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INFORMATION
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CONTENTS
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MEMBERS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The members present their annual report together with the audited financial statements of DG Partners LLP (the "LLP") for the year ended 31 December 2024.
Principal activities and review of business
The principal activity of the LLP in the year under review was that of providing investment management services to certain funds and managed accounts for which it acts as investment manager.
DG Partners Services Limited acts as a service company to the LLP and is also a member of the LLP. Since October 2010, a number of members of the LLP have also been appointed as members of BH-DG Systematic Trading LLP ("BHDG"). Although the LLP manages some of its funds using the same systematic trading models as BHDG, the members are of the opinion that this does not constitute a conflict of interest. The LLP shares a wide range of resources with BHDG, these being primarily staff and technology. Costs associated with these resources are shared between the two entities and are spilt on a percentage usage basis. The members do not anticipate any change in the overall nature of the LLP's principal activity in the foreseeable future. Please refer to the section entitled "Principal Risks and Uncertainties" below in relation to economic and market conditions, Ukraine-Russia conflict and catastrophic events related disclosures. Results and allocation to members The results for the year are shown in the Statement of Comprehensive Income on page 9. The LLP paid members' remuneration of £180,000 (2023: £120,000) and allocated £122,491 (2023: £6,192,962) of its profits to its members. The Statement of Financial Position as detailed on page 10 shows a satisfactory position. Members' total interests amount to £4,343,335 (2023: £4,569,652). Any profits that have been shared amongst the members are decided by the Board, and governed by the Partnership Agreement dated 4 November 2019. Policy for members' drawings, subscriptions and repayments of members' capital Policies for members' drawings, subscriptions and repayment of members' capital are governed by the Limited Liability Partnership Agreement. In summary, the capital is contributed by each member upon admission to the Partnership and shall be repayable only at the absolute discretion of the Board. The Board also has sole discretion to determine and vary the level of each member's drawings. Financial risk management The key business risks and uncertainties affecting the business relate to the performance and level of assets under management. The members consider that the LLP has sufficient capital and other resources to continue in operation as a going concern for at least 12 months from the date of these accounts. The LLP is not exposed to any material cashflow, price, liquidity or credit risks.
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MEMBERS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Members
The members of the LLP during the year and up to the date of this report were as follows:
D M Gorton*
DG Partners Services Limited*
W Allen (appointed 20 December 2024)
U M Aziz
M B Corden
A J Dodd-Noble
I M Nazir
S Radu
D F Rix
D J Seaton
M A Turnbull
DG Systematic Holdings Limited
*denotes designated member
Statement of disclosure of information to auditors
So far as each person who was a designated member 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 enquiries of fellow members, each member has taken all the steps that they are obliged to take as a member in order to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information. Going concern The LLP is regulated by the UK Financial Conduct Authority (the “FCA”). The FCA rules require the LLP to maintain sufficient capital on an ongoing basis. The LLP believes it is appropriate to prepare the financial statements on a going concern basis because it intends to continue to run its business. The LLP’s financial plans cover at least the period of twelve months from the date of the approval of these financial statements. These plans indicate that the LLP will continue to operate as a going concern and there is a reasonable expectation that those plans can be implemented. Please refer to the section entitled "Principal Risks and Uncertainties" below in relation to economic and market conditions, Ukraine-Russia conflict and catastrophic events related disclosures. Principal risks and uncertainties Catastrophic Events Catastrophes that result in disrupted markets and/or interrupt the expected course of events, such as health crises, pandemics and epidemic diseases, as well as other natural disasters, war or civil disturbance, strike action affecting critical infrastructure and services, acts of terrorism, power outages and other unforeseeable and external events and public response to or fear of such crises or events, may have an adverse effect on the operations of the firm, its clients and their investments. Ukraine-Russia conflict Following the Russian invasion of Ukraine in February 2022, various countries have imposed sanctions upon Russia and connected persons and entities. The firm's client exposure to Russia, Belarus and Ukraine is very limited and the various sanctions have not materially affected our activities thus far. Where the firm has identified operational risks relating to the conflict (e.g. due to service providers connected to Ukraine), this has been monitored and where mitigation is required, appropriate courses of action will be pursued. The firm continues to monitor the situation as well as any potential widening of the conflict zone beyond Ukraine.
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MEMBERS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Economic and Market Conditions
The success of the LLP’s strategies will be affected by general economic and market conditions, such as interest rates, availability of credit, credit defaults, inflation rates, economic uncertainty, changes in laws, trade barriers, imposition of tariffs, withdrawal from treaty obligations, currency exchange controls, and national and international political circumstances (including wars, terrorist acts or security operations). These factors may affect the level and volatility of investments’ prices and the liquidity of the investments. Volatility or illiquidity could impair the strategies’ profitability or result in losses.
AIFMD and MIFIDPRU Disclosure
In accordance with the FCA rules, the LLP has published its risk management objectives and policies on its regulatory capital requirements resources. This information can be found on the LLP's website at http://dgpartners.co .uk/ and is not audited.
Remuneration code disclosures
The remuneration code disclosures of the LLP as required by the FCA Prudential Sourcebook for Banks, Building Societies and Investment Firms (MIFIDPRU) 8.6 and SYSC 19A - Disclosure obligations in relation to the remuneration of code staff can be found on the LLP's website at http://dgpartners.co .uk/ and are not audited.
UK Stewardship code disclosures
The remuneration code disclosures of the LLP as required by the FCA Prudential Sourcebook for Banks, Building Societies and Investment Firms (BIPRU) COBS 2.2.3 - Disclosure of commitments to the Financial Reporting Council's Stewardship Code are available on the LLP's website at http://www.dgpartners .co.uk/ and are not audited.
Auditors
The auditors, BDO LLP have indicated their willingness to continue in office and a resolution concerning their reappointment will be proposed at the members' meeting held to approve these financial statements.
This report was approved by the members and signed on their behalf by:
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MEMBERS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
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 applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law, as applied to LLPs, 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 LLP and of the profit or loss of the LLP for that period.
In preparing these financial statements, the members are required to:
∙select suitable accounting policies for the LLP's financial statements and then apply them consistently;
∙make judgments and accounting estimates that are reasonable and prudent;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the entity will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the LLP's transactions and disclose with reasonable accuracy at any time the financial position of the LLP and to enable them to ensure that the financial statements comply with the Limited Liability Partnerships (Accounts and Audit) (Application of the Companies Act 2006) Regulations 2008. They are also responsible for safeguarding the assets of the LLP and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DG PARTNERS LLP
In our opinion, the financial statements:
∙give a true and fair view of the state of the Limited Liability Partnership’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 applied to limited liability partnerships by the Limited Liability Partnerships (Accounts and Audit) (Application of the Companies Act 2006) Regulations 2008.
We have audited the financial statements of DG Partners LLP (“the Limited Liability Partnership”) for the year ended 31 December 2024 which comprise the statement of comprehensive income, the statement of financial position, the reconciliation of members' interests, the statement of cash flows 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).
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 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.
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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DG PARTNERS LLP (CONTINUED)
The Members are 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, 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.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DG PARTNERS LLP (CONTINUED)
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 Limited Liability Partnership and the industry in which it operates;
∙Discussion with management and those charged with governance; and
∙Obtaining an understanding of the Limited Liability Partnership’s policies and procedures regarding compliance with laws and regulations;
We determined that the most significant laws and regulations which are directly relevant to specific assertions in the financial statements are those relating to compliance with the Companies Act 2006 as applicable to Limited Liability Partnerships, those resulting from being authorised by the Financial Conduct Authority to undertake regulated activities and UK accounting standards.
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; and
∙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 Limited Liability Partnership’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 meeting 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; and
∙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 and revenue recognition.
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; and
∙Testing a sample of journal entries throughout the year, which did not meet a defined risk criteria, by agreeing to supporting documentation; and
∙Assessing the appropriateness of revenue recognised in the period.
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INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF DG PARTNERS LLP (CONTINUED)
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 for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' 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 Limited Liability Partnerships (Accounts and Audit) (Application of the 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 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 Partnership and the Limited Liability Partnership’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
55 Baker Street
W1U 7EU
Date:
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127)
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STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2024
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STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2024
*Cash at bank and in hand in the Statement of Financial Position has been restated to exclude investments in Blackrock liquidity funds of £524,112 for the year ended 31 December 2023 and disclose them separately as current asset investments, to conform with those required by the Companies Act - Statutory format of the Balance Sheet. There is no impact on other line items in the Statement of Financial Position nor on net current assets.
The financial statements were approved and authorised for issue by the members and were signed on their behalf by
The notes on pages 14 to 23 form part of these financial statements.
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STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
DG Partners LLP ("the LLP") is a limited liability partnership registered in England and Wales. The registered office is 55 Baker Street, London, W1U 7EU.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006 and the requirements of the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the LLP's accounting policies (see note 3).
The following principal accounting policies have been applied:
The LLP is a regulated entity. As such, the LLP is required to maintain sufficient capital under the regulations of the Financial Conduct Authority, which it continues to do. In the "Principal Risks and Uncertainties" section of the Members' report the members have considered the impact that catastrophic events, the Ukraine-Russia conflict, and economic and market conditions could have on the LLP through various stress test scenarios.
The LLP believes it is appropriate to prepare the financial statements on a going concern basis because it is the intention to continue to run the business as such, there are financial plans for a period including twelve months from the date of the approval of these financial statements that indicate the LLP will continue to operate as a going concern and a reasonable expectation that those plans can be implemented. Turnover represents fees for investment management and advisory services provided during the year and facility recharges. Management fees and facility recharges are recognised on an accruals basis and performance fees are accrued when they crystallise. All turnover in the year arose from continuing activities performed in the United Kingdom, being the supply of fund management services to offshore funds and facilities recharges to BH-DG Systematic Trading LLP ("BHDG"). Turnover also includes other income which comprises recharges for costs incurred by the LLP on behalf of other entities, accounted for on an accruals basis.
Cost of sales, which is stated net of value added tax, is recognised on an accrual basis.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
All intangible assets are considered to have a finite useful life. If a reliable estimate of the useful life cannot be made, the useful life shall not exceed ten years.
Tangible fixed assets are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
The LLP adds to the carrying amount of an item of tangible fixed assets the cost of replacing part of such an item when that cost is incurred. If the replacement part is expected to provide incremental future benefits to the LLP the carrying amount of the replaced part is derecognised. Repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Functional and presentation currency
Transactions and balances
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The estimates and assumptions made in respect of the carrying amounts of assets and liabilities are addressed below. These are not considered to be material. (a) Critical accounting estimates and assumptions The LLP makes estimates and assumptions concerning the future. The resulting accounting estimates will by definition, seldom equal the related actual results. The estimates and assumptions within the next financial year are addressed below. Useful economic lives of non-financial assets The annual depreciation charge for tangible fixed assets is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are reassessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 8 for the carrying amount of the tangible fixed assets, and note 2.8 for the useful economic lives for each class of assets. (b) Key sources of estimation uncertainty The key assumptions concerning the future, and other key sources of estimation uncertainty, within the next financial year are discussed below. Recoverability of accrued income When assessing recoverability, the members consider factors such as aging of the debtors and past experience of recoverability. On the basis of this assessment, the amount £614,467 (2023: £136,455) included in accrued income has been considered fully recoverable.
Cost of sales represents fees for investment management and advisory services incurred during the year. Management fees payable are recognised on an accruals basis and performance fees payable are accrued when the underlying income crystallises. All cost of sales in the year arose from continuing activities performed in the United Kingdom, being the receipt of fund management services to offshore funds by BHDG.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 19
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 20
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 21
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The DG Partners LLP Employee Benefit Trust (EBT) was established on 8 December 2023 between Intertrust Employee Benefit Trustee Limited as the Trustee and the LLP. Intertrust Employee Benefit Trustee Limited acts as Nominee of the LLP and BH-DG LLP and is the registered holder of Securities on behalf of the Members and Employees of the LLP and BH-DG LLP who participate in a bonus deferral arrangement operated by the LLP and BH-DG LLP. A contribution of £127,588 was made in September 2024 by the LLP. This has been treated as an investment into the EBT and disclosed as a fixed asset investment on the Statement of Financial Position. Once the deferred shares vest unconditionally with the members, the LLP derecognise the investment in the EBT and recognise a liability under 'Amounts Due to Members' for the value of the shares, regardless of whether the member elects to redeem or retain the investment.
Page 22
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The ultimate controlling party is considered to be DM Gorton.
Page 23
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