PIP maintains a prudent financial position to ensure that it is able to finance its undrawn commitments as well as invest in new opportunities. Undrawn commitments are investments that PIP has committed to but for which the capital is yet to be collected by the private equity manager. PIP is contractually obliged to finance these undrawn commitments. PIP’s balance sheet is managed to ensure that committed future payments are proportional to assets and available financing. Available financing is defined as a combination of net available cash and an undrawn multi-currency credit facility. The graphic below shows PIP’s financial position at the financial year-end. PIP has access to a £500m equivalent multi-currency revolving credit facility, provided by five relationship lenders, and US$150m of loan notes provided by five institutional investors. As at 31 May 2024, net debt was modest at 8.1%.

The diagram below demonstrates that PIP is able to meet its future commitments.

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PIP’s undrawn commitments were £789m as at 31 May 2024. Of the £789m undrawn commitments, £41.7m relate to funds that are outside their investment period and are unlikely to be called. Therefore this amount has been excluded from the calculations of the financing cover and undrawn coverage ratio.

Generally, when a fund is past its investment period, which is typically between five and six years, it cannot make any new investments and only draws capital to fund follow-on investments into existing portfolio companies, or to pay expenses. As a result, the rate of capital calls by these funds tends to slow dramatically.

PIP’s undrawn commitments according to vintage are shown in the chart below.