Pollen Street Group Reports Robust H1 2025 Performance with 35% AUM Growth and Strong Earnings

Investment Company returns and what equalisation means

Income on Net Investment Assets was £13.3 million in H1, down from £15.8 million a year ago. Reported Net Investment Return was 8.4% versus 9.7% in H1 2024. Management points to two technical reasons:

• Equalisation from strong fund inflows re‑allocates prior gains between early and later investors so everyone is treated as if they invested at first close. This temporarily reduces reported returns for earlier investors.
• Equity gains are expected to be more H2‑weighted, reflecting portfolio companies with December year‑ends.

On an underlying basis, excluding equalisation, Net Investment Return was 8.8%. The Group still expects full‑year Investment Company returns in line with FY24.

Profitability, capital and dividends

Operating profit rose 28% to £30.9 million. Profit after tax increased to £27.9 million and EPS moved up to 46.0 pence, assisted by £29.2 million of buybacks since 1 January 2024, of which £6.3 million occurred in H1 2025.

The Board declared a 27.0 pence interim dividend, amounting to £16.3 million, payable on 24 October 2025 to holders on 26 September 2025. Pollen Street also reaffirmed its FY guidance.

Outlook and medium‑term targets

Guidance for H2 is clear and sensible:

• Fee‑paying AUM should keep rising with Credit IV deployment.
• Recurring management fees grow, but no catch‑up fees are expected in H2.
• Performance fees to normalise towards the lower end of the 15%‑25% long‑term share of Fund Management Income.
• Investment Company returns expected to be in line with FY24.

Medium‑term, management still targets £10 billion of AUM, a blended fee rate of about 1.25%‑1.50%, a Fund Management EBITDA margin above 50%, and Investment Company returns trending to low double digits.

What looks positive for POLN shareholders

• Fundraising outperformance: Private Equity Fund V finished well above target and Credit IV is on track to surpass £1 billion. That sets up more fee‑paying AUM and fee growth.
• Operational leverage showing: Fund Management EBITDA margin improved to 43%, demonstrating scalability as AUM rises.
• Cash returns continue: 27.0 pence interim dividend and ongoing buybacks remain embedded in the capital allocation framework.
• Diversified engine: Private Equity dealmaking plus asset‑based lending in Private Credit supports balanced growth.

Where to be cautious

• H1 boost from catch‑up fees will not recur in H2, so Fund Management income will be lower sequentially.
• Performance fees sat at 8% of Fund Management Income in H1 and are guided to the lower end of the long‑term range this year.
• Investment Company returns dipped on reported numbers due to equalisation and timing of equity gains. While temporary by nature, it is still a drag in the half.
• Leverage and liquidity to watch: interest‑bearing borrowings were £206.3 million and cash was £6.7 million at period end. The debt‑to‑tangible equity ratio was 57.7%.

Why this update matters

For a listed alternatives platform, the three things that drive value are fundraising, deployment and fee conversion. Pollen Street ticked all three. The private markets backdrop remains supportive, particularly for mid‑market alternatives and asset‑based lending, where the firm has a clear edge. The new Abu Dhabi office is a sensible step as capital pools deepen across the Middle East.

Yes, the H1 numbers have a catch‑up tailwind and reported investment returns were diluted by equalisation. But the direction of travel is positive, the fee base is expanding, and the medium‑term targets are intact. For investors, the combination of dividend, buybacks and organic growth is doing the heavy lifting.

Key numbers at a glance

Metric	H1 2025	H1 2024
Total AUM	£6.1 billion	£4.5 billion
Fee‑paying AUM	£4.7 billion	£3.4 billion
Management fees	£37.9 million	£21.2 million
Fund Management income	£41.4 million	£26.8 million
Fund Management EBITDA	£17.7 million	£8.4 million
Fund Management EBITDA margin	43%	31%
Income on Net Investment Assets	£13.3 million	£15.8 million
Operating profit	£30.9 million	£24.1 million
Profit after tax	£27.9 million	£23.6 million
Earnings per share	46.0 pence	36.9 pence
Interim dividend	27.0 pence per share	26.5 pence per share

Quick jargon buster

• Fee‑paying AUM: the portion of assets that actually generate management fees.
• Catch‑up fees: back‑dated management fees paid by investors who join a private equity fund after first close. One‑off in nature.
• Equalisation: a mechanism that reallocates gains between early and later fund investors so all are treated as if they invested at first close. Can temporarily dampen reported returns.
• Asset‑based lending: loans secured on underlying assets, such as SME loans or leases, aiming for controlled risk through collateral and structuring.

Bottom line

H1 2025 shows Pollen Street’s model working as intended. Fundraising is strong, deployment is active and the fee base is scaling. Expect H2 to look tidier than flashier, with no catch‑up fees and performance fees at the low end. The medium‑term plan of £10 billion AUM and higher EBITDA margins remains credible, and the dividend plus buybacks provide tangible returns while the platform grows.