Company No:
Contents
| DIRECTORS | Charles Kane Antelme (Resigned 24 March 2025) |
| The Honourable James Henry Morys Bruce | |
| Charles Vincent Ellingworth | |
| John David Gordon | |
| Harry Michael Charles Morley (Appointed 01 January 2025) | |
| Andrew John Shirley Ross |
| SECRETARY | Anna Jane Lewis |
| REGISTERED OFFICE | 10 Duke Of York Square |
| London | |
| SW3 4LY | |
| United Kingdom |
| COMPANY NUMBER | 03008401 (England and Wales) |
| AUDITOR | BDO LLP |
| Statutory Auditor | |
| 55 Baker Street | |
| London | |
| W1U 7EY |
The directors present their Strategic Report for the financial year ended 31 December 2024.
REVIEW OF THE BUSINESS
**Cazenove investment portfolio**
2024 saw the investment portfolio make a return of +12.4% in comparison to CPI +3.5% which returned +6.1%.
This return was ahead of the short-term industry comparators, the Asset Risk Consulting (ARC) Steady Growth Private Client and the Investment Association (IA) Mixed Shares 40-85% shares indices, which returned +8.4% and +8.9% respectively over the same time period.
Over the longer term time period of seven years, the portfolio (+42.3%) is behind the inflation benchmark (CPI+4.0% to 31.12.2023 and CPI plus 3.5% thereafter) (+69.0%) whilst remaining comfortably ahead both the ARC (+30.4%) and IA (+34.6%) industry comparators.
The final quarter of 2024 brought a dramatic shift in the global landscape as we learnt that Donald Trump had won the US election, with this seismic political event likely to increase escalating geopolitical tensions. Concerns surrounding inflation reacceleration also grew, with central banks split on how to proceed in their rate cutting cycles.
US equities were the best performing equity market over the year, with the S&P 500 up 26% helped by its tech exposure. This matched its prior annual performance, producing a return of over 20% for the second year running. The impressive gains were largely driven by the continued success of the "Magnificent 7" tech stocks, which saw an increase of 67% during the year. Market concentration is a risk, with these seven stocks accounting for over 20% of global equity market capitalisation, but this reflects their superior earnings growth, and we are maintaining our exposure to these companies at close to benchmark weight, having increased our weighting materially over the last 18 months.
The US market was dominated by the aftermath of the presidential election in Q4, with the S&P rallying before paring back some gains. The initial surge was driven by optimism about tax cuts and deregulation, but as the quarter ended the market was digesting the nomination of Scott Bessent as Treasury Secretary which could suggest a more fiscally conservative approach and perhaps some thawing of the administration's trade policy positions. The prospect of a trade war with China and its impact on global supply chains and inflation remained key concerns, with Trump indicating 25% tariffs on Canada and Mexico, who often route Chinese goods into the US. The energy and materials sectors, especially oil and gas, underperformed despite the ‘Drill Baby Drill’ messaging from Trump. Interest rate-sensitive sectors, such as consumer staples, real estate and utilities, also declined as bond yields continued to march higher and investors dialled back their expectations for Fed rate cuts. Current expectations for two interest rate cuts in 2025 look broadly fair.
European equities made a positive return over the year despite falling towards the end of the period. Concerns about a possible trade war and rising political instability weighing on investor sentiment. The prospect of higher tariffs under a Trump administration raised fears of a negative impact on European exports and economic growth. Some of the largest stocks such as Novo Nordisk, ASML and LVMH, disappointed towards the end of the year which dragged the index lower. Novo Nordisk reported trial results for its new weight loss drug, but despite the results confirming it would be the best drug on the market, it fell 25% on the day as the efficacy was slightly below what the market had discounted. We still see this result as positive overall and remain bullish on the growth potential for Novo Nordisk from this new drug. ASML and LVMH’s underperformance was linked to weakening Chinese demand, with the former being affected by export restrictions. Uncertainty regarding the European Central Bank's (ECB) policy trajectory and the timing of future rate cuts, given heightened inflation uncertainty and weak economic activity, also added to market volatility.
The UK saw the first Labour Government budget in 14 years, with Chancellor Rachel Reeves delivering a classic ‘tax and spend’ budget, as expected. Taxes will rise by £40bn a year, mostly through a rise in employer national insurance contributions, and borrowing will rise by £140bn more over the next five years. UK equities experienced a muted quarter, down 1%, underperforming global equities. Concerns about rising inflation and its potential to hinder economic growth weighed on the market too, whilst uncertainty about the Bank of England's policy path added to volatility.
Fixed income markets experienced a volatile year for performance. US Treasury yields rose in the aftermath of the election on the expectation that stronger growth and higher inflation would lead to fewer Fed rate cuts. The Fed also pivoted in a more hawkish direction in December; although they cut rates again, bringing their total cuts in 2024 to 100 basis points (bps), they only signalled 50bps of cuts for 2025. The UK gilt market underperformed, with yields rising sharply and the spread between UK gilt yields and those of other major sovereign bonds widening as investors reacted to the UK government's budget announcement. European bond yields also experienced upward pressure, as Spain’s latest inflation print came in above expectations and fears of a slower cutting cycle grew. Emerging market bonds faced a challenging quarter as the strengthening dollar and rising US Treasury yields increased pressure on debt repayment.
Commodity markets produced mixed returns for the year. Oil prices, after an initial rally on geopolitical tensions surrounding the Russia-Ukraine conflict, experienced a significant decline as the focus shifted to concerns about global demand. Gold performed strongly over the year and Bitcoin (sometimes dubbed digital gold) passed the $100k mark for the first time. Industrial metals, such as copper, also saw declines, reflecting concerns about global demand and the potential for slower economic growth in China.
Looking ahead, we expect the global economy to continue to deliver growth in the region of 2.5-3% over the next couple of years. While this is broadly in line with 2023 and 2024, the relative stability masks some major shifts at the country level. Stronger growth in the US is offset by weaker growth elsewhere. Trump’s plan to cut taxes and regulation should boost US growth in 2025 and 2026. However, faster growth may add to the inflationary pressure from any potential tariffs and immigration restrictions, which could mean less scope for interest rate cuts.
Economic fundamentals suggest that 2025 should be another positive year for equities, and we enter 2025 overweight. The challenge is that downside risks are greater than before; the prospect of an all-out trade war looms large, the outlook for interest rates is more uncertain, and government debt continues to rise. It will be important to be nimble with asset allocation in the face of these changing conditions.
Diversification should also help to mitigate some of these risks. In multi-asset portfolios, bonds should provide some protection against risks to growth, while gold and other commodities help to manage the risk of inflation and elevated geopolitical tensions.
Within equities, the US mega-caps continue to deliver from an earnings perspective, but their exceptionally strong performance and high concentration mean ex-US diversifiers are also important. The UK, Japan, and commodity-exposed markets all look attractive today and should help to diversify our equity exposure. The picture is more challenging for Europe and emerging markets, although we are keeping a keen eye on China for signs of improvement.
**Private investments portfolio**
The private equity portfolio is mature and well diversified across strategy and geography. Excluding cash, the portfolio comprises 54 commitments to private investments funds completed across 24 high quality manager relationships. 14 managers are classified as active manager relationships, 2 are in review and 8 are in run-off. Portfolio performance since inception has been robust in all categories (buyouts, growth, venture and secondaries) but performance in 2024 was weaker especially when compared to public markets. The prolonged period of elevated interest rates, have exerted pressure on the portfolio, particularly on pre-revenue and pre-profit businesses within the venture capital category. However, the diversification within the CSEL portfolio continues to prove beneficial, with buyouts and secondaries managers mitigating losses.
Despite broader macroeconomic challenges, 2024 marked the first year the portfolio was cash flow positive, defined as underlying managers distributing more capital than was called for new investments. Distributions were bolstered by the partial secondary transaction of one of the growth equity positions. Looking ahead to 2025, we anticipate improved private investment performance, with M&A and IPO exit activity gaining momentum. However, recent public market volatility raises concerns about the overall outlook.
PRINCIPAL RISKS AND UNCERTAINTIES
**Cazenove investment portfolio**
On the 1 January 2021, the Investment Objectives of the portfolio were amended from a long-term Strategic Assets Allocation framework, to a new Investment Objective and performance target of achieving UK Inflation +4% over a rolling 5-7 year period. On the 1 January 2024 the target was revised to UK inflation +3.5% over a rolling 5-7 year period. Inflation will be measured by the UK Consumer Price Index (UK CPI).
With regards to risk, the Investment Portfolio is to be managed with an upper limit of 80% volatility of global equity markets (as measured by the MSCI All Country World Index) on an ex-Ante basis.
In order to meet the long-term Investment Objective, the Investment Portfolio will be invested predominantly in global equity markets, but also continue to invest in other assets, including fixed income, commodities and absolute return focussed funds, held with the objectives of reducing volatility and moderating risk.
As at 31 December 2024, the ex-Ante volatility of the Investment Portfolio was 71% of the volatility of global Equity markets (below the upper limit of 80%). Over the last five years, the rolling portfolio volatility (over the last five years) has averaged 72%, with a lowest reading of 63.5% and the highest 73.4%.
Further diversification is provided by the multi-manager approach; investing in third-party funds to gain access to asset classes. This limits ‘manager risk’ as investments are spread across fund management houses (currently over 25). Where possible, investments are made in a Unit Trust structure, which is regulated by the UK Financial Conduct Authority (FCA). This structure is subject to risk controls and legislation on the types and limits of investments that can be held and are governed by the FCA’s COLL Rules (Collective Investment Schemes Sourcebook).
Overall investment decisions are made by Cazenove Capital which is part of the Schroders Group. Cazenove Capital are responsible for fund selection and ensuring that the risk controls are adhered too. Overall investment risk, performance and asset allocation is monitored by Cazenove Capital, whilst this is overseen by a non-executive Board member with specific responsibility for non-property related investments on a frequency no less than quarterly. Full written reports are provided to the Board quarterly and presentations are given on a six monthly basis.
Fund selection at Cazenove Capital is carried out by a team, who utilise sophisticated software to monitor risk so as to ensure that the portfolio accurately reflects the investment strategy and that an appropriate level of risk is being taken in comparison to global equity markets.
**Private investments portfolio**
The private investment portfolio is managed with the objective of outperforming public markets (MSCI All Country World Index) by a substantial premium per annum. The target premium for illiquidity is 300-500 basis points per annum in excess of public markets over the long term. Given the high return target for the portfolio, the portfolio is inherently risk-seeking and managers in the portfolio regularly underwrite investments with high operational complexity, science/technology risk, and business model & execution risk. In order to become comfortable with these risks, Cambridge Associates conducts extensive due diligence on managers to ensure that private investment managers have appropriate expertise and resources to manage investments effectively using repeatable strategies for creating value. Portfolio-level risk is managed through significant diversification across the portfolio by sector, geography and strategy, and by ensuring sufficient vintage year diversification (ensuring a relatively consistent commitment pace each year). With the majority of exposure denominated in USD, significant currency volatility poses a risk to the portfolio, especially as no hedging is planned.
Approved by the Board of Directors and signed on its behalf by:
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The Honourable James Henry Morys Bruce
Director |
Charles Vincent Ellingworth
Director |
The directors present their report and the financial statements for the financial year ended 31 December 2024.
REVIEW OF THE BUSINESS
Turnover for the financial year amounted to £Nil (2023: £Nil). The company earned a profit after taxation totalling £98,675,936 (2023: £64,399,572).
The net current asset position of the company as at the financial year end amounted to £19,248,602 (2023: net current asset £15,351,029).
The net asset position of the company as at the financial year end amounted to £836,358,052 (2023: net asset £768,205,166).
DIRECTORS
The directors, who served during the financial year and to the date of this report except as noted, were as follows:
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(Resigned 24 March 2025) |
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(Appointed 01 January 2025) |
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DIRECTORS' INDEMNITIES
Financial instruments - objectives and policies
The company's principal financial instruments consist of financial assets and liabilities such as cash, trade creditors and other debtors. These arise directly from its operations.
Credit risk
Investments of cash surpluses are made through reputable banks with suitably high credit ratings. Receivables are monitored on an ongoing basis and provision is made for doubtful debts where necessary.
Liquidity risk
The company manages its cash and term deposit balances to maximise interest income whilst maintaining sufficient liquid resources to meet the operating needs of the company and its subsidiaries.
Foreign currency risk
The principal foreign currency exposure arises from foreign currency cash balances and overseas investments.
Going Concern
The directors have considered the appropriateness of adopting the going concern basis in preparing the financial statements for the year ended 31 December 2024.
After making enquiries, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence at least to 31 August 2026. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Disclosure of information to the auditors
So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information, being information needed by the auditor in connection with preparing its report, of which the auditor is unaware. Having made inquiries of fellow directors and the Company's auditor, each director has taken all steps that he/she is obliged to take as director in order to make himself/herself aware of any relevant audit information and to establish that the auditor is aware of that information.
AUDITOR
BDO LLP have expressed their willingness to continue in office as auditor and appropriate arrangements have been put in place for them to be deemed reappointed as auditor in the absence of an Annual General Meeting, in accordance with section 485 of the Companies Act 2006.
Approved by the Board of Directors and signed on its behalf by:
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The Honourable James Henry Morys Bruce
Director |
Charles Vincent Ellingworth
Director |
The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law), including FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”. Under company law the directors 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 the profit or loss of the company for that financial period.
In preparing these financial statements, the directors are required to:
* Select suitable accounting policies and then apply them consistently;
* Make judgements and accounting estimates that are reasonable and prudent; and
* State whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
* Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The directors are responsible for keeping adequate 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 the financial statements comply with the Companies Act 2006. The directors are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Report on the audit of the financial statements
In our opinion the financial statements:
•give a true and fair view of the state of the Company’s affairs as at 31 December 2024 and of its profit for the year then ended;
•have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
•have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Cadogan Settled Estates Limited (“the Company”) for the year ended 31 December 2024 which comprise the profit and loss account, balance sheet, statement of changes in equity and notes to the financial statements, including a summary of 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).
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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We are independent of the Company 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.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ 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 Company'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 Directors with respect to going concern are described in the relevant sections of this report.
The Directors are responsible for the other information. The other information comprises the information included in the Directors report and financial statements, other than the financial statements and our auditor’s report thereon. 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.
Report on other legal and regulatory requirements
Other Companies Act 2006 reporting
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the Strategic report and the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
As explained more fully in the Statement of Directors Responsibilities, 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 (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.
Extent to which the audit was 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:
Non-compliance with laws and regulations
Based on:
• Our understanding of the Company and the industry in which it operates;
• Discussion with management and those charged with governance; and
• Obtaining an understanding of the Company’s policies and procedures regarding compliance with laws and regulations,
we considered the significant laws and regulations to be Companies Act 2006, United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland and UK tax legislation.
The Company is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such laws and regulations to be the health and safety legislations.
Our procedures in respect of the above included:
• Review of minutes of meetings of those charged with governance for any instances of non-compliance with laws and regulations;
• Review of financial statement disclosures and agreeing to supporting documentation;
• Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment procedures included:
• Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
• Obtaining an understanding of the Company’s policies and procedures relating to:
• Detecting and responding to the risks of fraud; and
• Internal controls established to mitigate risks related to fraud.
• Review of minutes of meetings of those charged with governance for any known or suspected instances of fraud;
• Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
• Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material misstatement due to fraud;
• Considering remuneration incentive schemes and performance targets and the related financial statement areas impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls.
Our procedures in respect of the above included:
• Testing a sample of journal entries throughout the year, which met a defined risk criteria, by agreeing to supporting documentation;
• Assessing significant estimates made by management for bias.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the Financial Reporting Council’s website at:
https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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.
For and on behalf of
Statutory Auditor
London
W1U 7EY
| Note | 2024 | 2023 | ||
| £ | £ | |||
| Administrative expenses | (
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| Other operating income | 3 |
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| Income from other fixed asset investments | 4 |
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| Other non-operating income | 9 |
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| Profit before interest and taxation | 115,776,792 | 73,329,935 | ||
| Interest receivable and similar income | 4 |
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| Profit before taxation |
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| Tax on profit | 8 | (
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| Profit for the financial year |
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| £ | £ | |||
| Fixed assets | ||||
| Investments | 11 |
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| 912,333,704 | 832,395,438 | |||
| Current assets | ||||
| Debtors | 12 |
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| Cash at bank and in hand | 13 |
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| 19,489,709 | 15,420,400 | |||
| Creditors: amounts falling due within one year | 14 | (
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| Net current assets | 19,248,602 | 15,351,029 | ||
| Total assets less current liabilities | 931,582,306 | 847,746,467 | ||
| Provision for liabilities | 15 | (
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| Net assets | 836,358,052 | 768,205,166 | ||
| Capital and reserves | 17 | |||
| Called-up share capital |
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| Capital redemption reserve |
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| Profit and loss account |
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| Total shareholder's funds | 836,358,052 | 768,205,166 |
The financial statements of Cadogan Settled Estates Limited (registered number:
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The Honourable James Henry Morys Bruce
Director |
Charles Vincent Ellingworth
Director |
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The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
The company is a private company limited by share capital incorporated in England and Wales.
The address of its registered office is:
10 Duke of York Square
London
SW3 4LY
The single entity financial statements for Cadogan Settled Estates Limited were prepared in accordance with Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland'.
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies.
The financial statements are presented in Sterling which is the functional currency of the company and rounded to the nearest £.
The directors have considered the appropriateness of adopting the going concern basis in preparing the financial statements for the year ended 31 December 2024.
The key asset of the company include the Cazenove portfolio valued at c. £708m as at 31 December 2024. The portfolio is well diversified and closely monitored for risk and volatility. Furthermore, most of the investments can be realised at short notice. Based on this assessment, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence until 31 August 2026. Accordingly, they continue to adopt the going concern basis in preparing the financial statements.
Group accounts exemption s400
The Company has taken advantage of the exemption under section 400 of the Companies Act 2006 not to prepare consolidated accounts. The financial statements present information about the company as an individual entity and not about its group.
Cadogan Settled Estates Limited is a wholly owned subsidiary of Cadogan Settled Estates Holdings Limited and the results of Cadogan Settled Estates Limited are included in the consolidated financial statements of Cadogan Settled Estates Holdings Limited which are available from 10 Duke of York Square, London, SW3 4LY.
Dividends and interest received from investments are recognised in the profit and loss account. Dividends are recognised on the date they become ex-div without making any adjustment for amounts accrued at the dates of purchase and sale of the securities. Interest is recognised on the accruals basis.
The current tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the company operates and generates taxable income.
The company has recognised the deferred tax liability that arises as a result of temporary differences between the recognition of gains on revaluation in the accounts and tax return.
Deferred tax has been calculated using the tax rates that are expected to apply in the periods in which timing differences reverse.
Trade creditors are recognised initially at the transaction price and subsequently measured at amortised cost using the effective interest method.
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.
Investments
Investments in equity shares and other securities which are publicly traded or where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Investments in equity shares and other securities which are not publicly traded and where fair value cannot be measured reliably are measured at cost less impairment.
Subsidiaries, jointly controlled entities, and associates where the fair value can be measured reliably are initially measured at fair value, with changes in fair value recognised in profit or loss. Subsidiaries, jointly controlled entities, and associates where fair value cannot be measured reliably are measured at cost less impairment.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the financial year in which the estimate is revised if the revision affects only that financial year, or in the financial year of the revision and future financial years if the revision affects both current and future financial years.
The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are outlined below.
The valuation of investments is subjective and hard to value investments require a material degree of estimation.
Management estimation is required to determine the tax rates that are expected to apply in the periods in which timing differences reverse.
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| £ | £ | ||
| Guarantee fee income |
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| Income from other fixed asset investments |
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| Interest receivable and similar income |
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| 13,934,959 | 9,852,142 |
Income from other fixed asset investments
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| Income from fixed asset investments: | |||
| Other investments |
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Interest receivable and similar income
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| £ | £ | ||
| Bank interest |
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An analysis of the auditor's remuneration is as follows:
| 2024 | 2023 | ||
| £ | £ | ||
| Fees payable to the company’s auditor and its associates for the audit of the company's annual financial statements: | 60,440 | 88,880 | |
| Total audit fees |
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| 2024 | 2023 | ||
| Number | Number | ||
| The average monthly number of employees (including directors) was: | |||
| Directors |
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|
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| Employees |
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|
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Their aggregate remuneration comprised:
| 2024 | 2023 | ||
| £ | £ | ||
| Wages and salaries |
|
|
| 2024 | 2023 | ||
| £ | £ | ||
| Directors' emoluments |
|
|
| 2024 | 2023 | ||
| £ | £ | ||
| Current tax on profit | |||
| UK corporation tax |
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|
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| Foreign tax |
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| Total current tax |
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| Deferred tax | |||
| Origination and reversal of timing differences |
|
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| Total deferred tax |
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| Total tax on profit |
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The tax assessed for the year is lower than (2023: lower than) the standard rate of corporation tax in the UK:
| 2024 | 2023 | ||
| £ | £ | ||
| Profit before taxation | 116,081,386 | 73,550,385 | |
| Tax on profit at standard UK corporation tax rate of 25% (2023: 25%) |
|
|
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| Effects of: | |||
| Decrease in current tax from adjustment for prior periods | (17,493) | (281,251) | |
| Tax decrease from effect of dividends from UK companies | (13,119,681) | (10,195,776) | |
| Other tax effects for reconciliation between accounting profit and tax expense | 1,522,277 | 1,314,831 | |
| Decrease in current tax from changes in tax rates | 0 | (74,587) | |
| Total tax charge for year | 17,405,450 | 9,150,813 |
| 2024 | 2023 | ||
| £ | £ | ||
| Gain on revaluation of fixed asset investments | 62,790,037 | 32,926,829 |
| 2024 | 2023 | ||
| £ | £ | ||
| Amounts recognised as distributions to equity holders in the financial year: | |||
| Interim dividend for the financial year ended 31 December 2024 of £0.75 (2023: £0.31) per ordinary share | 30,523,050 | 12,612,596 | |
| 2024 | 2023 | ||
| £ | £ | ||
| Subsidiary undertakings |
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|
|
| Other investments and loans |
|
|
|
| 912,333,704 | 832,395,438 |
Investments in subsidiaries
| 2024 | |
| £ | |
| Cost | |
| At 01 January 2024 |
|
| Revaluation | 5,306,060 |
| At 31 December 2024 |
|
| Carrying value at 31 December 2024 |
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| Carrying value at 31 December 2023 |
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| Listed investments | Other investments | Total | |||
| £ | £ | £ | |||
| Cost or valuation before impairment | |||||
| At 01 January 2024 |
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| Additions |
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| Disposals | (
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(
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| Movement in fair value |
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(
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| At 31 December 2024 |
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| Carrying value at 31 December 2024 |
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| Carrying value at 31 December 2023 |
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Investments in shares
| Name of entity | Registered office | Principal activity | Class of shares |
Ownership 31.12.2024 |
Ownership 31.12.2023 |
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10 Duke Of York Square, London, United Kingdom, SW3 4LY | Holding Company |
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10 Duke Of York Square, London, United Kingdom, SW3 4LY | Property Investment |
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10 Duke Of York Square, London, United Kingdom, SW3 4LY | Farming, fishing, and estate management in Scotland |
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10 Duke Of York Square, London, United Kingdom, SW3 4LY | Renewable energy generation |
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1 Le Marchant Street, St. Peter Port, Guernsey, GY1 4HP | Equity Investment |
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| 2024 | 2023 | ||
| £ | £ | ||
| Amounts owed by parent undertakings (note 19) |
|
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| Short term loans to group companies (note 19) |
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|
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| Corporation tax |
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|
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|
| 2024 | 2023 | ||
| £ | £ | ||
| Cash at bank and in hand |
|
|
| 2024 | 2023 | ||
| £ | £ | ||
| Amounts owed to own subsidiaries (note 19) |
|
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| Taxation and social security |
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| Accruals |
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| Deferred taxation | Total | ||
| £ | £ | ||
| At 01 January 2024 |
|
79,541,301 | |
| Charged to the Profit and Loss Account |
|
15,682,953 | |
| At 31 December 2024 |
|
95,224,254 | |
Deferred tax
| 2024 | 2023 | ||
| £ | £ | ||
| Accelerated capital allowances |
|
|
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| Provision for deferred tax |
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The carrying values of the company’s financial assets and liabilities are summarised by category below:
| 2024 | 2023 | ||
| £ | £ | ||
| Financial assets | |||
| Measured at fair value through profit or loss | |||
| Investments in listed equity instruments (note 11) |
|
|
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| Measured at cost less impairment | |||
| Unlisted investments |
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| Measured at undiscounted amount receivable | |||
| Amounts owed by Parent undertakings (note 12) |
|
|
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| Short term loans to Group companies (note 12) |
|
|
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| 922,706,024 | 842,410,196 | ||
| Financial liabilities | |||
| Measured at undiscounted amount payable | |||
| Amounts owed to own subsidiaries (note 14) | (
|
(
|
| 2024 | 2023 | ||
| £ | £ | ||
| Allotted, called-up and fully-paid | |||
|
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| Presented as follows: | |||
| Called-up share capital presented as equity | 40,463,896 | 40,463,896 |
The profit and loss reserve includes all current and prior period distributable retained profits and losses.
The capital redemption reserve arose on the historic acquisition and consolidation of a subsidiary company.
Commitments
The company made capital contributions to CSEL (Guernsey) LP Inc of £nil (2023 - £5,000,000) in the period. At the balance sheet date £53,800,000 (2023 - £53,800,000) had been paid to CSEL (Guernsey) LP Inc.
The capital commitments are for the purpose of making portfolio investments, satisfying expenses, and fulfilling the obligations to underlying Funds.
During the year, the company made further capital commitments to CSEL (Guernsey) LP of £15,000,000 (2023 - £nil). The total amount contracted for but not provided in the financial statements was £112,200,000 (2023 - £97,200,000).
Transactions with group companies
Amounts owed by Parent undertakings
| 2024 | 2023 | ||
| £ | £ | ||
| Debtors: due within one year - Amounts owed by parent company |
|
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Short term loans to group companies
| 2024 | 2023 | ||
| £ | £ | ||
| Short term loan to subsidiary | (10,364,758) | (10,014,758) |
The company has guaranteed financial support to the subsidiary in order for it to continue with ongoing business activities.
The loan outstanding at year-end is £10,364,758 (2023 - £10,014,758) and is repayable on demand.
Amounts owed to own subsidiaries
| 2024 | 2023 | ||
| £ | £ | ||
| Amounts owed to own subsidiaries |
|
|
Transactions with the entity’s directors (or members of its governing body)
Key management compensation
| 2024 | 2023 | ||
| £ | £ | ||
| Salaries and other short term employee benefits. |
|
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This was the result of the announcement of a series new Tariffs on US imports by the US president Donald Trump or “Liberation Day”. This caused equity and bond markets to fall significantly on concerns on slowing global growth and potential recession. Post “Liberation Day”, the announcement of a 90 day pause in Tariffs and negotiations on series of trade deals have largely seen markets recover these falls, with many global equity markets going on to reach near or all-time highs.
The ultimate holding company is Cadogan Settled Estates Holdings Limited, which is registered in England and Wales and which is ultimately controlled by The Eighth Earl Cadogan's 6 December 1961 Settlement. The consolidated financial statements of Cadogan Settled Estates Holdings Limited may be obtained from The Registrar of Companies, Companies House, Crown Way, Cardiff, CF14 3UZ.