BH Macro Limited - Annual Report and Audited Financial Statements for the year ended 31 December 2025
LEI: 549300ZOFF0Z2CM87C29
(Classified Regulated Information, under DTR 6 Annex 1 section 1.1)
The Company has today, in accordance with DTR 6.3.5, released its Annual Report and Audited Financial Statements for the year ended
Financial highlights
-- Total NAV return per GBP ordinary share of 1.38%, and USD shares 0.83%
(2024: 5.86% and 4.92%, respectively)
-- Share price total returns of -1.72% for the Sterling Class and 1.68%
for the US Dollar Class
-- Despite £116m having been spent during 2025 under the buyback program,
including US Dollar buybacks of US$1.3 million , this was not sufficient
to prevent the average discount for the year being 8.1% for the Sterling
Class shares and 8.3% for the US Dollar Class shares.
Results commentary highlights
-- The Board regards this performance as less than satisfactory as does
Brevan Howard Capital Management LP (the “Manager”) – whilst it is
within expected bounds of return. The Board are encouraged by the
changes to process which the Manager has implemented during the course
of the year.
-- In addressing the persistent level of discount, the Board has
negotiated an increase in the 2026 allowance for Master Fund redemptions
to enable buybacks to up to 14.99% of each class of the Company’s issued
share capital (as at the end of 2025), without fees being incurred, up
from 5% in 2025.
-- On 26 January 2026 , it was announced that a private Brevan Howard fund
was being launched which will have the power to invest in the shares of
both the Master Fund and BH Macro , along with other products offered
by Brevan Howard. Therefore, there will be an additional potential
purchaser of the Company’s shares.
Outlook
The macro-economic and geopolitical background remains extremely challenging. While this is undoubtedly a very difficult environment for individuals to experience and live through, it will provide opportunities for the Manager to deliver returns in the future. The Board retains full confidence in the Company’s strategy during these challenging times
Commenting on the results,
Annual Report and Audited Financial Statements 2025
Chair’s Statement
I am pleased to present the Annual Report for
markets.
2025 was a challenging year in terms of return with the net asset value (“NAV”) per share of the Sterling Class shares rising by 1.4% and the NAV per share of the US Dollar Class shares rising by 0.8%. The share price returns experienced by the Company’s shareholders (the “Shareholders”) were slightly different, namely -1.7% for the Sterling Class shares and 1.7% for the US Dollar Class shares. In summary, the board of directors of the Company (the “Board”) regards this performance as less than satisfactory whilst it is within expected bounds of return. The Board acknowledges that the persistent level of share price to NAV discount at which the Sterling Class shares and US Dollar Class shares have traded, which, for example, remained stubbornly between 6.7% to 10.6% with respect to the Sterling Class shares, is undesirable.
During 2024, the Board spent £116 million buying back
I am pleased to report that, at the subsequent
The Board has also negotiated with the Manager an increased buyback allowance of 14.99% of the Company’s share capital, which can be bought back in 2026 without fees being incurred, up from 5% in 2025. In addition, on 26 January, it was announced that a private fund is being launched whose intention is to invest and trade in strategies and funds managed by the Manager, including the Company. This will mean that there is potentially an additional purchaser of the Company’s shares. The Board is confident that these actions may potentially help to address the issues facing Shareholders. During the course of the year, the Manager’s business has remained stable with assets under management of approximately
The Board has acknowledged and supported steps taken by the Manager to invest in the ongoing enhancement of its technology and infrastructure, strengthening analytical capabilities, risk management frameworks and operational resilience.
Against this background, the Board has continued its regular dialogue with the Manager, reviewing the Master Fund’s trading strategies and risk exposure and satisfying itself that the Manager’s analytical trading and risk management capabilities continue to be maintained at a high standard.
The Company and the Manager have continued to pursue an active programme for public communication and investor relations. Up-to-date performance information is provided through NAV data published monthly on a definitive basis and weekly on an estimated basis, as well as through monthly reports and shareholder reports. All these reports and further information about the Company are available on its website ( www.bhmacro.com ).
The Board is wholly independent of the Brevan Howard group, is very closely focused on safeguarding the interests of Shareholders and believes that the Company observes high standards of corporate governance. The Board continues to operate well with a high level of engagement and a close working relationship between the diverse members of the Board. We are pleased to say that we are in compliance with all current regulations and recommendations of board composition.
CONCLUSION
The macro-economic and geopolitical backdrop remains challenging. Global uncertainty continues to weigh on markets, especially owing to an evolving and increasingly complex conflict in the
With respect to the
In these circumstances, the Board retains full confidence that the Manager’s strategy provides the opportunity to deliver returns in a dynamic environment. I would like to thank Shareholders for their continued support and trust in the Company’s strategy and management.
Chair
1
Having not carried out any buybacks in the US Dollar share class during 2024, in 2025, the Board spent
Board Members
The Directors of the Company during the year and as at the date of signing, all of whom are non-executive, are listed below:
Disclosure of Directorships in Public Companies Listed on Recognised Stock Exchanges
The following summarises the Directors’ current directorships in other public companies:
Exchange
Richard Horlick
Riverstone Energy Limited London
VH Global Energy Infrastructure Plc London Caroline Chan
NextEnergy Solar Fund Limited London
NB Private Equity Partners Limited London Bronwyn Curtis
TwentyFour Income Fund Limited London John Le Poidevin
Super Group (SGHC) Limited New York
TwentyFour Income Fund Limited London John Whittle
The Renewables Infrastructure Group Limited London
Sancus Lending Group Limited AIM
Strategic Report
For the year ended 31 December 2025
The Directors submit to the Shareholders their Strategic Report of the Company for the year ended
The Strategic Report provides a review of the business for the financial year and describes how risks are managed. In addition, the report outlines key developments and the financial performance of the Company during the financial year and the position at the end of the year, and discusses the main factors that could affect the future performance and financial position of the Company.
BUSINESS MODEL AND STRATEGY
Investment Objective and Company Structure
The Company is organised as a feeder fund that invests solely in the ordinary Sterling and US Dollar-denominated Class B shares issued by the
Sources of Cash and Liquidity Requirements
As the
BUSINESS ENVIRONMENT
Corporate Governance, Risk Framework and Internal Controls
The Board is responsible for establishing and maintaining an effective corporate governance, risk management and internal control framework and for reviewing its effectiveness. The Company has no staff and the Board delegates contractually to third-party service providers for all of the Company’s operational requirements. The Company’s risk framework comprises five pillars:
-- Oversight of service providers throughout the year, including regular
reporting on their activities, review of internal controls reports from
the Manager and Northern Trust International Fund Administration
Services (Guernsey) Limited (the “Administrator”), an annual assessment
of all service providers through the Management Engagement Committee and
an on-site visit by the Board to one of the Manager’s key offices.
Oversight of service providers’ policy maintenance in relation to market
abuse, anti-bribery, anti-fraud, anti-tax evasion, anti-money
laundering, data protection, information security and conflicts of
interest;
-- Regular reporting on and an annual review of compliance with the UK
Listing Rules;
-- Annual review of compliance with the Association of Investment
Companies Corporate Governance Code (the “AIC Code”);
-- The establishment and annual review of a number of key policies,
including those in relation to anti-bribery, information security, share
dealing, insider information and disclosure; and
-- Regular review of a comprehensive risk matrix and the effective
operation of internal controls in relation to those material risks.
Principal Risks and Uncertainties
The nature and extent of the principal and emerging risks which have been determined by the Board in order to meet the Company’s long term strategic objectives and the steps which are taken by the Board to manage or mitigate them are as follows:
-- Investment Risks: The Company is exposed to the risk that its
portfolio fails to perform in line with the Company’s objectives if it
is inappropriately invested or markets move adversely or the environment
becomes structurally unsuitable for the Company’s investment policy,
leading to investor dissatisfaction. The Board receives reports
presented by the Manager, which has total discretion over portfolio
allocation, at each quarterly Board meeting, paying particular attention
to this allocation and to the performance and volatility of underlying
investments. The Board and the Manager have regular contact with
investors and the Manager publishes monthly shareholder reports and fact
sheets which are available on the Company’s website;
-- Operational and Cyber Security Risks: The Board is responsible for
ensuring it is effective in its oversight of the Company’s operations
and cyber security. The Company is exposed to the risks arising from any
failure of systems and controls in the operations of its key service
providers, including each of the Manager and the Administrator, or from
their unavailability for whatever reason, including those arising from
cyber security issues. The Board receives regular reports from each of
those parties on cyber security and annual independent third-party
reporting on their respective internal controls;
-- Financial Risks: The financial risks faced by the Company include
market, credit and liquidity risk. These risks and the controls in place
to mitigate them are reviewed at each quarterly Board meeting. The
Company’s principal documents also require that if any class of shares
trades at an average discount at or in excess of 8% of the monthly NAV
in any year from 1 January to 31 December, the Company will hold a class
closure vote of the relevant class. The Company has available and has
previously implemented, a number of methods in order to mitigate any
discount to NAV, including making market purchases of its shares as part
of a discount management programme;
-- Regulatory, legal and accounting risks: Comprising two of the pillars
of the Company's risk framework, the Company is exposed to risk if it
fails to comply with the regulations of the UK Listing Authority or the
provisions of the AIC Code and/or any other applicable regulatory and
legislative matters, or if it fails to maintain accurate or timely
accounting records and published financial information. The
Administrator provides the Board with regular internal control and
compliance reports and reports on changes in regulatory requirements;
-- Geopolitical Risks: The Company is indirectly exposed to the risk of
geopolitical events, covering disruption arising from economic
uncertainty and volatility including any change or disruption to global
trade and economic policy resulting from any major shifts in
long-standing policy positions of major economies. I n respect of
political and military conflict, including the current conflicts in
Ukraine and the Middle East , the Master Fund has had no direct material
exposure to Russia , Ukraine or Iran , and the Board and the Manager
monitor global events in order to mitigate any collateral impact on the
Company and its performance. The Board has also made enquiries of key
service providers in respect of any impact from such conflicts and the
related instability in world markets and has been assured that where, as
in the case of Brevan Howard in Abu Dhabi , service providers have
operations in the affected regions, they are not impacted in terms of
their ability to continue to supply their services to the Company; and
-- Climate Change and Environmental Social and Governance (“ESG”) Risks:
The Company recognises the importance of this emerging risk, including
regulatory requirements relating thereto and the expectations of
stakeholders regarding relevant disclosures around this set of risks,
which have continued to develop over recent years. The Company has no
employees and does not own any physical assets and is not directly
exposed to climate change risk. Therefore, climate change risk does not
have an impact on the financial statements at 31 December 2025 , but the
Company recognises that climate change risk may have an effect on the
investments held in the Master Fund . The Manager monitors developments
in this area and industry best practice on behalf of the Board, where
appropriate, and regularly assesses the trading activity of the
underlying Master Fund and sub-funds to ascertain whether ESG factors
are appropriate or applicable to such funds. The Board has also made
enquiries of key service providers in respect of their assessment of how
climate change and ESG risk impacts their own operations and has been
assured that this has no impact on their ability to continue to supply
their services to the Company.
The Board’s assessment of the above risks has not changed during the year.
Board Policy on Diversity
The Company has no employees and its policy on diversity is therefore applicable only to the composition of the Board of Directors and board committees. The objective of the Company’s Diversity Policy is to ensure the best possible mix of skills and experience within the overall composition of the Board and this is reviewed annually by the
When appointing new Directors and reviewing the Board
composition, the
Board Diversity Name Gender Identity Ethnicity Richard Horlick Male White British Caroline Chan Female White Asian British Julia Chapman Female White British Bronwyn Curtis Female White European John Le Poidevin Male White British John Whittle (appointed 1 July 2025) Male White British
Environmental, Social and Governance Factors
The Company does not have employees, it does not own physical assets and its Board is formed exclusively of non-executive Directors. As such, the Company does not undertake any material activity which would directly affect the environment.
On a regular basis, the Manager assesses the trading activity of the investment funds it manages, including the
The Manager continues to monitor developments in this area and seeks to implement industry best practice where applicable. The Manager is a signatory to the
The Administrator is a wholly-owned indirect subsidiary of Northern Trust Corporation, which has adopted the
POSITION AND PERFORMANCE
Packaged Retail and Insurance Based Investment Products (“PRIIPs”)
From
The Manager is the PRIIPs manufacturer for each KID and the Company is not responsible for the information contained in each KID. The process for calculating the risks, cost and potential returns is prescribed by regulation. The figures in the KID, relating to the relevant share class, may not reflect the expected returns for that share class of the Company and anticipated returns cannot be guaranteed.
Performance
Key Performance Indicators (“KPIs”)
At each quarterly Board meeting, the Directors consider a number of performance measures to assess the Company’s success in achieving its objectives. Below are the main KPIs which have been identified by the
1. NAV
The Company’s NAV can be considered to have appreciated from £1.00* per Sterling share and
* The launch price is adjusted by a factor of 10 to reflect the 10 for 1 share sub-division, which occurred on
2. Share Prices, Discount/Premium
The Company’s shares traded at an average discount of 8.10% and 8.36% to NAV for its Sterling shares and US Dollar shares respectively for the year ended
3. Ongoing Charges
The Company’s ongoing charges ratio, which includes both performance fees and
The Company reports an aggregated view of the charges for both the Sterling shares and US Dollar shares. Further details are in the Directors’ Report.
Gain per Share
Total gain per share is based on the net gain on ordinary activities after tax of £7,022,125 for the Sterling share class and a net gain of
These calculations are based on the weighted average number of shares in issue for the year ended
Year ended Year ended
31.12.25 31.12.24
Per share '000 Per share '000
Net total gain for Sterling shares 2.12p £7,022 17.91p £68,166
Net total gain for US Dollar shares 2.35c US$613 19.88c US$5,681
NAV
The NAV per Sterling share, as at
The NAV per US Dollar share, as at
Dividends
No dividends were paid during the year (2024: US$ Nil).
Viability Statement
The investment objective of the Company is to seek to generate consistent long-term capital appreciation through its investment policy of investing all of its assets (net of funds required for its short-term working capital) in the
The Directors have assessed the viability of the Company over the three-year period to
The continuation of the Company in its present form is largely dependent on the management agreement between the Company and the Manager (the “Management Agreement”) remaining in place. Since
The Company’s assets exceed its liabilities by a considerable margin. Furthermore, the majority of the Company’s most significant expenses, being the fees owing to the Manager and to the Administrator, fluctuate by reference to the Company’s investment performance and NAV. The Company is able to meet its expenses by redeeming shares in the
The Company’s investment performance depends upon the performance of the
The Company’s shares were largely traded at a premium up until the middle of 2023, since when, in common with the broader investment trust sector, the shares have traded at a discount. In the event of any downward pressure on the Company’s share prices, the Company is able to consider resuming active discount management actions, including share buybacks, so that as far as possible the share prices would more closely reflect the Company’s underlying performance. Share buybacks commenced in
The Directors have carried out a robust assessment of the risks, which include the
Section 172, Companies Act 2006
Although the Company is domiciled and resident in Guernsey, the Board has considered the guidance set out in the
Key Service Providers
The Company does not have any employees and, as such, the Board delegates responsibility for its day-to-day operations to a number of key service providers, which are considered to be the Company's suppliers. The activities of each service provider are closely monitored by the Board and they are required to report to the Board at set intervals.
In addition, a formal review of the performance of each service provider is carried out once a year by the Management Engagement Committee.
The Manager
The Manager is a leading and well-established hedge fund manager. In exchange for its services, a fee is payable as detailed in note 4 to the Annual Audited Financial Statements.
The Board considers that, under the Company’s current investment objective, the interests of Shareholders, as a whole, are best served by the ongoing appointment of the Manager.
Administrator and Corporate Secretary
Signed on behalf of the Board by:
Chair
Director
Directors’ Report
The Directors submit their Annual Report together with the Company’s Audited Statement of Assets and Liabilities, Audited Statement of Operations, Audited Statement of Changes in Net Assets, Audited Statement of Cash Flows and the related notes for the year ended
The Company
The Company’s ordinary shares are issued in Sterling and US Dollars.
Investment Objective And Policy
The Company is organised as a feeder fund that invests all of its assets (net of short-term working capital requirements) directly in the
The Company may employ leverage for the purposes of financing share purchases or buybacks, satisfying working capital requirements or financing further investment into the
Results And Dividends
The results for the year are set out in the Audited Statement of Operations. The Directors do not recommend the payment of a dividend.
Share Capital
At the Annual General Meeting held on
During the financial year 2025, the Company has bought back 29,268,612 Sterling shares on the
The number of shares in issue at the year end is disclosed in note 5 of the Annual Audited Financial Statements.
Going Concern
The Directors, having considered the Principal and Emerging Risks and Uncertainties to which the Company is exposed, which are listed in the Business Environment section, and on the assumption that these are managed or mitigated as noted, are not aware of any material uncertainties which may cast significant doubt upon the Company’s ability to continue as a going concern for at least 12 months from the date of approval of these Annual Audited Financial Statements and, accordingly, consider that it is appropriate that the Company continues to adopt the going concern basis of accounting for these Annual Audited Financial Statements.
Whilst the Board continues to monitor the ongoing impact of various geopolitical events, the Board has concluded that the biggest threat to the Company remains the failure of a key service provider to maintain business continuity and resiliency. The Board has assessed the measures in place by key service providers to maintain business continuity and, so far, has not identified any significant issues that affect the Company. The financial position of the Company has not been negatively impacted by geopolitical events either and the Board is confident that these events have not impacted the going concern assessment of the Company.
In
The average discount to NAV for the Sterling shares and US Dollar shares for the year ended
The Directors have therefore concluded that there are no significant cash flow or other risks in relation to preparing the Annual Audited Financial Statements on a going concern basis.
The Board
The Board of Directors has overall responsibility for safeguarding the Company’s assets, for the determination of the investment policy of the Company, for reviewing the performance of the service providers and for the Company’s activities. The Directors, all of whom are non-executive, are listed in the Board Members section.
The Board meets at least four times a year and between these formal meetings, there is regular contact with the Manager,
For each Director, the tables below set out the number of Board meetings and Audit Committee meetings they were entitled to attend during the year ended
Scheduled Board Meetings Held Attended
Richard Horlick 4 4
Caroline Chan 4 4
Julia Chapman 4 4
Bronwyn Curtis 4 4
John Le Poidevin 4 4
John Whittle* 2 2
Attended
Audit Committee Meetings Held
John Le Poidevin 4 4
Caroline Chan 4 4
Julia Chapman 4 4
Bronwyn Curtis 4 4
John Whittle* 2 2
Remuneration and Nomination Committee Meetings Held Attended
Richard Horlick 3 3
Caroline Chan 3 3
Julia Chapman 3 3
Bronwyn Curtis 3 3
John Le Poidevin 3 3
John Whittle* 1 1
Attended
Management Engagement Committee Meetings Held
Richard Horlick 2 2
John Le Poidevin 2 2
Caroline Chan 2 2
Julia Chapman 2 2
Bronwyn Curtis 2 2
John Whittle* 1 1
*
In addition to these scheduled meetings, twelve ad-hoc committee meetings were held during the year ended
The Board has reviewed the composition, structure and diversity of the Board, succession planning, the independence of the Directors and whether each of the Directors has sufficient time available to discharge their duties effectively. The Board confirms that it believes that it has an appropriate mix of skills and backgrounds, that all of the Directors are considered to be independent in accordance with the provisions of the AIC Code and that all Directors have the time available to discharge their duties effectively.
The Chair’s and the other Directors’ tenures are limited to nine years, which is consistent with the principles listed in the
During the year, the Board completed an externally facilitated recruitment exercise to replace
Notwithstanding that some of the Directors sit on the boards of a number of other listed companies, the Board notes that each appointment is non-executive and that listed investment companies generally have a lower level of complexity and time commitment than trading companies. Furthermore, the Board notes that attendance of all Board and Committee meetings during the year is high and that each Director has always shown the time commitment necessary to discharge fully and effectively their duties as a Director.
Directors’ Interests
The Directors had the following interests in the Company, held either directly or beneficially:
Sterling Shares
31.12.25 31.12.24
Richard Horlick 200,000 200,000
Caroline Chan 11,587 11,587
Julia Chapman 6,260 6,260
Bronwyn Curtis 33,173 33,173
John Le Poidevin 116,940 116,940
John Whittle (appointed 1 July 2025) 10,000 -
US Dollar Shares
31.12.25 31.12.24
Richard Horlick 20,000 20,000
Caroline Chan - -
Julia Chapman - -
Bronwyn Curtis - -
John Le Poidevin - -
John Whittle (appointed 1 July 2025) - -
Directors’ Indemnity
Directors’ and Officers’ liability insurance cover is in place in respect of the Directors.
The Directors entered into indemnity agreements with the Company which provide, subject to the provisions of The Companies (Guernsey) Law, 2008, for an indemnity for Directors in respect of costs which they may incur relating to the defence of proceedings brought against them arising out of their positions as Directors, in which they are acquitted, or judgement is given in their favour by the Court. The agreement does not provide for any indemnification for liability which attaches to the Directors in connection with any negligence, unfavourable judgements and breach of duty or trust in relation to the Company.
Corporate Governance
To comply with the
The Company is a member of the AIC and by complying with the AIC Code, it is deemed to comply with both the
To ensure ongoing compliance with the principles and the recommendations of the AIC Code, the Board receives and reviews a report from the Corporate Secretary, at each quarterly meeting, identifying whether the Company is in compliance and recommending any changes that are necessary.
The Company has complied with the requirements of the AIC Code and the relevant provisions of the
The
-- the role of the chief executive;
-- executive Directors’ remuneration;
-- the need for an internal audit function; and
-- a whistle-blowing policy.
For the reasons explained in the
The Company does not have employees, hence no whistle-blowing policy is necessary. However, the Directors have satisfied themselves that the Company’s service providers have appropriate whistle-blowing policies and procedures and seek regular confirmation from the service providers that nothing has arisen under those policies and procedures which should be brought to the attention of the Board.
All of the Directors are independent of the Manager and any Company in the same group as the Manager (the “Manager’s Group”).
The Company has adopted a Code of Directors’ dealings in securities.
The Company’s risk appetite and risk exposure and the effectiveness of its risk management and internal control systems are reviewed by the Audit Committee and by the Board at their meetings. The Board believes that the Company has adequate and effective systems in place to identify, mitigate and manage the risks to which it is exposed.
For new appointments to the Board, a specialist independent recruitment firm is engaged as and when appropriate, to source potential candidates who are then interviewed by the Directors. The current Board has a breadth of experience relevant to the Company, and the Directors believe that any changes to the Board’s composition can be managed without undue disruption. An induction programme is provided for newly appointed Directors.
In line with the AIC Code, Article 21.3 of the Company’s Articles requires all Directors to retire at each Annual General Meeting. At the Annual General Meeting of the Company on
The Board, through the
Each of the Board, the Audit Committee, the Management Engagement Committee and the
Our Culture
As the Company has no staff and the Board delegates all of the Company’s operational requirements to third-party service providers, the Board is responsible for setting the culture of the Company through its own activities. The Board operates in a collegiate manner, with open dialogue and constructive challenge supporting effective decision making and oversight. The Board meets regularly, welcoming active engagement with and receiving detailed reports from its service providers to enable it to discharge its duties effectively and ensure that the service providers contracted are aligned to the Company's strategy and culture.
The Company invests solely in the
Board Performance
The performance of the Board and that of each individual Director is scheduled for external evaluation every three years, the most recent of which was completed in 2025.
The Board completed an externally facilitated evaluation of its effectiveness during the year, conducted by an independent third party service provider,
The Board carries out an annual internal evaluation of its performance in years when an external evaluation is not taking place.
The Board needs to ensure that the Annual Audited Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company’s performance, business model and strategy. In seeking to achieve this, the Directors have set out the Company’s investment objective and policy and have explained how the Board and its delegated Committees operate and how the Directors review the risk environment within which the Company operates and sets appropriate risk controls. Furthermore, throughout the Annual Report, the Board has sought to provide further information to enable Shareholders to better understand the Company’s business and financial performance.
Policy to Combat Fraud, Bribery and Corruption
The Board has adopted a formal policy to combat fraud, bribery and corruption. The policy applies to the Company and to each of its Directors. Furthermore, the policy is shared with each of the Company’s service providers and confirmation from each of them is sought in relation to their own policies.
In respect of the
Social and Environmental Issues
The Board also keeps under review developments involving other social and environmental issues, such as modern slavery, and reports on those to the extent they are considered relevant to the Company’s operations. Further explanation of these issues is detailed under ' Climate Change and Environmental Social and Governance (“ESG”) Risks’.
Ongoing Charges
The ongoing charges (the “Ongoing Charges”) represent the Company’s management fee and all other operating expenses, excluding finance costs, performance fees, share issue or buyback costs and non-recurring legal and professional fees, expressed as a percentage of the average of the daily net assets during the year.
Ongoing Charges for the years ended
The following table presents the Ongoing Charges for each share class of the Company for the years ended
31.12.25
Sterling US Dollar
Shares Shares
Company – Ongoing Charges 1.66% 1.58%
Master Fund – Ongoing Charges 0.66% 0.64%
Performance fees 0.15% 0.18%
Ongoing Charges plus performance fees 2.47% 2.40%
31.12.24
Sterling US Dollar
Shares Shares
Company – Ongoing Charges 1.58% 1.56%
Master Fund – Ongoing Charges 0.63% 0.63%
Performance fees 0.74% 0.87%
Ongoing Charges plus performance fees 2.95% 3.06%
The Master Fund’s Ongoing Charges represent the portion of the Master Fund’s operating expenses which have been allocated to the Company. The Company invests substantially all of its investable assets in ordinary Sterling and US Dollar-denominated Class B shares issued by the
Audit Committee
The Company’s Audit Committee conducts formal meetings at least three times a year for the purpose, amongst others, of considering the appointment, independence and effectiveness of the audit and remuneration of the auditors, and to review and recommend the Annual Audited Financial Statements and Annual Report to the Board of Directors. It is chaired by
Management Engagement Committee
The Board has established a Management Engagement Committee which has adopted terms of reference that set out its duties and responsibilities. The Management Engagement Committee meets formally at least once a year, is chaired by
The function of the Management Engagement Committee is to ensure that the Company’s Management Agreement is competitive and reasonable for the Shareholders, along with a review of the terms of the Company’s agreements with all other third-party service providers (other than
The details of the Manager’s fees and notice period are set out in note 4 to the Annual Audited Financial Statements.
The Board continuously monitors the performance of the Manager and a formal review of the Manager is conducted by the Management Engagement Committee annually.
The Manager has wide experience in managing and administering investment companies and has access to extensive investment management resources.
At its meeting on
The Board has established a
The function of the
-- regularly review the structure, size and composition of the Board and
make recommendations to the Board with regard to any changes that are
deemed necessary;
-- identify, from a variety of sources, candidates to fill Board vacancies
as and when they arise with a continued focus on Board diversity;
-- assess and articulate the time needed to fulfil the role of the Chair
and of a non-executive director, and undertake an annual performance
evaluation to ensure that all the members of the Board have devoted
sufficient time to their duties, and also to review their contribution
to the work of the Board and the breadth of experience of the Board as a
whole; and
-- annually review the levels of remuneration of each of the Chair of the
Board, the Chair of the Audit Committee, the Chair of each other Board
committee and other non-executive Directors having regard to the maximum
aggregate remuneration that may be paid under the Company’s Articles.
Internal Controls
Responsibility for the establishment and maintenance of an appropriate system of internal control rests with the Board and to achieve this, processes have been established which seek to:
-- review the risks faced by the Company and the controls in place to
address those risks;
-- identify and report changes in the risk environment and operational
controls, including the identification and management of emerging risks;
-- identify and report on the effectiveness of controls and errors
arising; and
-- ensure no override of controls by the Manager, the Administrator and
the Company’s other key service providers.
A risk matrix report is tabled and discussed at each Audit Committee meeting, and reviewed at least once a year by the Board, setting out the Company’s risk exposure and the effectiveness of its risk management and internal control systems. The Board believes that the Company has adequate and effective systems in place to identify, mitigate and manage the risks to which it is exposed.
The Board has delegated the management of the Company and the administration, corporate secretarial and registrar functions, including the independent calculation of the Company’s NAV and the production of the Annual Report and Audited Financial Statements, which are independently audited. Whilst the Board delegates these functions, it remains responsible for the functions it delegates and for the systems of internal control. Formal contractual agreements have been put in place between the Company and the providers of these services. On an ongoing basis, Board reports are provided at each quarterly Board meeting by the Manager, the Corporate Broker, the Administrator and Corporate Secretary and the Registrar. A representative from the Manager is asked to attend these meetings.
In common with most investment companies, the Company does not have an internal audit function. All of the Company’s management functions are delegated to the Manager, the Administrator and Corporate Secretary and the Registrar which have their own internal audit and risk assessment functions.
Further reports are received from the Administrator in respect of compliance, LSE continuing obligations and other matters. The reports received during the year were reviewed by the Board. No material adverse findings were identified in these reports.
International Tax Reporting
For the purposes of the US Foreign Account Tax Compliance Act, the Company registered with the US Internal Revenue Services (“IRS”) as a Guernsey reporting
The Common Reporting Standard (“CRS”) is a global standard for the automatic exchange of financial account information developed by the
Relations with Shareholders
The Board welcomes Shareholders’ views and places great importance on communication with the Company’s Shareholders. The Board receives regular reports on the views of Shareholders and the Chair and other Directors are available to meet Shareholders, with a number of such meetings taking place during the year and subsequent to the financial year end. The Company provides weekly estimates of NAV, month end estimates and final NAVs. The Company also provides a monthly newsletter. These are published via RNS,
The Manager maintains regular dialogue with institutional Shareholders, the feedback from which is reported to the Board. Shareholders who wish to communicate with the Board should contact the Administrator in the first instance.
Having reviewed the Financial Conduct Authority’s restrictions on the retail distribution of non-mainstream pooled investments, the Company, after taking legal advice, announced on
In accordance with the AIC Code, when 20 per cent or more of Shareholder votes have been cast against a Board recommendation for a resolution, the Company should explain, when announcing voting results, what actions it intends to take to consult Shareholders in order to understand the reasons behind the result. An update on the views received from Shareholders and actions taken should be published no later than six months after the Shareholder meeting. The Board should then provide a final summary in the Annual Report and, if applicable, in the explanatory notes to resolutions at the next Shareholders’ meeting, on what impact the feedback has had on the decisions the Board has taken and any actions or resolutions now proposed. During the year, no resolution recommended by the Board received 20 per cent or more votes against it.
Significant Shareholders
As at
% holding
in class
Significant Shareholders
Sterling Shares BH Macro Limited * 18.9%
Rathbone Nominees Limited 13.7%
Evelyn Partners Nominees Limited 10.8%
Nortrust Nominees Limited 6.5%
Lion Nominees Limited 5.2%
Pershing Nominees Limited 4.2%
Vidacos Nominees Limited 4.2%
Vestra Nominees Limited 3.6%
Cheviot Capital Nominees Limited 3.3%
Brewin Nominees Limited 3.2%
*Treasury Shares which carry no voting rights
% holding
in class
Significant Shareholders
US Dollar Shares
Vidacos Nominees Limited 15.4%
Euroclear Nominees Limited 15.1%
Rathbone Nominees Limited 14.8%
Aurora Nominees Limited 8.2%
Securities Services Nominees Limited 7.9%
Luna Nominees Limited 7.0%
Lynchwood Nominees Limited 5.8%
Cgwl Nominees Limited 3.2%
Signed on behalf of the Board by:
Chair
Director
Statement of Directors’ Responsibility in respect of the Annual Report and Audited Financial Statements
The Directors are responsible for preparing the Annual Report and Audited Financial Statements in accordance with applicable law and regulations.
The Companies (Guernsey) Law, 2008 requires the Directors to prepare financial statements for each financial year. They have resolved to prepare the financial statements in accordance with accounting principles generally accepted in
The Directors, by law, must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of its profit or loss for that year. In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and estimates that are reasonable, relevant and reliable;
· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;
· assess the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to the going concern basis; and
· use the going concern basis of accounting unless liquidation is imminent.
The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that its financial statements comply with the Companies (Guernsey) Law, 2008. They are responsible for such internal control as they determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error, and have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in Guernsey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
RESPONSIBILITY STATEMENT OF THE DIRECTORS IN RESPECT OF THE ANNUAL FINANCIAL REPORT
We confirm that to the best of our knowledge:
· so far as each of the Directors is aware, there is no relevant audit information of which the Company’s Independent Auditor is unaware, and each has taken all the steps they ought to have taken as a Director to make themselves aware of any relevant information and to establish that the Company’s Independent Auditor is aware of that information;
· the financial statements, prepared in accordance with the applicable set of accounting standards, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and
· each of the Chair’s Statement, the Strategic Report, the Directors’ Report and the Manager’s Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that it faces.
We consider the Annual Report and Annual Audited Financial Statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for Shareholders to assess the Company’s position and performance, business model and strategy.
Signed on behalf of the Board by:
Chair
John Le Poidevin
Director
Directors’ Remuneration Report
Introduction
An ordinary resolution for the approval of the Directors’ Remuneration Report in the Company’s Annual Audited Financial Statements for the year ended
Remuneration policy
The Company’s policy is that the fees payable to the Directors should reflect the time spent by the Directors on the Company’s affairs and the responsibilities borne by the Directors and be sufficient to attract, retain and motivate Directors of a quality required to run the Company successfully. The Chair of the Board is paid a higher fee in recognition of his additional responsibilities, as are the Chairs of the various Board committees and the Senior Independent Director. The policy is to review fee rates periodically, although such a review will not necessarily result in any changes to the rates, and account is taken of fees paid to Directors of comparable companies.
There are no long-term incentive schemes provided by the Company and no performance fees are paid to Directors.
No Director has a service contract with the Company but each of the Directors is appointed by a letter of appointment which sets out the main terms of their appointment. The Directors were appointed to the
Directors are remunerated in the form of fees, payable quarterly in arrears, to the Director personally.
No other remuneration or compensation was paid or payable by the Company during the year to any of the Directors apart from the reimbursement of allowable expenses.
Directors’ fees
The fees payable by the Company in respect of each of the Directors who served during the years ended
Year Year
ended ended
31.12.25 31.12.24
£ £
Richard Horlick 99,000 90,000
Caroline Chan 58,000 55,000
Julia Chapman 58,000 55,000
Bronwyn Curtis 59,000 55,000
John Le Poidevin 69,000 65,000
John Whittle (appointed 1 July 2025) 26,500 -
Total 369,500 320,000
The annual aggregate limit of fees payable to Directors is £800,000 per annum.
Fee per annum
Role £
Board Chair 110,000
Audit Committee Chair 75,000
Management Engagement Committee Chair 64,000
Remuneration and Nomination Committee Chair 64,000
Senior Independent Director 66,000
All other Directors 59,000
Caroline Chan
Remuneration and Nomination Committee Chair
Report of the Audit Committee
31 December 2025
We present the Audit Committee’s (the “Committee”) Report for 2025, setting out the Committee’s structure and composition, principal duties and key activities during the year. As in previous years, the Committee has reviewed the Company’s financial reporting, the independence and effectiveness of the Independent Auditor and the internal control and risk management systems of the service providers.
Structure and Composition
The Committee is chaired by
Appointment to the Committee is for a period of up to three years, which may be extended for two further three-year periods, provided that the majority of the Committee remains independent of the Manager.
The Committee conducts formal meetings at least three times a year. The table in the Directors’ Report sets out the number of Committee meetings held during the year ended
Principal Duties
The role of the Committee includes:
· monitoring the integrity of the published Financial Statements of the Company;
· reviewing and reporting to the Board on the significant issues and judgements made in the preparation of the Company’s published Financial Statements (having regard to matters communicated by the Independent Auditor), significant financial returns to regulators and other financial information;
· monitoring and reviewing the quality and effectiveness of the Independent Auditor and their independence;
· considering and making recommendations to the Board on the appointment, reappointment, replacement and remuneration to the Company’s Independent Auditor; and
· monitoring and reviewing the internal control and risk management systems of the service providers.
The complete details of the Committee’s formal duties and responsibilities are set out in the Committee’s terms of reference, which can be obtained from the Administrator.
The independence, integrity and objectivity of the Independent Auditor is reviewed by the Committee, which also reviews the terms under which the Independent Auditor is appointed to perform non-audit services, which includes consideration of the Financial Reporting Council (“FRC”) Revised Ethical Standard 2024 (the “Ethical Standard”). The Committee has also established policies and procedures for the engagement of the Company’s auditor to provide audit, assurance and other services.
Independent Auditor
The audit and any non-audit fees proposed by the Independent Auditor each year are reviewed by the Committee, taking into account the Ethical Standard and the Company’s structure, operations and other requirements during the year and the Committee makes recommendations to the Board.
Key Activities in 2025
The following sections discuss the assessment made by the Committee during the year:
Significant Financial Statement Issues
The Committee’s review of the Annual Audited Financial Statements focused on the following area:
The Company’s investment in the
This matter was discussed during the planning and final stage of the audit and there was no significant divergence of views between the Committee and the Independent Auditor.
The Committee has carried out a robust assessment of the risks to the Company in the context of making the Viability Statement in these Annual Audited Financial Statements. Furthermore, the Committee has concluded it appropriate to continue to prepare the Annual Audited Financial Statements on the going concern basis of accounting.
Effectiveness of the Audit
The Committee held formal meetings with
The Committee considered the effectiveness and independence of
· reviewing the audit plan presented to them before the start of the audit;
· reviewing and challenging the audit findings report including variations from the original plan;
· reviewing any changes in audit personnel; and
· requesting feedback from both the Manager and the Administrator.
Further to the above, during the year ended
Audit Fees and Safeguards on Non-Audit Services
The table below summarises the remuneration paid by the Company to
Year Year
ended ended
31.12.25 31.12.24
£ £
Annual audit 136,000 73,800
Interim review 60,000 37,275
The Audit Committee has examined the scope and results of the external audit, its cost effectiveness and the independence and objectivity of the Independent Auditor, with particular regard to non-audit fees, and
FRC Audit Committees and External Audit Minimum Standard
During 2025, the Committee conducted a review of compliance with the FRC Audit Committees and External Audit Minimum Standard, 2023. The Committee was satisfied that its processes achieved a high level of adherence and where relevant these standards are incorporated into its Terms of Reference.
Internal Control
The Committee also reviewed the need for an internal audit function and concluded that the systems and procedures employed by the Manager and the Administrator, including their own internal audit functions, currently provide sufficient assurance that a sound system of internal control, which safeguards the Company’s assets, is maintained.
The Committee examined externally prepared assessments of the control environment in place at the Manager and the Administrator, with the Manager providing an International Standard on Assurance Engagements (“ISAE 3402”) report and the Administrator providing a Service Organisation Control (“SOC1”) report. No significant findings have been noted during the year.
Conclusion and Recommendation
After reviewing various reports such as the operational and risk management framework and performance reports from the Manager and the Administrator, consulting where necessary with
The Independent Auditor reported to the Committee that no unadjusted material misstatements were found in the course of its work. Furthermore, both the Manager and the Administrator confirmed to the Committee that they were not aware of any unadjusted material misstatements including matters relating to the presentation of the Annual Audited Financial Statements. The Committee confirms that it is satisfied that the Independent Auditor has fulfilled its responsibilities with diligence and professional scepticism.
For any questions on the activities of the Committee not addressed in the foregoing, a member of the Audit Committee remains available to attend each Annual General Meeting to respond to such questions.
John Le Poidevin
Audit Committee Chair
30 March 2026
Manager’s Report
Performance Review
The NAV per share of the USD shares of the Company appreciated by 0.83% in 2025 and the NAV per share of the GBP shares appreciated by 1.38%.
The month-by-month NAV performance of each currency class of the Company since it commenced operations in 2007 is set out below.
USD Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
2007 - - 0.10 0.90 0.15 2.29 2.56 3.11 5.92 0.03 2.96 0.75 20.27
2008 9.89 6.70 (2.79) (2.48) 0.77 2.75 1.13 0.75 (3.13) 2.76 3.75 (0.68) 20.32
2009 5.06 2.78 1.17 0.13 3.14 (0.86) 1.36 0.71 1.55 1.07 0.37 0.37 18.04
2010 (0.27) (1.50) 0.04 1.45 0.32 1.38 (2.01) 1.21 1.50 (0.33) (0.33) (0.49) 0.91
2011 0.65 0.53 0.75 0.49 0.55 (0.58) 2.19 6.18 0.40 (0.76) 1.68 (0.47) 12.04
2012 0.90 0.25 (0.40) (0.43) (1.77) (2.23) 2.36 1.02 1.99 (0.36) 0.92 1.66 3.86
2013 1.01 2.32 0.34 3.45 (0.10) (3.05) (0.83) (1.55) 0.03 (0.55) 1.35 0.40 2.70
2014 (1.36) (1.10) (0.40) (0.81) (0.08) (0.06) 0.85 0.01 3.96 (1.73) 1.00 (0.05) 0.11
2015 3.14 (0.60) 0.36 (1.28) 0.93 (1.01) 0.32 (0.78) (0.64) (0.59) 2.36 (3.48)
(1.42)
2016 0.71 0.73 (1.77) (0.82) (0.28) 3.61 (0.99) (0.17) (0.37) 0.77 5.02 0.19 6.63
2017 (1.47) 1.91 (2.84) 3.84 (0.60) (1.39) 1.54 0.19 (0.78) (0.84) 0.20 0.11
(0.30)
2018 2.54 (0.38) (1.54) 1.07 8.41 (0.57) 0.91 0.90 0.14 1.32 0.38 0.47 14.16
2019 0.67 (0.70) 2.45 (0.49) 3.55 3.97 (0.66) 1.12 (1.89) 0.65 (1.17) 1.68 9.38
2020 (1.25) 5.39 18.40 0.34 (0.82) (0.54) 1.84 0.97 (1.11) (0.01) 0.76 3.15 28.89
2021 1.21 0.31 0.85 0.16 0.26 (1.47) (0.47) 0.86 0.31 0.14 (0.09) 0.59 2.67
2022 0.74 1.77 5.27 3.80 1.09 0.76 0.12 3.11 2.46 (0.50) (1.09) 2.01 21.17
2023 1.26 (0.30) (4.11) (0.88) (1.54) (0.15) 0.92 0.34 1.08 0.88 (0.40) 1.69
(1.33)
2024 0.24 (3.13) 0.86 (1.05) 0.73 0.87 0.42 (0.60) 4.91 (2.93) 6.56 (1.63) 4.92
2025 (2.81) (1.54) (1.29) 4.47 (0.73) 1.48 (1.81) 1.18 1.60 0.62 (0.42) 0.29 0.83
GBP Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD
2007 - - 0.11 0.83 0.17 2.28 2.55 3.26 5.92 0.04 3.08 0.89 20.67
2008 10.18 6.85 (2.61) (2.33) 0.95 2.91 1.33 1.21 (2.99) 2.84 4.23 (0.67) 23.25
2009 5.19 2.86 1.18 0.05 3.03 (0.90) 1.36 0.66 1.55 1.02 0.40 0.40 18.00
2010 (0.23) (1.54) 0.06 1.45 0.36 1.39 (1.96) 1.23 1.42 (0.35) (0.30) (0.45) 1.03
2011 0.66 0.52 0.78 0.51 0.59 (0.56) 2.22 6.24 0.39 (0.73) 1.71 (0.46) 12.34
2012 0.90 0.27 (0.37) (0.41) (1.80) (2.19) 2.38 1.01 1.95 (0.35) 0.94 1.66 3.94
2013 1.03 2.43 0.40 3.42 (0.08) (2.95) (0.80) (1.51) 0.06 (0.55) 1.36 0.41 3.09
2014 (1.35) (1.10) (0.34) (0.91) (0.18) (0.09) 0.82 0.04 4.29 (1.70) 0.96 (0.04) 0.26
2015 3.26 (0.58) 0.38 (1.20) 0.97 (0.93) 0.37 (0.74) (0.63) (0.49) 2.27 (3.39)
(0.86)
2016 0.60 0.70 (1.78) (0.82) (0.30) 3.31 (0.99) (0.10) (0.68) 0.80 5.05 0.05 5.79
2017 (1.54) 1.86 (2.95) 0.59 (0.68) (1.48) 1.47 0.09 (0.79) (0.96) 0.09 (0.06)
(4.35)
2018 2.36 (0.51) (1.68) 1.01 8.19 (0.66) 0.82 0.79 0.04 1.17 0.26 0.31 12.43
2019 0.52 (0.88) 2.43 (0.60) 3.53 3.82 (0.78) 1.00 (1.94) 0.47 (1.22) 1.52 7.98
2020 (1.42) 5.49 18.31 0.19 (0.85) (0.53) 1.74 0.94 (1.16) (0.02) 0.75 3.04 28.09
2021 1.20 0.32 0.81 0.15 0.25 (1.50) (0.49) 0.87 0.40 0.27 - 0.47 2.76
2022 0.94 1.79 5.39 3.86 1.66 1.05 0.15 2.84 2.12 (0.40) (1.15) 1.88 21.91
2023 1.20 (0.28) (4.29) (0.93) (1.61) (0.25) 0.90 0.34 1.12 0.86 (0.42) 1.69
(1.81)
2024 0.36 (3.08) 0.98 (0.98) 0.76 0.91 0.41 (0.55) 5.10 (3.10) 7.00 (1.63) 5.86
2025 (2.76) (1.47) (1.21) 4.55 (0.73) 1.51 (1.81) 1.21 1.71 0.63 (0.41) 0.35 1.38
Source: Master Fund NAV data is provided by the administrator of the Master Fund , State Street Fund Services (Ireland) Limited . The Company’s NAV and NAV per Share data is provided by the Company’s administrator, Northern Trust International Fund Administration Services (Guernsey) Limited .
The Company’s NAV per Share % Monthly Change is calculated by BHCM.
The Company’s NAV data is unaudited and net of all investment management and performance fees and all other fees and expenses payable by the Company. In addition, the Company’s investment in the Master Fund is subject to an operational services fee.
NAV performance is provided for information purposes only. Shares in the Company do not necessarily trade at a price equal to the prevailing NAV per Share.
Data as at 31 December 2025 .
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS
Quarterly and Annual contribution (%) to the performance of the NAV per Share of the Company’s USD Shares (net of fees and expenses) by asset class*
This information is given in USD (US$)
_____________________________________________________________________________ | | Rates| FX | Commodities| Credit| Equity| Digital| Discount | TOTAL| | | | | | | |Assets |Management| | |________|______|_____|____________|_______|_______|________|__________|______| | Q1 2025|-1.12 |-3.90|0.11 |-0.27 |0.29 |-0.65 |0.00 |-5.54 | |________|______|_____|____________|_______|_______|________|__________|______| | Q2 2025|1.34 |1.53 |0.23 |-0.01 |1.96 |0.19 |0.00 |5.24 | |________|______|_____|____________|_______|_______|________|__________|______| | Q3 2025|-1.33 |-1.17|0.81 |-0.02 |2.24 |0.40 |0.00 |0.94 | |________|______|_____|____________|_______|_______|________|__________|______| | Q4 2025|-0.20 |-1.22|0.99 |0.27 |1.82 |-1.26 |0.10 |0.49 | |________|______|_____|____________|_______|_______|________|__________|______| | 2025 |-1.38 |-4.84|2.13 |-0.02 |6.18 |-1.34 |0.10 |0.83 | |________|______|_____|____________|_______|_______|________|__________|______|
Data as at
Quarterly and YTD figures are calculated by BHCM as at
Quarterly and Annual contribution (%) to the performance of the NAV per Share of the Company’s GBP Shares (net of fees and expenses) by asset class*
This information is given in GBP (£)
_____________________________________________________________________________ | | Rates| FX | Commodities| Credit| Equity| Digital| Discount | TOTAL| | | | | | | |Assets |Management| | |________|______|_____|____________|_______|_______|________|__________|______| | Q1 2025|-1.09 |-3.88|0.11 |-0.27 |0.29 |-0.65 |0.14 |-5.35 | |________|______|_____|____________|_______|_______|________|__________|______| | Q2 2025|1.33 |1.53 |0.23 |-0.01 |1.96 |0.18 |0.12 |5.34 | |________|______|_____|____________|_______|_______|________|__________|______| | Q3 2025|-1.38 |-1.20|0.80 |-0.02 |2.23 |0.40 |0.23 |1.08 | |________|______|_____|____________|_______|_______|________|__________|______| | Q4 2025|-0.22 |-1.23|0.98 |0.27 |1.80 |-1.27 |0.25 |0.58 | |________|______|_____|____________|_______|_______|________|__________|______| | 2025 |-1.43 |-4.87|2.12 |-0.02 |6.19 |-1.36 |0.74 |1.38 | |________|______|_____|____________|_______|_______|________|__________|______|
Data as at
Quarterly and YTD figures are calculated by BHCM as at
PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS
Methodology and Definition of Contribution to Performance:
Attribution by asset class is produced at the instrument level, with adjustments made based on risk estimates.
*The above asset classes are categorised as follows:
“
Rates
”: interest rates markets
“
FX
”: FX forwards and options
“
Commodities
”: commodity futures and options
“
Credit
”: corporate and asset-backed indices, bonds and CDS
“ Equity ”: equity markets including indices and other derivatives
“Digital Assets ”: crypto-currencies including derivatives
“Discount Management ”: buyback activity or shares from treasury
Performance and Economic Outlook Commentary
The main focus for markets in 2025 was the Trump Administration’s policy agenda. Out of the twelve biggest market moves, six of them were directly related to President Trump’s announcements about tariffs, five were related to data releases (mostly US employment reports) and one was caused by the October Federal Open Market Committee press conference. If the start of this year is any guide, we expect Trump-related policy volatility to continue in 2026.
Despite widespread concerns about potential recession sparked by tariffs, the US and global economy look to have posted respectable growth outturns in 2025. In the event, tariffs were smaller than initially threatened, other countries didn’t retaliate for the most part, and economists probably exaggerated the downside risks from what amounted to a tax of 1% of US GDP. Combined with the One Big Beautiful Bill Act fiscal package passed mid-year, the overall stance of US fiscal policy was modestly expansionary. In the second half of the year, most global economies gained momentum.
Inflation developments were mixed. In the US, there was no progress in bringing down inflation, as small declines in housing and non-housing services inflation were offset by a jump in goods price inflation. Going forward, goods price inflation may peak as the one-time increase in tariffs is passed on and services inflation may slow further still. Outside the US, Japan’s inflation continued to be powered by the weak Yen, easy monetary policy and potentially expansionary fiscal policy. Inflation in the Euro area was heading to its 2% target but remained stubbornly elevated in the
Looking forward,
The macro impact of the material changes in US policies has been felt in the depreciation in the exchange value of the US Dollar and boom in US Dollar-alternatives like gold, as investors hedged some of their exposure to US markets. In addition, investors injected some term premium into the US bond market because of concerns about US fiscal sustainability and policy unpredictability. US equities performed well in absolute terms but disappointed in relative terms to other significant equity markets, even controlling for US Dollar depreciation. Investors are clearly looking to diversify their geographic exposure to risk assets.
With
Elsewhere, other central banks are on hold or recalibrating. In
With this landscape of macro dispersion and geopolitical uncertainty across all regions, markets are likely to remain extremely interesting.
acting by its sole general partner,
Independent Auditor’s Report to the Members of BH Macro Limited
Opinion
We have audited the financial statements of
In our opinion, the financial statements:
►
give a true and fair view of the state of the Company’s affairs as at
► have been properly prepared in accordance with US GAAP; and
► have been properly prepared in accordance with the requirements of the Companies (Guernsey) Law, 2008.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) and applicable law. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements, as required by the Crown Dependencies’ Audit Rules and Guidance, as applied to Guernsey incorporated Market Traded Companies, including the
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Company and we remain independent of the Company in conducting the audit.
Overview of our audit approach
Key audit matters Misstatement of the valuation of the Company’s investment in
Brevan Howard Master Fund Limited (the “Master Fund”)
Materiality Overall materiality of £39.6m which represents 2% of Net
Assets.
An overview of the scope of our audit
Tailoring the scope
Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account size, risk profile, the organisation of the Company and effectiveness of controls, changes in the business environment and the potential impact of climate change when assessing the level of work to be performed. All audit work was performed directly by the audit engagement team.
Climate change
The Company has explained climate-related risks in the Principal Risks and Uncertainties section of the Strategic Report and forms part of the “Other information”, rather than the audited financial statements. Our procedures on these disclosures therefore consisted solely of considering whether they are materially inconsistent with the financial statements or our knowledge obtained during the course of the audit or otherwise appear to be materially misstated. The Directors have concluded that there is no direct impact of climate change on the financial statements at
Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to impact a key audit matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in our opinion thereon, and we do not provide a separate opinion on these matters.
______________________________________________________________________________ | Risk | Our response to the risk | |______________________________________|_______________________________________| | |Our audit procedures consisted of: | | | | | |At the Company level: | | | | | |Confirming our understanding of the | | |Company’s processes and methodologies, | | |for valuing investments in accordance | | |with the practical expedient per | | |Accounting Standard Codification (ASC) | | |Topic 820 Fair Value Measurement; | | | | | | | | | | | |Obtaining a confirmation, from the | | |Master Fund’s independent administrator| | |of the class, number of shares, and | | |value per share for both the US Dollar | | |and Sterling Class B shares and | | |reconciling these to the net asset | | |values used in the valuation of the | | |investment; and | | | | | Misstatement of the valuation of | | |the Company’s investment in Brevan | | |Howard Master Fund Limited (the |Agreeing the value of the Company’s | |“Master Fund”) |investment in the Master Fund as per | | |its accounting records to the Master | |$1,938,053,000 (2024:$1,911,988,000 )|Fund’s coterminous audited financial | | |statements; | |Refer to the Report of the Audit | | |Committee; and Note 3 of the Financial|At the Master Fund level: | |Statements (‘Valuation of investments’| | |section) |Obtaining the audited control reports | | |to understand the relevant processes | |The value of the Company’s investment |and controls in place at the key | |in the Master Fund is measured using |service providers i.e. Brevan Howard | |the Net Asset Value (“NAV”) of the |Capital management LP, Coremont LLP and| |Master Fund as a practical expedient |the Administrator (State Street Fund | |under ASC 820 – Fair Value |Services (Ireland) Limited) involved in| |Measurement. |compiling and maintaining the | | |accounting records of the Master Fund. | |Due to the significance of the account| | |balance to the financial statements as|In reviewing the respective control | |a whole, any misstatement in the |reports we understood whether there | |Master Fund’s NAV could result in a |were any modifications to the | |material misstatement in the Company’s|responsible external audit firm’s | |financial statements. |report and we specifically considered | | |the results of the control testing as | |The value of the Company’s investment |set out in the control reports | |may be misstated due to error or |impacting the existence, and valuation | |misstatement in the NAV of the Master |of the significant balances | |Fund. |contributing to Master Fund’s Net | | |Assets consisting of: | |As a result of such risk, misstatement| | |in the investment valuation could have|Investments in securities, derivative | |a significant impact on the net asset |contracts, and investments | |value of the Company and the total |purchased/sold under agreements to | |return generated for shareholders. |resell/repurchase, at fair value; | | | | | |Securities sold short, at fair value; | | | | | |Derivative contracts, at fair value; | | | | | |Due from/(to) brokers; | | | | | |and Cash | | | | | | | | | | | |Reviewing the audited financial | | |statements of the Master Fund to | | |determine: | | | | | |Whether the underlying fund disclosed | | |that it is an investment company | | |following the accounting and reporting | | |guidance in ASC Topic 946; and | | | | | | | | | | | |Whether the underlying fund applied ASC| | |820 to determine the fair value of its | | |investments. | |______________________________________|_______________________________________|
Our application of materiality
We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion.
Materiality
The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.
We determined materiality for the Company to be
During the course of our audit, we reassessed initial materiality and elected to update materiality at
Performance materiality
The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.
On the basis of our risk assessments, together with our assessment of the Company’s overall control environment, our judgement was that performance materiality was 50% of our planning materiality, namely
Reporting threshold
An amount below which identified misstatements are considered as being clearly trivial.
We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion.
Other information
Management is responsible for the other information. The other information comprises the information included in the Annual Report, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and, we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.
We have nothing to report in this regard.
Report on other legal and regulatory requirements
Guernsey Company Law exception reporting
We have nothing to report in respect of the following matters in relation to which the Companies (Guernsey) Law, 2008 requires us to report to you if, in our opinion:
► proper accounting records have not been kept by the Company; or
► the financial statements are not in agreement with the Company’s accounting records and returns; or
► we have not received all the information and explanations we require for our audit.
Corporate Governance Statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability and that part of the Corporate Governance Statement relating to the Company’s compliance with the provisions of the
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:
► Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material uncertainties identified in the Directors’ Report;
► Directors’ explanation as to its assessment of the Company’s prospects, the period this assessment covers and why the period is appropriate in the Directors’ Report;
► Director’s statement on whether it has a reasonable expectation that the Company will be able to continue in operation and meets its liabilities in the Directors’ Report;
► Directors’ statement on fair, balanced and understandable in the Directors’ Report;
► Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks in the Strategic Report;
► The section of the Annual Report that describes the review of effectiveness of risk management and internal control systems in the Directors’ Report; and;
► The section describing the work of the Audit Committee in the Report of the Audit Committee.
Responsibilities of Directors
As explained more fully in the Statement of Directors’ Responsibility in respect of the Annual Report and Audited Financial Statements, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Directors are responsible for assessing the 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 Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of
internal control.
-- Obtain an understanding of internal control relevant to the audit in
order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
-- Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures made by
management.
-- Conclude on the appropriateness of the management’s use of the going
concern basis of accounting and, based on the audit evidence obtained,
whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Company’s ability to continue as
a going concern. If we conclude that a material uncertainty exists, we
are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the
audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Company to cease to continue
as a going concern.
-- Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Section 262 of the Companies (Guernsey) Law, 2008. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Other matter – Predecessor Auditor
The Financial statements of the Company for the year ended
for and on behalf of
Guernsey
Audited Statement of Assets and Liabilities
As at
31.12.25 31.12.24
US$'000 US$ '000
Assets
Investment in the Master Fund (note 3) 1,938,053 1,911,988
Master Fund redemption proceeds receivable 19,167 45,111
Prepaid expenses 98 31
Cash and bank balances denominated in Sterling 26,589 42,122
Cash and bank balances denominated in US Dollars 4,798 3,111
Total assets 1,988,705 2,002,363
Liabilities
Performance fees payable (note 4) 3,068 14,536
Management fees payable (note 4) 2,531 2,667
Purchase of shares into treasury payable 1,288 498
Accrued expenses and other liabilities 593 164
Administration fees payable (note 4) 156 155
Total liabilities 7,636 18,020
Net assets 1,981,069 1,984,343
Number of shares in issue (note 5)
Sterling shares 315,526,112 342,211,496
US Dollar shares 23,824,541 27,478,960
Net asset value per share (notes 7 and 9)
Sterling shares £4.41 £4.35
US Dollar shares US$4.52 US$4.48
See accompanying Notes to the Annual Audited Financial Statements .
Signed on behalf of the Board by:
Richard Horlick
Chair
John Le Poidevin
Director
Audited Statement of Operations
For the year ended
01.01.25 01.01.2
4
to 31.12.25 to
31.12.24
US$'000 US$ '000
Net investment gain allocated from the Master
Fund
Interest income 164,190 111,463
Dividend and other income (net of dividend
withholding tax
31 December 2025: US$120,640 ; 31 December 2024: 3,905 13,879
US$100,043 )
Expenses (123,299) (92,649)
Net investment gain allocated from the Master 44,796 32,693
Fund
Company income
Bank interest income 429 825
Foreign exchange gains 141,278 -
Total Company income 141,707 825
Company expenses
Performance fees (note 4) 3,073 14,819
Management fees (note 4) 29,667 29,967
Other expenses 2,381 886
Directors' fees 479 409
Administration fees (note 4) 305 307
Foreign exchange losses - 34,544
Total Company expenses 35,905 80,932
Net investment gain/(loss) 150,598
(47,414)
Net realised and unrealised gain/(loss) on
investments allocated from the Master Fund
Net realised gain on investments 100,605 44,345
Net unrealised (loss)/gain on investments (100,064) 61,300
Net realised and unrealised gain on 541 105,645
investments allocated from the Master Fund
Net increase in net assets resulting from 151,139 58,231
operations
See accompanying Notes to the Annual Audited Financial Statements.
Audited Statement of Changes in Net Assets
For the year ended
01.01.25 01.01.24
to 31.12.25 to 31.12.24
US$'000 US$ '000
Net increase in net assets resulting from
operations
Net investment gain/ 150,598 (47,414)
(loss)
Net realised gain on investments allocated from 100,605 44,345
the Master Fund
Net unrealised (loss)/gain on investments (100,064) 61,300
allocated from the Master Fund
151,139 58,231
Share capital
transactions
Purchase of shares into
treasury
Sterling shares (153,114) (148,419)
US Dollar shares (1,299) -
Total share capital (154,413) (148,419)
transactions
Net decrease in net (3,274) (90,188)
assets
Net assets at the 1,984,343 2,074,531
beginning of the year
Net assets at the end 1,981,069 1,984,343
of the year
See accompanying Notes to the Annual Audited Financial Statements.
Audited Statement of Cash Flows
For the year ended
01.01.25 01.01.24
to 31.12.25 to31.12.24
US$'000 US$ '000
Cash flows from operating activities
Net increase in net assets resulting from 151,139 58,231
operations
Adjustments to reconcile net increase in net
assets resulting from operations to net cash
generated from operating activities:
Net investment gain allocated from the Master (44,796) (32,693)
Fund
Net realised gain on investments allocated from (100,605) (44,345)
the Master Fund
Net unrealised loss/(gain) on investments allocated 100,064 (61,300)
from the Master Fund
Purchase of investment in the Master Fund (28,183) -
Proceeds from sale of investment in the Master 212,584 205,961
Fund
Foreign exchange (gains)/losses (141,278) 34,544
(Increase)/decrease in prepaid expenses (67) 16
(Decrease)/increase in performance fees payable (11,468) 14,534
Decrease in management fees payable (136) (104)
Increase in accrued expenses and other 429 16
liabilities
Increase in administration fees payable 1 75
Net cash generated from operating activities 137,684 174,935
Cash flows from financing activities
Purchase of own shares into treasury (153,623) (149,398)
Net cash used in financing activities (153,623) (149,398)
Change in cash and bank balances (15,939) 25,537
Cash and bank balances, beginning of the year 45,233 19,651
Effect of exchange rate fluctuations 2,093 45
Cash and bank balances, end of the year 31,387 45,233
Cash and bank balances, end of the year
Cash and bank balances denominated in Sterling 26,589 42,122
1
Cash and bank balances denominated in US 4,798 3,111
Dollars
31,387 45,233
1 Cash and bank balances in Sterling (GBP'000) 19,732 33,664
See accompanying Notes to the Annual Audited Financial Statements.
Notes to the Annual Audited Financial Statement s
For the year ended 31 December 2025
1. The Company
The Company’s ordinary shares are issued in Sterling and US Dollars.
2. Organisation
The Company is organised as a feeder fund and seeks to achieve its investment objective by investing all of its investable assets, net of short-term working capital requirements, in the ordinary Sterling and US Dollar-denominated Class B shares issued by
As such, the Annual Audited Financial Statements of the Company should be read in conjunction with the Financial Statements of the
At the date of these Annual Audited Financial Statements, there were four other feeder funds in operation in addition to the Company that invest all of their assets (net of working capital) in the
Off-Balance Sheet, market and credit risks of the Master Fund’s investments and activities are discussed in the notes to the Master Fund’s Annual Audited Financial Statements. The Company’s investment in the
Market risk represents the potential loss in value of financial instruments caused by movements in market factors including, but not limited to, market liquidity, investor sentiment and foreign exchange rates.
The Manager
The Manager also manages the
In order to reflect the increased investment of the Company in the
The Company will ordinarily be required to provide 12 months’ notice of the redemption of all or some of its investment in the Master Fund , except as may be required to fund the Company’s specific working capital requirements and, up to a maximum amount equal to five per cent of each class of the Company’s holding of Master Fund shares every month, to finance on-market share buybacks. As such, any redemption of all or part of the Company’s investment in the Master Fund on a winding up of the Company or to finance a tender offer or a class closure resolution will be required to be on 12 months’ notice. In those cases, the Company would only receive the proceeds of redemption from the Master Fund (and, therefore, Shareholders would only receive payment from the Company) after the redemption date at the end of the 12-month notice period and the Company (and, therefore, Shareholders) would remain exposed to the investment performance of the Master Fund in the intervening period to that redemption date.
In other changes to the Management Agreement, the circumstances in which the Company can terminate the Management Agreement and redeem its investment in the Master Fund on less than 12 months’ notice includes certain “cause” events affecting the Manager, in which case the Company would be entitled to terminate the Management Agreement on 90 days’ notice and redeem its investment in the Master Fund on three months’ notice.
The annual buyback allowance fee arrangements introduced in 2021 would continue to apply in respect of repurchases and redemptions by the Company of its shares of each class in excess of a number equal to five per cent of shares in issue of the relevant class at the end of the prior calendar year.
See also note 8 for further details relating to redemptions from the Master Fund for discount management mechanisms.
3. Significant accounting policies
These Annual Audited Financial Statements, which give a true and fair view, are prepared in accordance with United States Generally Accepted Accounting Principles and comply with The Companies (Guernsey) Law, 2008. The functional and reporting currency of the Company is US Dollars which is the currency of the primary economic environment in which the Company operates.
Going Concern
As further described in the Directors’ Report, the Directors are not aware of any material uncertainties which may cast significant doubt upon the Company’s ability to continue as a going concern for at least 12 months from the date of approval of these Financial Statements and, accordingly, these Annual Audited Financial Statements have been prepared using the going concern basis of accounting.
The Board continues to monitor the ongoing impact of various geopolitical events but has concluded that the biggest threat to the Company remains the failure of a key service provider to maintain business continuity and resiliency. The Board has assessed the measures in place by key service providers to maintain business continuity and, so far, has not identified any significant issues that affect the Company. The financial position of the Company has not been negatively impacted by geopolitical events and the Board is confident that these events have not impacted the going concern assessment of the Company.
Results of the
The Company is an investment Company which has applied the provisions of Accounting Standards Codification (“ASC”) 946.
Recent accounting pronouncements
The Company has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective and is currently evaluating the potential impact on the Annual Audited Financial Statements.
The following are the significant accounting policies adopted by the Company:
Valuation of investments
The Company records its investment in the
NAV per Shares Investment in Investment in
Percentage of Share held in the Master Fund Master Fund
Master Fund
Master Fund's (Class B) (Class B) CCY '000 US$ '000
capital
31 December 2025
Sterling 16.60% £7,270.87 187,303 £1,361,858 1,835,105
US Dollar 0.93% US$7,306.71 14,088 US$102,948 102,948
1,938,053
31 December 2024
Sterling 14.95% £7,101.86 201,713 £1,432,534 1,792,458
US Dollar 1.00% US$7,126.07 16,772 US$119,530 119,530
1,911,988
The valuation and classification of securities held by the
Income and expenses
The Company records monthly its proportionate share of the Master Fund’s income, expenses and realised and unrealised gains and losses. In addition, the Company accrues its own income and expenses.
Use of estimates
The preparation of the Annual Audited Financial Statements in accordance with United States Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of these Annual Audited Financial Statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.
Foreign exchange
Transactions reported in the Audited Statement of Operations are translated into US Dollar amounts at the date of such transactions. Assets and liabilities denominated in foreign currencies are translated into US Dollars at the exchange rate at the reporting date. The share capital and other capital reserves are translated at the historic rate ruling at the date of the transaction.
Investment securities and other assets and liabilities of the Sterling share class are translated into US Dollars, the Company's reporting currency, using exchange rates at the reporting date. The Audited Statement of Operations’ items of the Sterling share class are converted into US Dollars using the average exchange rate. Exchange differences arising on translation are included in foreign exchange gains or losses in the Audited Statement of Operations. This foreign exchange adjustment has no effect on the value of net assets allocated to the individual share classes.
Cash and bank balances
Cash and bank balances comprise demand deposits.
Allocation of results of the Master Fund
Net realised and unrealised gains or losses of the
Treasury
shares
Where the Company has purchased its own share capital, the consideration paid, which includes any directly attributable costs, has been recognised as a deduction from equity Shareholders’ funds through the Company’s reserves.
Where such shares have been subsequently sold or reissued to the market, any consideration received, net of any directly attributable incremental transaction costs, is recognised as an increase in equity Shareholders’ funds through the share capital account. Where the Company cancels treasury shares, no further adjustment is required to the share capital account of the Company at the time of cancellation. Shares held in treasury are excluded from calculations when determining NAV per share as detailed in note 7 and in the ‘Financial highlights’ in note 9.
Refer to note 5 for details of sales of shares from treasury or purchases by the Company of its share capital.
Segment reporting
The Company adopted Financial Accounting Standards Board Accounting Standards Update 2023-07, Segment Reporting (Topic 280) - Improvements to Reportable Segment Disclosures (“ASU 2023-07”). Adoption of ASU 2023-07 impacted financial statement disclosures only and did not affect the Company's financial position or the results of its operations. An operating segment is defined as a component of a public entity that engages in business activities from which it may recognize revenues and incur expenses, has operating results that are regularly reviewed by the public entity’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and has discrete financial information available. The executive leadership of the Company acts as the Company's CODM. The Company represents a single operating segment, as the CODM monitors the investment activity and cash flow of the Company as a whole. The financial information disclosed in the Company's financial statements in the form of Net investment gain/(loss), Net realised and unrealised gain on investments allocated from the
4. Management Agreement and administration agreement
Management fee and performance fee
The Company has entered into the Management Agreement with the Manager to manage the Company’s investment portfolio. The management fee charged to the Company is reduced by the Company’s share of management fees incurred by the
During the financial year ended
The Manager is also entitled to an annual performance fee for both share classes. The performance fee is equal to 20% of the appreciation in the NAV per share of that class during the period of twelve months ending on 31 December in each year (the “calculation period”) which is above the base NAV per share of that class, other than that arising to the remaining shares of the relevant class from any repurchase, redemption or cancellation of any share in the calculation period. The base NAV per share is the greater of the NAV per share of the relevant class at the time of issue of such share and the highest NAV per share achieved as at the end of any previous calculation period.
The Manager will be paid an estimated performance fee on the business day preceding the last business day of each calculation period. Within 5 business days of the publication of the final NAV of each class of shares as at the end of the calculation period, any difference between the actual performance fee and the estimated amount will be paid to or refunded by the Manager, as appropriate. Any accrued performance fee in respect of shares which are converted into another share class prior to the date on which the performance fee would otherwise have become payable in respect of those shares will crystallise and become payable on the date of such conversion. The performance fee is accrued on an ongoing basis and is reflected in the Company’s published NAV. During the financial year ended
The notice period for termination of the Management Agreement without cause by either the Company or the Manager is 12 months.
Administration fee
The Company has appointed
5. Share capital
Issued and authorised share capital
The Company has the power to issue an unlimited number of ordinary shares with no-par value and an unlimited number of shares with a par value. Shares may be divided into at least two classes denominated in Sterling and US Dollars. Further issues of shares may be made in accordance with the Articles of Incorporation (the “Articles”). Shares may be issued in differing currency classes of ordinary redeemable shares. The following tables show the movement in ordinary shares.
For the year ended 31 December 2025 :
Sterling shares US Dollar
shares
Number of ordinary shares
In issue at 1 January 2025 342,211,496 27,478,960
Share conversions 2,583,228 (3,342,525)
Purchase of shares into Treasury (29,268,612) (311,894)
In issue at 31 December 2025 315,526,112 23,824,541
Number of treasury shares
In issue at 1 January 2025 33,244,410 -
Shares purchased and held in Treasury
during the year:
On market purchases* 29,268,612 311,894
In issue at 31 December 2025 62,513,022 311,894
Percentage of class 16.54% 1.29%
*On market purchases for the year ended
Number of shares purchased Cost
Treasury shares Cost (US$) (in currency)
US Dollar shares 311,894 1,298,786 US$1,298,786
Sterling shares 29,268,612 153,113,842 £115,343,977
For the year ended 31 December 2024 :
Sterling shares US Dollar shares
Number of ordinary shares
In issue at 1 January 2024 372,024,149 29,856,472
Share conversions 1,927,480 (2,377,512)
Purchase of shares into treasury (31,740,133) -
In issue at 31 December 2024 342,211,496 27,478,960
Number of treasury
shares
In issue at 1 January 2024 1,504,277 -
Shares purchased and held in Treasury
during the year:
On market purchases* 31,740,133 -
In issue at 31 December 2024 33,244,410 -
Percentage of class 8.85% -
*On market purchases in the year ended
Number of shares purchased Cost (in currency)
Treasury shares Cost (US$)
US Dollar shares - - -
Sterling shares 31,740,133 148,418,885 £115,985,967
Share classes
In respect of each class of shares, a separate class account has been established in the books of the Company. An amount equal to the aggregate proceeds of issue of each share class has been credited to the relevant class account. Any increase or decrease in the NAV of the Master Fund US Dollar shares and
Voting rights of shares
Ordinary shares carry the right to vote at general meetings of the Company and to receive any dividends attributable to the ordinary shares as a class declared by the Company and, in a winding-up will be entitled to receive, by way of capital, any surplus assets of the Company attributable to the ordinary shares as a class in proportion to their holdings remaining after settlement of any outstanding liabilities of the Company.
As prescribed in the Company’s Articles, the different classes of ordinary shares have different values attributable to their votes. The attributed values have been calculated on the basis of the Weighted Voting Calculation (as described in the Articles) which takes into account the prevailing exchange rates on the date of initial issue of ordinary shares. On a vote, a single US Dollar ordinary share has 0.7606 votes and a single Sterling ordinary share has 1.4710 votes.
Repurchase of ordinary shares
Under the Company’s Articles, Shareholders of a class of shares have the ability to call for repurchase of that class of shares in certain circumstances. At the Annual General Meeting held on
Further issue of shares
As approved by the Shareholders at the Annual General Meeting held on
Distributions
As announced on
Further, the Company will first apply any such income in payment of its management fee and performance fees.
Treasury shares are not entitled to distributions. During the year ended 31 December 2025 , the Company purchased 29,268,612 (31 December 2024 : 31,740,133) Sterling shares and 311,894 (31 December 2024 : Nil) US Dollar shares to be held in Treasury .
Share conversion scheme
The Company has implemented a share conversion scheme. The scheme provides Shareholders with the ability to convert some or all of their ordinary shares in the Company of one class into ordinary shares of the other class. Shareholders are able to convert ordinary shares on the last business day of every month. Each conversion will be based on the NAV (note 7) of the shares of the class to be converted.
6. Taxation
Overview
The Company is exempt from taxation in Guernsey under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989. The adoption of Pillar Two by Guernsey effective
Uncertain tax positions
The Company recognises the tax benefits of uncertain tax positions only where the position is more-likely-than-not (i.e. greater than 50%) to be sustained assuming examination by a tax authority based on the technical merits of the position. In evaluating whether a tax position has met the recognition threshold, the Company must presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognise in the Company’s Annual Audited Financial Statements. Income tax and related interest and penalties would be recognised by the Company as tax expenses in the Annual Audited Statement of Operations if the tax positions were deemed to meet the more-likely-than-not threshold.
The Company analyses all open tax years for all major taxing jurisdictions. Open tax years are those that are open for examination by taxing authorities, as defined by the statute of limitations in each jurisdiction. The Company identifies its major tax jurisdictions as: Guernsey; the
The Directors have analysed the Company’s tax positions and have concluded that no liability for unrecognised tax benefits should be recorded related to uncertain tax positions. Further, the Directors are not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognised tax benefits will significantly change in the remainder of the year.
7. Publication and calculation of the Company’s Net Asset Value (“NAV”)
The NAV of the Company is equal to the value of its total assets less its total liabilities. The NAV per share of each class will be calculated by dividing the NAV of the relevant class account by the number of shares of the relevant class in issue on that day.
The Company publishes the NAV per share for each class of shares as calculated by the Administrator based in part on information provided by the
The Company also publishes an estimate of the NAV per share for each class of shares as calculated by the Administrator based in part on information provided by the
8. Discount management programme
The Company has previously implemented a number of methods in order to seek to manage any discount to NAV at which the Company’s shares trade. See note 2 for further details regarding the Company’s annual buyback allowance.
Market purchases
Subject to the authority granted by Shareholders at the 2023, 2024 and 2025 AGMs, market purchases by the Company of the Company’s shares were resumed in
Under the terms of the Management Agreement, the Company may, on one month’s notice, redeem up to 5 per cent of its shares of each class in the
Please see note 5 for details of shares purchased and held in
Annual offer of partial return of capital
Under the Company’s Articles, once in every calendar year, the Directors have discretion to determine that the Company make an offer of a partial return of capital in respect of such number of shares of the Company in issue as they determine, provided that the maximum amount distributed does not exceed 100% of the increase in NAV of the Company in the prior calendar year.
The Directors have discretion to determine the particular class or classes of shares in respect of which a partial return of capital would be made, the timetable for that partial return of capital and the price at which the shares of each relevant class are to be returned.
The Company is entitled to redeem upon three months’ notice, no more than once per year, a portion of its interest in the
The decision to make a partial return of capital in any particular year and the amount of the return depend, among other things, on prevailing market conditions, the ability of the Company to liquidate its investments to fund the capital return, the success of prior capital returns and applicable legal, regulatory and tax considerations.
Class closure resolutions
If any class of shares trades at an average discount at or in excess of 8% of the monthly NAV in any year from 1 January to 31 December, the Company will hold a class closure vote of the relevant class.
The average discount to NAV for the Sterling shares and US Dollar shares for the year ended
The arrangements for class closure meetings are described more fully in the Company’s principal documents which were approved at the EGM on
9. Financial highlights
The following tables include selected data for a single ordinary share of each of the ordinary share classes in issue at
The per share amounts and ratios shown reflect the income and expenses of the Company for each class of ordinary share.
31.12.25 31.12.25
Sterling shares US Dollar shares
£ US$
Per share operating performance
Net asset value at beginning of the 4.35 4.48
year
Income from investment operations
Net investment gain 1 0.02 0.02
Net realised and unrealised gain on - 0.01
investment
Other capital items 2 0.04 0.01
Total gain 0.06 0.04
Net asset value, end of the year 4.41 4.52
Total gain before performance fees 1.61% 1.05%
Performance fees (0.23%) (0.22%)
Total gain after performance fees 1.38% 0.83%
Total gain reflects the net gain for an investment made at the beginning of the year and is calculated as the change in the NAV per ordinary share during the year ended
31.12.25 31.12.25
Sterling shares US Dollar shares
£'000 US$ '000
Supplemental data
Net asset value, end of the year 1,390,318 107,616
Average month end net asset value for 1,416,866 113,790
the year
31.12.25 31.12.25
Sterling shares US Dollar shares
Ratio to average net assets
Operating expenses
Company expenses 3 1.67% 1.59%
Master Fund expenses 4 0.97% 0.96%
Master Fund interest expenses 5 5.27% 5.24%
Performance fees 0.15% 0.18%
8.06% 7.97%
Net investment gain before 0.62% 0.65%
performance fees 1
Net investment gain after 0.47% 0.47%
performance fees 1
31.12.24 31.12.24
Sterling shares US Dollar shares
£ US$
Per share operating performance
Net asset value at beginning of the 4.11 4.27
year
Income from investment operations
Net investment loss 1 (0.03) (0.03)
Net realised and unrealised gain on 0.23 0.24
investment
Other capital items 2 0.04 -
Total gain 0.24 0.21
Net asset value, end of the year 4.35 4.48
Total gain before performance fees 6.59% 5.86%
Performance fees (0.73%) (0.94%)
Total gain after performance fees 5.86% 4.92%
Total gain reflects the net gain for an investment made at the beginning of the year and is calculated as the change in the NAV per ordinary share during the year ended
31.12.24 31.12.24
Sterling shares US Dollar shares
£'000 US$ '000
Supplemental data
Net asset value, end of the year 1,487,501 123,111
Average month end net asset value for 1,463,916 121,860
the year
31.12.24 31.12.24
Sterling shares US Dollar shares
Ratio to average net assets
Operating expenses
Company expenses 3 1.59% 1.57%
Master Fund expenses 4 1.07% 1.07%
Master Fund interest expenses 5 3.58% 3.55%
Performance fees 0.74% 0.87%
6.98% 7.06%
Net investment gain before 0.10% 0.12%
performance fees 1
Net investment loss after (0.64%) (0.75%)
performance fees 1
Notes
1
The net investment gain and loss figures disclosed above do not include net realised and unrealised gains/losses on investments allocated from the
2 Included in other capital items are the discounts and premiums on conversions between share classes and on the sale of treasury shares as well as any partial capital return effected in the relevant year as compared to the NAV per share at the beginning of the year.
3 Company expenses are as disclosed in the Audited Statement of Operations for the year excluding the performance fee and foreign exchange gains/losses.
4
5
10. Related-party transactions
Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the party in making financial or operational decisions.
The management fees and performance fees are disclosed in note 4. Details of the amended Management Agreement can be found in note 2.
Fee per annum
Role £
Board Chair 110,000
Audit Committee Chair 75,000
Management Engagement Committee Chair 64,000
Remuneration and Nomination Committee Chair 64,000
Senior Independent Director 66,000
All other Directors 59,000
The fees payable by the Company in respect of each of the Directors who served during the year ended
Year Year
ended ended
31.12.25 31.12.24
£ £
Richard Horlick 99,000 90,000
Caroline Chan 58,000 55,000
Julia Chapman 58,000 55,000
Bronwyn Curtis 59,000 55,000
John Le Poidevin 69,000 65,000
John Whittle (appointed 1 July 2025) 26,500 -
Total 369,500 320,000
The annual aggregate limit of fees payable to Directors is £800,000 per annum.
11. Subsequent events
On 5 January 2026 , the Company completed the share conversion for the 30 November 2025 share conversion date, issuing 7,682 US Dollar shares and cancelling 9,911 GBP Shares.
On 3 February 2026 , the Company completed the share conversion for the 31 December 2025 share conversion date, issuing 353,354 US Dollar shares and cancelling 464,473 GBP Shares.
Subsequent to the year-end the Company made the following purchases of ordinary shares to be held in
Sterling Class shares
Number of Highest Price Lowest Price
Month shares bought point point
£ £
January 2026 3,735,757 4.15 4.00
February 2026 5,003,654 4.32 4.16
March 2026* 278,613 4.39 4.23
Total 9,018,024
*Until
USD Class shares
Number of Highest Price Lowest Price
Month shares bought point point
£ £
January 2026 88,533 4.34 4.12
February 2026 49,429 4.42 4.34
March 2026* 4,661 4.48 4.48
Total 142,623
*Until
The Directors have evaluated subsequent events up to
Historic Performance Summary
As at 31 December 2025
31.12.25 31.12.24 31.12.23 31.12.22 31.12.21
US$'000 US$ '000 US$ '000 US$ '000 US$ '000
Net increase
in net assets
resulting
from 151,139 58,231 66,494 112,078 12,010
operations
Total 1,988,705 2,002,363 2,079,009 1,707,130 1,307,490
assets
Total (7,636) (18,020) (4,478) (66,682) (9,762)
liabilities
Net 1,981,069 1,984,343 2,074,531 1,640,448 1,297,728
assets
Number of
shares in
issue
Sterling 315,526,112 342,211,496 372,024,149 30,156,454* 25,864,663*
shares
US
Dollar 23,824,541 27,478,960 29,856,472 2,858,135* 2,689,547*
shares
Net asset
value per
share
Sterling £4.41 £4.35 £4.11 £41.81* £34.30*
shares
US
Dollar US$4.52 US$4.48 US$4.27 US$43.28 * US$35.71 *
shares
*
The Number of Shares In Issue and Net Asset Value Per Share prior to
Affirmation of the Commodity Pool Operator
As at 31 December 2025
To the best of my knowledge and belief, the information detailed in this Annual Report and these Annual Audited Financial Statements is accurate and complete.
Title: Director and Authorised Signatory
Glossary of Terms and Alternative Performance Measures
Alternative Performance Measures (“APMs”)
We assess our performance using a variety of measures that are not specifically defined under US GAAP and therefore termed APMs. The APMs that we use may not be directly comparable with those used by other companies.
Average Discount to NAV
The average discount to NAV of the whole year is calculated for each share class by using the following formula:
(A-B) B
Where:
-- ‘A’ is the average closing market price of a share of the relevant
share class as derived from the trading price on the London Stock
Exchange , calculated as the sum of all the closing market prices per
share of that class as at each London Stock Exchange trading day during
a calendar year, divided by the number of such trading days in such
year; and
-- ‘B’ is the average NAV per share of the shares of the relevant share
class taken over the 12 month-end NAV Calculation Dates in the year
ended 31 December 2025 calculated as the sum of the final NAV of the
share class as at each month-end NAV Calculation Date during the year
ended 31 December 2025 , divided by 12.
Discount
If the share price of an investment is lower than the NAV per share, the shares are said to be trading at a discount. The size of the discount is calculated by subtracting the share price from the NAV per share of the relevant share class and is usually expressed as a percentage of the NAV per share. If the share price is higher than the NAV per share, the shares are said to be trading at a premium. The Board monitors the level of discount or premium and consideration is given to ways in which share price performance may be enhanced, including the effectiveness of marketing and share buybacks, where appropriate. The discount is shown below.
Sterling Shares US Dollar Shares
31.12.25 31.12.24 31.12.25 31.12.24
Share Price at Year End (C) £3.99 £4.06 US$4.24 US$4.17
NAV per Share (D) £4.41 £4.35 US$4.52 US$4.48
Discount to NAV (C-D)/D (9.52%) (6.67%) (6.19%) (6.92%)
Gain/(Loss) Per Share
Gain per share is calculated using the net loss/gain on ordinary activities after finance costs and taxation (year ended
Year ended Year ended
31.12.25 31.12.24
Per share '000 Per share '000
Net total gain for Sterling shares 2.12p £7,022 17.91p £68,166
Net total gain for US Dollar shares 2.35c US$613 19.88c US$5,681
Ongoing Charges
The Ongoing Charges are calculated using the AIC Ongoing Charges methodology, which was last updated in
Sterling Shares US Dollar Shares
Year ended Year ended Year ended Year ended
31.12.25 31.12.24 31.12.25 31.12.24
Average NAV
for the year £1,416,866,238 £1,463,916,101 US$113,789,609 US$121,859,568
(A)
Management £21,268,394 £22,022,232 US$1,709,780 US$1,833,616
Fee
Other Company £2,336,220 £1,190,495 US$97,110 US$79,940
expenses
Total
Company £23,604,614 £23,212,727 US$1,806,890 US$1,913,556
Expenses
Expenses
allocated from £9,146,725 £9,161,315 US$722,975 US$758,658
the Master Fund
Performance £2,184,478 £10,771,912 US$201,121 US$1,058,004
Fee
Total
Expenses £34,935,817 £43,145,954 US$2,730,986 US$3,730,218
(B)
Ongoing 2.47% 2.95% 2.40% 3.06%
Charges (B/A)
The NAV
The NAV is the net assets of the Company attributable to Shareholders, that is, total assets less total liabilities, expressed as an amount per individual share of the relevant class of shares.
Company Information
Directors
(All Directors are non-executive and independent for the purpose of UKLR 11.2.12)
Registered Office
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey
Channel Islands GY1 3QL
Manager
Brevan Howard Capital Management LP
6th Floor
37 Esplanade
St Helier
Jersey
Channel Islands JE2 3QA
Administrator and Corporate Secretary
Northern Trust International Fund
Administration Services (Guernsey) Limited
PO Box 255
Trafalgar Court
Les Banques
St Peter Port
Guernsey
Channel Islands GY1 3QL
Independent Auditor
Guernsey
Glategny Court
Glategny Esplanad e
St Peter Port
Guernsey
Channel Islands GY1 1WR
Registrar and CREST Service Provider
Computershare Investor Services (Guernsey) Limited
1st Floor
Tudor House
Le Bordage
St Peter Port
Guernsey GY1 1DB
Legal Advisor (Guernsey Law)
Carey Olsen
Carey House
Les Banques
St Peter Port
Guernsey
Channel Islands GY1 4BZ
Legal
Advisor
(
Hogan
Corporate Broker
JPMorgan Cazenove
25 Bank Street
Canary Wharf
Tax Adviser
PO Box 137
Regency Court
Glategny Esplanade
St Peter Port
Guernsey
Channel Islands GY1 3HW
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