000
Salary and
fees
Taxable
Beneits Pension
Bonus
Pre-
Admission RSP Other
Total Fixed
Remuneration
Total Variable
Remuneration
NED
Admission
Fees
1
Legacy Share
Allocation
(Pre-
Admission) Total
William Jackson 798.8 5.6
2
9.9
3
630.0
4
– 72.0
5
814.3 702.0 84.8
5
1,601.1
Adam Jones 415.6 11.7
2
9.9
3
292.5
4
– 28.8
5
437.2 321.3 33.9
5
792.4
Angeles
Garcia-Poveda 41.0
1
– – – – 41.0 – 500.0 541.0
Archie Norman 86.4
1
– – – – 86.4 – 1,750.0 1,836.4
Dame Carolyn
McCall 32.3
1
– – – – 32.3 – 500.0 532.3
Tim Score 41.0
1
– – – – 41.0 – 500.0 541.0
Notes to the table
1. Non-Executive Directors fees are shown from the date of appointment. Each of the Non-Executive Directors’ received a pre-Admission fee. Each Non-Executive
Director used the post-tax amount of this fee to acquire shares in the Company, which must be held for at least three years from Admission, or one year from
leaving (if sooner).
2. Executive Directors receive family private medical insurance, Life Insurance and Income Protection. William Jackson also participates in a legacy spouses pension
arrangement
3. Executive Directors have elected to receive an allowance in lieu of pension
4. William Jackson and Adam Jones received cash bonuses prior to Admission. These amounts related to performance prior to the IPO. No further bonuses were paid
in relation to the 2021 inancial year.
5. Prior to Admission, certain employees including the Executive Directors were given the opportunity to purchase shares in the Company. The difference between
the value and the price paid gave rise to an income tax liability that was settled by the Company and is included here alongside the value of the shares less
amounts paid to purchase them. These shares are subject to a vesting and holding period until July 2026.
Annual Bonus Plan
Prior to Admission, the Executive Directors received bonuses in line with normal practice. The amount of bonus payable was determined by the
Remuneration Committee of the unlisted company on a discretionary basis.
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 2021.
Incentive Awards granted during the year
No RSP awards were granted during the year. Prior to Admission, on 7 June 2021 William Jackson and Adam Jones accepted the invitation to
purchase shares under legacy share purchase arrangements which converted into Bridgepoint shares. The awards contained a number of
restrictions, including the requirement to sell the shares for nominal value if they leave the Company in certain circumstances (as a bad leaver)
within ive years from the date of their issue. The remuneration value of these shares are shown in the Single Figure table above since they do
not have any other performance conditions attached.
Payments to former Directors and for loss of ofice
No payments were made to former Directors of the Company or in relation to loss of ofice during the year.
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2021 Annual Report & Accounts
Annual Report on Remuneration continued
Directors’ interests
The interests of the Directors and their connected persons in the shares in the Company as at 31 December 2021 is set out below. Since
31 December 2021 there have been no changes in the Directors’ interest in shares.
Director
Shares held outright at
31 December 2021
Vested shares subject to
holding period
Unvested shares subject to
holding period
Shareholding requirement (%
of salary) Requirement met
1
William Jackson
2
- 10,630,980 5,711,050 300% Yes
Adam Jones
2
- 4,222,994 300% Yes
Angeles Garcia-Poveda 94,286
Dame Carolyn McCall 75,714
Archie Norman 275,000
Tim Score 75,714
1. Based on closing share price on 31 December 2021 of £4.93 per share.
2. Including shares held by connected persons, but excluding shares held by Burgundy Investments Holdings LP
During employment, Executive Directors are required to build and maintain a shareholding equivalent to 300% of their base salary. The
shareholdings of the Executive Chairman and CFO on Admission exceed this requirement signiicantly.
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.
William Jackson and Adam Jones purchased shares under legacy share purchase arrangements in June 2021 which will have to be sold for
nominal consideration if they leave employment prior to various dates that end in July 2026.
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 to 31 December 2021 against the FTSE250 index.
The FTSE250 index is considered an appropriate comparison as Bridgepoint is a constituent of the index.
80
90
100
110
120
130
140
150
160
170
Bridgepoint
23 July
2021
31 December
2021
FTSE 250
2021
Executive Chairman single igure total remuneration (£000s) 1,601.1
Bonus as a % of maximum opportunity N/A
Long-term incentive vesting (as % of maximum opportunity) N/A
Figures relect remuneration to 31 December 2021. No Long-term incentives have been granted or bonuses awarded under the Directors
Remuneration Policy to date. Prior to Admission, the Executive Directors received bonuses in line with normal practice. The amount of bonus
payable was determined by the Remuneration Committee of the unlisted company on a discretionary basis.
Change in director and employee remuneration
As Bridgepoint only listed on 26 July 2021, there is no comparable remuneration to disclose for the prior year. Full disclosure on the percentage
change for Director and employee remuneration, in line with applicable regulations, will be provided in future Annual Reports.
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2021 Annual Report & Accounts
Executive Chairman Pay Ratio
UK regulations require companies with more than 250 UK employees to publish a ratio to show the ratio of the highest paid director versus that
ofthe Group’s UK employees. Whilst we do not yet have more than 250 employees in the UK, we have elected to calculate this ratio. In the
calculation, wehave used Option A because this is the most statistically accurate approach.
Financial year Method Lower Quartile Median Upper Quartile
2021 A 14:1 8:1 4:1
The pay for the Executive Chairman and the employees at the requisite percentiles are set out below:
Figures shown in £000s
Executive
Chairman Lower Quartile Median Upper Quartile
Basic salary 798.8 65.0 95.0 165.0
Total pay 1,601.1 111.6 211.6 366.0
The employee pay igures were calculated by reference to the year to 31 December 2021, which is consistent with the period used for the Single
Figure of Remuneration for the Directors. The total pay and taxable beneits were determined for all UK permanent and ixed term employees as
at 31 December 2021. No components have been omitted in calculating total pay and taxable beneits on a single total igure of remuneration
(STFR) basis. Necessary adjustments were made in determining full time pay and beneits so that salaries, cash bonuses, share awards, taxable
beneits and pensions were annualised for employees who have not been with the Company for the full inancial 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 2021
FY 2021
£m
Distribution to shareholders 60.0
Aggregate Personnel Expenses 132.7
No prior year comparison has been provided as the Company was not listed at that time. Distributions to shareholders include the inal dividend
for year ending 31 December 2021 and a dividend of £30m which was paid to eligible A1 and A2 ordinary shareholders on the day immediately
before Admission to the London Stock Exchange. Aggregate Personnel Expenses are as set out on page 141 of this report.
Implementation of Policy in 2022
Executive Director remuneration
Base Salary
There will be no change to the base salary levels set on Admission. Therefore, the base salary levels will be as follows:
− Executive Chair: £890,000
− Chief Financial Oficer: £500,000
Pension and beneits
Executive Directors are eligible to participate in beneits 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 beneits include family private health
cover, life insurance and Group Income Protection. William Jackson also participates in the Group Spouses Pension scheme which is a legacy
beneit provided to other employees of similar tenure.
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2021 Annual Report & Accounts
Annual Report on Remuneration continued
Annual Bonus Plan
Adam Jones, the Chief Financial Oficer, will be the only Director eligible to participate in the Annual Bonus Plan for 2022, as the Executive
Chairman will not receive a bonus. The maximum bonus opportunity for Adam Jones will be 50% of salary.
Performance will be based on a mix of inancial and non-inancial metrics, weighted 70% and 30% of the bonus opportunity, respectively.
More speciically the mix of metrics will be:
Financial Metrics (% of total bonus) Non-Financial Metrics
EBITDA (40%) ESG (15%)
Capital Raised (15%) Strategy (15%)
Capital Deployed (15%)
Total (70%) Total (30%)
The Committee considers the prospective disclosure of target ranges to be commercially sensitive, but there will be full retrospective disclosure
in next year’s Annual Report. The Remuneration Committee has the discretion to adjust the formulaic Annual Bonus or waive speciic 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 Policy, as set out on page 98.
Restricted Share Awards
Restricted Share Awards will be made to Adam Jones following the announcement of the annual results. The award will be valued at 50% of
salary. Awards will vest after three years subject to continued employment and the underpin contained in the Policy table.
William Jackson will not be eligible to receive a Restricted Share Award.
Non-Executive Director remuneration
Prior to Admission, Non-Executive Director fees were reviewed. A summary of the fees set on Admission are shown below.
These fees will not be increased in the upcoming year.
Non-Executive Director Fee
Senior Independent Director’s fee £125,000
Non-Executive Director base fee £75,000
Audit and Risk Committee Chair’s fee £20,000
Remuneration Committee Chair’s fee £20,000
All-Employee Share Incentives
The Company established an all-employee share plan upon Admission. The Committee is currently considering how this plan can be best
utilised to support the continued growth and success of the business.
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Directors’ report and additional disclosures
The Directors present their Report and the audited consolidated Group and Company inancial statements for the year ended 31 December
2021. The Directors’ Report comprises this report and the entire Governance section. In accordance with the FCA’s Listing Rules, the information
to be included in the 2021 Annual Report and Accounts, where applicable, under LR 9.8.4, is set out in this Directors’ Report. Particular
information that is relevant to this Report, and which is incorporated by reference, can be located as follows:
Information Section in Annual Report Page number
Likely future developments of the business of the Group Strategic Report 24 - 29
Stakeholder engagement (including employee engagement) Strategic Report 30 - 32
Dividends Strategic Report 45
Carbon and greenhouse gas emissions Strategic Report 64 - 65
Risk management Strategic Report 68 - 75
Board of Directors Governance 76 - 79
Corporate governance report Governance 80 - 85
Long-term incentive schemes Governance 92 - 105
Financial instruments – risk management objectives and policies Financial Statements 157 - 165
The Directors’ Report, together with the Strategic Report on pages 4 to 75, 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 Oficers’ insurance cover against certain legal liabilities and costs for claims in
connection with any act or omission by such Directors and oficers in the execution of their duties.
The Company has also indemniied 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 indemnity provisions under section 234 the Companies
Act 2006, were put in place ahead of the Company’s IPO and remain in force.
Political donations
It is not the policy of the Company to make political donations as contemplated by the Companies Act 2006 and, during 2021, no donations
were made to political parties or organisations, or independent election candidates, and no political expenditure was incurred.
Acquisition of shares in the Company and EBT
In connection with the reorganisation undertaken to implement the IPO, 350,000,003 deferred shares in the capital of the Company with an
aggregate nominal value of £17,500.00015 were gifted by shareholders to the Company for no consideration. Such shares were cancelled on
26 July 2021.
Acquisitions of ordinary shares in the capital of the Company by the Group’s employee beneit trust are described in note 23 to the
inancial statements.
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Diversity, Equity and Inclusion (DE&I)
At Bridgepoint we believe in the power of the individual. We are a decisions business and we make better decisions when we are better
informed – when we are able to see challenges and opportunities from multiple angles. Our approach to DE&I is therefore not about tokenism or
ticking boxes, it’s about our diversity of thought and collective intelligence and the impact they can bring on the quality of our decision-making,
outcomes and performance. We aim to create a work environment that properly relects the communities in which we operate, where every
voice is heard, and everyone’s wellbeing is valued. Why? Because doing so makes our company a better place to work. And because it makes
Bridgepoint a better business and helps us achieve our wider, strategic goals. That’s why, by becoming more diverse, equitable and inclusive,
Bridgepoint is becoming a better business.
Further details on equal opportunities and diversity are included in the strategic report on page 52.
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 to provide support to job applicants who happen to be disabled. Should an employee
become disabled during their employment, efforts are be made to retain them in their current employment or to explore 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 to local market conditions.
The Group has clear grievance and disciplinary procedures in place, and also has an employee assistance programme which provides a
conidential, free and independent counselling service and is available to employees in a number of locations.
Share capital
As at 29 March 2022, the issued share capital was 823,268,774 ordinary shares of £0.00005 each, 500 deferred shares of £81 each, 1 deferred
share of £1, and 1 deferred share of £0.01.
Signiicant shareholdings
As at 31 December 2021, the Company had been notiied or otherwise become aware of the following interests pursuant to the FCA’s Disclosure
Guidance and Transparency Rules representing 3 per cent. or more of the voting rights of the Company:
Shareholder
Number of
ordinary shares
Percentage of total
voting rights
Dyal Capital Partners IV (C) LP 124,531,939 15.13%
Burgundy Investments Holdings LP 57,055,963 6.93%
T. Rowe Price Associates, Inc. 45,130,992 5.48%
The Capital Group Companies, Inc. 41,939,868 5.09%
Between 31 December 2021 and 29 March 2022, being the latest practicable date before the publication of this Annual Report, the Company
received no further notiications under DTR 5.
Rights and restrictions attaching to ordinary shares
The Articles of the Company do not contain any restrictions on the transfer of ordinary 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 certiicate (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.
All issued share capital of the Company at the date of this Annual Report is fully paid.
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 approval to deal in the
Company’s securities.
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In the event the Company is deemed to be an investment company as
deined 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 deined
in Regulation S under the U.S. Securities Act) that are not a “qualiied
purchaser” (as deined under the Investment Company Act); or (ii) a
person that is a beneit 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.
Holders of ordinary shares are entitled to attend, speak and vote
at general meetings and to appoint proxies and, in the case of
corporations, 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.
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 per cent. 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
uncertiicated form, the Directors may only exercise their discretion
not to register a transfer if permitted to do so by applicable legislation.
Save for the arrangements entered into in connection with the IPO
described in section 10 of Part XVI and section 3.3 of Part XVII of the
Prospectus, 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 a general meeting held on 20 July 2021, shareholders passed
a special resolution to authorise the Company, subject to certain
conditions, to purchase on the market a maximum of 82,326,877
ordinary shares, representing approximately 10 per cent. of the
Company’s issued ordinary share capital immediately following
Admission. No shares have been purchased under this authority,
and the authority will expire at the conclusion of the 2022 AGM or,
if earlier, at the close of business on 31 October 2022. The Directors
are seeking the renewal of this authority at the 2022 AGM.
Employee Beneit Trust and share schemes
The Company has established an employee beneit trust (EBT) to hold
and acquire shares for the potential beneit 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.
Pursuant to the Company’s Deferred Annual Bonus Plan, award holders
are not generally entitled to receive dividends or to vote (or have any
other shareholder rights) in relation to an award until the relevant
shares are transferred to them.
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 a Director, provided
that such person is recommended by the Directors, or the Company
has received from the person conirmation 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 ofice. The Articles also set
out the circumstances in which a person shall cease to be a Director.
The Articles require that at each annual general meeting each person
who is then a director shall retire from ofice. 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 to their
roles, and to have suficient time to perform their duties. All Directors
are required to seek the prior approval of the Board before taking on
any signiicant external appointments.
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2021 Annual Report & Accounts
Directors’ report and additional disclosures continued
Articles
The Articles may only be amended by special resolution at a general
meeting of shareholders.
Change of control
There are no signiicant 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 lagship 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 612 month period (varying
by fund), the investment period will be permanently terminated;
− awards under the Group’s Deferred 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 satisied 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 ofice or employment
that occurs because of a takeover bid, apart from those described
above and the usual provisions for payment in lieu of notice.
By order of the Board:
Sandra Dadd FCG
Company Secretary
29 March 2022
Bridgepoint Group plc
Company number: 11443992
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2021 Annual Report & Accounts
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the
inancial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare inancial statements
for each inancial year. Under that law, the Directors have prepared
the Group and Company inancial 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 inancial statements in
accordance with international inancial reporting standards adopted in
the United Kingdom.
Under company law, the Directors must not approve the inancial
statements unless they are satisied that they give a true and fair view
of the state of affairs of the Group and Company and of the proit or
loss of the Group and Company for that period. In preparing the
inancial 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 inancial 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 inancial statements, state whether applicable UK
accounting standards have been followed, subject to any material
departures disclosed and explained in the Company inancial
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 suficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the
inancial position of the Company and enable them to ensure that
the inancial 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 inancial statements may differ from
legislation in other jurisdictions.
The Directors consider that the Annual Report and Accounts, 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
pages76 to 79 conirm that, to the best of their knowledge:
− the inancial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair view
of the assets, liabilities, inancial position and proit 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 conirm 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
inancial, operational and compliance controls, for the year ended
31December2021.
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 CFO
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2021 Annual Report & Accounts
Independent auditor’s report to the members of
Bridgepoint Group plc
Opinion
We have audited the inancial statements of Bridgepoint Group plc
(the ‘Parent Company’) and its subsidiaries (together the ‘Group’) for
the year ended 31 December 2021 which comprise the Consolidated
Income Statement, Consolidated Statement of Comprehensive
Income, Consolidated and Company Statement of Financial Position,
Consolidated Statement of Changes in Equity, Company Statement of
Changes in Equity, Consolidated and Company Statement of Cash
Flows, and notes 1 to 29 to the inancial statements, including a
summary of signiicant accounting policies.
The inancial reporting framework that has been applied in their
preparation is applicable law and as regards the Group, UK-adopted
international accounting standards and, as regards the parent
company inancial statements, in accordance with the provisions of
the Companies Act 2006.
In our opinion, the inancial 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 2021 and of the Group’s and
the Parent Company result for the year then ended;
− have been properly prepared in accordance with UK-adopted
international accounting standards; and
− have been prepared in accordance with the requirements of the
Companies Act 2006.
Separate opinion in relation to IFRSs as issued by
theIASB
As explained in note 1 to the Group inancial statements, the Group in
addition to complying with its legal obligation to apply UK-adopted
international accounting standards, has also applied International
Financial Reporting Standards as issued by the International
Accounting Standards Board (IASB).
In our opinion the Group inancial statements give a true and fair
view of the consolidated inancial position of the Group as at
31 December 2021 and of its consolidated inancial performance and
its consolidated cash lows for the year then ended in accordance
with International Financial Reporting Standards as issued by the IASB.
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 inancial 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
inancial statements in the UK, including the FRC’s Ethical Standard as
applied to listed entities and public interest entities, and we have
fulilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
suficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the inancial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the inancial 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
limitedto:
− Undertaking an initial assessment at the planning stage of the
audit to identify events or conditions that may cast signiicant
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 inancial performance;
− Identifying and testing key assumptions within the going
concern assessment, including back-testing of historic forecasts
to actual performance;
− Testing the mechanical and arithmetical accuracy of the model
used to prepare the Group’s cash low forecasts;
− Considering the consistency of management’s forecasts with
other areas of the audit, including the impairment review
ofgoodwill;
− Obtaining an understanding of the inancing facilities available to
the Group;
− Assessing the sensitivity of the forecasts and conclusions to key
assumptions; and
− Assessing the appropriateness of risk factors disclosed in the
Group’s going concern and viability statements by comparison
to the understanding gained in our audit procedures.
Based on the work we have performed, we have not identiied any
material uncertainties relating to events or conditions that,
individually or collectively, may cast signiicant 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
inancial 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 inancial statements about whether the directors
considered it appropriate to adopt the going concern basis
ofaccounting.
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Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most signiicance in our audit of the inancial statements of the
current period and include the most signiicant assessed risks of material misstatement (whether or not due to fraud) we identiied, 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 inancial 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 indings, 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 fees
In the Consolidated Income Statement,
management fees total £197.7m
(2020: £148.6m).
Refer to the Audit & Risk Committee Report
(pages 87 to 91); Accounting policies
pages127 to 133); and Note 5 of the
Financial Statements (page 140).
The Group is entitled to management fees
arising from its performance of investment
management services to Bridgepoint funds.
Management fees are generated from funds
in multiple investment strategies and are
based on an agreed percentage of either
committed or invested capital, depending
on the fund and its life stage.
Revenue recognition is presumed to be a
risk because management may inluence or
misstate key inputs into the calculations,
such as net asset information, to meet
market expectations or net operating
revenue-based targets.
Our audit procedures
Our testing approach resulted in selecting a sample of those funds generating management
fee income, with our sample selected based on fund strategy and signiicance relative to
materiality.
Our procedures extended to testing 89% of the related amount and the principal and controls
procedures were:
− 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;
− For a sample of funds:
− 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 administrators by performing independent recalculations; and
− tracing management fees received during the year to bank statements;
− Assessing the appropriateness of the accounting policy associated with the recognition of
management fees; and
− In order to address the risk of management override, testing a sample of journal entries
associated to management fees and corroborating their business purpose, as well as
performing enquiries of management outside the inance function.
Our observations
Our audit procedures did not identify any matters regarding the recognition of revenue
arising from management fees in accordance with UK-adopted international accounting
standards. All calculations tested have been performed materially in accordance with
contractual terms. Based on our procedures performed we had no material matters to report
to the Audit & Risk Committee.
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2021 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 private equity, credit funds
and collateralised loan obligations (CLOs)
In the Consolidated Statement of Financial
Position, the fair value of fund investments
is £304.4m (2020: £233.5m). The fair value
of CLO assets is £285.7m (2020: £272.5m)
and CLO liabilities is £240.8m
(2020: 256.6m).
Refer to the Audit & Risk Committee Report
(pages 87 to 91); Accounting policies
(pages127 to 133); and Notes 17 and 18 of
the Financial Statements pages 149 to 156).
The proprietary investment portfolio
comprises unquoted securities, including
interests in private equity and credit fund
investments, CLO assets and CLO liabilities
(which are held directly by consolidated
subsidiaries of the Group and Parent
Company), and investments in investment
entities (which are typically limited
partnerships and other holding structures).
The interests in private equity and credit
funds are measured at fair value based on
the net asset value determined by the
manager of the underlying funds.
The loan asset portfolios held through the
CLO vehicles were originated and are
managed by the Group. These are
measured at fair value using pricing
obtained from third-party valuations.
The valuation techniques used involve a
high degree of estimation uncertainty.
Therefore, there is a risk of error in the
determination of the fair value of
theseinvestments.
Our audit procedures
For balances arising from investments in private equity and credit funds, our principal audit
procedures were:
− Performing walkthroughs to develop an understanding of the procedures and controls
associated with valuation of investments and evaluating the design, implementation and
operating effectiveness of the relevant controls in place. This included inquiry of
Management regarding the valuation governance structure and protocols around their
oversight of the valuation process, including evidencing the oversight from the Audit &
Risk Committee and the relevant Valuation Committees;
− Engaging our valuation specialists to assess the reasonableness of the valuation
methodology applied to unquoted investments, including whether it is in accordance with
IFRS 13 – Fair value measurement (“IFRS 13”) and the International Private Equity and
Venture Capital Valuation (IPEV) guidelines;
− For a sample of investments in funds, agreeing the balance to capital statements and
reconciling the capital statements to audited inancial statements of the funds;
− For a sample of ten underlying portfolio companies selected from different investment
strategies, with the assistance of our valuation specialists, evaluating the appropriateness
of the valuation methodology and key assumptions. Also agreeing key inputs into the
valuation models to source data and assessing the mathematical accuracy of the valuation
models; and
− In order to address the risk of management override testing journal entries associated with
the investment accounts and corroborating their business purpose;we have also
performed enquiries of Management outside of the inance function.
The audit team, including the valuation specialists have tested 20% of the fund portfolio.
For balances arising from the investment in CLOs, our principal audit procedures were:
− Independently revaluing the loan asset portfolio held through the consolidated CLO
vehicle to third party pricing sources.
− With the assistance of our valuation specialists, independently revaluing notes issued by
CLO entities. This included:
− Obtaining the underlying cash low information from Management and agreeing back
material cash transactions to underlying documents and cash ledgers of CLO entities
independently obtained from the custodian.
− Using a range of sources and modelling assumptions (recovery rate, prepayments,
default and yield); and
− determining an acceptable threshold.
The audit team, including the valuation specialists have tested 100% of the CLO asset
portfolio and loan notes.
Our observations
For private equity and credit funds, management has appropriately estimated the fair value of
the investments. We consider 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. The
reconciliations of the Group’s interest in these investments did not identify any material
misstatements.
For CLO holdings, the valuation of the loan portfolio held by CLO entities and notes issued by
CLO entities is deemed to be within a reasonable range of fair values and we had no material
matters to report to the Audit & Risk Committee.
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2021 Annual Report & Accounts
Key Audit Matter How our scope addressed this matter
Recognition of carried interest income
and measurement of related receivable
In the Consolidated Income Statement,
carried interest income totals £14.3m
(2020: £12.9m). In the Consolidated
Statement of Financial Position, carried
interest receivable amounts to £38.9m
(2020: 27.9m).
Refer to the Audit & Risk Committee Report
(pages 87 to 91); Accounting policies
(pages127 to 133); and Notes 5 and 16 of
the Financial Statements (pages 140 to 141
and 149 respectively).
The carried interest receivable represents
the expected income that the Group will
receive from those funds whereby the fund
performance has exceeded the relevant
thresholds based upon the net asset value
of the underlying fund.
The initial recognition of carried interest is
by its nature uncertain as it requires fund
performance to exceed agreed thresholds.
Carried interest revenue is only recognised
to the extent that it is highly probable that
there would not be a signiicant reversal of
accumulated revenue 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 (i) whether or
not revenue should be recognised and (ii)
the timing and measurement of such
amounts. This process considers the current
fund valuation and internal forecasts on the
expected timing and disposal of fund
assets. For private equity funds the Group
applies discounts to the fair values of
investments where the fund value exceeds
the carried interest hurdle. For credit funds
which are more sensitive to the
performance of individual investments in
their portfolio , only funds that have reached
their hurdle or are expected to do so
imminently are modelled on that basis.
Due to the number of bespoke, complex
agreements and the manual nature of the
calculation and recognition process, there is
an increased risk of error in relation to the
carried interest receivable. In addition, there
is a risk that management may inluence the
timing or recognition of revenue in order to
meet market expectations or net operating
revenue-based targets.
Our audit procedures
Our procedures extended to testing 100% of the related amount and the principal
procedures were:
− Performing walkthroughs to develop an understanding of the procedures and controls
associated with recognition and measurement of carried interest and evaluating the
design, implementation and operating effectiveness of the relevant controls;
− Assessing the appropriateness of the accounting policy associated with the recognition of
carried interest;
− For all 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;
− Assessing the reasonableness of discounts applied by Management to adjust for Possible
reversals in the performance of the underlying funds, including back-testing of prior year
performance forecasts to actuals for the year; and
− Recalculating the value of the carried interest receivable.
In addition to the procedures above, for credit funds speciically, we have performed the
following procedures:
− Reviewing the agreements relevant to the recognition of carried interest, ensuring that the
agreements specify the trigger of carry, and verifying that the trigger has occurred in the
year in line with the agreement; and
− Recalculating the value of the carried interest revenue and receivable.
In order to address the risk of management override, we tested a sample of journal entries
associated to carried interest and corroborated their business purpose, as well as performed
enquiries of management outside the inance function.
Our observations
Our audit procedures did not identify any matters regarding the recognition of carried
interest in accordance with UK-adopted international accounting standards. All calculations
tested have been performed in accordance with contractual terms. Based on our procedures
performed we had no material matters to report to the Audit and Risk Committee.
114
Bridgepoint
2021 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 inluenced 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 inancial statement line items and disclosures and in evaluating the effect of misstatements, both individually and on the inancial
statements as a whole. Based on our professional judgment, we determined materiality for the inancial statements as a whole as follows:
Group materiality
Overall materiality
£4.5m
How we determined it
5% of Underlying proit before tax, as deined in the Annual Report
Rationale for
benchmark applied
We have considered that the proitability of the business is the key focus of the users of the inancial statements,
and as such, we have based out materiality around this benchmark. Exceptional items and amortisation of
intangible assets have been excluded from proit before tax due to their nature and that they do not relect the
underlying performance of the Group, consistent with presentation in the annual report.
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 inancial statements exceeds materiality for the inancial
statements as a whole.
Based on our risk assessment, together with our assessment of the overall control environment and the
consideration of this being our irst-year audit of Bridgepoint Group plc, our performance materiality is set at
£2.3m, which represents 50% of overall materiality.
Reporting threshold
We agreed with the directors that we would report to them misstatements identiied during our audit above
£0.1m, as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
The range of overall materiality across components, audited to the lower of statutory audit materiality and materiality capped for Group audit
purposes, was between £0.1m and £3.0m, all being below the level of overall materiality that was set for the Group.
Parent Company materiality
Overall materiality
£4.5m
How we determined it
1% of Total assets (Capped at 0.4% 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 not trading
and mainly holds investments in subsidiaries, as well as intercompany balances.
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 inancial statements exceeds materiality for the inancial
statements as a whole.
Based on our risk assessment, together with our assessment of the overall control environment and the
consideration of this being our irst-year audit of Bridgepoint Group plc, our performance materiality is set at
£2.3m, which represents 50% of overall materiality.
Reporting threshold
We agreed with the directors that we would report to them misstatements identiied during our audit above
£0.1m, as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
As part of designing our audit, we assessed the risk of material misstatement in the inancial 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 judgments,
such as assumptions on signiicant accounting estimates.
We tailored the scope of our audit to ensure that we performed suficient work to be able to give an opinion on the inancial statements as a
whole. We used the outputs of our risk assessment, our understanding of the Group and the Parent Company, their environment, controls,
andcritical business processes, to consider qualitative factors to ensure that we obtained suficient coverage across all inancial statement
lineitems.
Our Group audit scope included an audit of the Group and the Parent company inancial statements. Based on our risk assessment, Bridgepoint
Advisers Holdings, Bridgepoint Advisers Limited, Bridgepoint Advisers II Limited, Bridgepoint Advisers UK Limited, Opal Investments LP,
Bridgepoint SAS, Bridgepoint LLC, Bridgepoint CLO 1 Designated Activity Company of the Group, including the Parent Company Bridgepoint
Group plc, were subject to full scope audit performed by the Group audit team. We audited 92% of the Group’s total assets and 89% of the
Group’s proit before tax.
At the Parent Company level, the Group audit team also tested the consolidation process and carried out analytical procedures to conirm our
conclusion that there were no signiicant risks of material misstatement of the aggregated inancial information.
115
Bridgepoint
2021 Annual Report & Accounts
Other information
The other information comprises the information included in the
annual report other than the inancial statements and our auditor’s
report thereon. The directors are responsible for the other information.
Our opinion on the inancial 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 inancial 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 inancial 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
thatfact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the
Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of theaudit:
− the information given in the Strategic Report and the Directors’
Report for the inancial year for which the inancial statements are
prepared is consistent with the inancial statements and those
reports have been prepared in accordance with applicable
legalrequirements;
− the information about internal control and risk management
systems in relation to inancial 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 inancial 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 to report
byexception
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 identiied material misstatements in the:
− Strategic Report or the Directors’ Report; or
− information about internal control and risk management systems in
relation to inancial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 of the
FCARules.
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 inancial 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 speciied 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.
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 speciied 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 inancial 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 identiied, set out on pages 48 and 49;
− 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 48 to 49;
− Directors’ statement on fair, balanced and understandable, set out
on page 110;
− Board’s conirmation that it has carried out a robust assessment of
the emerging and principal risks, set out on page 69 to 75;
− The section of the annual report that describes the review of
effectiveness of risk management and internal control systems, set
out on page 68; and
− The section describing the work of the Audit & Risk Committee, set
out on pages 87 to 91.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibilities
set out on page 110, the directors are responsible for the preparation
of the inancial statements and for being satisied that they give a true
and fair view, and for such internal control as the directors determine
is necessary to enable the preparation of inancial statements that are
free from material misstatement, whether due to fraud or error.
In preparing the inancial 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
inancialstatements
Our objectives are to obtain reasonable assurance about whether the
inancial 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.
116
Bridgepoint
2021 Annual Report & Accounts
Independent auditor’s report to the members of
Bridgepoint Group plc continued
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be
expected to inluence the economic decisions of users taken on the
basis of these inancial 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
inancial statements: the Data Protection Act, UK Bribery Act, UK
Corporate Governance Code, British Private Equity & Venture Capital
Association regulations, The Alternative Investment Fund Managers
Directive, Financial Services and Markets Act, Streamlined Energy and
Carbon Reporting, 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 is 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 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
ofnon-compliance.
We also considered those laws and regulations that have a
direct effect on the preparation of the inancial statements,
such as tax legislation, the Listing Rules, FCA regulations,
theCompanies Act 2006.
In addition, we evaluated the directors’ and management’s incentives
and opportunities for fraudulent manipulation of the inancial
statements, including the risk of management override of controls,
and determined that the principal risks related to manipulating
accounting records and preparing fraudulent inancial 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;
− Performing audit work over accounting estimates, journal entries
and signiicant transactions outside the normal course of business
or otherwise unusual;
− Review the journal entry process to evaluate its effectiveness and
appropriateness, including an assessment of the level of
segregation of duties; and
− Performing analysis of journal entries from the nominal ledger using
a data analytics tool
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
FinancialReporting Council’s website at www.frc.org.uk
/auditorsresponsibilities. This description forms part of our
auditor’sreport.
Other matters which we are required to address
Following the recommendation of the Audit & Risk Committee, we
were appointed by Bridgepoint Group plc on 4 October 2021 to audit
the inancial statements for the year ending 31 December 2021 and
subsequent inancial periods. The period of total uninterrupted
engagement is one year, covering the year ended 31 December 2021.
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
ouraudit.
Our audit opinion is consistent with our additional report to the Audit
& Risk Committee.
Use of the audit report
This report is made solely to the company’s members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Ouraudit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them in
an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body for our
audit work, for this report, or for the opinions we haveformed.
David Herbinet (Senior Statutory Auditor)
for and on behalf of MazarsLLP
Chartered Accountants and Statutory Auditor
Tower Bridge House
St Katharine’s Way
London
E1W 1DD
29 March 2022
117
Bridgepoint
2021 Annual Report & Accounts
Consolidated Income Statement
for the year ended 31 December
116 Bridgepoint 2021 Annual Report & Accounts
Note
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Management fees 5 197.7 148.6
Carried interest 5 14.3 12.9
Fair value remeasurement of investments 5
Other operating income 5
Total operating income 5
Personnel expenses 6 (132.7 ) (96.3 )
Other expenses 7
(53.7 ) (36.6 )
Foreign exchange gains/(losses)
EBITDA*
Depreciation and amortisation expense 9 (15.0 ) (8.8 )
Total operating profit 70.3 49.9
Finance income 10
Finance expenses 10
(11.9 ) (6.1 )
Profit before tax*
Tax 11 (4.8 ) (0.8 )
Profit after tax
Attributable to:
Equity holders of the parent 57.8 36. 5
Non-controlling interests
£ £
Basic and diluted earnings per share 12 0.16 11.59
* Exceptional expenses of £28.6 m (2020: £7.7 m) are included in EBITDA. Profit before tax includes exceptional expenses of £28.6 m (2020: £7.9 m) and exceptional
income of £3.8 m (2020: £4 .4 m). Details of exceptional items are included in note 8.
118
Bridgepoint
2021 Annual Report & Accounts
Consolidated Statement of Comprehensive Income
for the year ended 31 December
2021 Annual Report & Accounts Bridgepoint 11
7
Note
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Profit after tax 57.8 47.7
Items that may be reclassified to income statement in subsequent years:
Exchange differences on translation of foreign operations (3.6 ) 2.8
Change in the fair value of hedging instrument
Reclassifications to income statement
(1.6 ) (1.4 )
Total tax on components of other comprehensive (expense)/income 11 (c)
(2.1 ) 0.9
Total comprehensive income for the year, net of tax 63.3 45.2
Total comprehensive income attributable to:
Equity holders of the parent 63.3 34. 6
Non-controlling interests 23 (f)
119
Bridgepoint
2021 Annual Report & Accounts
Consolidated Statement of Financial Position
as at 31 December
118 Bridgepoint 2021 Annual Report & Accounts
Note
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Assets
Non-current assets
Pro
p
ert
y
,
p
lant and e
q
ui
p
ment 13 75.8 41.6
Goodwill and intan
g
ible assets 15 122.6 125.7
Carried interest receivable 16
Fair value of fund investments 17
Trade and other receivables 17
Total non-current assets
Current assets
Fair value of CLO assets* 17 286.8 272.5
Trade and other receivables 17
Derivative financial instruments 17
Cash and cash e
q
uivalents 17 323.1 42.3
CLO cash* 17
Total current assets
Total assets 1,280.1 1,04 5.0
Liabilities
Non-current liabilities
Trade and other
p
a
y
ables 18 43.5 32.2
Other financial liabilities 18
CLO liabilities* 18
Lease liabilities 19
Deferred tax liabilities 22
Total non-current liabilities
Current liabilities
Trade and other
p
a
y
ables 18 90.2 85.9
Borrowin
g
s 18 – 99.7
Lease liabilities 19
Derivative financial instruments 18
CLO liabilities* 18
CLO purchases awaiting settlement* 18
Total current liabilities
Total liabilities 563.8 654.5
Net assets 716.3 390.5
E
q
uit
y
Share ca
p
ital 23 0.1 240.9
Share
p
remium 23 289.8 0.5
Ca
p
ital redem
p
tion reserve 23 – 24.6
Share-based
p
a
y
ment reserve 23 3.2 –
Cash flow hed
g
e reserve 23 7.5 (2.2 )
Net exchan
g
e differences reserve 23 3.1 5.3
Retained earnings 23
Ca
p
ital and reserves attributable to e
q
uit
y
holders of the com
p
an
y
Non-controlling interests 23 – 81.7
Total equity
* Detail of the Group’s interest in consolidated Collateralised Loan Obligations (“CLOs”) are included in note 17 (c). The equity holders’ exposure in the consolidated CLOs
is £12.3 m at 31 December 2021 (2020: £19.5 m). The Group’s investment in CLOs which are not consolidated is £38.0 m (2020:
fund investments.
The financial statements of Bridgepoint Group plc (company registration number: 11443992), which include the notes, were approved and
authorised by the Board of Directors on 29 March 2022 and were signed on its behalf by:
A M Jones
Director
120
Bridgepoint
2021 Annual Report & Accounts
Consolidated Statement of Changes in Equity
for the year ended 31 December
2021 Annual Report & Accounts Bridgepoint 119
Note
S
S
h
h
a
a
r
r
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a
a
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£
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m
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h
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a
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-
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b
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a
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s
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m
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a
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m
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m
m
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e
e
t
t
a
a
i
i
n
n
e
e
d
d
e
e
a
a
r
r
n
n
i
i
n
n
g
g
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
N
N
o
o
n
n
-
-
c
c
o
o
n
n
t
t
r
r
o
o
l
l
l
l
i
i
n
n
g
g
i
i
n
n
t
t
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r
r
e
e
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s
s
£
£
m
m
T
T
o
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t
t
a
a
l
l
e
e
q
q
u
u
i
i
t
t
y
y
£
£
m
m
At 1 January 2021 240.9 0.5 24.6 – (2.2 ) 5.3 39.7 308.8 81.7 390.5
Profit for the year – – – – – – 57.8 57.8 – 57.8
Other comprehensive
income
Total comprehensive income
Share capital issuance 23 (a) – 289.3 – 3.2 – – – 292.5 – 292.5
Share capital reorganisation 23 (a)
(240.8 ) – (24.6 ) – – – 265.4 – – –
Dividends 24
Movement in non-controlling
interests 23 (f) – – – – (1.5 ) 1.4 81.8 81.7 (81.7 ) –
At 31 December 2021
Note
Share
capital
£ m
Share
premium
£ m
Capital
redemption
reserve
£ m
Share-
based
payment
reserve
£ m
Cash flow
hedge
reserve
£ m
Net
exchange
differences
reserve
£ m
Retained
earnings
£ m
Total
£ m
Non-
controlling
interests
£ m
Total
equity
£ m
At 1 January 2020 240.9 0.5 24.6 – 2.6 3.1 (6.2 ) 265.5 90.9 356.4
Profit for the year – – – – – – 36.5 36.5 11.2 47.7
Other comprehensive
income – – – – (4.8 ) 2.2 0.7 (1.9 ) (0.6 ) (2.5 )
Total comprehensive income – – – – (4.8 ) 2.2 37.2 34.6 10.6 45.2
Purchase of own shares 23 (b) – – – – – – (0.1 ) (0.1 ) – (0.1 )
Dividends 24 – – – – – – (6.6 ) (6.6 ) (4.4 ) (11.0 )
Movement in non-controlling
interests 23 (f) – – – – – – 15.4 15.4 (15.4 ) –
At 31 December 2020 240.9 0.5 24.6 – (2.2 ) 5.3 39.7 308.8 81.7 390.5
121
Bridgepoint
2021 Annual Report & Accounts
Consolidated Statement of Cash Flows
for the year ended 31 December
120 Bridgepoint 2021 Annual Report & Accounts
Note
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Cash flows from operating activities
Cash generated from operations 25 (a) 24.5 32. 4
Tax paid
(1.4 ) (4.0 )
Net cash inflow from operating activities
Cash flows from investing activities
Payment for acquisition of subsidiary, net of cash acquired 14 – (86.3 )
Payments for property, plant and equipment 13
(6.3 ) (3.2 )
Receipts from investments (non-CLO) 16, 17 (b)
Purchase of investments (non-CLO) 16, 17 (b)
(86.9 ) (77.3 )
Interest received (non-CLO)
Receipts from investments (CLO)
Purchase of investments (CLO)
(281.2 ) (6.2 )
Cash acquired on acquisition of CLO (CLO)
Receipts from sale and repurchase of the Group’s holding in CLOs 18 (d)
Net cash flows from investing activities
(163.0 ) (111.5 )
Cash flows from financing activities
Receipt from non-controlling interest 114.3 71.4
Proceeds from issue of shares by subsidiary
Proceeds from issue of shares by the Company 23 (a)
IPO costs
(36.4 ) –
Dividends paid to shareholders of the Company 24
(30.0 ) (6.6 )
Dividends paid to non-controlling interests
Drawings on banking facilities
Repayment of banking facilities
(146.9 ) (73.5 )
Drawings from related party investors in intermediate fund holding entities
Principal elements of lease payments
(6.8 ) (5.9 )
Drawn funding (CLO)
Repayment of CLO borrowings (CLO)
(1.4 ) (124 .2 )
Cash from CLO investors (CLO)
Interest paid (non-CLO)
(5.9 ) (4.9 )
Net cash flows from financing activities
Net increase in cash and cash equivalents 178.7 142.1
Cash and cash equivalents at the beginning of the year 157.1 12.1
Effect of exchange rate changes on cash and cash equivalents
(8.5 ) 2.9
Cash and cash equivalents at the end of year
Cash and cash equivalents (for use within the Group) 17 (f) 323.1 42.3
CLO cash (restricted) 17 (f) 4.2 114.8
Total cash at the end of the year
122
Bridgepoint
2021 Annual Report & Accounts
Company Statement of Financial Position
as at 31 December
2021 Annual Report & Accounts Bridgepoint 121
Note
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Assets
Non-current assets
Investments in subsidiaries 28 451.2 448.0
Deferred tax asset 22
1.1 –
Total non-current assets
452.3 448.0
Current assets
Trade and other receivables 17 (e) 106.5 –
Cash and cash equivalents 17 (f)
159.0 9.4
Total current assets
265.5 9.4
Total assets 717.8 457.4
Liabilities
Current liabilities
Trade and other payables 18 (b) 23.1 0.9
Total liabilities
23.1 0.9
Net assets 694.7 456.5
Equity
Share capital 23 0.1 240.9
Share premium 23
289.8 0.5
Capital redemption reserve 23
– 24.6
Share-based payment reserve 23
3.2 –
Retained earnings 23
401.6 190.5
Total equity
694.7 456.5
123
Bridgepoint
2021 Annual Report & Accounts
Company Statement of Changes in Equity
for the year ended 31 December
122 Bridgepoint 2021 Annual Report & Accounts
Note
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At 1 January 2021 240.9 0.5 24.6 – 190.5 456.5
Loss for the year – – – – (24.3) (24.3)
Other comprehensive income
– – – – – –
Total comprehensive expense
– – – – (24.3) (24.3)
Share capital issuance 23 (a) – 289.3 – 3.2 – 292.5
Share capital reorganisation 23 (a)
(240.8) – (24.6) – 265.4 –
Dividends 24
– – – – (30.0) (30.0)
At 31 December 2021
0.1 289.8 – 3.2 401.6 694.7
Note
Share capital
£ m
Share premium
£ m
Capital
redemption
reserve
£ m
Share-based
payment
reserve
£ m
Retained
earnings
£ m
Total equity
£ m
At 1 January 2020 240.9 0.5 24.6 – 184.3 450.3
Profit for the year – – – – 12.9 12.9
Other comprehensive income – – – – – –
Total comprehensive income – – – – 12.9 12.9
Purchase of own shares 23 (b) – – – – (0.1) (0.1)
Dividends 24 – – – – (6.6) (6.6)
At 31 December 2020 240.9 0.5 24.6 – 190.5 456.5
124
Bridgepoint
2021 Annual Report & Accounts
Company Statement of Cash Flows
for the year ended 31 December
2021 Annual Report & Accounts Bridgepoint 123
Note
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Cash flows from operating activities
Cash generated from operations 25 (89.5) (2.5)
Net cash outflow from operating activities (89.5) (2.5)
Cash flows from investing activities
Dividends received
– 15.5
Net cash flows from investing activities – 15.5
Cash flows from financing activities
Proceeds from issue of shares of the Company 23 (a) 305.1 –
IPO costs
(36.0) –
Dividends paid to shareholders of the Company 24
(30.0) (6.6)
Net cash flows from financing activities
239.1 (6.6)
Net increase in cash and cash equivalents 149.6 6.4
Cash and cash equivalents at the beginning of the year 9.4 3.0
Effect of exchange rate changes on cash and cash equivalents
– –
Cash and cash equivalents at the end of year 17 (f)
159.0 9.4
125
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
124 Bridgepoint 2021 Annual Report & Accounts
1
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General information
is England and Wales . The Company’s registration number is 11443992 and the address of its registered office is 95 Wigmore Street, London,
Basis of preparation
The financial statements for the year ended 31 December 2021 comprise the financial statements of the Group and the Company.
The financial statements have been prepared in accordance with UK-adopted international accounting standards, International Financial Reporting
Standards (“IFRS”) and the legal requirements of the Companies Act 2006 and have been prepared under the historical cost convention, except for
financial instruments measured at fair value.
The principal accounting policies applied in the preparation of the financial statements are set out within note 2. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
The preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires
management to exercise judgement in the process of applying the Group’s accounting policies. Details of the critical judgements and key sources
of estimation uncertainty are set out in note 3. Actual results may differ from these estimates.
The financial statements are presented in pound sterling and all values are rounded to the nearest £0.1m except where otherwise indicated.
Transition to IFRS
The financial statements are the first set of IFRS statutory financial information prepared by the Company and the Group.
The Group’s Prospectus for Admission to the London Stock Exchange included restated historical information for the years ended 31 December
2018, 2019 and 2020. A reconciliation of the adjustments from the statutory accounts for the Group, which had been prepared in compliance with
United Kingdom Accounting Standards, including Financial Reporting Standard 102, “The Financial Reporting Standard applicable in the United
Kingdom and the Republic of Ireland” (“FRS 102”) and IFRS is set out in the Prospectus, which can be found in the shareholder section of the
Bridgepoint website, within IPO documents.
The Company’s financial information under IFRS were not included in the Prospectus, however as there are no transition differences between the
Company numbers under FRS 102 and IFRS, no reconciliations have been included within these financial statements.
Changes to comparatives
A number of minor changes to the numbers included within the historical financial information within the Prospectus have been made to the
comparative period presented within these financial statements to make them comparable with the current period, however there is no impact on
the profit, net assets and cash flow of the Group.
Expenses of £0.3m relating to the acquisition of EQT AB’s Credit business (“EQT Credit”) are now treated as exceptional. Whilst these costs were
not material in the comparative period, they are now more significant in the current year and therefore the comparative has been updated to
include them.
Other changes can be summarised as:
Investments in funds and other financial liabilities have been grossed up by £2.4m and cashflows from investing and financing activities have
been grossed up by £1.7m, in relation to a number of limited partnerships that the Group consolidates, through which some of the Group’s
investment in funds are held, but where the Group’s interest only constitutes a portion of the total of the investment;
Derivative financial instrument assets of £0.7m have been presented gross rather than net of liabilities within the consolidated balance sheet;
Interest receipt cash flows of £0.1m have been reclassified from financing activities to investing activities in the consolidated cash flow
statement; and
Other operating income of £1.8m, personnel expenses of £1.1m and other expenses of £0.5m have has been reclassified to the Central segment
within the operating segment disclosure (note 4).
Adoption of new and revised standards
The Group has adopted all relevant amendments to existing standards and interpretations issued by the International Accounting Standards Board
(“IASB”) that are effective from 1 January 2021. Other amendments to IFRSs not adopted are not material. The Group has not early adopted any
other standard, interpretation or amendment that has been issued but is not yet effective. The Group plans to adopt the “Amendments to IAS 1
‘Presentation of Financial Statements’ classification of liabilities” issued by IASB and IFRIC when it becomes effective on 1 January 2023. The impact
of this standard on the Group’s financial statements is currently being reviewed.
126
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2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 125
No other standards or interpretations issued are expected to have a material impact on the Group or Company’s financial statements.
Going concern
The financial statements have been prepared on a going concern basis as the directors have a reasonable expectation that the Group and Company
have adequate resources to continue in operational existence for the foreseeable future having assessed the business risks, financial position and
resources of both the Group and Company. Further detail is set out within the viability and going concern statement.
Company result
As permitted by section 408 of the Companies Act 2006, the income statement and the statement of comprehensive income of the Company is
not presented as part of these financial statements. The Company’s loss for the year amounted to £24.3m, which includes costs relating to the IPO
(2020: profit of £12.9m).
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(a) Consolidation
The consolidated financial statements include the comprehensive gains or losses, the financial position and the cash flows of the Company, its
subsidiaries and the entities that the Group is deemed to control, drawn up to the end of the relevant period, which includes elimination of all intra-
group transactions. Uniform accounting policies have been adopted across the Group.
Assessment of control
Control is achieved when the Group has power over the relevant activities, exposure to variable returns from the investee, and the ability to affect
those returns through its power over the investee.
The Group controls an investee (entity) if, and only if, the Group has all of the following:
power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
exposure, or rights, to variable returns from its involvement with the investee; and
ability to use its power over the investee to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three
elements of control listed above.
When the Group holds less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to
give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and circumstances in
assessing whether or not the Group’s voting rights in an investee are sufficient to give it power, including:
the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
potential voting rights held by the Group, other vote holders or other parties;
rights arising from other contractual arrangements; and
any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the
time when decisions need to be made, including voting patterns at previous shareholders meetings.
The assessment of control is based on all relevant facts and circumstances and the Group reassesses its conclusion if there is an indication that
there are changes in facts and circumstances.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control over the
subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement
of comprehensive income from the date the Group gains control until the date when the Group ceases to control the subsidiary.
Transactions with non-controlling interests are recognised in equity.
(b) Foreign currencies
Presentation currency
The presentational currency of the Company and Group is pound sterling.
Foreign currency transactions
Foreign currency transactions are translated into the functional currency using the opening spot exchange rate for the month in which the
transaction occurs as an approximate for the actual rate at the date of the transaction.
Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation of monetary assets and liabilities
denominated in foreign currencies at year end exchange rates, are generally recognised in profit or loss. They are deferred in equity and recognised
in other comprehensive income if they relate to qualifying cash flow hedges or are attributable to part of the net investment in a foreign operation.
127
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
126 Bridgepoint 2021 Annual Report & Accounts
The impact of the revaluation of investments and carried interest held in foreign currencies is presented together with the income from the fair
value measurement of the income receivable.
Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are translated to the functional currency
at the applicable foreign currency exchange rate on the date the fair value was determined.
Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation
differences on non-monetary assets and liabilities such as investments held at fair value through profit or loss are recognised in profit or loss as
part of the fair value gain or loss.
Foreign operations
The results and financial position of foreign operations that have a functional currency different from the presentation currency are translated into
the presentation currency of the Group and Company as follows:
assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial
position;
income and expenses for each profit and loss period are translated using the opening spot rate for the month; and
all resulting exchange differences are recognised in other comprehensive income.
(c) Operating income
Operating income primarily comprises of management fees, carried interest income and investment profits from the management of investment
in private equity and credit fund partnerships. The parties to agreements for fund management services comprise the Group and the investors of
each fund as a body. Accordingly, the group of investors of each fund are identified as a customer for accounting purposes.
Income is measured based on the consideration specified in the contracts and exclude amounts collected on behalf of third parties, discounts and
value added taxes.
Management fees
The Group earns management fees and carried interest from its provision of various investment management services to funds, which are treated
as a single performance obligation.
Management fees are recognised over time over the life of each fund, generally 10 – 12 years, occasionally subject to an extension, if agreed with
the investors of that fund.
Management fees are based on an agreed percentage of either committed or invested capital, depending on the fund and its life stage. Fees are
billed in accordance with the Limited Partnership Agreement (“LPA”) and are either billed semi-annually or quarterly in advance or arrears.
Carried interest
The Group receives a share of fund profits through its holdings in Founder Partnerships as variable consideration dependent on the level of fund
returns. The entitlement to carried interest and the amount is determined by the level of accumulated profits exceeding an agreed threshold (the
“hurdle”) over the life-time of each fund. The carried interest income is recognised when the performance obligations are expected to be met.
Income 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. The reversal risk due to uncertainty of future fund performance is managed through the application of discounts.
This is explained further within note 3.
The carried interest receivable represents a contract asset under IFRS 15 “Revenue from contracts with customers”. Amounts are typically
presented as non-current assets unless they are expected to be received within the next 12 months.
The Group applies the simplified approach for measuring impairment of the contract asset and the practical expedient permitted by IFRS 9
“Financial instruments”.
Investment income
Investment income consists primarily of fair value measurements of the Group’s investments in private equity and credit funds. Details of the
valuation of such investments is explained further within note 3.
Other operating income
Other operating income includes fees and commissions receivable by the Group’s procurement consulting business, PEPCO Services LLP.
Amounts payable to sub-contractors who contribute to the provision of services are presented net of other operating income. Amounts are
recognised in the income statement on an accruals basis.
128
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2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 12
7
(d) Deferred acquisition costs
Professional costs, particularly legal and other advisor costs, are incurred when raising a new fund. The LPA of each fund dictates the aggregate
expense that can be recharged to the fund investors on the close of a new fund. Costs in excess of the Cap and any/all fees paid to placement
agents are capitalised as a non-current asset.
The benefit of the incurred costs for private equity funds is primarily considered to be attributable to the period when the primary fund investment
activity is carried out. Therefore, the useful life of the asset is the commitment period for the fund. A useful life of three years is used for private
equity funds, being the shortest likely commitment period, but is typically between three and five years.
For credit funds, the period of portfolio construction is typically longer, therefore a five year useful life is used, which correlates with the period over
which the management fees build up to a maximum leveI.
(e) Personnel benefits
Short-term employee benefits
Short-term employee benefits, which include employee salaries and bonuses, are expensed as the related service is provided. A liability is
recognised for the amount expected to be paid if the Group has a present or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
Accumulated holiday balances are accrued at each period end, if an employee’s entitlement is not used in full.
Long-term employee benefits
Long-term employee benefits, which are those that are not expected to be settled wholly before 12 months after the period end in which the
employee renders the service that gives rise to the benefit, include certain long-term bonuses. An expense is recognised over the period in which
the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present or constructive obligation to
pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.
Defined contribution pensions
Amounts payable in respect of employers’ contributions to the Group’s defined contribution pension scheme are recognised as employee
expenses as incurred. The assets of the scheme are held separately from those of the Group in an independently administered fund.
Share-based payments
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at
the grant date.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period,
based on an estimate of the number of equity instruments that will eventually vest. A corresponding credit is made to the Share-based payment
reserve within equity.
At each reporting date, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the
original estimates, if any, is recognised in the Income Statement such that the cumulative expense reflects the revised estimate, with a
corresponding adjustment to equity.
(f) EBITDA
EBITDA means earnings before interest, taxes, depreciation and amortisation. It is used to provide an overview of the profitability of the Group’s
business and segments. Underlying EBITDA is calculated by deducting exceptional items within EBITDA.
EBITDA and Underlying EBITDA are alternative performance measures and non-IFRS measures.
The Group uses Underlying EBITDA as exceptional income or expenditure could distort an understanding of the performance of the Group. Details
of exceptional expenses are set out in note 8.
(g) Operating profit
Operating profit means earnings before finance income, finance expenses and taxes. Operating profit is an alternative performance measure and
non-IFRS measure.
(h) Leases
Leases for office premises
The Group has applied IFRS 16 “Leases” where the Group has the right-of-use of an asset under a lease contract for a period of more than 12
months. Such contracts represent leases of office premises where the Group is a tenant.
129
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2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
128 Bridgepoint 2021 Annual Report & Accounts
Assets are recorded initially at cost and depreciated on a straight-line basis over the shorter of the lease term or the estimated useful life. Cost is
defined as the lease liabilities recognised plus any initial costs and dilapidations provisions less any incentives received. The right-to-use assets are
depreciated during the lease term, generally 5 to 10 years. Right-of-use assets are included within property, plant and equipment in the statement
of financial position.
The lease liability is initially measured at the net present value of future lease payments that are not paid at the commencement date discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate (“IBR”). Generally,
the Group uses its IBR as the discount rate as the implicit rate is not readily determinable for the rented office premises. The lease liability is
subsequently measured at amortised cost using the effective interest method.
The IBR is the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use
asset in a similar economic environment within similar terms, security and conditions.
Lease payments due within the next 12 months are recognised within current liabilities, payments due after 12 months are recognised within non-
current payables.
Group as lessor
Where the Group acts as an intermediate lessor by entering into a subletting agreement and has transferred substantially all the risks and rewards
incidental to ownership of the underlying asset, the Group accounts for these subleases as finance leases under IFRS 16 “Leases”. Such contracts
represent subleases of office premises.
At commencement of the lease term, the Group derecognises the right-of-use asset relating to the head lease and recognises the net investments
in the sublease as a receivable. The difference between the right-of-use asset and the net investment is in the sublease is recognised in profit or
loss. The Group uses the IBR used for the head lease to measure the net investment in the lease (adjusted for any initial direct costs associated with
the sublease). During the term of the sublease, the Group recognises both finance income on the sublease and finance expense on the head lease.
The Group applies the simplified approach for measuring impairment of lease receivables and the practical expedient permitted by IFRS 9
“Financial instruments”.
Short-term leases and leases of low value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and
leases of low-value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the
lease term within operating expenses.
(i) Finance income and finance expenses
Finance income comprises of the net income from the remeasurement and revaluation of the deferred contingent consideration payable and
associated unwind of the discount, and the unwind of the discount on the deferred proceeds receivable, in addition to interest earned on cash
deposited with bank balances and finance income on sublease agreements. Finance expenses comprises of interest on interest-bearing liabilities
and finance expenses on lease liabilities.
Recurring fees and charges levied on committed bank facilities are charged to the Income Statement as accrued. Credit facility arrangement fees
are capitalised and amortised to the Income Statement using the effective interest method over the term of the facility.
Interest income and expense is recognised using the effective interest method. The calculation includes all fees and points paid or received
between parties to the contract that are an integral part of the effective interest rate, transaction costs, and all other premiums and discounts.
(j) Exceptional items
Items of income and expense that are material by size and/or nature and are not considered to be incurred in the normal course of business
are classified as ‘exceptional’ within the income statement and disclosed separately to give a clearer presentation of the Group’s underlying
financial performance.
(k) Taxation
Taxation expense for the period comprises of current and deferred tax recognised in the reporting period. Tax is recognised in the Income
Statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case tax is also
recognised in other comprehensive income or directly in equity respectively.
Current tax
Current tax is the amount of corporation tax payable in respect of the taxable profit for the period or prior period. Tax is calculated on the basis
of tax rates and laws that have been enacted or substantively enacted by the period end.
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2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 129
Deferred tax
Deferred tax arises from temporary differences at the reporting date between the carrying amounts of assets and liabilities and the amounts used
for taxation purposes. Deferred tax is not recognised if the temporary difference arises from the initial recognition of goodwill or from the initial
recognition of other assets and liabilities in a transaction, other than a business combination, that affects neither the tax nor the accounting profit.
Deferred tax liabilities are recognised for all taxable temporary differences.
Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of
deferred tax liabilities or other future taxable profits will be available against which the deferred tax assets can be utilised.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to be applied to their respective period of realisation, provided
they are enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset when there is a legally enforceable right
of set off, when they relate to income taxes levied by the same tax authority and the Group intends to settle on a net basis. Changes in deferred tax
assets or liabilities are recognised as a component of tax expense in the income statement, except where they relate to items that are charged or
credited directly to equity, in which case the related deferred tax is also charged or credited directly to other comprehensive income or equity.
Current or deferred taxation assets and liabilities are not discounted.
(l) Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and any provision for impairment.
The cost includes the purchase price as well as expenditure directly attributable to put the asset in place and order to be used in accordance with
the purpose of the acquisition.
Assets are depreciated so as to write off their cost, on a straight-line basis, over their estimated useful lives as follows:
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Computers, Furniture and Other 3 to 5 years
Leasehold Improvements Over the shorter of their useful economic life or the lease term
The loss to reduce the carrying amount of any assets that are impaired is recognised within the Income Statement and reversed if there are
indications that the need for impairment is no longer present. The carrying amount of an item of property, plant and equipment is derecognised
from the statement of financial position at disposal or when no future economic benefits are expected from the use or disposal of the asset.
The depreciation is included within ‘Depreciation and Amortisation’ within the Income Statement.
(m) Intangible assets
Intangible assets, which constitute acquired customer relationship assets acquired from a business combination, are stated at cost less
accumulated amortisation and accumulated impairment losses.
Intangible assets are annually assessed for impairment when there are indicators of impairment.
Amortisation is calculated, using the straight-line method, to allocate the depreciable amount of the assets to their residual values over their
estimated useful lives. The amortisation is included within ‘Depreciation and Amortisation’ within the Income Statement.
(n) Business combinations and goodwill
Business combinations of subsidiaries and businesses are accounted for by applying the acquisition method. The cost of a business combination
is the fair value of the consideration given, liabilities incurred or assumed and of equity instruments issued. Costs attributable to the business
combination are expensed in the Income Statement. Where control is achieved in stages the cost is the consideration at the date of each transaction.
On acquisition of a business, fair values are attributed to the identifiable assets, liabilities and contingent liabilities. Intangible assets are only
recognised separately from goodwill where they are separable and arise from contractual or other legal rights. Where the fair value of contingent
liabilities cannot be reliably measured, they are disclosed on the same basis as other contingent liabilities.
Contingent consideration is recognised at the acquisition date. It is classified as a financial liability and subsequently remeasured to fair value,
with changes in fair value recognised in the Income Statement.
Goodwill recognised represents the excess of the fair value of the purchase consideration over the fair values to the Group’s interest in the
identifiable net assets, liabilities and contingent liabilities acquired.
Goodwill is assessed for impairment annually or more frequently if events or changes in circumstances indicate potential impairment loss.
Any identified impairment is charged to the income statement. No reversals of impairment are recognised. Intangible assets are annually assessed
for impairment when there are indicators of impairment. Impairment triggers could include the loss of a fund management contract or a failure to
raise a new fund.
131
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2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
130 Bridgepoint 2021 Annual Report & Accounts
(o) Financial instruments
Financial assets
The Group’s financial assets consist of investments in funds, investments made by Collateralised Loan Obligations (“CLOs”) consolidated by the
Group, derivative financial instruments, accounts receivable and other receivables and cash and cash equivalents.
The Company’s financial assets consist of investments in subsidiaries, accounts receivable and other receivables and cash and cash equivalents.
Recognition
A financial asset is recognised when the Group or Company becomes party to the contractual provisions of the instrument.
Classification and measurement
A financial asset is initially classified into one of three measurement categories. The classification depends on how the asset is managed
(business model) and the characteristics of the assets contractual cash flows. The measurement categories for financial assets are as follows:
Fair value through profit or loss;
Fair value through other comprehensive income; and
Amortised cost.
Financial assets must be measured through profit of loss unless they are measured at amortised cost or through other comprehensive income.
The Group’s investments in funds and investments in CLOs are measured at fair value through profit of loss as such assets are held for
investment returns.
Derivative instruments used for hedging foreign exchange, are measured at fair value through profit of loss. Where they qualify for hedge
accounting the effective portion of the gain or loss on the hedging instrument is recognised in other comprehensive income until the recognition
of the hedged transaction affects profit or loss, at which point the amount recognised in other comprehensive income is recycled to the
income statement.
Financial assets are measured at amortised cost only if both of the following criteria are met:
the asset is held within a business model whose objective is to collect the contractual cash flows; and
the contractual terms give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Group’s trade and other receivables are short-term receivables relating to non-financing transactions and are therefore subsequently measured
at amortised cost using the effective interest method less loss allowance.
Receivables due in greater that one year are initially discounted to their present value using an equivalent rate of interest that would be due on
borrowings. The discount is released over time to the Income Statement.
Cash and cash equivalents are measured at amortised cost.
Derecognition
A financial asset is derecognised when the contractual rights to the cash flows from the asset expire, or when the Group or Company transfers
the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset
are transferred.
Impairment
Expected credit losses are calculated on financial assets measured at amortised cost and are recognised within the income statement. For trade
and other receivables, the Group and Company applies the simplified approach and the practical expedient permitted by IFRS 9 “Financial
Instruments” to apply a provision matrix that is based on its historic default rates over the expected life of the short-term receivables.
Financial liabilities
Financial liabilities, with the exception of financial liabilities at or designated at fair value through profit or loss, are initially recognised at fair value,
net of transaction costs, and subsequently measured at amortised cost using the effective interest rate method, with interest expense recognised
on an effective yield basis.
Derivative financial liabilities are initially measured at fair value and are subsequently measured at fair value at each reporting date.
Liabilities of CLOs consolidated by the Group are designated as financial liabilities measured at fair value through profit or loss. Financial liabilities
at fair value through profit or loss related to CLOs are initially recognised and subsequently measured at fair value on a recurring basis with gains or
losses arising from changes in fair value recognised through the fair value remeasurements of investments line within the income statement along
with interest paid on the CLO financial liabilities.
Amounts payable for purchases of CLO assets awaiting settlement are recognised at the point at which the CLO has a contractual obligation to
exchange cash.
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2021 Annual Report & Accounts Bridgepoint 131
Deferred contingent consideration payable relating to business combinations is measured at fair value through profit or loss.
Borrowings are initially recognised at the amount of cash received from the bank, less separately incurred transaction costs. They are measured
subsequently at amortised cost using the effective interest rate method.
Repurchase agreements are measured at fair value and fees associated with repurchase agreements are capitalised and amortised over the life
of the agreement.
All of the Group’s and Company’s other financial liabilities are measured at amortised cost using the effective interest rate method.
The Group and Company derecognises financial liabilities when the Group’s or Company’s obligations are discharged, cancelled or expired.
Derivative instruments and hedge accounting
Derivative financial instruments are initially measured at fair value on the date on which the derivative contract is entered into and are subsequently
measured at fair value at each reporting date.
For derivatives designated as cash flow hedges, prior to their settlement the fair value movements on the effective portion of the gain or loss on
the hedging instrument is recognised in other comprehensive income and within the cash flow hedge reserve within equity, while any ineffective
portion is recognised immediately in the Income Statement as gain/loss on cash flow hedge within operating expenses. Amounts recognised in the
Statement of Comprehensive Income are transferred to the Income Statement when the hedged transaction affects profit or loss, such as when the
hedged cash flow occurs.
For derivatives that are not designated as cash flow hedges, all fair value movements are recognised in the Income Statement. Where a derivative
relates to a hedge of investments in foreign currencies, the profit or loss on the revaluation of the hedging instrument is recognised together with
the investment returns in the Income Statement.
Prior to their settlement, derivatives are carried as assets when the fair value is positive and as a liability when fair value is negative. The fair value
of unsettled forward currency contracts is calculated by reference to the market for forward contracts with similar maturities.
(p) Investment in subsidiaries
Investments in subsidiaries in the Statement of Financial Position of the Company are recorded at cost less provision for impairments.
All transactions between the Company and its subsidiary undertakings are classified as related party transactions for the Company accounts
and are eliminated on consolidation.
(q) Investments in associates
Associates are entities in which the Group has an investment and over which it has significant influence, but not control, through participation
in the financial and operating policy decisions. Such entities are funds or carried interest partnerships where the Group holds more than a
20% interest in the entity. The Group initially records the investment at fair value through profit or loss as operating income within the Income
Statement. The investments are recorded as financial assets or carried interest receivable within the Group’s Statement of Financial Position.
(r) Cash and cash equivalents
Cash and cash equivalents comprise cash in hand and call deposits, held at call with banks with an original maturity of three months or less.
The carrying amount of these assets approximates to their fair value.
CLO cash is cash held by CLO vehicles consolidated by the Group and is not available for the Group’s other operating activities.
(s) Dividends
Dividends and other distributions to the Company’s shareholders are recognised in the period in which the dividends and other distributions are
paid to the shareholders. These amounts are recognised in the Statement of Changes in Equity.
(t) Own shares
Own shares are recorded by the Group when ordinary shares are purchased through special purpose vehicles, which have the purpose of
purchasing and holding surplus shares of the Company from employees who have left the employment of the Group or from other means. The
special purpose vehicles include Atlantic SAV Limited, Atlantic SAV 2 Limited and the Bridgepoint Group plc Employee Benefit Trust. These entities
are aggregated together with the financial statements of the Company and are consolidated within the financial statements. Own shares are held
at cost and their purchase reduces the Group’s net assets by the amount spent. They are recognised as a deduction to retained earnings. When
shares are sold, they are transferred at their weighted average cost. No gain or loss is recognised on the purchase, sale, issue or cancellation of
the Company’s own shares.
133
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2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
132 Bridgepoint 2021 Annual Report & Accounts
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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.
(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 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.
Where the Group holds an interest that is greater than 20% the Group is considered to have significant influence, but not control through
participation in the financial and operating policy decisions. This includes the Group’s investment in Bridgepoint Credit “C” II LP, where the
Group has a commitment of 27% in the fund. Details of the associate are set out within note 28 (d).
Returns from the Group’s investments in Bridgepoint funds, including those considered associates, are accordingly measured at fair value through
profit or loss as operating income within the Income Statement.
Consolidation of CLOs
The Group holds investments in the senior and subordinated notes of CLOs that it manages, predominately 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 the Group has a principal or agent relationship and therefore whether the
CLO should be consolidated under IFRS 10 “Consolidated Financial Statements”.
The Group consolidates Bridgepoint CLO 1 DAC (“CLO 1”) as the Group has exposure to variable returns as an investor in the subordinated notes.
The subordinated notes 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.
The Group holds the majority of the subordinated notes in CLO 1. The Group’s holding is 55% and the directors have therefore concluded that the
Group is principal and should consolidate.
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 CLOs has a significant gross-up on the Group’s assets and liabilities, which is shown gross on the face of the statement of
financial position and cash flow statement as separate lines but has no net effect on the profit or loss, cash flows or net assets. Details of the assets
and liabilities are included in note 17 and 18.
Bridgepoint CLO 2 DAC (“CLO 2”) was consolidated in the financial statements of the Group at 31 December 2020 during its warehousing and until
its formal launch on 28 June 2021, as the Group held a majority interest in the warehouse equity. On its launch the Group’s exposure to the variable
returns reduced to 5% of all notes, therefore CLO 2 is not consolidated in the financial statements as at 31 December 2021.
Bridgepoint CLO 3 DAC (“CLO 3”) was consolidated from the start of its warehousing in June 2021 until its formal launch to external investors on
22 December 2021. On its launch, the Group’s holding was 7% of all notes, with a 31% interest in the subordinated notes and a minority exposure to
the variable returns, therefore CLO 3 is treated as an associate in the financial statements as at 31 December 2021. Details of the associate are set
out within note 28 (d).
Consolidation of Carried Interest Partnerships
As a fund manager to its Private Equity and Credit Funds, the Group participates in Carried Interest Partnerships (“CIPs”), the participants of which
are the Group, certain of the Group’s employees and others connected to the underlying fund. These vehicles have two purposes: 1) to facilitate
payments of carried interest from the fund to carried interest participants, and 2) 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 legal nature of the relationships between the relevant fund, the CIPs and the CIP participants and have
determined that the power to control the CIPs (which are entitled to the carried interest from the funds) ultimately resides with the fund investors
and that the Group is therefore an agent and not a principal.
This is because the purpose and design of the CIPs and the carry rights in the fund are determined at the outset by the fund’s LPA which requires
investor agreement and reflects investor expectations to incentivise individuals to enhance performance of the underlying fund. The Group does
not primarily benefit as its principal revenue stream is management fees based on commitments or invested capital. While the Group has some
power over the Adjudication Committees of the CIPs, these powers are limited and represent the best interests of all carried interest holders
collectively and hence, these are assessed to be on behalf of the fund investors.
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2021 Annual Report & Accounts Bridgepoint 133
The directors have assessed the payments and the returns the carried interest holders make and receive from their investment in carried interest
and have considered whether those carried interest holders who are also employees of the Group were providing a service for the benefit of the
Group or the investors in the fund. The directors have concluded that the carried interest represents a separate relationship between the fund
investors and the individual employees and that the carried interest represents an investment requiring the individuals to put their own capital
at risk and that, after an initial vesting period, continued rights to returns from the investment is not dictated by continuation of employment.
In addition, the directors have also considered the variability of returns for all CIPs that currently have value under IFRS 15 “Revenue from
contracts with customers” and in doing so have determined that the Group is exposed to limited variable returns in the range 5-26% with the main
beneficiaries of the CIP variable returns being the other participants. The directors concluded that the CIPs are not controlled by the Group and
therefore should not be consolidated.
Where the Group has a share of 20% or more of the rights to the carried interest, the Group is considered to have significant influence. Accordingly,
the BDC III carry scheme, where the Group holds an interest of 26%, is considered an associate. Details of the associate 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, which will comprise the Company’s shares and other investments. 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 allocating
to future partners in the business, as a means of allowing them to build a meaningful long-term shareholding in Bridgepoint and other investments
and reflect the opportunities that previous partners were offered. The existing employee shareholders prior to listing, and certain new 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.
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 meet all three criteria: 1) power over the investee, 2) exposure, or rights, to variable returns from
its involvement with the investee, and 3) the ability to use its power over the investee to affect its returns, they 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 (i) whether
or not revenue should be recognised and (ii) the timing and measurement of such amounts.
The Group base their 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 reversal risk is managed through the application of discounts of 30 to 50 percent to the fair values of unrealised
investments where the realised and unrealised valuation of a fund exceeds the relevant carried interest hurdle.
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 specific circumstances of each fund, 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. The level of discounts applied are reassessed annually.
A sensitivity analysis on the impact of a change in the fair value of unrealised investments has been included in note 5.
135
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
134 Bridgepoint 2021 Annual Report & Accounts
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 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 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 Managers typically reflect the fair value of the Group’s proportionate share of
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. This comprises valuation techniques such as market comparable companies
and multiple techniques. 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 multiple 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 multiple 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/earning 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 indicated
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 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 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 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.
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 20 (a).
Valuation of CLO assets and liabilities
The loan asset portfolios of the consolidated CLO vehicles are valued using observable inputs such as recently executed transaction prices in
securities of the issuer or comparable issuers and from independent loan pricing sources. To the extent that the significant inputs are observable,
the Group categorises these investments as Level 2.
CLO investments in debt instruments are classified as level 2 financial assets under IFRS 13 “Fair Value Measurement” on the basis that the prices
have been corroborated externally.
The liabilities of consolidated CLOs are also fair valued through profit or loss. They are valued, based upon broker prices, which use discounted
cash flow analyses with observable market data inputs, such as constant annual default rates, prepayment rates, reinvestment rates, recovery rates
and discount rates and therefore considered as level 3 financial liabilities under IFRS 13 “Fair Value Measurement”. A sensitivity analysis has been
included within note 20 (f).
136
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2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 135
Measurement of deferred contingent consideration payable
Under the sale and purchase agreement for EQT Credit the Group has an obligation to settle an amount of deferred contingent consideration on
the completion of fundraising for Bridgepoint Direct Lending III and Bridgepoint Credit Opportunities IV. Both processes completed a first round of
fundraising during 2021 and fundraising will continue during 2022 and is expected to complete in 2023. The amount payable has been based upon
management’s current best estimate of each fundraising, which is consistent with approved budgets.
A sensitivity analysis has been included within note 18 (b).
Measurement of intangible assets, useful lives and impairment
A customer relationship asset was recognised following the Group’s acquisition in October 2020 of EQT Credit 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 discount rate of 10.5%, which was calculated by using comparable
company information.
The useful life of the intangible assets arising from this transaction have been determined as 7 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
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. The Group has assessed that it consists of a single CGU 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 2022 to 2026, including new fundraising, and a pre-tax discount rate of 10.7%, which was calculated by
using comparable company information.
A sensitivity analysis of goodwill and the intangible asset has been included within note 15.
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The key management of the Group for the period up to the Admission to the London Stock Exchange was considered to be the directors of
Bridgepoint Advisers Group Limited, a subsidiary company, and from Admission onwards the executive directors are considered to represent
the key management of the Group. The Group is divided into operating segments based on how key management reviews and evaluates the
operation and performance of the business. The operating segments correspond to the internal reporting used to assess performance and to
allocate resources.
The Group’s operations are divided into two groups, the Core business, consisting of the Private Equity and 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 Credit. The operations of both business segments consist
of providing investment management services to the respective funds and their investors. The investment management services comprise of
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. Together the Private Equity, Credit and Central segments form the Core business.
137
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
136 Bridgepoint 2021 Annual Report & Accounts
Segmental Income Statement analysis
The executive directors assess the operating segments based on the line items below, primarily on operating income and operating profit.
The EBITDA for each segment (the segment result), together with depreciation and amortisation and net finance expense forms Profit before Tax.
Depreciation, net finance expense and exceptional expenses are not allocated to operating segments and are included in the Group total. Foreign
exchange gains/losses are allocated to Central.
The comparative period has been amended from the numbers included within the historical financial information included within the Prospectus
to reclassify income and costs relating to the Group’s Luxembourg fund administration platform to Central. There is no impact on EBITDA or profit
before tax.
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Management fees 157.3 37.9 2.5 197.7 – 197.7
Carried interest 14.3 – – 14.3 – 14.3
Fair value remeasurement of investments
54.5 2.4 – 56.9 – 56.9
Other operating income
0.8 – – 0.8 0.9 1.7
Total operating income
226.9 40.3 2.5 269.7 0.9 270.6
Personnel expenses (66.2) (22.1) (32.0) (120.3) (1.1) (121.4)
Other expenses
(13.3) (9.1) (13.7) (36.1) (0.3) (36.4)
Foreign exchange
– – 1.1 1.1 – 1.1
EBITDA (excluding exceptional expenses)
147.4 9.1 (42.1) 114.4 (0.5) 113.9
Exceptional expenses (28.6)
EBITDA (including exceptional expenses) 85.3
Depreciation and amortisation
(15.0)
Net finance expense
(7.7)
Profit before tax
62.6
138
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 13
7
Group
Year ended 31 December 2020
Private
Equity
£ m
Credit
£ m
Central
£ m
Total Core
£ m
Total Other
£ m
Total Group
£ m
Management fees 136.6 10.2 1.8 148.6 – 148.6
Carried interest 12.9 – – 12.9 – 12.9
Fair value remeasurement of investments 25.3 4.1 – 29.4 – 29.4
Other operating income 0.2 – – 0.2 0.7 0.9
Total operating income 175.0 14.3 1.8 191.1 0.7 191.8
Personnel expenses (54.5) (11.6) (28.7) (94.8) (1.2) (96.0)
Other expenses (10.6) (2.5) (15.7) (28.8) (0.4) (29.2)
Foreign exchange – – (0.2) (0.2) – (0.2)
EBITDA (excluding exceptional expenses) 109.9 0.2 (42.8) 67.3 (0.9) 66.4
Exceptional expenses (7.7)
EBITDA (including exceptional expenses) 58.7
Depreciation and amortisation (8.8)
Net finance expense (1.4)
Profit before tax 48.5
Geographical analysis and customer concentrations
The Group’s income from funds is earned from funds entirely domiciled within Europe. The Group’s operating expenses are incurred in the
locations where the Group has offices, to identify and support portfolio companies which is unconnected to the domicile of the fund or the location
of the fund investors. Therefore, the Group’s operating results cannot be analysed in a meaningful way by geography.
No single fund investor constitutes more than 10% of assets under management.
Assets and liabilities analysis
The Group’s 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 and the carried interest receivable, which can be split between private equity and credit (split between
attributable to the Group and third party investors).
3
3
1
1
D
D
e
e
c
c
e
e
m
m
b
b
e
e
r
r
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Investments:
Private equity 217.9 191.2
Credit (assets attributable to the Group)
108.1 64.2
Credit (CLO assets attributable to third party investors)
274.5 253.0
Total investments
600.5 508.4
Carried interest receivable:
Private equity 36.4 24.9
Credit
2.5 3.0
Total carried interest receivable
38.9 27.9
139
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
138 Bridgepoint 2021 Annual Report & Accounts
5
5
O
O
p
p
e
e
r
r
a
a
t
t
i
i
n
n
g
g
i
i
n
n
c
c
o
o
m
m
e
e
Operating income primarily comprises management fees, carried interest income and investment profits from the management of and investment
in private equity and credit fund partnerships.
Management fees
Management fees are presented net of the profit or loss impact of the settlement of foreign exchange hedging used to limit the volatility of foreign
exchange on fees earned in euros.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Gross management fees 196.7 148.0
Settlement of FX hedges 1.0 0.6
Management fees, net
197.7 148.6
Carried interest
The amount of carried interest recognised in operating income and the carrying value of the related asset is sensitive to the fair value of unrealised
investment within each fund. The reversal risk in carried interest income, which is accounted for under IFRS 15 “Revenue from contracts with
customers,” is managed through the application of discounts of 30 to 50 percent to the fair value of the fund investments and the later recognition
of carried interest relating to credit funds.
If the fair value of unrealised investments of each relevant fund had been higher/lower at each year end, the impact on carried interest income in
each year is shown in the table below.
G
G
r
r
o
o
u
u
p
p
C
C
a
a
r
r
r
r
i
i
e
e
d
d
i
i
n
n
t
t
e
e
r
r
e
e
s
s
t
t
i
i
n
n
c
c
o
o
m
m
e
e
:
:
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
10% lower value of unrealised assets (4.2) (2.9)
10% higher value of unrealised assets 5.4 2.9
As at 31 December 2021, the unrecognised carried interest asset due to the discounts applied is £49.3m (2020: £28.6m).
Note 20 (a) includes a sensitivity analysis for co-investment valuations and the impact on profit or loss.
Investment income
Investment income consists of net changes in the fair value of the Group’s investments in private equity and credit funds.
Investment income is presented net of the profit or loss impact of the remeasurement of foreign exchange hedging used to limit the volatility of
foreign exchange on investment income earned in euros.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Investment income 53.8 29.4
Remeasurement of FX hedges 3.1 –
Investment income, net
56.9 29.4
Investment income also includes the remeasurement of the fair value of investments in CLOs which are fully consolidated by the Group. The CLO
investment expense is the amount of investment income due to third party note holders who have invested in the CLOs.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
CLO investment income 3.0 3.3
CLO investment expense (1.3) (2.8)
CLO investment income, net
1.7 0.5
140
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 139
Other operating income
Other income includes fees and commissions receivable by the Group’s procurement consulting business, PEPCO Services LLP.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Other operating income 2.4 1.8
Commissions payable (0.7) (0.9)
Total other operating income
1.7 0.9
6
6
P
P
e
e
r
r
s
s
o
o
n
n
n
n
e
e
l
l
e
e
x
x
p
p
e
e
n
n
s
s
e
e
s
s
Aggregate personnel expenses (including directors’ remuneration) in each year were as follows:
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Wages and bonuses 104.4 76.3
Social security costs 15.8 12.0
Pensions
1.9 1.6
Share-based payments
3.2 –
Other employee expenses
7.4 6.4
Total Personnel expenses
132.7 96.3
Total personnel expenses include £11.3m (2020: £0.3m) of exceptional expenses, and accordingly are excluded from the calculation of underlying
profitability measures (see note 8 for further details).
a) Pensions
The Group operates a defined contribution pension scheme for its directors and employees. The assets of the scheme are held separately from
those of the Group in an independently administered fund. The scheme is a non-contributory scheme but does permit employee contributions.
b) Share-based payments
The total charge to the Income Statement for the year was £3.2m (2020: nil) and this was credited to the Share-based payments reserve in equity.
Details of the different types of awards making up the charge are set out below.
In June 2021, the Company issued 612,000 A3 ordinary shares of £0.01 nominal value to certain employees for consideration of £1.50 per share.
The A3 shares would vest on the fifth anniversary of their issue provided that the shareholder remains an employee throughout this period. As part of
the Company’s share reorganisation, the A3 shares were converted into ordinary shares. The fair value of the share issued was calculated as £3.96
per share. This was determined by a third party valuation.
In July 2021, as part of the Admission to the London Stock Exchange, the Company offered employees ordinary shares in the Company under the
IPO Share Award. 870,090 ordinary shares were issued to employees as part of the IPO Share Award Plan, with the nominal value of £0.00005 per
share being fully paid up. A further 29,053 ordinary shares are held in the Bridgepoint Group plc Employee Benefit Trust. The shares had a fair value
of £3.50 per share, being the Admission Offer Price. The shares are generally forfeited to the Bridgepoint Group plc Employee Benefit Trust in the
event that the relevant employee ceases employment or gives or is given notice to the same.
No other share-based payment awards were made during the year to 31 December 2021.
141
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
140 Bridgepoint 2021 Annual Report & Accounts
Group and Company
N
N
u
u
m
m
b
b
e
e
r
r
F
F
a
a
i
i
r
r
v
v
a
a
l
l
u
u
e
e
o
o
f
f
a
a
w
w
a
a
r
r
d
d
(
(
£
£
)
)
A
A
3
3
S
S
h
h
a
a
r
r
e
e
A
A
w
w
a
a
r
r
d
d
I
I
P
P
O
O
S
S
h
h
a
a
r
r
e
e
A
A
w
w
a
a
r
r
d
d
A
A
3
3
S
S
h
h
a
a
r
r
e
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A
A
w
w
a
a
r
r
d
d
I
I
P
P
O
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S
S
h
h
a
a
r
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e
e
A
A
w
w
a
a
r
r
d
d
Opening
–– ––
Share reorganisation/granted 612,000 870,090 3.96 3.50
Vested – – 3.96 3.50
Forfeited (10,000) (32,860) 3.96 3.50
Outstanding at 31 December 2021 602,000 837,230 3.96 3.50
c) 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:
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
N
N
o
o
.
.
2020
No.
UK 207 165
Other 133 117
Total
340 282
The Company has 4 employees (2020: nil).
7
7
O
O
t
t
h
h
e
e
r
r
e
e
x
x
p
p
e
e
n
n
s
s
e
e
s
s
Other expenses include expenditure on IT, travel and legal and professional fees. Other expenses include fees paid to the auditors for the audit
of the Group and relevant subsidiary financial statements and other fees for other services and expenditure relating to low-value asset leases are
required to be disclosed separately and are set out below.
a) Auditor’s remuneration
PricewaterhouseCoopers LLP (“PwC”) resigned as auditor of the Company and the Group on the Company’s Admission to the London Stock
Exchange. The table below sets out fees earned by PwC up until their resignation. Fees paid to PwC in the year ended 31 December 2020 included
transaction related services relating to the acquisition of the EQT Credit business. Fees paid to PwC in the year ended 31 December 2021 included
services relating to the IPO.
G
G
r
r
o
o
u
u
p
p
Fees paid to PwC
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Audit fees
Fees payable to the external auditor for the audit of the Company and the consolidated financial statements – 0.1
Fees payable to ’the external auditor for the audit of the accounts of the Company’s subsidiaries – 0.3
Total audit fees – 0.4
Non-audit fees
Tax compliance 1.0 0.1
Other non-audit services 5.3 1.6
Total non-audit fees 6.3 1.7
Total auditor’s remuneration 6.3 2.1
142
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 141
Mazars LLP (“Mazars”) were appointed to replace PwC. The table below sets out fees earned by Mazars in relation to the year ended
31 December 2021.
G
G
r
r
o
o
u
u
p
p
Fees paid to Mazars
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Audit fees
Fees payable to the external auditor for the audit of the Company and the consolidated financial statements 0.4 –
Fees payable to the external auditor for the audit of the Company’s subsidiaries 0.8 –
Total audit fees 1.2 –
Non-audit fees
Audit-related assurance services 0.1 –
Total non-audit fees 0.1 –
Total auditor’s remuneration 1.3 –
b) Low-value asset leases
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Expense relating to low-value assets leases
Low-value assets leases
0.2 0.2
8
8
E
E
x
x
c
c
e
e
p
p
t
t
i
i
o
o
n
n
a
a
l
l
i
i
t
t
e
e
m
m
s
s
The amounts shown in the table below have been recognised separately as exceptional where the income or expenditure is material, is not
considered to be incurred in the normal course of business and without disclosure could distort an understanding of the financial statements.
Accordingly, exceptional items are excluded from the calculation of underlying profitability measures.
Exceptional items in the year ended 31 December 2021 relate to costs associated with the Group’s Admission to the London Stock Exchange,
further costs relating to the Group’s acquisition of EQT Credit and costs incurred in relation to potential acquisitions. Exceptional finance income
relates to an unwind of a discount on deferred proceeds receivable. Further explanation is included below the table.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Personnel expenses 11.3 0.3
Other expenses 17.3 7.4
Total exceptional expenses within EBITDA
28.6 7.7
Finance expenses – 0.2
Total exceptional expenses
28.6 7.9
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Finance income (3.8) (4.4)
Total exceptional income (3.8) (4.4)
a) Exceptional personnel expenses
In 2021, exceptional personnel expenses arose from the IPO, including specific transaction related bonuses, share based payment expenses and
associated social security costs, and from the acquisition of EQT Credit, including deferred transaction related bonuses and associated social
security costs.
In the year ended 31 December 2020, exceptional personnel expenses represent deferred transaction related bonuses and associated social
security costs relating to the EQT Credit acquisition.
143
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
142 Bridgepoint 2021 Annual Report & Accounts
b) Exceptional other expenses
In 2021, exceptional other expenses include professional costs relating to the IPO and costs incurred in relation to potential acquisitions. Separately,
£18.4m of costs incurred during the IPO have been recognised within equity, which are considered to represent costs of issuing the related share
capital on listing.
In the year ended 31 December 2020, exceptional other expenses represent transaction costs relating to the EQT Credit acquisition.
c) Exceptional finance income and expenses
In 2021, exceptional finance income of £3.8m (2020: £4.4m) relates to remeasurement and revaluation of the deferred contingent consideration
payable to EQT AB and associated unwind of the discount and deferred proceeds receivable under the Investment Agreement with Dyal Capital
Partners IV (C) LP. In the year ended 31 December 2020, exceptional finance expenses of £0.2m related to the unwind of the discount of the
deferred contingent consideration payable to EQT AB.
9
9
D
D
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p
p
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c
c
i
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a
a
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n
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i
i
s
s
a
a
t
t
i
i
o
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n
n
The following table summarises the depreciation and amortisation charge during the year.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Depreciation on property, plant and equipment 11.9 8.2
Amortisation of intangible assets 3.1 0.6
Total depreciation and amortisation
15.0 8.8
The amortisation of intangible assets is excluded from the calculation of underlying profitability measures in order to distinguish from underlying
performance.
1
1
0
0
F
F
i
i
n
n
a
a
n
n
c
c
e
e
i
i
n
n
c
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m
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a
n
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x
x
p
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G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Other finance income 4.2 4.7
Total finance income 4.2 4.7
Interest expense on bank overdrafts and borrowings (3.1) (3.1)
Interest expense on lease liabilities (2.8) (1.8)
Other finance expenses
(0.4) (0.2)
Finance expense on amounts payable to related party investors in Opal Investments LP
(5.6) (1.0)
Total finance expenses
(11.9) (6.1)
a) Other finance income
The other finance income primarily relates to the unwind of discounting on the deferred proceeds receivable from Dyal Partners IV (C) LP of £2.6m
(2020: £4.4m) and the remeasurement and revaluation of the deferred contingent consideration payable and associated unwind of discount to EQT
AB (see note 18 (b) for further details) of £1.2m (2020: expense £0.2m). Both are considered exceptional income, and accordingly are excluded
from the calculation of underlying profitability measures. Also included is the finance income on sub-leases of £0.4m (2020: £0.2m).
b) Other finance expenses
The other finance expenses includes facility fees which are being amortised over the term of the facility of £0.4m (2020: nil). In the year ended
31 December 2020, finance expenses of £0.2m related to the unwind of discounting of the deferred contingent payable to EQT AB (see note 18 (b)
for further details) and is considered an exceptional expense, and accordingly excluded from the calculation of underlying profitability measures.
c) Finance expense on amounts payable to related party investors in Opal Investments LP
Finance expense on other financial liabilities represent amounts due to related party investors in the Opal Investments LP partnership under the
limited partnership agreement (see note 18 (d) for further detail).
144
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 143
1
1
1
1
T
T
a
a
x
x
e
e
x
x
p
p
e
e
n
n
s
s
e
e
(a) Tax expense
Tax charged in the Income Statement:
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Current taxation
Current tax – current year 2.8 1.9
Current tax – prior year
0.3 –
Total current tax expense
3.1 1.9
Deferred taxation
Deferred tax – current year 2.8 –
Deferred tax – prior year
(1.1) (1.1)
Total deferred taxation
1.7 (1.1)
Tax expense 4.8 0.8
(b) Reconciliation of tax expense
The tax on profit before tax is different to the standard rate of corporation tax in the UK of 19% (2020: 19%) primarily due to timing differences on
taxation of management fee income, losses carried forward, a proportion of which are not recognised, and other timing differences. The 2021 tax
charge also includes the effect on deferred tax liabilities of the corporation tax rate increase from 19% to 25% effective from April 2023 and capital
gains on cancellation of own shares.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Profit before tax 62.6 48.5
Tax on profit before taxation at the standard rate of corporation tax in the UK of 19.0% (2020: 19.0%) 11.9 9.2
Non-taxable and non-deductible items (5.3) (28.7)
Deferred tax adjustments regarding management fee income and investments
(13.9) 4.7
Capital gains transferred
3.1 –
Effect of tax rate changes
5.3 1.2
Effect of foreign tax rates
0.5 1.3
Deferred tax not recognised
4.0 14.2
Prior year adjustment
(0.8) (1.1)
Total tax expense for the year
4.8 0.8
In the Spring Budget 2021, the Government announced that from 1 April 2023 the corporation tax rate will increase to 25%. As the change has been
substantively enacted at the balance sheet date, the deferred tax balances have been revalued during the year ended 31 December 2021.
(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.
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Tax on amounts recognised in other comprehensive income (2.1) 0.9
145
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
144 Bridgepoint 2021 Annual Report & Accounts
(d) Tax losses not recognised
The Group and Company have deferred tax assets of £113.1m (2020: £70.0m) and £1.1m (2020: nil) respectively as at 31 December 2021, relating
to tax losses carried forward that have not been recognised due to the uncertainty of future taxable profits against which the asset can be utilised
in the foreseeable future.
The Group has an asset of £25.0m (2020: £16.1m) and the Company an asset of £1.1m (2020: nil) that have been recognised where there is an
expectation that the tax losses can be utilised against profits. See note 22 for further detail on deferred tax assets recognised.
1
1
2
2
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a
a
r
r
n
n
i
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2
2
0
0
2
2
1
1
2020
Profit attributable to equity holders of the Company (£m) 57.8 36.5
Weighted average number of ordinary shares for purposes of basic and diluted EPS (m) 356.0 3.1
Basic and diluted earnings per share (£)
0.16 11.59
The weighted average number of shares for the year ended 31 December 2021 reflects the number of shares both pre and post simplification of
the share structure and issue of new shares in the IPO. Had the shares in issue at 31 December 2021 been in issue throughout 2021, the weighted
average number of shares would have been 823.3m and the earnings per share would have been £0.07. The 2020 equivalent earnings per share
for the number of shares in issue at 31 December 2021 would have been £0.04.
The adjusted earnings per share on underlying profit after tax of £85.7m based on the number of shares in issue at 31 December 2021 is £0.10
(2020: £0.06 on underlying profit after tax of £51.8m gross of non-controlling interests).
See note 23 for further details on the changes in the number of shares.
The number of ordinary shares included in the calculation of earnings per share excludes own shares held by the Group.
1
1
3
3
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Group
Cost
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£
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p
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r
r
o
o
v
v
e
e
m
m
e
e
n
n
t
t
s
s
£
£
m
m
C
C
o
o
m
m
p
p
u
u
t
t
e
e
r
r
s
s
,
,
f
f
u
u
r
r
n
n
i
i
t
t
u
u
r
r
e
e
a
a
n
n
d
d
o
o
t
t
h
h
e
e
r
r
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Balance at 1 January 2021 50.1 9.9 10.0 70.0
Foreign exchange – (0.2) (0.1) (0.3)
Additions
65.1 5.5 1.0 71.6
Disposals
(37.8) – (0.1) (37.9)
Balance at 31 December 2021
77.4 15.2 10.8 103.4
Accumulated depreciation
Balance at 1 January 2021 (17.5) (4.3) (6.6) (28.4)
Foreign exchange
– 0.1 0.1 0.2
Depreciation
(9.0) (1.4) (1.5) (11.9)
Disposals
12.3 – 0.2 12.5
Balance at 31 December 2021
(14.2) (5.6) (7.8) (27.6)
Carrying value at 31 December 2021 63.2 9.6 3.0 75.8
146
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 145
Group
Cost
Right-of-use
assets
£ m
Leasehold
improvements
£ m
Computers,
furniture and
other
£ m
Total
£ m
Balance at 1 January 2020 50.4 8.7 7.8 66.9
Foreign exchange – 0.1 0.1 0.2
Additions – 1.1 2.1 3.2
Disposals (0.3) – – (0.3)
Balance at 31 December 2020 50.1 9.9 10.0 70.0
Accumulated depreciation
Balance at 1 January 2020 (11.3) (3.4) (5.5) (20.2)
Depreciation (6.2) (0.9) (1.1) (8.2)
Balance at 31 December 2020 (17.5) (4.3) (6.6) (28.4)
Carrying value at 31 December 2020 32.6 5.6 3.4 41.6
The Company has no plant, property or equipment.
1
1
4
4
B
B
u
u
s
s
i
i
n
n
e
e
s
s
s
s
c
c
o
o
m
m
b
b
i
i
n
n
a
a
t
t
i
i
o
o
n
n
s
s
On 23 October 2020, the Group acquired 100% of the equity instruments in entities representing the EQT Credit fund management business and
interests in certain funds and carried interest managed by EQT Credit, for initial cash consideration of £98.9m (including liabilities incurred) and
a deferred element of up to €50.0m (£42.0m), which is payable to EQT AB based on the outcome of fundraising for certain funds. This excludes
consideration paid in relation to the acquisition of the interests in funds and carried interest which has been detailed in note 16 and 17. The
acquisition was undertaken to increase the scale of the Group’s credit offering.
The amount of deferred consideration recorded of £30.3m (2020: £31.6m) is based on management’s expectation of the fundraising at the
acquisition date and adjusted thereafter for any change in expectation and at current exchange rates. The deferred consideration is expected to
be paid in 2023. See note 18 (b) for further detail.
As part of the acquisition of the EQT Credit business, the Group also acquired an interest in CLO notes in CLO 1 and CLO 2 for cash consideration
of £23.6m. On acquisition, as an investor in the subordinated notes, the Group has exposure to variable returns and was considered to have both
power over the investee and the ability to use that power and so was required to consolidate the CLO vehicles. On CLO 2’s formal launch on
28 June 2021, the Group’s exposure to the variable returns was reduced to 5% of all notes, therefore CLO 2 is not consolidated in the financial
statements as at 31 December 2021.
The following table summarises the consideration paid by the Group, the fair value of assets acquired and liabilities assumed at the acquisition date.
This excludes consideration paid in relation to the acquisition of the interests in funds and carried interest.
Group
Fair value of assets acquired
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Intangible assets 21.2
Cash and cash equivalents 18.0
Trade debtors 8.4
Trade creditors (19.1)
Total identifiable EQT Credit net assets acquired 28.5
CLO assets 173.6
CLO cash 1.9
CLO liabilities (151.9)
Total identifiable CLO net assets acquired 23.6
Deferred tax liabilities (4.0)
Goodwill 105.1
Total purchase consideration 153.2
Goodwill arising from the acquisition is attributable to the workforce and track record of the acquired business.
147
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
146 Bridgepoint 2021 Annual Report & Accounts
Adjustments to book values arising on acquisition were principally in relation to the recognition of acquired fund management contracts as
intangible assets and deferred tax liabilities in relation to the amortisation of the intangible assets and goodwill. The useful life of intangible assets
is estimated to be 7 years, which represents the period over which the net present value of cash flows from the acquired investor relationships
reduce to nil.
The acquisition costs of the business combination were £7.4m and were recognised in the Income Statement as an exceptional expense.
1
1
5
5
G
G
o
o
o
o
d
d
w
w
i
i
l
l
l
l
a
a
n
n
d
d
i
i
n
n
t
t
a
a
n
n
g
g
i
i
b
b
l
l
e
e
a
a
s
s
s
s
e
e
t
t
s
s
Group
Cost
G
G
o
o
o
o
d
d
w
w
i
i
l
l
l
l
£
£
m
m
I
I
n
n
t
t
a
a
n
n
g
g
i
i
b
b
l
l
e
e
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Balance at 1 January 2021 105.1 21.2 126.3
Balance at 31 December 2021 105.1 21.2 126.3
Accumulated depreciation and impairment
Balance at 1 January 2021 – (0.6) (0.6)
Amortisation
– (3.1) (3.1)
Balance at 31 December 2021
– (3.7) (3.7)
Carrying value
Balance at 1 January 2021 105.1 20.6 125.7
Balance at 31 December 2021
105.1 17.5 122.6
Group
C
C
o
o
s
s
t
t
Goodwill
£ m
Intangibles
£ m
Total
£ m
Balance at 1 January 2020 – – –
Additions 105.1 21.2 126.3
Balance at 31 December 2020 105.1 21.2 126.3
Accumulated depreciation and impairment
Balance at 1 January 2020 – – –
Amortisation – (0.6) (0.6)
Balance at 31 December 2020 – (0.6) (0.6)
Carrying value
Balance at 1 January 2020 – – –
Balance at 31 December 2020 105.1 20.6 125.7
The goodwill arose following the acquisition of EQT Credit in 2020. All goodwill is attributable to the Credit operating segment.
Goodwill is required to be assessed for impairment annually or more frequently if events or changes in circumstances indicate potential impairment
loss. 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. The value-in-use is determined by discounting the expected future cash flows generated from
the continuing use of the Credit operating segment and is based on the following key assumptions:
The cash flows are projected based on the actual operating results and a five-year estimate (2022-2026). Cash flows for the time thereafter are
taken into account by calculating a terminal value based on the discount factor applied by the Group.
Operating profits are based on Board approved income, future fundraising, deployment of capital and costs of the business, taking into
account growth plans for the Credit business as well as past experience.
A pre-tax discount rate of 10.7%, which is based on the Group’s weighted average cost of capital, is applied in determining the recoverable amount.
A long-term growth rate of 5.0%, which is based on an assessment of the private debt industry rates of growth, and management’s experience,
is applied to the terminal value.
As at 31 December 2021 a significant headroom is noted, and therefore no impairment is identified (2020: nil). The Credit business would need
to fall short of its projected profit margins by over 76.0% over the period 2022 to 2026 for the goodwill to be impaired.
148
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 14
7
The intangible asset represents a customer relationship asset which arose as part of the acquisition of EQT Credit.
The intangible asset was valued based on a number of assumptions. These include profit margins, size of funds, level of reinvestment/attrition
in new funds and the discount rate applied to the projections. The valuation is sensitive to any number of changes to one or a combination of
these assumptions. As an illustration, a +/-20% change to the level of investor reinvestment has a £6m impact on the carrying value of the
intangible assets.
The Company has no goodwill or intangibles.
1
1
6
6
C
C
a
a
r
r
r
r
i
i
e
e
d
d
i
i
n
n
t
t
e
e
r
r
e
e
s
s
t
t
r
r
e
e
c
c
e
e
i
i
v
v
a
a
b
b
l
l
e
e
The carried interest receivable relates to revenue which has been recognised by the Group relating to its share of fund profits through its holdings
in CIPs.
Revenue is only recognised to the extent it is highly probable that the revenue recognised would not result in significant revenue reversal of any
accumulated revenue recognised on the completion of a fund. The reversal risk is mitigated through the application of discounts. If adjustments
to the carried interest receivable recognised in previous periods are required, they are adjusted through revenue.
A sensitivity analysis of the impact of a change in the value of unrealised fund assets is included within note 5.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Opening balance 27.9 13.0
Purchases – 4.1
Income recognised in the year
15.2 12.2
Foreign exchange movements
(1.1) 0.7
Receipts of carried interest
(3.1) (2.1)
Closing balance
38.9 27.9
The Company has no carried interest receivable.
1
1
7
7
F
F
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
a
a
s
s
s
s
e
e
t
t
s
s
(a) Classification of financial assets
The following tables analyse the Group and Company’s assets in accordance with the categories of financial instruments in IFRS 9 “Financial
Instruments”. Assets which are not considered as financial assets, for example prepayments and lease receivables, under IFRS 9 are also shown
in the table in a separate column in order to reconcile to the face of the Statement of Financial Position.
Group
A
A
s
s
a
a
t
t
3
3
1
1
D
D
e
e
c
c
e
e
m
m
b
b
e
e
r
r
2
2
0
0
2
2
1
1
F
F
a
a
i
i
r
r
v
v
a
a
l
l
u
u
e
e
t
t
h
h
r
r
o
o
u
u
g
g
h
h
p
p
r
r
o
o
f
f
i
i
t
t
o
o
r
r
l
l
o
o
s
s
s
s
£
£
m
m
H
H
e
e
d
d
g
g
i
i
n
n
g
g
d
d
e
e
r
r
i
i
v
v
a
a
t
t
i
i
v
v
e
e
s
s
£
£
m
m
F
F
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
a
a
s
s
s
s
e
e
t
t
s
s
a
a
t
t
a
a
m
m
o
o
r
r
t
t
i
i
s
s
e
e
d
d
c
c
o
o
s
s
t
t
£
£
m
m
A
A
s
s
s
s
e
e
t
t
s
s
w
w
h
h
i
i
c
c
h
h
a
a
r
r
e
e
n
n
o
o
t
t
f
f
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
a
a
s
s
s
s
e
e
t
t
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Fair value of fund investments 313.7 – – – 313.7
Fair value of CLO assets 286.8 – – – 286.8
Trade and other receivables
– – 76.4 28.7 105.1
Derivative financial instruments
– 9.9 – – 9.9
Cash and cash equivalents
– – 323.1 – 323.1
CLO cash
– – 4.2 – 4.2
Total
600.5 9.9 403.7 28.7 1,042.8
149
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
148 Bridgepoint 2021 Annual Report & Accounts
Group
As at 31 December 2020
Fair value
through
profit or loss
£ m
Hedging
derivatives
£ m
Financial assets
at amortised
cost
£ m
Assets which are
not financial
assets
£ m
Total
£ m
Fair value of fund investments 235.9 – – – 235.9
Fair value of CLO assets 272.5 – – – 272.5
Trade and other receivables – – 173.0 10.6 183.6
Derivative financial instruments – 0.7 – – 0.7
Cash and cash equivalents – – 42.3 – 42.3
CLO cash – – 114.8 – 114.8
Total 508.4 0.7 330.1 10.6 849.8
Company
A
A
s
s
a
a
t
t
3
3
1
1
D
D
e
e
c
c
e
e
m
m
b
b
e
e
r
r
2
2
0
0
2
2
1
1
F
F
a
a
i
i
r
r
v
v
a
a
l
l
u
u
e
e
t
t
h
h
r
r
o
o
u
u
g
g
h
h
p
p
r
r
o
o
f
f
i
i
t
t
o
o
r
r
l
l
o
o
s
s
s
s
£
£
m
m
H
H
e
e
d
d
g
g
i
i
n
n
g
g
d
d
e
e
r
r
i
i
v
v
a
a
t
t
i
i
v
v
e
e
s
s
£
£
m
m
F
F
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
a
a
s
s
s
s
e
e
t
t
s
s
a
a
t
t
a
a
m
m
o
o
r
r
t
t
i
i
s
s
e
e
d
d
c
c
o
o
s
s
t
t
£
£
m
m
A
A
s
s
s
s
e
e
t
t
s
s
w
w
h
h
i
i
c
c
h
h
a
a
r
r
e
e
n
n
o
o
t
t
f
f
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
a
a
s
s
s
s
e
e
t
t
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Trade and other receivables – – 106.5 – 106.5
Cash and cash equivalents – – 159.0 – 159.0
Total
– – 265.5 – 265.5
Company
As at 31 December 2020
Fair value
through
profit or loss
£ m
Hedging
derivatives
£ m
Financial assets
at amortised
cost
£ m
Assets which are
not financial
assets
£ m
Total
£ m
Trade and other receivables – – – – –
Cash and cash equivalents – – 9.4 – 9.4
Total – – 9.4 – 9.4
(b) Fair value of fund investments
Investments representing the Group’s interests in private equity and credit funds are initially recognised at fair value and subsequently measured
at fair value through the Income Statement within operating income.
The investments primarily consist of loans or commitments made in relation to the Bridgepoint VI, V and III private equity funds, the Bridgepoint
Credit I, II, Direct Lending I, II and Credit Opportunities III funds.
The fund investments are measured at fair value through profit or loss as the business model of each vehicle is to manage the assets and to
evaluate their performance on a fair value basis.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Opening balance 235.9 206.1
Additions 92.7 49.6
Change in fair value
65.7 20.1
Foreign exchange movements
(14.7) 11.3
Receipts
(65.9) (51.2)
Closing balance
313.7 235.9
The Company has no investment in funds at 31 December 2021 (2020: nil).
150
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 149
(c) Fair value of CLO assets
The balance shown includes the gross value of the assets held by CLO 1 (2020: CLO 1 and CLO 2), which is consolidated by the Group, but of which
the Group only holds the right and liabilities in relation to a small portion. The CLO assets are measured at fair value through profit or loss as the
business model of each vehicle is to manage the assets and to evaluate their performance on a fair value basis.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Fair value of CLO assets consolidated by the Group 286.8 272.5
Fair value of CLO assets attributable to third party investors (274.5) (253.0)
Group’s exposure to consolidated CLO assets
12.3 19.5
The Company has no investments in CLO assets at 31 December 2021 (2020: nil).
(d) Derivative financial assets
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Derivative financial assets:
Forward contracts 9.9 0.7
The derivative financial assets relate to forward contracts that are used to hedge foreign exchange risk. Further detail on the hedging programme is
set out in note 20 (b).
The Company has no derivative financial assets at 31 December 2021 (2020: nil).
(e) Trade and other receivables
G
G
r
r
o
o
u
u
p
p
C
C
o
o
m
m
p
p
a
a
n
n
y
y
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Non-current:
Trade receivables 16.9 6.9 – –
16.9 6.9 – –
Current:
Trade receivables 16.0 13.1 – –
Accrued income
2.8 1.0 – –
Prepayments
11.4 3.5 – –
Other receivables
58.0 47.4 106.5 –
Deferred proceeds receivable
– 111.7 – –
88.2 176.7 106.5 –
Total trade and other receivables 105.1 183.6 106.5 –
There are no material differences between the above amounts for trade and other receivables and their fair value.
i) Other receivables
Other receivables primarily relate to amounts to be invoiced to funds managed by the Group in relation to costs incurred on their behalf. Such
costs include deal and fundraising expenditure. Amounts receivable from the funds at year end were £37.6m (2020: £27.7m). Amounts receivable
from portfolio companies of the funds at the end of the year were £2.1m (2020: £1.6m).
ii) Deferred proceeds receivable
Deferred proceeds receivable relate to additional consideration payable under an Investment Agreement with a shareholder of the Group,
Dyal Capital Partners IV (C) LP. The outstanding amount at 31 December 2020 was paid during 2021.
151
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
150 Bridgepoint 2021 Annual Report & Accounts
iii) Cost of acquisition
Current and non-current trade and other receivables also include the deferred cost of acquisition and consist of expenditure in excess of the cap
within the LPA and fees paid to placement agents. Such costs are capitalised as a non-current asset and amortised between three and five years.
The movement in the capitalised costs of acquisition is set out in the following table.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Opening balance 1.1 2.0
Additions – 0.6
Amortisation
(1.0) (1.5)
Closing balance
0.1 1.1
iv) Lease receivables
Non-current and current trade and other receivables include lease receivables on sub-let office premises. Two of the sub-leases run until the end
of the related head lease and expire on 31 December 2027. The third sub-lease runs for 10 years and expires on 16 August 2031. The undiscounted
cashflows for these lease receivables during the year ended 31 December 2021 were £1.0m (2020: £1.0m). The finance income earned on the
subleases during the year ended 31 December 2021 were £0.4m (2020: £0.2m).
The following table sets out the maturity analysis of lease receivables, showing undiscounted lease payments to be received after the reporting date.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Due within 1 year 1.4 1.0
Due between 1-2 years 2.5 1.0
Due between 2-3 years
2.5 1.0
Due between 3-4 years
2.5 1.0
Due between 4-5 years
2.5 1.0
Due more than 5 years
7.9 2.1
Total undiscounted lease payments receivable
19.3 7.1
Unearned finance income (3.1) (0.9)
Net investment in leases
16.2 6.2
Current 0.8 0.8
Non-current 15.4 5.4
16.2 6.2
The Company does not have any lease receivables.
(f) Cash and cash equivalents
G
G
r
r
o
o
u
u
p
p
C
C
o
o
m
m
p
p
a
a
n
n
y
y
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Cash and cash equivalents 323.1 42.3 159.0 9.4
CLO cash 4.2 114.8 – –
327.3 157.1 159.0 9.4
CLO cash is cash held by CLO vehicles consolidated by the Group and is not available for the Group’s other operating activities.
There are no material differences between cash and cash equivalents and CLO cash and their fair value.
152
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 151
1
1
8
8
F
F
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
l
l
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
(a) Classification of financial liabilities
The following tables analyse the Group and Company’s financial liabilities in accordance with the categories of financial instruments in IFRS 9
“Financial Instruments”. Liabilities such as deferred income, long-term employee benefits, social security and other taxes are excluded as they do
not constitute a financial liability under IFRS 9 are shown in the table in a separate column in order to reconcile to the face of the Statement of
Financial Position.
Group
A
A
s
s
a
a
t
t
3
3
1
1
D
D
e
e
c
c
e
e
m
m
b
b
e
e
r
r
2
2
0
0
2
2
1
1
F
F
a
a
i
i
r
r
v
v
a
a
l
l
u
u
e
e
t
t
h
h
r
r
o
o
u
u
g
g
h
h
p
p
r
r
o
o
f
f
i
i
t
t
o
o
r
r
l
l
o
o
s
s
s
s
£
£
m
m
H
H
e
e
d
d
g
g
i
i
n
n
g
g
d
d
e
e
r
r
i
i
v
v
a
a
t
t
i
i
v
v
e
e
s
s
£
£
m
m
F
F
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
l
l
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
a
a
t
t
a
a
m
m
o
o
r
r
t
t
i
i
s
s
e
e
d
d
c
c
o
o
s
s
t
t
£
£
m
m
L
L
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
w
w
h
h
i
i
c
c
h
h
a
a
r
r
e
e
n
n
o
o
t
t
f
f
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
l
l
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Trade and other payables 30.3 – 39.0 64.4 133.7
Other financial liabilities 18.8 – 28.1 – 46.9
Lease liabilities
– – 84.8 – 84.8
Fair value of CLO liabilities
242.9 – – – 242.9
CLO purchases awaiting settlement
– – 35.8 – 35.8
Total
292.0 – 187.7 64.4 544.1
Group
As at 31 December 2020
Fair value
through
profit or loss
£ m
Hedging
derivatives
£ m
Financial
liabilities at
amortised
cost
£ m
Liabilities which
are not financial
liabilities
£ m
Total
£ m
Trade and other payables 31.6 – 35.6 50.9 118.1
Borrowings – – 99.7 – 99.7
Other financial liabilities 6.2 – – – 6.2
Lease liabilities – – 42.0 – 42.0
Derivative financial instruments – 4.9 – – 4.9
Fair value of CLO liabilities 274.5 – – – 274.5
CLO purchases awaiting settlement – – 93.2 – 93.2
Total 312.3 4.9 270.5 50.9 638.6
Company
A
A
s
s
a
a
t
t
3
3
1
1
D
D
e
e
c
c
e
e
m
m
b
b
e
e
r
r
2
2
0
0
2
2
1
1
F
F
a
a
i
i
r
r
v
v
a
a
l
l
u
u
e
e
t
t
h
h
r
r
o
o
u
u
g
g
h
h
p
p
r
r
o
o
f
f
i
i
t
t
o
o
r
r
l
l
o
o
s
s
s
s
£
£
m
m
H
H
e
e
d
d
g
g
i
i
n
n
g
g
d
d
e
e
r
r
i
i
v
v
a
a
t
t
i
i
v
v
e
e
s
s
£
£
m
m
F
F
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
l
l
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
a
a
t
t
a
a
m
m
o
o
r
r
t
t
i
i
s
s
e
e
d
d
c
c
o
o
s
s
t
t
£
£
m
m
L
L
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
w
w
h
h
i
i
c
c
h
h
a
a
r
r
e
e
n
n
o
o
t
t
f
f
i
i
n
n
a
a
n
n
c
c
i
i
a
a
l
l
l
l
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Trade and other payables – – 23.1 – 23.1
Total – – 23.1 – 23.1
Company
As at 31 December 2020
Fair value
through
profit or loss
£ m
Hedging
derivatives
£ m
Financial
liabilities at
amortised
cost
£ m
Liabilities which
are not financial
liabilities
£ m
Total
£ m
Trade and other payables – – 0.9 – 0.9
Total – – 0.9 – 0.9
153
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
152 Bridgepoint 2021 Annual Report & Accounts
(b) Trade and other payables
G
G
r
r
o
o
u
u
p
p
C
C
o
o
m
m
p
p
a
a
n
n
y
y
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Amounts due in more than one year:
Deferred contingent consideration payable 30.3 31.6 – –
Management incentive scheme
12.6 – – –
Accrued expenses
0.6 0.6 – –
43.5 32.2
– –
Amounts due within one year:
Trade payables 8.0 5.1
– –
Accrued expenses
70.2 78.2
2.9 –
Amounts due to related parties
0.7 –
20.2 0.9
Social security and other taxes
2.7 2.4
– –
Other payables
8.6 0.2
– –
90.2 85.9
23.1 0.9
Total trade and other payables 133.7 118.1
23.1 0.9
i) Deferred contingent consideration
The deferred contingent consideration is payable to EQT AB and relates to the outcome of fundraising for the Bridgepoint Direct Lending III and
Bridgepoint Credit Opportunities IV funds. The maximum amount payable is €50.0m (£42.0m). Both funds completed a number of rounds of
fundraising during 2021 and fundraising will continue during 2022 and is expected to complete in 2023. The amount payable has been based upon
management’s current best estimate of each fundraising. Were the eventual fund sizes over 40% lower than the estimate used within the financial
statements, no deferred contingent consideration would be payable. The fund sizes would need to be 15% higher than the estimate for the
maximum deferred contingent consideration to be payable.
ii) Management incentive scheme
In April 2021, a subsidiary company, Bridgepoint Credit Holdings Limited, issued shares to certain employees of the Group as part of a management
incentive scheme. The shares are subject to a put and call option, whereby the participating employees have the option to sell and the Group has
the option to buy back the shares in the future based upon a pre-determined formula which considers the amount of funds raised and the
resulting management fees over a five year-period. The scheme has been accounted for as a other long-term employment benefit under IAS 19
“Employment Benefits”. As at 31 December 2021, the expense and corresponding liability has been based upon funds raised and expected
management fees which exceed the targets at that date.
iii) Accruals and deferred income
Accruals and deferred income include amounts that have been incurred, but not yet invoiced, employee bonuses and amounts that have been
received in relation to fund management activity for services that have not been provided, but are owed to the Bridgepoint funds
iv) Other payables
Other payables include costs due to be incurred on the assignment of a lease.
There are no material differences between the above amounts for trade and other payables and their fair value.
(c) Borrowings
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Liabilities held at amortised cost:
Bank loans due in less than one year – 99.7
On 19 October 2020, Bridgepoint Advisers Holdings, entered into a Revolving Facility Agreement for £125m for a period of three years. At 31
December 2021 there were no drawn amounts on the facility (2020: £90.7m drawn). Loan arrangement fees of £1.25m have been capitalised and
are being amortised over the life of the facility. At 31 December 2021 the unamortised fees are £0.7m (2020: £1.2m).
154
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 153
On 17 October 2017, Opal Investments LP, a subsidiary, entered into a Revolving Credit Agreement for €40.0m for a period of 50 months.
On 31 January 2020 the size of the facility was reduced to €25.0m and on 9 October 2020 was reduced to €15.0m. The facility was cancelled
in October 2021 having been fully repaid in July 2021. At 31 December 2020, £10.1m had been drawn on the facility.
There are no material differences between the above amounts for borrowings held at amortised cost and their fair value.
The Company has no borrowings at 31 December 2021 (2020: nil).
(d) Other financial liabilities
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Liabilities held at amortised cost:
CLO repurchase agreement 28.1 –
28.1 –
The Group has entered into an arrangement to sell and repurchase an interest in CLO 2 and 3. For CLO 2, the repurchase liability is €14.9m (£12.5m)
and will be repaid at face value as at the scheduled repurchase date of 15 April 2035, unless an earlier date is agreed as per the agreement. For CLO
3, the repurchase liability is €18.6m (£15.6m) and will be repaid at face value as at the scheduled repurchase date of 15 January 2036, unless an
earlier date is agreed as per the agreement.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Liabilities held at fair value through profit and loss:
Amounts payable to related party investors in Opal Investments LP 9.5 3.8
Amounts payable to related party investors in intermediate fund holding entities
9.3 2.4
18.8 6.2
(i) Amounts payable to related party investors in Opal Investment LP
The Group has an investment in Opal Investments LP, which is an investor in the Bridgepoint Europe V Fund partnerships. Under the limited
partnership agreement, related party investors had the right to receive up to 100% of the profits from the partnership unless the Group exercised
an option to trigger up to 85% of the profits of the partnership from the date of the exercise of the option. Effective 31 December 2020, the option
was exercised therefore 85% of the accumulated profits from the partnership were allocated to the equity shareholders of the Company from non-
controlling interests. 15% of the residual profits are classified as a financial liability payable to related party investors.
(ii) Amounts payable to related party investors in intermediate fund holding entities
The Group consolidates a number of limited partnerships through which some of the Group’s investment in funds is held. The Group’s interest only
constitutes a portion of the total and therefore other financial liabilities include the fair value of the amounts due to external parties, who are related
party investors, under the limited partnership agreement.
The Company has no other financial liabilities at 31 December 2021 (2020: nil).
(e) CLO liabilities
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Liabilities held at fair value through profit and loss:
Liabilities of CLOs consolidated by the Group (non-current) 241.4 256.6
Liabilities of CLOs consolidated by the Group (current)
1.5 17.9
242.9 274.5
CLO liabilities are designated as financial liabilities at fair value through profit and loss.
Financial liabilities held at fair value through profit or loss represent notes and loans issued by CLOs which are consolidated by and have been
originated by the Group. They are initially recognised and subsequently measured at fair value with gains or losses arising from changes in fair
value and interest paid on financial instruments recognised through investment income in the Income Statement.
The notes and loans issued by CLOs have rights to the assets of the respective CLO and there is no recourse to the Group.
155
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
154 Bridgepoint 2021 Annual Report & Accounts
(f) CLO purchases awaiting settlement
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
CLO purchases awaiting settlement 35.8 93.2
35.8 93.2
(g) Derivative financial liabilities
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Derivative financial liabilities:
Forward contracts – 4.9
The derivative financial liabilities relate to forward contracts that are used to hedge foreign exchange risk. Further detail on the hedging programme
is set out in note 20 (b).
The Company has no derivative financial liabilities (2020: nil).
(h) Commitments
The Group’s undrawn capital commitments to the Bridgepoint funds at each year end is shown in the table below. Capital commitments are
called over time, typically between one to five years following the subscription of the commitment. Capital commitments are a financial liability,
but the Group does not have an obligation to pay cash until the capital is called. Commitments may increase where distributions made by the
fund are recallable.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Private equity funds 113.7 135.3
Credit funds 28.5 27.6
142.2 162.9
1
1
9
9
L
L
e
e
a
a
s
s
e
e
l
l
i
i
a
a
b
b
i
i
l
l
i
i
t
t
i
i
e
e
s
s
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Lease liabilities
Current 4.0 6.1
Non-current
80.8 35.9
84.8 42.0
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 liability is initially measured at the net present value of future lease payments that are not paid at the commencement date discounted
using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s IBR. Generally, the Group uses its IBR as the
discount rate as the implicit rate is not readily determinable for the rented office premises.
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/early exit.
A number of leases have extension options which have not been incorporated into the lease liability on the basis that the Group does not currently
expect to take them.
The lease liability is therefore sensitive to assumptions relating to the selection and application of the IBR and those relating to the exercise/non-
exercise of lease break 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.
156
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 155
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 found to be comparable. If the IBR had been 1% higher/lower, the
impact on the lease liability would be:
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Increase of 1% (3.5) (1.3)
Decrease of 1% 3.8 1.3
All lease liabilities have been modelled to the end of their non-cancellable lease term, or where expected to be exercised to the break date.
Therefore, the lease exposure stated is the maximum exposure, ignoring any extension options.
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 Income Statement includes the following amounts relating to the lease liabilities:
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Interest on lease liability 2.8 1.8
The lease liability excludes those leases which have not yet commenced, but to which the Group is committed.
Details of leases that the Group is committed to but have not yet commenced are:
L
L
e
e
a
a
s
s
e
e
s
s
t
t
a
a
r
r
t
t
d
d
a
a
t
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e
e
I
I
n
n
d
d
i
i
c
c
a
a
t
t
i
i
v
v
e
e
I
I
B
B
R
R
%
%
R
R
i
i
g
g
h
h
t
t
-
-
o
o
f
f
-
-
u
u
s
s
e
e
a
a
s
s
s
s
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e
t
t
£
£
m
m
L
L
e
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a
a
s
s
e
e
l
l
i
i
a
a
b
b
i
i
l
l
i
i
t
t
y
y
£
£
m
m
1 April 2022 3.8 1.4 (1.4)
1 May 2022 3.3 0.9 (0.9)
The Company has no lease liabilities (2020: nil).
2
2
0
0
F
F
i
i
n
n
a
a
n
n
c
c
i
i
a
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k
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t
t
In its activities, the Group is exposed to various financial risks: price/valuation risk, market risk (including exposure to interest rates and foreign
currencies), liquidity risk and credit risk arising from financial instruments. The Group’s senior management is responsible for the creation and
control of an overall risk management policy in the Group.
The Group’s balance sheet is made up predominately of investments into private equity and credit funds, consolidated CLO assets and cash and
cash equivalents. The assets of a private equity fund are controlling or minority stakes, typically in private companies, and their debt. The assets
of credit funds and the consolidated CLO vehicles are loans to private companies. The financial risks relating to such investment are inherently
different, due to the nature of the investment as equity or debt and recovery and returns from capital invested will depend upon the financial
health and prospects of each underlying investee entity. As part of their construction, each fund is constructed as a diversified portfolio of
assets, diversified by the number of assets, their industry and geography.
Risk management policies are established to identify and analyse the risks faced by the Group and to set appropriate risk limits and controls.
Policies are reviewed on a regular basis to reflect changes in the market conditions and the Group’s activities. The Group, through its training and
management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand
their roles and obligations.
The Company’s balance sheet is made up predominantly of an investment in subsidiary and cash and cash equivalents.
157
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
156 Bridgepoint 2021 Annual Report & Accounts
(a) Price/valuation risk
Price/valuation risk is the uncertainty about the difference between the reported value and the price that could be obtained on exit or maturity.
This relates to investments in funds, which hold portfolios of private equity and debt investments, and the investments held by consolidated CLOs.
This uncertainty arises due to the use of unobservable inputs, such as EBITDA, in the calculation of fair value, the performance and financial health
of portfolio companies, and ultimately – as it relates to investments in private equity – what a third party may be willing to pay for the business.
There is less uncertainty for investments in debt as the upside is capped to the maximum of the principal and interest receipts, whereas private
equity investments have greater potential for larger changes in their valuation as the upside is not capped.
The Group monitors the performance of each investment closely. Portfolio monitoring is embedded and maintains focus throughout the
investment life of each company. All investments are formally reviewed through dedicated Portfolio Monitoring Committees. The review process
involves a rigorous assessment of the company financial performance, financial health (including covenant coverage) and exit prospects.
The Group values all investments in line with the IPEV Guidelines at least twice a year, and in most cases quarterly. Each investment undergoes
the same detailed valuation process, in accordance with the Group’s valuation policies. Completed valuations are presented and discussed at the
relevant Bridgepoint valuation committee for approval.
The number of unique investments that the Group indirectly invests into through its investments in private equity and credit funds is numerous, it
is not practical to provide a summary of the principal inputs into each investment. The table below summarises the valuation methodologies used
to fair value investments in private equity and credit funds which are classified as level 3 financial assets. 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. Whilst some assets held by the funds may be classified as level 2 instruments, the Group
does not consolidate the funds and treats the unit of account as the fund rather than the individual asset.
N
N
a
a
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a
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a
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3
1
1
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D
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m
m
b
b
e
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r
r
2
2
0
0
2
2
1
1
(
(
£
£
m
m
)
)
N
N
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m
b
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f
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V
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Private
equity funds
217.9 69 Earnings Where a portfolio company
is profitable and for which a
set of listed companies and
precedent transactions are
available. This is the most
commonly used private equity
valuation methodology.
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 funds share
of the value is calculated by calculating its holding.
At 31 December 2021, 97% of private equity fund
investments were valued using the earnings
multiples approach.
Listed price Where a portfolio company
has instruments traded on a
recognised exchange the
traded price is used to value
the investment.
The traded price is applied to the number of shares
held by the fund in the portfolio company. The value
is then adjusted to take into account any assets or
liabilities in holding entities outside of the listed
company. As at 31 December 2021, there were two
listed portfolio companies (3%) which were priced
using the prevailing share price.
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2021 Annual Report & Accounts Bridgepoint 15
7
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Credit funds 382.6 194 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 how active the
market is, depends upon 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 identify anomalies or other inaccuracies in
market pricing or whether there are other factors that
should be considered, for example, recent
transactions.
As at 31 December 2021, 8% of the Credit fund assets
(excluding CLOs) were priced using market prices.
99% of the CLO fund assets were priced using
market prices.
Amortising to
par method
Where a performing loan that
has been originated is valued
based upon its amortised cost.
Provided that there are no circumstances which
indicate a 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).
As at 31 December 2021, 82% of the Credit fund assets
were priced using the amortising to par method.
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.
As at 31 December 2021, 4% of the Credit fund assets
were priced using earnings basis.
Other Other valuation techniques
may be utilised where the
above methodologies are
not deemed appropriate.
Considering the broad array of debt instruments
that may be held by the funds, it may be deemed
appropriate for other valuation techniques to be
utilised in certain cases.
As at 31 December 2021, 6% of the Credit fund assets
were priced using other valuation techniques.
A reasonably possible change in the values of investments at fair value through profit or loss is shown in the table below. This is modelled as 10%
of private equity fund investments and 1% of credit fund investments. As above, investments in private equity inherently have greater potential for
larger changes in their valuation as the upside is not capped. The downside is limited to the amount invested in the funds. For credit investments,
the upside is capped to the maximum of the principal and interest receipts, the downside is limited to the amount invested in the funds, but due
to the investment strategy of the fund, losses are expected to be very small.
The sensitivity analysis considers only the net impact on the Group from changes in the consolidated CLO portfolio, as the Group’s exposure to
price risk is limited to only its interest within the CLO and not the gross assets and liabilities.
159
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2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
158 Bridgepoint 2021 Annual Report & Accounts
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
(
(
+
+
/
/
-
-
)
)
2020
£ m
(+/-)
Fair value sensitivity:
10% private equity fund investments 21.8 19.1
1% credit fund investments
1.1 0.6
The Company has no significant exposure to price/valuation risk.
(b) Foreign currency risk
Foreign currency (‘FX’) risk is the risk of losses or other adverse effects resulting from a change in a foreign exchange rate, or from other
unfavourable changes in relation to a foreign currency. The Group is primarily exposed to two types of FX risk:
Transaction risk: The adverse effect that foreign exchange rate fluctuations can have on a completed transaction prior to settlement. It is the
exchange rate, or currency risk associated specifically with the time delay between entering into a trade or contract and then settling it. As the
majority of the Group’s income is denominated in euro, this means that its income when recognised in sterling is subject to exposure to FX rate
movements over time.
Translation risk: Is the risk that changes in the rates at which assets, liabilities, income or costs in foreign currencies are translated into
the reporting currency. The Group holds assets denominated in currencies other than sterling, the measurement currency of the Group.
Consequently, the Group is exposed to currency risk since the value of investments denominated in other currencies will fluctuate due to
change in exchange rate.
Hedging of EUR management fees
In order to hedge EUR denominated management fee income, the Group has entered into a series of forward trades and swap agreements to sell
EUR and buy GBP at various dates in the future to reduce the currency exposure of EUR denominated income to future spot rate volatility. The level
of hedging is determined with reference to the amount of sterling denominated costs and dividends. The level of hedging provides for almost full
coverage in 2022, and reducing in 2023 and 2024, which will be increased and extended as part of the ongoing hedging strategy over time.
The nominal value of open trades at the year end date to match certain expected future cash flows is shown in the table below, along with the
aggregate mark-to market of the year end date.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Nominal value of forward trades in GBP 266.4 197.4
Market-to-market value at year-end 6.8 (4.2)
These hedges are in place to match known future cash flows, and the Group has decided to use cash flow hedge accounting as allowed and
determined under IFRS 9 “Financial instruments”. The effective portion of the gain or loss on these hedging instruments are recognised in the other
comprehensive income in cash flow hedge reserves while any ineffective portion is recognised immediately in the Income Statement as gain or
loss on cash flow hedges within operating expenses. When the hedge is settled all gains or losses relating to the hedge are transferred to the
Income Statement.
The change in value that has been recognised as ineffective in the Income Statement, the amount of the effective portion recognised within
the cash flow hedge reserve and amounts released to the Income Statement during the year is shown in the table below. There was no
hedge ineffectiveness.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Ineffective portion recognised in the Income Statement – –
Effective portion recognised in the Other Comprehensive Income 12.8 (4.8)
Released to the Income Statement on settlement of hedges
(1.6) (1.4)
Hedge ineffectiveness could occur if the amount of hedging is more than the amount of the EUR denominated income and timing differences
between receipt of the income and settlement of the hedge.
160
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2021 Annual Report & Accounts Bridgepoint 159
Hedging of investments in EUR
The Group’s primary exposure to assets and liabilities in foreign currencies is to investments in funds and carried interest receivable, which are
predominately held in EUR. In order to remove the risk of volatility in the Group’s earnings on the translation of assets at each year end, the Group
has entered into a series of forward trades and swap agreements to sell EUR and buy GBP at various dates in the future that match the expected
date of receipts from the underlying funds.
The Group’s exposure to EUR investments and borrowings at each year end is summarised below, along with a sensitivity of the impact of a 5%
change in the FX rate. This analysis excludes the CLO assets, which are attributable to third party investors.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
m
m
2020
m
EUR denominated investments (EUR) 347.7 307.4
Borrowings (EUR) – (100.2)
Investment hedges (EUR)
(180.0) –
EUR denominated investments, net (EUR)
167.7 207.2
+/- 5% sensitivity (GBP) impact on P&L and net assets 7.0 8.8
The nominal value of open trades at the year end date is shown in the table below, along with the aggregate mark-to-market.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Nominal value of forward trades in GBP 159.7 –
Mark-to-market value at year-end 3.1 –
The profit or loss on the revaluation of the hedging instrument is recognised together with the investment returns in the Income Statement.
A change to FX rates will impact the fair value of derivative contracts, however an opposing movement will be seen in the hedged item.
The Company has no significant exposure to foreign currency risk.
(c) Interest rate risk
The Group’s income and operating cash flows are substantially independent of changes in market interest rates. The amounts drawn under the
Group’s Revolving Credit Agreements, however, bear interest at a floating rate that could rise and increase the Group’s interest cost and debt,
although at 31 December 2021 the Group had no outstanding borrowings.
If interest rates were to change by 1%, the Group’s finance expense applied on the borrowings at year-end would have increased/(decreased) by
the amounts set out in the table below.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Increase or decrease of 1% – 0.5
(d) Credit risk
Credit risk is the risk that a counterparty is be unable to meet their contractual obligations in full, when due. Potential areas of credit risk consist
of cash and cash equivalents, including deposits with banks and financial institutions, short-term receivables and derivative financial instruments.
The Company and the Group have not experienced any significant defaults in prior periods.
Group exposure
The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty. Expected credit losses are calculated
on all of the Group’s financial assets that are measured at amortised cost. Factors considered in determining whether a default has taken place
include how many days past the due date a payment is, deterioration in the credit quality of a counterparty, and knowledge of specific events that
could influence a counterparty’s ability to pay.
161
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2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
160 Bridgepoint 2021 Annual Report & Accounts
IFRS 9 “Financial instruments” requires a three-stage model to be used to calculate expected credit losses, which requires financial assets to be
assessed as:
Performing (stage 1) – Financial assets where there has been no significant increase in credit risk since original recognition
Under-performing (stage 2) – Financial assets where there has been a significant increase in credit risk since initial recognition, but no default
Non-performing (stage 3) – Financial assets that are in default
The maximum exposure to credit risk at the reporting date of these financial assets is their carrying amount.
Expected credit losses are not expected to be material and there are no financial assets that are impaired.
Cash and cash equivalents
The Group limits its exposure in relation to cash balances and derivative financial instruments by only dealing with well-established financial
institutions of high-quality credit standing. At each period end, the Group’s cash was held with banks that were investment grade credit quality
(BBB or higher).
Investments in CLOs
At 31 December 2021 the Group fully consolidated CLO 1, which was launched in November 2020. The Group’s interest in CLO 1 comprises an
interest in subordinated notes which incur the first loss if there is any default within the portfolio of assets by an individual borrower. Whilst the
Group has entered into a sale and repurchase agreement for CLO 2 and 3, it remains contractually exposed to the performance of CLOs, however
as the interest is held vertically across all notes of the CLO the holdings are more diversified than the Group’s interest in CLO 1. Under the sale and
repurchase agreement, the Group is subject to credit risk with the counterparty to £28.5m, however is holding cash collateral of £28.4m, reducing
the risk.
The Group is required to hold a 5% interest in such vehicles after they are launched under risk retention rules. Each CLO portfolio typically invests
in 70-100 individual loans issued by private equity borrowers. The portfolios are highly diversified by geography, industry and sponsor. The Group's
maximum exposure to credit risk is the carrying amount of the consolidated assets. However, the Group's net exposure to loss associated with its
interest in the CLOs is limited to the carrying amounts of the notes held by the Group, which at 31 December 2021 was £50.3m (2020: £19.5m).
Investments in private equity and credit funds
The Group’s investments in private equity and credit funds indirectly expose it to credit risk via loans to investee entities. The maximum exposure
to loss associated to funds is limited to the carrying value at 31 December 2021 which was £266.4m (2020: £233.5m).
The Group applies the simplified approach to calculate expected credit losses for trade and other receivables. Under this approach, instruments are
not categorised into three stages and expected credit losses are calculated based on the life of the instrument.
Trade and other receivables
Trade and other receivables are primarily amounts due from funds or amounts due from portfolio companies, which are collected by the Group, for
the benefit of the fund. The funds are managed by the Group on behalf of investors, who have made commitments to the funds. Therefore, trade
and other receivables with the funds are collateralised against unfunded investor commitments. These commitments can be drawn at any time.
The Group therefore considers the probability of default to be remote.
As a lessor the Group has exposure to payments by lessees. The Group considers there to be a low risk of default due to the quality of
the counterparty.
Carried interest receivable
The Group’s carried interest receivable represents income expected from CIPs. The Group considers there to be no risk of default on these
receivables on the basis that these amounts are due from the funds for reasons set out above (e.g. investor commitments).
Company exposure
Potential areas of credit risk for the Company consist of cash and cash equivalents, including deposits with banks and financial institutions and
short-term receivables. The maximum exposure to credit risk the year end of these financial assets is their carrying value. The company limits its
exposure to cash balances by only dealing with well established financial institutions of high quality credit standing.
(e) Liquidity risk
Liquidity risk is the risk that the Group or Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are
settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always
have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
Liquidity outlook is monitored at least monthly by management and regularly reviewed by the board of directors.
162
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2021 Annual Report & Accounts Bridgepoint 161
The timing of the Group’s management fee receipts and operating expenditure are predictable. The timing, amount and profits from the Group’s
investments into and divestments from the Funds are inherently less predictable, however a reasonable period of notice is given to all investors,
including the Group, ahead of drawing of funds.
The Group’s policy is to maintain sufficient amounts of cash and cash equivalents to meet its commitments at a given date. The Group has the use
of a Revolving Credit Facility to assist in managing liquidity. Due to the long-term nature of the Group’s assets, the Group seeks to ensure that the
maturity of its debt instruments is matched to fee cash generated from the business.
The Company has sufficient cash reserves to assist in managing liquidity. The risk is not considered to be material as the majority of the balances
are held with the Group companies.
The tables below summarise the Group and Company’s financial liabilities by the time frame they are contractually due to be settled, undiscounted
and including interest payable. This also excludes liabilities which are not financial liabilities (for example, deferred income).
Group
A
A
s
s
a
a
t
t
3
3
1
1
D
D
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c
c
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m
b
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2
0
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2
1
1
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£
£
m
m
D
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1
1
a
a
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d
d
2
2
y
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a
a
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s
s
£
£
m
m
D
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e
w
w
i
i
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t
h
h
i
i
n
n
2
2
a
a
n
n
d
d
5
5
y
y
e
e
a
a
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s
s
£
£
m
m
D
D
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e
m
m
o
o
r
r
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e
t
t
h
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a
a
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n
5
5
y
y
e
e
a
a
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r
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Borrowings – – – – –
Other financial liabilities 18.8 – - 28.1 46.9
Derivative financial instruments
– – – – –
Trade and other payables
39.0 – – – 39.0
Deferred contingent consideration
– 33.2 – – 33.2
Lease liabilities
7.2 8.9 38.8 47.1 102.0
CLO liabilities
1.5 – – 241.4 242.9
CLO purchases awaiting settlement
35.8 – – – 35.8
102.3 42.1 38.8 316.6 499.8
Group
As at 31 December 2020
Due within
1 year
£ m
Due between
1 and 2 years
£ m
Due within
2 and 5 years
£ m
Due more than
5 years
£ m
Total
£ m
Borrowings 99.7 – – – 99.7
Other financial liabilities 6.2 – – – 6.2
Derivative financial instruments
1.8 1.6 1.5 – 4.9
Trade and other payables
35.6 – – – 35.6
Deferred contingent consideration
– 33.2 – – 33.2
Lease liabilities
7.7 7.4 20.0 13.1 48.2
CLO liabilities
17.9 – – 256.6 274.5
CLO purchases awaiting settlement
93.2 – – – 93.2
262.1 42.2 21.5 269.7 595.5
Company
A
A
s
s
a
a
t
t
3
3
1
1
D
D
e
e
c
c
e
e
m
m
b
b
e
e
r
r
2
2
0
0
2
2
1
1
D
D
u
u
e
e
w
w
i
i
t
t
h
h
i
i
n
n
1
1
y
y
e
e
a
a
r
r
£
£
m
m
D
D
u
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e
b
b
e
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t
t
w
w
e
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e
n
n
1
1
a
a
n
n
d
d
2
2
y
y
e
e
a
a
r
r
s
s
£
£
m
m
D
D
u
u
e
e
w
w
i
i
t
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h
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i
i
n
n
2
2
a
a
n
n
d
d
5
5
y
y
e
e
a
a
r
r
s
s
£
£
m
m
D
D
u
u
e
e
m
m
o
o
r
r
e
e
t
t
h
h
a
a
n
n
5
5
y
y
e
e
a
a
r
r
s
s
£
£
m
m
T
T
o
o
t
t
a
a
l
l
£
£
m
m
Trade and other payables 23.1 – – – 23.1
23.1 – – – 23.1
163
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2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
162 Bridgepoint 2021 Annual Report & Accounts
Company
As at 31 December 2020
Due within
1 year
£ m
Due between
1 and 2 years
£ m
Due within
2 and 5 years
£ m
Due more than
5 years
£ m
Total
£ m
Trade and other payables 0.9 – – – 0.9
0.9 – – – 0.9
(f) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at
the measurement date in the principal, or in its absence, the most advantageous market to which the Group has access to at that date. The fair
value of a liability reflects its non-performance risk.
The Group discloses fair values using the following fair value hierarchy that reflects the significance of the inputs used in making the
measurements:
Quoted prices (unadjusted) in active markets (level 1);
Inputs – other than quoted prices included within level 1 – that are observable for assets or liabilities, either directly (as prices) or indirectly
(derived from prices) (level 2);
Inputs for assets or liabilities that are not based on observable market data (level 3).
Financial assets presented in the statement of financial position as investments in funds through profit or loss use inputs based on unobservable
market data and therefore classified as level 3 in the fair value hierarchy. Further details of the approach to the valuation of investments are set out
within note 3. There have not been any transfers between levels in the fair value hierarchy during the year.
Derivatives used for hedging, which are fair valued, are classified as Level 1 fair values as the inputs are observable.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Financial assets at fair value through profit or loss:
Level 1 – –
Level 2
286.8 272.5
Level 3
313.7 235.9
Total
600.5 508.4
The assets of the CLO vehicles, which are fully consolidated by the Group, are classified as level 2 fair values as they are priced using independent
loan pricing sources. These sources consolidate broker quotes where depth represents the number of quotes supporting the price provided.
A reconciliation of level 3 fair values for financial assets which represent the Group's interest in private equity and credit funds, including the
Group’s investment in CLOs which are not consolidated, is set out in the table below:
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Level 3 financial assets at fair value through profit or loss:
Opening balance 235.9 206.1
Additions
92.7 49.6
Change in fair value
65.7 20.1
Foreign exchange movements
(14.7) 11.3
Receipts
(65.9) (51.2)
Transfers (to)/from Level 1 or 2
– –
Closing balance
313.7 235.9
The underlying assets in each fund consist of portfolios of investments in controlling or minority stakes, typically in private companies, and their
debt. 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, such investments are classified as level 3 financial assets under IFRS 13 “Fair Value Measurement”.
A sensitivity analysis of a change in the value of investments at fair value through profit or loss is set out in note 20 (a).
164
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2021 Annual Report & Accounts Bridgepoint 163
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Financial liabilities at fair value through profit or loss:
Level 1 – –
Level 2
213.2 236.7
Level 3
78.8 75.6
Total
292.0 312.3
The investment grade debt liabilities of consolidated CLOs are marked using broker quotes based on market-related discount spreads and are
therefore classified as level 2 financial liabilities under IFRS 13.
Non-investment grade and subordinated debt liabilities of the consolidated CLOs are valued based upon broker prices, which use discounted cash
flow analyses with unobservable market data inputs, such as constant annual default rates, prepayment rates, reinvestment rates, recovery rates
and discount rates and are therefore considered level 3 financial liabilities.
Financial liabilities classified as level 3 under the fair value hierarchy consist of the deferred contingent consideration, liabilities of CLOs
consolidated by the Group and other financial liabilities, which represents a payable to related party investors in Opal Investments LP and amounts
payable to related party investors in intermediate fund holding entities. The valuation of these liabilities is based on unobservable market data and
therefore classified as level 3. There have been no transfers between levels in the fair value hierarchy during the year (2020: nil).
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Level 3 financial liabilities at fair value through profit or loss:
Deferred contingent consideration 30.3 31.6
CLO liabilities
29.7 37.8
Other financial liabilities
18.8 6.2
Total
78.8 75.6
A reconciliation of level 3 fair values for CLO liabilities at fair value through profit or loss is set out in the table below. A reconciliation is not provided
for the deferred contingent consideration on the basis that the movement between 31 December 2021 and 31 December 2020 relates to foreign
exchange movements and for other financial liabilities refer to note 18 (d).
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Movement in CLO liabilities at fair value through profit or loss which are level 3:
Opening balance 37.8 –
On acquisition
– 24.5
Repayment
(5.5) (18.7)
Drawn
– 31.8
Foreign exchange movements
(2.2) (0.2)
Change in fair value
(0.4) 0.4
Transfers (to)/from Level 1 or 2
– –
Closing balance
29.7 37.8
A change in the value of the CLO liabilities is included in the table below. A sensitivity analysis for the deferred contingent consideration is included
within note 18 (b).
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Increase or decrease of 1% 0.3 0.4
The Company does not hold any liabilities at fair value.
165
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
164 Bridgepoint 2021 Annual Report & Accounts
2
2
1
1
C
C
a
a
p
p
i
i
t
t
a
a
l
l
m
m
a
a
n
n
a
a
g
g
e
e
m
m
e
e
n
n
t
t
The primary objective of the Group’s capital management is to ensure that the Group 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”) for MiFID investment firms came into effect from 1 January 2022. This regime applies to 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. From 2022, the Group and certain regulated subsidiaries will be required to 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, comprising share capital,
share premium, capital contributions, other reserves and retained earnings as set out below.
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Cash and cash equivalents (for use within the Group) 323.1 42.3
Loans and borrowings – (99.7)
Net cash
323.1 (57.4)
Share capital 0.1 240.9
Share premium 289.8 0.5
Capital redemption reserve
– 24.6
Share-based payment reserve
3.2 –
Cash flow hedge reserve
7.5 (2.2)
Net exchange differences reserve
3.1 5.3
Retained earnings
412.6 39.7
Equity attributable to equity holders
716.3 308.8
The Group’s banking facilities are subject to financial covenants. The Bridgepoint Advisers Holdings Revolving Credit Agreement is subject to a
ratio of adjusted EBITDA to net finance charges and ratio of total net debt to adjusted EBITDA on a rolling 12 month period.
During the year the Group was fully compliant with regulatory capital requirements and banking covenants.
2
2
2
2
D
D
e
e
f
f
e
e
r
r
r
r
e
e
d
d
t
t
a
a
x
x
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Deferred tax assets 47.8 26.0
Deferred tax liabilities (67.5) (41.9)
Total
(19.7) (15.9)
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Deferred tax assets
Opening balance 26.0 24.4
(Charge)/credit to other comprehensive income
(0.8) 0.8
Credit to income statement
22.6 0.8
Closing balance
47.8 26.0
Analysed as:
Other timing differences 22.8 9.1
Management fee hedges
– 0.8
Losses carried forward
25.0 16.1
47.8 26.0
166
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 165
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Deferred tax liabilities
Opening balance (41.9) (38.3)
(Charge)/credit to other comprehensive income
(1.3) 0.1
Charge to income statement
(24.3) (3.7)
Closing balance
(67.5) (41.9)
Analysed as:
Management fee income and investments (42.8) (31.3)
Capital allowance
(2.5) –
Other timing differences
(20.9) (10.6)
Management fee hedges
(1.3) –
(67.5) (41.9)
Deferred tax liabilities primarily represent a future tax on the Group’s fee income and a timing difference arising on the remeasurement of the fair
value of investments. They unwind as fees become taxable and investments are realised.
Deferred tax assets primarily relate to tax losses carried forward, to the extent that they can be utilised under relevant tax legislation.
The deferred tax asset and liabilities also include deferred tax on right-of-use assets and lease liabilities which will unwind over the period of the lease.
The Company had a deferred tax asset of £1.1m (2020: nil) which relates to tax losses carried forward.
The deferred tax has been measured using the applicable tax rate expected at the point at which the income or cost will become taxable.
2
2
3
3
E
E
q
q
u
u
i
i
t
t
y
y
(a) Share capital and premium
Allotted, called up and fully paid shares
2
2
0
0
2
2
1
1
2020
N
N
o
o
.
.
£
£
No £
Ordinary of £0.00005 each 823,268,774 41,163
––
Deferred of £81 each 500 40,500
––
Deferred of £1 each
1 1
––
Deferred of £0.01 each
1 0.01
––
A1 of £81 each – – 2,280,000 184,680,000
A2 of £0.01 each
– – 552,000 5,520
A4 of £0.01 each
– – 235,540 2,355
C1 of £170 each
– – 59,460 10,108,200
C2 of £70 each
– – 105,000 7,350,000
C3 of £85 each
– – 95,000 8,075,000
C4 of £165 each
– – 60,000 9,900,000
C5 of £150 each
– – 65,000 9,750,000
C6 of £275 each
– – 40,000 11,000,000
YY of £1 each
– –
11
823,269,276 81,664.01 3,492,001 240,871,076
The shares included for 2020 in the table above were in issue for the full year with no new shares issued or shares cancelled in the period.
167
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
166 Bridgepoint 2021 Annual Report & Accounts
In June 2021, the Company cancelled 201,499 A1 shares held by Atlantic SAV Limited, cancelled the capital redemption reserve of the Company,
reduced the nominal value of the A1, C1, C2, C3, C4, C5 and C6 shares to £0.01 per share, redesignated 500 A1 shares held by Atlantic SAV 2
Limited as deferred shares, redesignated all outstanding A4, C1, C2, C3, C4, C5 and C6 shares as A1 shares, and cancelled 98,000 A1 shares and
72,500 A2 shares held by Atlantic SAV 2 Limited.
In June 2021, the Company issued 612,000 A3 ordinary shares of £0.01 nominal value for consideration of £1.50 per share.
In July 2021, the Company issued 18,500 A3 shares of £0.01 each to the EBT for consideration of £0.01 per share, redesignated the YY share into
a deferred share of £1.00 and sub-divided the classes of ordinary shares into A1, A2 and A3 ordinary shares and deferred shares. The resulting A1,
A2 and A3 ordinary shares were redesignated as ordinary shares. In addition, following the redesignation, an amount of £8,571 within the share
premium account was capitalised and appropriated as capital to the holdings of ordinary shares as part of a bonus share issue of 171,428,571 fully
paid-up ordinary shares at a rate of three shares for every seven existing ordinary shares held. The deferred shares were resolved to be gifted to the
Company for no consideration and cancelled through the capital redemption reserve.
In July 2021, as part of the Admission to the London Stock Exchange, the Company issued 85,714,286 new shares with a nominal value of
£0.00005 for consideration of £3.50 each.
At the same time, Dyal Capital Partners IV (C) LP exchanged shares in Bridgepoint Group Holdings Limited (formerly Bridgepoint Group Limited) for
163,263,206 shares in the Company. The transaction qualified for merger relief under s.612 of the Companies Act 2006 and therefore the shares
issued were recognised at the nominal value of £0.00005 per share.
In addition, 1,963,571 ordinary shares were issued to certain executives in leadership positions and non-executive directors with a nominal value
of £0.00005 for consideration of £3.50 each and 870,090 ordinary shares were awarded to employees as part of the IPO Share Award Plan for
consideration equal to the nominal value of £0.00005 per share and a further 29,053 held in the Bridgepoint Group plc Employee Benefit Trust.
The holders of the ordinary shares have the right to receive notice of and to attend and vote at any general meeting of the Company. The shares
have one vote per share on a resolution.
Each ordinary share is eligible for ordinary course dividends and distributions on a liquidation, and is generally entitled to participate in a return
of capital, in each case subject to the provisions set out in the Articles of the Company.
(b) Own shares
The Company held 853,624 ordinary shares and 501 deferred shares (2020: 326,500 A1 shares; 55,000 A2 shares) within retained earnings as at
31 December 2021 at a cost of £nil (2020: £0.3m).
(c) Cash flow hedge reserve
Other reserves consist of the cash flow hedge reserve and the costs of hedging reserve. The cash flow hedge reserve is used to recognise the
effective portion of gains or losses on foreign exchange forward contracts that are designated and qualify as cash flow hedges, as described
in note 20 (b) amounts are subsequently either transferred to deferred income or reclassified to the Income Statement as appropriate.
(d) Net exchange differences reserve
Other comprehensive income reported in the net exchange differences reserve comprises the net foreign exchange gain/(loss) on the translation
of foreign operations.
(e) Share-based payment reserve
The Share-based payment reserve relates to the accumulated expense from the recognition of equity-settled share-based payments to employees.
(f) Non-controlling interests
At 31 December 2020, non-controlling interests included Dyal Capital Partners IV (C) LP’s interest in Bridgepoint Group Holdings Limited, a majority
owned direct subsidiary of the Company. As part of the Company’s Admission to the London Stock Exchange, its interest was novated to an
interest in the shares of the Company, as set out above. As a result, the non-controlling interest previously recognised has been reassigned to
equity holders.
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Non-controlling interest in Bridgepoint Group Holdings Limited – 81.7
Total – 81.7
168
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 16
7
2
2
4
4
D
D
i
i
v
v
i
i
d
d
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n
n
d
d
s
s
A dividend of £30m was paid to eligible A1 and A2 ordinary shareholders on the day immediately before Admission to the London Stock Exchange,
which equates to £9.61 per share.
The Company paid a dividend of £3.3m in July 2020 and £3.3m in December 2020 to qualifying shareholders, which equates to £2.50 per share.
2
2
0
0
2
2
1
1
2020
O
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r
r
d
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i
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a
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y
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d
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n
n
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p
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:
:
£
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P
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£ m
Pence per
share
Interim 30.0 961.00 6.6 2.50
Proposed final dividend 30.0 3.64
––
2
2
5
5
C
C
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f
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a
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(a) Cash generated from operations
G
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o
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u
u
p
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C
C
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o
m
m
p
p
a
a
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2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Profit/(loss) before tax 62.6 48.5 (25.8) 12.9
Adjustments for:
Exceptional expenses 21.6 7.4 21.2 –
Share-based payments
2.9 –
––
Profit on disposal of right-of-use asset (0.6) –
––
Depreciation and amortisation expense
15.0 8.8
––
Net finance expense
7.7 1.4 – (15.5)
Carried interest
(14.3) (12.9) – –
Fair value remeasurement of investments
(56.9) (29.4) – –
Net exchange gains
(1.1) (0.6) – –
Increase in trade and other receivables
(10.3) (14.2) (108.5) –
(Decrease)/increase in trade and other payables
(2.1) 23.4 23.6 0.1
Cash generated from operations
24.5 32.4 (89.5) (2.5)
(b) Cash outflows from leases
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Financing 9.6 7.7
Operating 0.2 0.2
Cash generated from leases
9.8 7.9
The Company has no leases (2020: nil).
(c) Reconciliation of liabilities arising from financial activities
G
G
r
r
o
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u
u
p
p
N
N
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1
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2
2
0
0
2
2
1
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£
m
m
C
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£
£
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£
£
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3
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1
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m
m
b
b
e
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r
r
2
2
0
0
2
2
1
1
£
£
m
m
Borrowings 99.7 (97.7) – – (2.0) –
Lease liabilities 42.0 (9.6) 67.9 (15.5) – 84.8
Total
141.7 (107.3) 67.9 (15.5) (2.0) 84.8
169
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
168 Bridgepoint 2021 Annual Report & Accounts
Group
Non-cash changes
1 January 2020
£ m
Cash flows
£ m
Additions
£ m
Disposals
£ m
Foreign
exchange
movements
£ m
31 December
2020
£ m
Borrowings 42.3 56.8 – – 0.6 99.7
Lease liabilities 48.2 (7.7) 1.8 (0.3) – 42.0
Total 90.5 49.1 1.8 (0.3) 0.6 141.7
The Company has no borrowings or lease liabilities (2020: nil).
2
2
6
6
R
R
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a
a
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(a) Key management compensation
The key management of the Group for the period up to the Admission to the London Stock Exchange was considered to be the directors of
Bridgepoint Advisers Group Limited, a subsidiary company, from admission onwards, the executive directors are considered to represent the
key management of the Group. The compensation paid or payable to the key management is set out in the table below and is presented pro rata
for 2021.
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Salary, bonus and other benefits 5.0 8.0
Total 5.0 8.0
Further information on the remuneration of the directors can be found in the Remuneration Report.
(b) Directors’ emoluments
The directors of the Company since their appointment or the point of their resignation were remunerated as set out below. The aggregate value of
remuneration expenses in relation to pensions and share based payments are less than £0.1m.
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Salary, bonus and other benefits 6.6 3.9
Total 6.6 3.9
(c) Transactions with directors
On the Company’s Admission to the London Stock Exchange, 275,000 shares were issued to Archie Norman, 94,286 shares to Angeles Garcia-
Poveda, and 75,714 shares to each of Carolyn McCall and Tim Score for consideration of £3.50 per share.
On 7 June 2021, the directors of the Company, Adam Jones and William Jackson, were granted 10,000 and 25,000 A3 shares respectively for
consideration of £1.50 per share.
Jonathan Raoul Hughes, a director of the Company until 25 June 2021, received a loan from a subsidiary company that totalled £0.6m at
31 December 2019. The loan was made on arms’ length terms. It was repaid in April 2020.
(d) Carried interest
Fund investors expect certain members of the Group’s senior executive management to invest in carried interest and co-investment in the Group’s
third-party funds to demonstrate alignment of interest, and as such the directors of the Company have made significant personal commitments
from their own resources to some of these third-party funds. The funds and CIPs (which are entitled to the carry) are not consolidated by the Group
but are related parties. The returns (in the form of investment income and capital appreciation) are fully dependent on the performance of the
relevant fund and its underlying investments.
The directors of the Company at 31 December 2021 have committed amounts from their personal resources across multiple funds totalling £11.8m
(the directors at 31 December 2020: £18.9m).
170
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 169
(e) Transactions with funds
The Bridgepoint funds are related parties of the Group. Amounts received as fees from and reimbursement of expenses paid on behalf of the funds
during the year are shown in the table below, along with the amounts receivable at year end.
G
G
r
r
o
o
u
u
p
p
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Amounts received from funds 216.0 167.3
Amounts receivable from funds 39.6 27.7
2
2
7
7
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The Company is owned by a number of individual shareholders and companies, 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.
2
2
8
8
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The Group consists of the Company and entities controlled by the Company. This note sets out those subsidiary entities owned by the Company
and that are consolidated, those which are not, and those structured entities which are consolidated in the financial statements.
C
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a
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y
y
2
2
0
0
2
2
1
1
£
£
m
m
2020
£ m
Balance as at 1 January 448.0 448.0
Increase in investment in subsidiary 3.2 –
At 31 December
451.2 448.0
As part of the Company’s Admission to the London Stock Exchange, the non-controlling interests in Bridgepoint Group Holdings Limited novated
to an interest in the shares of the Company, increasing the Company’s holding.
The Group holds a direct interest in Bridgepoint Group Holdings Limited as at 31 December 2021 representing 100% (2020: 77.8%). Its registered
office is referenced in the table below the list of subsidiaries.
(a) List of subsidiaries
N
N
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Bridgepoint Group Holdings Limited 1 UK Holding company Ordinary shares 100%
The following table shows details of subsidiaries owned directly or indirectly by Bridgepoint Group Holdings Limited as at 31 December 2021 and its
ownership interest in each entity. The registered office of each subsidiary is referenced to a table below the list of subsidiaries.
171
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2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
170 Bridgepoint 2021 Annual Report & Accounts
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101 Investments (GP) Limited 1 UK General Partner Ordinary shares 100%
101 Investments Nominees Limited 1 UK Nominee company 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 2 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 Dormant entity 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 2 UK Founder 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 Founder Partner 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 Investment holding company 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 Dormant entity 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 IV 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%
172
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2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 171
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BDC Special 1 Limited 2 UK Dormant entity Ordinary shares 100%
BDC Special 2 Limited 2 UK Dormant entity Ordinary shares 100%
BDC Special GP LLP 2 UK Dormant entity 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 Investment holding company 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 Founder Partner Ordinary shares 100%
BE Advisers S.à r.L 3 Luxembourg Dormant entity Ordinary shares 100%
BE II Investments (GP) Limited 1 UK General Partner Ordinary shares 100%
BEP IV (Nominees) Limited 1 UK Nominee company Ordinary shares 100%
BEP IV FP Limited 1 UK Founder 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%
BE V Germany GP Co Limited 4 Guernsey General Partner Ordinary shares 100%
BEV FP Limited 1 UK Founder 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 Dormant entity Ordinary shares 100%
BE VI GP 2 Limited 1 UK Dormant entity Ordinary shares 100%
BE VI GP LLP 2 UK Dormant entity N/A –
BE VI GP LP 2 UK Dormant entity N/A –
BE VI Limited 4 Guernsey Dormant entity Ordinary shares 100%
BE VI MLP Limited 1 UK Managing Limited Partner Ordinary shares 100%
BE VI Nominees Limited 1 UK Nominee company Ordinary shares 100%
BG Holdco 1 Limited 4 Guernsey Dormant entity Ordinary shares 100%
BG II GP LLP 1 UK General Partner N/A –
Bridgepoint AB 5 Sweden Private equity advisory company Ordinary shares 100%
173
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
172 Bridgepoint 2021 Annual Report & Accounts
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Bridgepoint Advantage Limited 1 UK Dormant entity Ordinary shares 100%
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 (GP) Limited 1 UK General Partner Ordinary shares 100%
Bridgepoint Capital (Nominees) Limited 1 UK Nominee company Ordinary shares 100%
Bridgepoint Capital (Nominees) 2 Limited 1 UK Nominee company Ordinary shares 100%
Bridgepoint Capital Delaware GP LP 6 United States of
America
General Partner N/A –
Bridgepoint Capital Directorships Limited 1 UK Dormant entity Ordinary shares 100%
Bridgepoint Capital General Partner LP 2 UK General Partner N/A –
Bridgepoint Capital General Partner II 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 Scottish GP II Limited 2 UK General Partner Ordinary shares 100%
Bridgepoint Capital Partners Limited 1 UK Dormant entity Ordinary shares 100%
Bridgepoint Capital Trustee Limited 1 UK Dormant entity Ordinary shares 100%
Bridgepoint Capital Verwaltungs Gmbh 7 Germany General Partner Ordinary shares 100%
Bridgepoint Credit AD GP S.à r.l. 3 Luxembourg General Partner Ordinary shares 100%
Bridgepoint Credit Advisers Limited 1 UK Credit fund advisory company 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 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 Europe Limited 1 UK Credit fund advisory company Ordinary shares 100%
Bridgepoint Credit France SAS 8 France Credit fund management
company
Ordinary shares 100%
174
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 173
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Bridgepoint Credit GP Verwaltungs GmbH 7 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
49%
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 GmbH
& Co. KG
7 Germany General Partner Ordinary shares 100%
Bridgepoint Credit Opportunities II GP Limited 1 UK General Partner Ordinary shares 100%
Bridgepoint Credit Opportunities II GP LP 2 UK General Partner N/A –
Bridgepoint Credit Opportunities III GP Limited 1 UK General Partner Ordinary shares 100%
Bridgepoint Credit Opportunities III GP LP 2 UK General Partner N/A –
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 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 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 Europe (SGP) Limited 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 2 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 LP 2 UK General Partner N/A –
Bridgepoint Europe IV General Partner ‘F’ LP 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 VII (GP) S.à r.l. 3 Luxemburg General Partner Ordinary shares 100%
Bridgepoint Europe VII FP Limited 1 UK Founder Partner 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 –
175
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
174 Bridgepoint 2021 Annual Report & Accounts
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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 GmbH 7 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 –
Bridgepoint Growth Limited 1 UK Dormant entity Ordinary shares 100%
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
9 China Private equity advisory company Ordinary shares 100%
Bridgepoint Loan Fund GP GmbH & Co. KG 7 Germany General Partner Ordinary shares 100%
Bridgepoint Loan Fund GP S.à r.l. 3 Luxembourg General Partner Ordinary shares 100%
Bridgepoint Netherlands BV 10 Luxembourg Private equity advisory company Ordinary shares 100%
Bridgepoint Partners Limited 1 UK Dormant entity Ordinary shares 100%
Bridgepoint SAS 8 France Private equity advisory company Ordinary shares 100%
Bridgepoint Portfolio Services SAS 8 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 11 Spain Private equity advisory company Ordinary shares 100%
Bridgepoint Services S.à r.l. 3 Luxembourg Private equity advisory company Ordinary shares 100%
Bridgepoint Sp Zoo 12 Poland Private equity advisory company Ordinary shares 100%
Bridgepoint Sp Zoo sp.k 12 Poland Private equity advisory company N/A –
Bridgepoint Structured Credit Limited 1 UK Dormant entity Ordinary shares 100%
Bridgepoint Team Paris S.à r.l. 14 Luxembourg Dormant entity Ordinary shares 100%
Bridgepoint US Holdco Limited 1 UK Dormant entity Ordinary shares 100%
Bridgepoint Ventures Limited 1 UK Dormant entity Ordinary shares 100%
Bridgepoint, LLC 15 United States of
America
Private equity advisory company Ordinary shares 100%
Burgundy GP LLP 1 UK General Partner N/A –
176
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2021 Annual Report & Accounts Bridgepoint 175
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Burgundy GP 2 Limited 1 UK General Partner Ordinary shares 100%
George Town (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 Investment holding company Ordinary shares 100%
LORAC 6 Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BC Co-Investment Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BC II Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BDC III Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BDC IV Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BDC Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BDCP Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BEP IV Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BE VI Co-investment Limited 1 UK Investment holding company Ordinary shares 100%
LORAC BG I Limited 1 UK Investment holding company Ordinary shares 100%
LORAC Eagle Limited 1 UK Investment holding company Ordinary shares 100%
LORAC KITE Limited 1 UK Investment holding company Ordinary shares 100%
New HPE II GP LP 2 UK Investment holding company Ordinary shares 100%
Opal Investments LP 2 UK Investment holding company N/A –
PEPCO Services LLP 1 UK Collective purchasing
negotiator
N/A –
Ruby Germany GP Limited 4 Guernsey General Partner Ordinary shares 100%
Ruby Investments (UK) Limited 1 UK Investments holding company 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 S.à r.l. 13 France Dormant entity Ordinary shares 100%
Vigny Participation S.à r.l. 13 France Dormant entity Ordinary shares 100%
Vigny Holding S.à r.l. 13 France Dormant entity Ordinary shares 100%
* The Group holds 49% of A Shares and 100% of B shares
177
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
176 Bridgepoint 2021 Annual Report & Accounts
R
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1 95 Wigmore Street, London, W1U 1FB, UK
2 50 Lothian Road, Edinburgh, EH3 9WJ, UK
3 2 Avenue Charles de Gaulle, L-1653, Luxembourg
4 1 Royal Plaza, St. Peter Port, Guernsey, GY1 2HL
5 Mäster Samuelsgatan 1, 111 44 Stockholm, Sweden
One Rodney Square, 10th Floor, Tenth and King Streets, Wilmington, New Castle
6 County, Delaware 19801, USA
7 Neue Mainzer Strasse 28, 60311 Frankfurt am Main, Germany
8 21 Avenue Kléber, 75116 Paris, France
9 Shanghai One ICC, 999 Huaihai Road (Middle), 20031 Shanghai, China
10 Honthorststraat 16H, 1071 DE Amsterdam, The Netherlands
11 Calle Rafael Calvo 39A-4 , 28010 Madrid, Spain
12 Marsalkowska 126/134, 00-008 Warsaw, Poland
13 21 rue La Perouse, 75116 Paris, France
14 153-155, rue du Kien, L-8030 Strassen, Luxembourg
15 10 East 53rd St. 28th Floor, New York, NY 10022, USA
(b) Entities not consolidated
The table below shows entities that are indirect subsidiaries of the Company, but the Group does not have the power to direct activities or rights to
variable returns from the entity and are therefore not consolidated in the financial information.
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Bridgepoint PE CI Limited 1 UK Investment holding company Ordinary shares 52.53%
Sapphire Fund II South Limited 4 Guernsey Investment holding company Ordinary shares 25%
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%
The profit and loss for the above entities are not material.
(c) Consolidated structured entities
The table below shows details of structured entities that the Group has deemed to control and are consolidated within the financial statements for
the periods referenced.
178
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 17
7
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Name of subsidiary:
Bridgepoint CLO 1 DAC Ireland 55% Subordinated note in the residual class All periods
Bridgepoint CLO 2 DAC Ireland 50% Subordinated note in the residual class YE 2020
Opal Investments LP United Kingdom 85% Limited partner All periods
BE VI (French) Co-Invest LP United Kingdom 92% Limited partner All periods
BE VI Co-Investment (Feeder)
Partnership LP United Kingdom 53% Limited partner All periods
(d) Associates
Where the Group hold investments in funds or CIPs that give the Group significant influence, but not control, through participation in the financial
and operating policy decisions, the Group measures investments in associates at fair value through profit or loss. Information about the Group’s
associates measured at fair value is shown below. The investments are recorded as financial assets or carried interest receivable within the Group’s
statement of financial position.
Bridgepoint Credit II “C” LP
Within investments in funds, the Group has an investment that represents 27% of the total committed capital of Bridgepoint Credit II (C) LP, a fund
that lends to private companies. Where the Group holds an interest that is greater than 20% the Group is considered to have significant influence,
but not control. Accordingly, Bridgepoint Credit II is considered to be an associate of the Group. Key financial information about the fund is set out
in the table below.
3
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2020
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Investments at fair value 399.6 251.2
Other assets 22.4 10.6
Total liabilities
(234.9) (156.6)
Total
187.1 105.2
Profit for the year 15.9 6.9
Country of domicile UK UK
Group’s interest in the associate 27.2% 27.2%
The Partnership’s registered address is 95 Wigmore Street, London, W1U 1FB, UK.
BDC III SFP LP
The Group has an interest in a CIP which has a share of 26% of the rights to the carried interest from the BDC III fund partnerships and is therefore
considered to have significant influence. Where the Group holds an interest that is greater than 20% the Group is considered to have significant
influence, but not control. Accordingly, the BDC III carry scheme is considered an associate of the Group. Key financial information is set out in
the table below.
3
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2020
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Carried interest receivable 65.8 43.9
Country of domicile UK UK
Group’s interest in the associate 25.9% 25.0%
The Partnership’s registered address is 50 Lothian Road, Edinburgh, EH3 9WJ, UK.
179
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
178 Bridgepoint 2021 Annual Report & Accounts
BEP IV SFP LP
Within investments in funds, the Group has an investment that has an entitlement of 49.7% of the limited partner commitments of BEP IV SFP LP,
a partnership that is a co-investor into the BEP IV fund partnerships. The Group also has a 31.8% of the entitlement to the founder partner
commitments of the entity, which currently has no value. Where the Group holds an interest that is greater than 20% the Group is considered to
have significant influence, but not control. Accordingly, BEP IV SFP LP is considered to be an associate of the Group. Key financial information
about the fund is set out in the table below.
3
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2020
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Investments at fair value 46.6 51.4
Other assets 1.7 1.3
Total liabilities
(0.5) (2.9)
Total
47.8 49.8
Profit for the year 5.8 9.7
Country of domicile UK UK
Group’s interest in the associate 49.7% 49.7%
The Partnership’s registered address is 50 Lothian Road, Edinburgh, EH3 9WJ, UK.
Bridgepoint CLO 3 DAC
Within investment in funds, the Group has an interest that includes 31% of the subordinated notes of CLO 3. Where the Group holds an interest that
is greater than 20% the Group is considered to have significant influence, but not control. Accordingly, CLO 3 is considered an associate of the
Group. Key financial information about CLO 3 is set out in the table below.
3
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CLO assets 337.4
CLO liabilities (339.0)
Total
(1.6)
Loss for the period (5.3)
Country of domicile Ireland
Group’s interest in the associate 31.0%
The CLO’s registered address is 5th Floor, The Exchange, George’s Dock, IFSC, Dublin 1, D01 W3P9, Ireland.
180
Bridgepoint
2021 Annual Report & Accounts
2021 Annual Report & Accounts Bridgepoint 179
Other associates
In addition to the associates listed above, there are four other entities where the Group considers itself to have significant influence with ownership
above 20%. These are immaterial individually and in aggregate and have no balances or transactions associated with them for the years presented.
(e) Subsidiaries not audited
For the year ending 31 December 2021 the following UK subsidiaries were expected to be entitled to exemption from audit under section 479A of
the Companies Act 2006 relating to subsidiary companies:
BBTPS FP GP Limited
BC II FP SGP Limited
BDC II Limited
BDC II FP GP Limited
BDC III Limited
BDC III SFP GP Limited
BDC IV Limited
BDC Special 1 Limited
BDC Special 2 Limited
BDC Special GP LLP
BDCP II SFP GP Limited
BDCP II Limited
BEV FP SGP Limited
Bridgepoint Advantage FP SGP Limited
Bridgepoint Europe III FP (GP) Limited
Bridgepoint Europe IV FP (GP) Limited
181
Bridgepoint
2021 Annual Report & Accounts
Notes to the consolidated and company financial statements
continued
180 Bridgepoint 2021 Annual Report & Accounts
2
2
9
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A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls
the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of
contractual arrangements.
The Group has determined that where the Group holds an investment, loan, fee receivable, commitment with an investment fund, CIP with a right
to carried interest, that this represents an interest in a structured entity. Where the Group does not hold an investment in the structured entity, the
Group has determined that the characteristics of control are not met. As set out in note 3 (a), CIPs that currently have value are those where the
Group is exposed to variable returns in the range of 5-26% with the main beneficiaries of the CIP being the other participants.
The disclosure below includes CLO 2 and 3 for the year ended 31 December 2021, which are not consolidated, as explained in note 3 (a) (2020: CLO
1 and 2 were consolidated).
The Group acts in accordance within pre-determined parameters set out in various agreements and the decision-making authority is well defined,
including third-party rights in respect of the investment manager. The agreements include management fees that are commensurate with the
services provided and performance fee arrangements that are industry standard. As such the Group is acting as agent on behalf of these investors
and therefore these entities are not consolidated into the Group’s financial statements.
The Group’s interest in and exposure to unconsolidated structured entities including outstanding management fees is detailed in the table below
and recognised within trade and other receivables in the statement of financial position. The carried interest receivable is included within the
statement of financial position.
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Private equity funds 217.9 <2% 23.0 13.8 157.3 0.75 –
2.00%
Generally up to 20%
of profits over
threshold
Up to
35%
36.4 254.3
Credit funds
108.1 <2% 5.9 3.8 37.9 1.00 –
1.75%
Generally up to 20%
of profits over
threshold
Up to
35%
2.5 110.6
326.0 28.9 17.6 195.2 38.9 364.9
31 December 2020
Private equity funds 191.2 <2% 23.9 11.4 136.6 0.75 –
2.00%
Generally up to 20%
of profits over
threshold
Up to
35%
24.9 216.1
Credit funds 64.2 <2% 4.9 2.8 10.2 1.00 –
1.75%
Generally up to 20%
of profits over
threshold
Up to
35%
3.0 67.2
255.4 28.8 14.2 146.8 27.9 283.3
182
Bridgepoint
2021 Annual Report & Accounts
Corporate website
The Company’s website at
www.bridgepointgroupplc.com 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 notiied electronically of events such as AGMs, and can
receive shareholder communications such as the Annual Report
and the Notice of Meeting online.
Enquiries and notiications concerning dividends, share certiicates
or transfers and address changes should be sent to the Registrar.
Registered ofice and principal place of business
Bridgepoint Group plc
Tel: +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
Tower Bridge House
St Katharine’s Way
London, E1W 1DD
Registrar
Equiniti Limited
Aspect House
Spencer Road
Lancing, West Sussex BN99 6DA
Telephone: 0371 384 2030 from UK or
+44 121 415 7047 from overseas
Financial calendar
Ex-dividend date 21 April 2022
Record date 22 April 2022
Annual General Meeting 12 May 2022
Payment date for dividend 16 May 2022
Half-year results 26 July 2022
183
Bridgepoint
2021 Annual Report & Accounts
Shareholder information
Admission
the admission of the whole of the issued and to be issued ordinary share capital of the
Company to the premium listing segment of the Oficial List of the FCA and to trading on the
London Stock Exchange’s main market for listed securities;
Articles
the Articles of Association of the Company;
Board
the board of directors of the Company;
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 Financial Reporting Council, as amended from time to time;
FCA
the Financial Conduct Authority;
Group or Bridgepoint
the Company and each of its direct and indirect subsidiaries;
IPO
the initial public offering of the Company’s ordinary shares;
Prospectus
the prospectus related to the Company dated 21 July 2021; and
subsidiary
has the meaning given to it in the Companies Act 2006.
Glossary
184
Bridgepoint
2021 Annual Report & Accounts
This report is printed on Splendorgel paper
which is derived from sustainable sources.
Both the manufacturing paper mill and printer
are registered to the Environmental Management
System ISO 14001 and are Forest Stewardship
Council® chain of custody certiied.
Produced by Black Sun Plc
Bridgepoint Group plc
95 Wigmore Street
London
W1U 1FB
www.bridgepoint.eu
Published in March 2022
Bridgepoint Group plc 2021 Annual Report and Accounts