Capstone Investment Advisors (UK), LLP
Annual Report and Financial Statements
For the year ended 31 December 2023
Limited Liability Partnership Registration No. OC330201 (England and Wales)
Capstone Investment Advisors (UK), LLP
Limited Liability Partnership Information
Designated members
Capstone Investment Advisors, LLC
T Stott
Limited liability partnership number
OC330201
Registered office
1st Floor
10 New Burlington Street
London
W1S 3BE
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Business address
1st Floor
10 New Burlington Street
London
United Kingdom
W1S 3BE
Bankers
Bank of America
2 King Edward Street
London
EC1A 1HQ
Capstone Investment Advisors (UK), LLP
Contents
Page
Members' report
1 - 3
Independent auditor's report
4 - 7
Statement of comprehensive income
8
Balance sheet
9
Reconciliation of members' interests
10 - 11
Statement of cash flows
12
Notes to the financial statements
13 - 21
Capstone Investment Advisors (UK), LLP
Members' Report
For the year ended 31 December 2023
Page 1

The members present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of Capstone Investment Advisors (UK), LLP ('the limited liability partnership') is to establish investment management relationships and to provide investment management services. The limited liability partnership is regulated by the Financial Conduct Authority as a MIFIDPRU firm.

Designated members

The designated members who held office during the year and up to the date of signature of the financial statements were as follows:

Capstone Investment Advisors, LLC
T Stott

Policy on members' drawings and capital

The members' drawing policy allows each member to draw a proportion of their profit share, subject to the cash requirements of the business.

 

A member's capital requirement is linked to their share of profit and the financing requirement of the limited liability partnership. There is no opportunity for appreciation of the capital subscribed. Just as incoming members introduce their capital at "par", so members are repaid their capital at "par".

 

Members' interests

During the year discretionary profits of £27,049,713 were allocated to members.

Auditor

The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.

Capstone Investment Advisors (UK), LLP
Members' Report (Continued)
For the year ended 31 December 2023
Page 2
Energy and carbon report

This report represents the greenhouse gas (“GHG”) emission quantified by the business for the financial year ending 31st December 2023.

The report has been prepared under the Companies (Directors’ report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, under which we are required to disclose our UK Energy use and associated GHG emissions. Specifically, we are required to report UK energy usage and emission derived from purchased electricity, gas and transport.

UK GHG emissions:

 

2023

 

 

 

 

(Kgs CO2e)

 

 

 

 

 

Scope 1

 

 

 

1,578

Scope 2 – Location-based

 

 

25,337

Scope 2 – Market-based

 

 

-

Scope 3

 

 

 

-

Total Location-based emissions

 

 

26,915

Kgs CO2e / Sq. ft.

 

 

 

3.8

Kgs CO2e / £m Revenues

 

 

542.1

Energy consumed in UK operations:

 

2023

 

 

 

 

(kWh)

 

 

 

 

 

Fuel combustion: natural gas

 

 

8,646

Purchased electricity

 

 

122,355

 

 

 

 

131,001

Methodology

The report has been prepared in reference to the GHG Protocol Corporate Standard. A ‘financial control’ approach has been used to define the GHG emissions boundary. This approach captures emissions associated with the operation of all buildings and, to the extent required under the reporting scope, business travel.

Emissions have been calculated using the latest conversion factors by the UK Government.

There are no material omission from the mandatory reporting scope.

Scope

The Scope 1 emissions have been limited to the requirements of SECR, including stationary emissions. Mobile emissions are immaterial.

The Scope 2 emissions have been calculated in accordance with GHG Protocol and SECR. Including both location- and market-based emissions.

The Scope 3 emissions have been limited to the requirements of SECR, including staff vehicle emissions. Scope 3 emission are immaterial.

Capstone Investment Advisors (UK), LLP
Members' Report (Continued)
For the year ended 31 December 2023
Page 3

Energy efficiency initiatives

The Company has taken steps to improve the energy efficiency of its operations and reduce its carbon footprint. The actions taken include:

Statement of members' responsibilities

The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members 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 limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:

 

 

The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as the members are aware, there is no relevant audit information of which the limited liability partnership's auditor is unaware. Additionally, the members have individually have taken all the necessary steps that they ought to have taken as members in order to make themselves aware of all relevant audit information and to establish that the limited liability partnership's auditor is aware of that information.

Approved by the members on 23 April 2024 and signed on behalf by:
23 April 2024
Capstone Investment Advisors, LLC
Designated Member
Capstone Investment Advisors (UK), LLP
Independent Auditor's Report
To the Members of Capstone Investment Advisors (UK), LLP
Page 4
Opinion

We have audited the financial statements of Capstone Investment Advisors (UK), LLP (the 'limited liability partnership') for the year ended 31 December 2023 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Reconciliation of Members' Interests, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

 

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the limited liability partnership in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the limited liability partnership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.

Capstone Investment Advisors (UK), LLP
Independent Auditor's Report (Continued)
To the Members of Capstone Investment Advisors (UK), LLP
Page 5

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The members are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

 

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 as applied to limited liability partnerships requires us to report to you if, in our opinion:

 

Responsibilities of members

As explained more fully in the Members' Responsibilities Statement, the members 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 members 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 members are responsible for assessing the limited liability partnership'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 members either intend to liquidate the limited liability partnership or to cease operations, or have no realistic alternative but to do so.

Capstone Investment Advisors (UK), LLP
Independent Auditor's Report (Continued)
To the Members of Capstone Investment Advisors (UK), LLP
Page 6
Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

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.

Capstone Investment Advisors (UK), LLP
Independent Auditor's Report (Continued)
To the Members of Capstone Investment Advisors (UK), LLP
Page 7

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the limited liability partnership.

 

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

Use of our report

This report is made solely to the Limited Liability Partnership’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 (as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). Our audit work has been undertaken so that we might state to the Limited Liability Partnership’s members those matters which 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 any party other than the Limited Liability Partnership and the Limited Liability Partnership’s members as a body, for our work, for this report, or for the opinions we have formed.

Andrew Grieve (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
23 September 2024
Chartered Accountants
6th Floor
Statutory Auditor
9 Appold Street
London
EC2A 2AP
Capstone Investment Advisors (UK), LLP
Statement of Comprehensive Income
For the year ended 31 December 2023
Page 8
2023
2022
Notes
£
£
Turnover
50,075,083
39,773,379
Cost of sales
(6,723,397)
(4,355,432)
Gross profit
43,351,686
35,417,947
Administrative expenses
(12,939,878)
(11,599,962)
Profit for the financial year before members' remuneration and profit shares
30,411,808
23,817,985
Members' remuneration charged as an expense
6
(3,362,095)
(3,401,239)
Profit for the financial year available for discretionary division among members
27,049,713
20,416,746

The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.

Capstone Investment Advisors (UK), LLP
Balance Sheet
As at 31 December 2023
Page 9
2023
2022
Notes
£
£
£
£
Fixed assets
Tangible assets
7
292,274
450,052
Current assets
Debtors
8
27,914,087
24,668,684
Cash and cash equivalents
3,006,622
2,131,836
30,920,709
26,800,520
Creditors: amounts falling due within one year
9
(6,433,580)
(9,281,915)
Net current assets
24,487,129
17,518,605
Total assets less current liabilities and net assets attributable to members
24,779,403
17,968,657
Represented by:
Loans and other debts due to members within one year
Amounts due in respect of profits
18,821,913
12,006,167
Members' other interests
Members' capital classified as equity
5,957,490
5,962,490
24,779,403
17,968,657
Total members' interests
Amounts due from members
(26,722,974)
(20,377,769)
Loans and other debts due to members
18,821,913
12,006,167
Members' other interests
5,957,490
5,962,490
(1,943,571)
(2,409,112)
The financial statements were approved by the members and authorised for issue on 23 April 2024 and are signed on their behalf by:
23 April 2024
Capstone Investment Advisors, LLC
Designated member
Limited Liability Partnership Registration No. OC330201
Capstone Investment Advisors (UK), LLP
Reconciliation of Members' Interests
For the year ended 31 December 2023
Page 10
Current financial year
EQUITY
DEBT
TOTAL
Members' other interests
Loans and other debts due to members less any amounts due from members in debtors
Members'
Interests
Members' capital
Other reserves
Total
Other amounts
Total
Total
2023
£
£
£
£
£
£
Amounts due to members
12,006,167
Amounts due from members
(20,377,769)
Members' interests at 1 January 2023
5,962,490
-
5,962,490
(8,371,602)
(8,371,602)
(2,409,112)
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
-
-
3,362,095
3,362,095
3,362,095
Profit for the financial year available for discretionary division among members
-
27,049,713
27,049,713
-
-
27,049,713
Members' interests after profit and remuneration for the year
5,962,490
27,049,713
33,012,203
(5,009,507)
(5,009,507)
28,002,696
Allocation of profit for the financial year
-
(27,049,713)
(27,049,713)
27,049,713
27,049,713
-
Introduced by members
30,000
-
30,000
-
-
30,000
Repayments of capital
(35,000)
-
(35,000)
-
-
(35,000)
Drawings
-
-
-
(20,428,978)
(20,428,978)
(20,428,978)
Other movements
-
-
-
(9,512,289)
(9,512,289)
(9,512,289)
Members' interests at 31 December 2023
5,957,490
-
5,957,490
(7,901,061)
(7,901,061)
(1,943,571)
Amounts due to members
18,821,913
Amounts due from members, included in debtors
(26,722,974)
(7,901,061)
Capstone Investment Advisors (UK), LLP
Reconciliation of Members' Interests (Continued)
For the year ended 31 December 2023
Page 11
Prior financial year
EQUITY
DEBT
TOTAL
Members' other interests
Loans and other debts due to members less any amounts due from members in debtors
Members'
Interests
Members' capital
Other reserves
Total
Other amounts
Total
Total
2022
£
£
£
£
£
£
Amounts due to members
8,707,979
Amounts due from members
(13,966,211)
Members' interests at 1 January 2022
6,792,001
-
6,792,001
(5,258,232)
(5,258,232)
1,533,769
Members' remuneration charged as an expense, including employment costs and retirement benefit costs
-
-
-
3,401,239
3,401,239
3,401,239
Profit for the financial year available for discretionary division among members
-
20,416,746
20,416,746
-
-
20,416,746
Members' interests after profit and remuneration for the year
6,792,001
20,416,746
27,208,747
(1,856,993)
(1,856,993)
25,351,754
Allocation of profit for the financial year
-
(20,416,746)
(20,416,746)
20,416,746
20,416,746
-
Introduced by members
1,932,650
-
1,932,650
-
-
1,932,650
Repayments of capital
(2,762,161)
-
(2,762,161)
-
-
(2,762,161)
Drawings
-
-
-
(14,715,217)
(14,715,217)
(14,715,217)
Other movements
-
-
-
(12,216,138)
(12,216,138)
(12,216,138)
Members' interests at 31 December 2022
5,962,490
-
5,962,490
(8,371,602)
(8,371,602)
(2,409,112)
Amounts due to members
12,006,167
Amounts due from members, included in debtors
(20,377,769)
(8,371,602)
Capstone Investment Advisors (UK), LLP
Statement of Cash Flows
For the year ended 31 December 2023
Page 12
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
17
30,870,476
27,530,741
Payments to members
(29,941,267)
(26,931,355)
Net cash inflow from operating activities
929,209
599,386
Investing activities
Purchase of tangible fixed assets
(49,423)
(172,754)
Net cash used in investing activities
(49,423)
(172,754)
Financing activities
Capital introduced by members (classified as debt or equity)
30,000
1,932,650
Repayment of capital or debt to members
(35,000)
(2,762,161)
Net cash used in financing activities
(5,000)
(829,511)
Net increase/(decrease) in cash and cash equivalents
874,786
(402,879)
Cash and cash equivalents at beginning of year
2,131,836
2,534,715
Cash and cash equivalents at end of year
3,006,622
2,131,836
Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements
For the year ended 31 December 2023
Page 13
1
Accounting policies
Limited liability partnership information

Capstone Investment Advisors (UK), LLP is a limited liability partnership incorporated in England and Wales. The registered office is 1st Floor, 10 New Burlington Street, London, W1S 3BE.

 

The limited liability partnerships' principal activities are disclosed in the Members' Report.

1.1
Accounting convention

These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2018, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest pound.

The financial statements, which are those of Capstone Investment Advisors (UK), LLP as an individual entity, have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.

The financial statements of the limited liability partnership are drawn up to 31 December each year.

1.2
Going concern

At the time of approving the financial statements, the members have a reasonable expectation that the limited liability partnership has adequate resources to continue in operational existence for the foreseeable future. Thus, the members continue to adopt the going concern basis of accounting in preparing the financial statements. The limited liability partnership provides services to other group entities and accordingly the members have reviewed the financial position of the group and are confident it has adequate resources to enable the limited liability partnership to continue to trade for at least a year from the date of approval of these financial statements.

 

The parent entity has confirmed it will continue to support the limited liability partnership for at least 12 months from the date of approval of the audit report on these financial statements.

1.3
Turnover

Turnover represents the fair value of services provided during the period to the ultimate parent company. Turnover is recognised as contract activity progresses and the right to consideration is earned. Fair value reflects the amount expected to be recoverable from the ultimate parent company and is based on services provided and expenses incurred, but excludes VAT.

Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 14
1.4
Members' participation rights

Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).

 

Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.

 

All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within Members' remuneration charged as an expense in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as 'Amounts due from members' within members’ interests.

Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.

Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.

The LLP classifies automatic or discretionary profit distributions as operating cash flows, because they are in substance paid for services rendered to the LLP as part of its revenue generating activities.

1.5
Tangible fixed assets

Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Short leasehold land and buildings
over the life of the lease
Plant and machinery
over 5 years on a straight line basis
Fixtures, fittings and equipment
over 7 years on a straight line basis

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.

1.6
Impairment of fixed assets

At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying value. If the estimated recoverable amount is lower, the carrying value is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.

Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 15

If an impairment loss subsequently reverses, the carrying value of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

1.7
Financial instruments

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans and other debtors receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

Creditors

Short term trade creditors and other current creditors payable on demand are measured at the transaction price. Other financial liabilities, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

1.8
Taxation

The taxation payable on the partnership profits is solely the personal liability of the individual members consequently neither partnership taxation nor related deferred taxation arising in respect of the partnership are accounted for in these financial statements.

1.9
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.10
Retirement benefits and post retirement payments to members

The limited liability partnership contributes to personal pension schemes of certain individual employees. Contributions payable are charged to the profit and loss account in the year they are payable.

1.11
Leases

Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account on a straight line basis over the term of the relevant lease.

1.12
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
1
Accounting policies
(Continued)
Page 16
1.13
Members' remuneration and equity

A member’s share in the profit or loss for the year is accounted for when profits are allocated. Unallocated profits and losses are included within other reserves. The treatment of members' remuneration in the profit and loss account is determined by reference to the nature of the participation rights that give rise to the remuneration. If the members' remuneration gives rise to a liability it is charged as an expense. Amounts subscribed or otherwise contributed by members are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity capital. Equity capital is any capital that is repayable to the member only at the discretion of the limited liability partnership.

1.14

Deferred compensation

The LLP has a remuneration policy whereby a portion of the compensation for the year for eligible employees is deferred and may be subject to forfeiture. Payment to participating employees will depend on whether they remain in the employment of the LLP and on their performance over the deferral period.

 

Deferred remuneration is recognised as an expense evenly over the deferral period once an obligation exists, it is probable that the LLP will be required to pay the deferred remuneration and the amount can be measured reliably.

2
Judgements and key sources of estimation uncertainty

In the application of the limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

 

The members do not consider there to be any key estimates or judgements applicable to the company.

3
Operating profit
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange differences apart from those arising on financial instruments measured at fair value through profit or loss
(250,081)
77,266
Depreciation of owned tangible fixed assets
207,201
227,035
Operating lease charges
751,619
882,617
Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 17
4
Auditor's remuneration
2023
2022
Fees payable to the LLP's auditor and associates:
£
£
For audit services
Audit of the financial statements of the LLP
46,764
35,535
For other services
All other non-audit services
12,068
9,047
5
Employees

The average number of persons (excluding members) employed by the partnership during the year was:

2023
2022
Number
Number
Advisory
30
19
Administration
55
39
Total
85
58

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
13,835,348
10,043,292
Social security costs
1,569,411
1,378,639
Pension costs
392,514
254,546
15,797,273
11,676,477
6
Members' remuneration
2023
2022
Number
Number
Average number of members during the year
17
18
2023
2022
£
£
Profit attributable to the member with the highest entitlement
9,569,323
5,221,705
Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 18
7
Tangible fixed assets
Short leasehold land and buildings
Plant and machinery
Fixtures, fittings and equipment
Total
£
£
£
£
Cost
At 1 January 2023
1,122,289
221,893
468,475
1,812,657
Additions
49,423
-
-
49,423
At 31 December 2023
1,171,712
221,893
468,475
1,862,080
Depreciation and impairment
At 1 January 2023
811,030
144,542
407,033
1,362,605
Depreciation charged in the year
169,660
27,301
10,240
207,201
At 31 December 2023
980,690
171,843
417,273
1,569,806
Carrying amount
At 31 December 2023
191,022
50,050
51,202
292,274
At 31 December 2022
311,259
77,351
61,442
450,052
8
Debtors
2023
2022
Amounts falling due within one year:
£
£
Amounts owed by members
26,722,974
20,377,769
Other debtors
996,222
3,929,653
Prepayments and accrued income
194,891
361,262
27,914,087
24,668,684
9
Creditors: amounts falling due within one year
2023
2022
£
£
Trade creditors
346,818
316,342
Other taxation and social security
1,688,784
1,297,667
Other creditors
1,176,716
4,297,156
Accruals and deferred income
3,221,262
3,370,750
6,433,580
9,281,915
Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 19
10
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
392,514
254,546

The limited liability partnership operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.

11
Loans and other debts due to members
2023
2022
£
£
Analysis of loans
Amounts falling due within one year
18,821,913
12,006,167

In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.

 

Any reduction in members' other interests are subject to approval by the limited liability partnership's managing committee.

12
Operating lease commitments
Lessee

At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable rental operating leases, which fall due as follows:

2023
2022
£
£
Within one year
568,298
758,396
Between two and five years
-
631,997
568,298
1,390,393

On 12 January 2024, the limited liability partnership entered into an agreement for future minimum lease payments under non-cancellable rental operating leases of £3,552,921.

13
Related party transactions

 

Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
13
Related party transactions
(Continued)
Page 20

At the balance sheet date £878,337 (2022: £3,720,659) is included in debtors in relation to balances owing from companies in which the ultimate controlling party has an interest. These amounts are interest free, unsecured and repayable on demand.

 

At the balance sheet date £1,159,889 (2022: £4,111,823) is included in creditors in relation to balances owed to companies in which the ultimate controlling party has an interest. These amounts are interest free, unsecured and repayable on demand.

14
Members' transactions

During the year the limited liability partnership provided management services to Capstone Investment Advisors, LLC totalling £50,033,375 (2022: £39,773,379).

15
Ultimate controlling party

The ultimate controlling party is P Britton (2022: P Britton) by virtue of his interest in the designated member, Capstone Investment Advisors, LLC, a company incorporated in the United States of America (2022: Capstone Investment Advisors, LLC).

16
Deferred compensation

As part of the LLP's remuneration policy, unvested deferred compensation amounts for which a provision has not been recognised is £798,594 (2022: £1,275,559).

17
Cash generated from operations
2023
2022
£
£
Profit for the year
30,411,808
23,817,985
Adjustments for:
Depreciation and impairment of tangible fixed assets
207,201
227,035
Movements in working capital:
Decrease/(increase) in debtors
3,099,802
(650,430)
(Decrease)/increase in creditors
(2,848,335)
4,136,151
Cash generated from operations
30,870,476
27,530,741
Capstone Investment Advisors (UK), LLP
Notes to the Financial Statements (Continued)
For the year ended 31 December 2023
Page 21
18
Analysis of changes in net funds
1 January 2023
Cash flows
31 December 2023
£
£
£
Cash at bank and in hand
2,131,836
874,786
3,006,622
Loans and other debts due to members:
- Other amounts due to members
(12,006,167)
(6,815,746)
(18,821,913)
Balances including members' debt
(9,874,331)
(5,940,960)
(15,815,291)
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