Information
Contents
Members' report
For the year ended 31 December 2024
The members present their report together with the audited financial statements of SFM UK Management LLP ('the LLP') for the year ended 31 December 2024.
Principal activity
The principal activity of the LLP during the year was that of providing investment management services.
Designated members
The designated members during the year were as follows:
SFM UK Holdings Limited
Neil Pegrum
SFM UK Holdings Limited controls 99.1% (2023: 99.3%) of the voting rights of the LLP.
SFM UK Holdings Limited
Neil Pegrum
SFM UK Holdings Limited controls 99.1% (2023: 99.3%) of the voting rights of the LLP.
Members' capital and interests
Details of changes in members' capital in the year ended 31 December 2024 are set out in the Reconciliation of members' interests.
Members are remunerated from the profits of the LLP and are required to make their own provision for pensions and other benefits. Profits are allocated and divided between members after finalisation of the financial statements. Members draw a proportion of their profit shares monthly during the year in which it is made, with the balance of profits being distributed after the year, subject to the cash requirements of the business.
Policy with respect to members' drawings and the subscription of members' capital
Distribution of the cumulative total profits shall be made to each working member on an annual basis up to the aggregate of their priority, performance and discretionary drawings. Profits equal to interest on Regulatory Capital at the base rate of the Bank of England at 31 December each financial period are allocated to the managing member (SFM UK Holdings Limited). Remaining profits are allocated at the discretion of the managing member. Losses shall be allocated to members in accordance with their voting percentages.
All working members are entitled to monthly drawings as agreed by the managing member. If any member draws in excess of his share of the profits, then such excess shall be carried forward and offset against his entitlement to profits in the subsequent financial period.
The designated members shall ensure that at all times the LLP has sufficient capital that is at least equal to its Regulatory Capital.
All working members are entitled to monthly drawings as agreed by the managing member. If any member draws in excess of his share of the profits, then such excess shall be carried forward and offset against his entitlement to profits in the subsequent financial period.
The designated members shall ensure that at all times the LLP has sufficient capital that is at least equal to its Regulatory Capital.
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Members' report (continued)
For the year ended 31 December 2024
Members' responsibilities statement
The members are responsible for preparing the annual report and 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'.
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 (United Kingdom Accounting Standards and applicable law). 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 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 and then apply them consistently;
∙make judgements 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 LLP 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 Companies Act 2006 (as applied by 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.
This report was approved by the members on 8 April 2025 and signed on their behalf by:
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Independent auditor's report to the members of SFM UK Management LLP
For the year ended 31 December 2024
We have audited the financial statements of SFM UK Management LLP ('the LLP') for the year ended 31 December 2024, which comprise the Statement of comprehensive income, the Statement of financial position, the Reconciliation of members' interests and the related notes, 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 are independent of the LLP in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council'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.
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 LLP'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.
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 we do not express any form of assurance conclusion thereon.
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Independent auditor's report to the members of SFM UK Management LLP (continued)
For the year ended 31 December 2024
Other information (continued)
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.
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.
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.
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.
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Independent auditor's report to the members of SFM UK Management LLP (continued)
For the year ended 31 December 2024
Auditor's responsibilities for the audit of the financial statements (continued)
How the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud
and non-compliance with laws and regulations, was as follows:
How the audit was considered capable of detecting irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud
and non-compliance with laws and regulations, was as follows:
∙the Senior Statutory Auditor ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations, including knowledge specific to auditing regulated investment advisory firms;
∙we made enquiries of management as to where they considered there was susceptibility to fraud, and their knowledge of actual, suspected and alleged fraud;
∙we identified the laws and regulations that could reasonably be expected to have a material effect on the financial statements of the LLP through discussions with members and other management at the planning stage, and from our knowledge and experience of regulated investment advisory firms;
∙the audit team held a discussion to identify any particular areas that were considered to be susceptible to misstatement, including with respect to fraud and non-compliance with laws and regulations; and
∙we focused our planned audit work on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the LLP including the Companies Act 2006 as applied to LLPs, The Financial Services and Markets Act 2000, employment legislation and taxation legislation.
We assessed the extent of compliance with the laws and regulations identified above through:
∙making enquiries of management;
∙inspecting legal expenditure and correspondence throughout the year for any potential litigation or claims; and
∙considering the internal controls in place that are designed to mitigate risks of fraud and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls, we:
∙determined the susceptibility of the LLP to management override of controls by checking the implementation of controls and enquiring of individuals involved in the financial reporting process;
∙reviewed journal entries throughout the year to identify unusual transactions;
∙performed analytical procedures to identify any large, unusual or unexpected transactions and investigated any large variances from the prior period;
∙reviewed accounting estimates and evaluated where judgements or decisions made by management indicated bias on the part of the LLP's management; and
∙carried out substantive testing to check the occurrence and cut-off of expenditure.
In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included:
∙agreeing financial statement disclosures to underlying supporting documentation; and
∙enquiring of management as to actual and potential litigation and claims.
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Independent auditor's report to the members of SFM UK Management LLP (continued)
For the year ended 31 December 2024
Auditor's responsibilities for the audit of the financial statements (continued)
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
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 Auditor's report.
This report is made solely to the LLP's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006, as applied by Part 12 of The Limited Liability Partnerships (Accounts and Audit) (Applications of Companies Act 2006) Regulations 2008. Our audit work has been undertaken so that we might state to the LLP'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 LLP and the LLP'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
130 Wood Street
EC2V 6DL
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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
The financial statements were approved and authorised for issue by the members and were signed on their behalf on 8 April 2025 .
The notes on pages 10 to 19 form part of these financial statements.
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Reconciliation of members' interests
For the year ended 31 December 2024
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Notes to the financial statements
For the year ended 31 December 2024
SFM UK Management LLP is a limited liability partnership incorporated in England and Wales. The registered office of the LLP is 1 New Burlington Place, 1st Floor, London, W1S 2HR.
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 Republic of Ireland ('FRS 102'), the Companies Act 2006 and the requirements of the Statement of Recommended Practice "Accounting by Limited Liability Partnerships".
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the LLP's accounting policies (see note 3).
The principal accounting policies are set out below.
The LLP, as a qualifying entity, has taken advantage of the reduced disclosures for subsidiaries set out in section 1 of FRS 102. The LLP has elected not to prepare a statement of cash flows, to not disclose remuneration to key management personnel and taken the exemptions covering the disclosure of financial instruments. This information is disclosed in the consolidated financial statements of SFM UK Holdings Limited and can be obtained from Companies House.
A reconciliation of members’ interests has been presented as a primary statement instead of a statement of changes in equity per paragraph 60A of the LLP SORP.
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Notes to the financial statements
For the year ended 31 December 2024
2.Accounting policies (continued)
Tangible fixed assets under the cost model 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 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:
Leasehold improvements - Over the lease term
Equipment, furniture and fittings - 25% per annum
Computer equipment - 33.3% per annum
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 within 'Administrative expenses' in the Statement of comprehensive income.
The LLP adds to the carrying amount of an item of 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:
Leasehold improvements - Over the lease term
Equipment, furniture and fittings - 25% per annum
Computer equipment - 33.3% per annum
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 within 'Administrative expenses' in the Statement of comprehensive income.
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Notes to the financial statements
For the year ended 31 December 2024
2.Accounting policies (continued)
The LLP only enters into basic financial instruments transactions that result in the recognition of financial
assets and liabilities like trade and other accounts receivable and payable and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and
other accounts receivable and payable, are initially measured at present value of the future cash flows and
subsequently at amortised cost using the effective interest method. Debt instruments that are payable or
receivable within one year, typically trade payables or receivables, are measured, initially and subsequently,
at the undiscounted amount of the cash or other consideration, expected to be paid or received. However if
the arrangements of a short term instrument constitute a financing transaction, like the payment of a trade
debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in
case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially at
the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument
and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting
period for objective evidence of impairment. If objective evidence of impairment is found, an impairment
loss is recognised in the Income statement.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between
an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original
effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any
impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference
between an asset's carrying amount and best estimate, which is an approximation of the amount that the LLP
would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a
net basis or to realise the asset and settle the liability simultaneously.
assets and liabilities like trade and other accounts receivable and payable and loans to related parties.
Debt instruments (other than those wholly repayable or receivable within one year), including loans and
other accounts receivable and payable, are initially measured at present value of the future cash flows and
subsequently at amortised cost using the effective interest method. Debt instruments that are payable or
receivable within one year, typically trade payables or receivables, are measured, initially and subsequently,
at the undiscounted amount of the cash or other consideration, expected to be paid or received. However if
the arrangements of a short term instrument constitute a financing transaction, like the payment of a trade
debt deferred beyond normal business terms or financed at a rate of interest that is not a market rate or in
case of an out-right short-term loan not at market rate, the financial asset or liability is measured, initially at
the present value of the future cash flow discounted at a market rate of interest for a similar debt instrument
and subsequently at amortised cost.
Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting
period for objective evidence of impairment. If objective evidence of impairment is found, an impairment
loss is recognised in the Income statement.
For financial assets measured at amortised cost, the impairment loss is measured as the difference between
an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original
effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any
impairment loss is the current effective interest rate determined under the contract.
For financial assets measured at cost less impairment, the impairment loss is measured as the difference
between an asset's carrying amount and best estimate, which is an approximation of the amount that the LLP
would receive for the asset if it were to be sold at the reporting date.
Financial assets and liabilities are offset and the net amount reported in the statement of financial position
when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a
net basis or to realise the asset and settle the liability simultaneously.
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Notes to the financial statements
For the year ended 31 December 2024
2.Accounting policies (continued)
Functional and presentation currency
The LLP's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income except where deferred in other comprehensive income as qualifying cash flow hedges.
The LLP's functional and presentational currency is GBP.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.
At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.
Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income except where deferred in other comprehensive income as qualifying cash flow hedges.
Obligations for members' and employees' compensation are charged to the profit and loss account as members' remuneration or administrative expenses over the members' and employees' qualifying performance year. The liabilities could potentially increase or decrease based on factors including the benchmarked return linked to the compensation scheme. Unvested amounts are therefore disclosed as a contingent liability and are not recognised in the profit and loss account.
The taxation payable on the partnership profits is the personal liability of the members and consequently neither taxation nor related deferred taxation are accounted for in the financial statements. Amounts retained for tax are treated in the same way as other profits of the partnership and are included in "Members' interests" or in "Loans and other debts due to members" depending on whether or not division of profits has occurred.
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Notes to the financial statements
For the year ended 31 December 2024
2.Accounting policies (continued)
probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the
amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the LLP becomes aware of the
obligation, and are measured at the best estimate at the reporting date of the expenditure required to settle
the obligation, taking into account relevant risks and uncertainties.
position.
The members did not consider that there were any significant areas of estimation uncertainty or application of judgement.
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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
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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
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Contingent liabilities regarding deferred compensation plans are disclosed in note 21. The contingent liabilities could potentially increase or decrease based on factors including the benchmarked return linked to the compensation scheme.
Other than the above, there were no contingent liabilities at 31 December 2024 or 31 December 2023.
Other than the above, there were no contingent liabilities at 31 December 2024 or 31 December 2023.
The entity operates a defined contribution pension scheme. The assets of the scheme are held separately from those of the entity in an independently administered fund. The pension cost charge represents contributions payable by the entity to the fund and are disclosed in note 7. Contributions totalling £36,141 (2023 - £30,135) were payable to the fund at the reporting date.
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Notes to the financial statements
For the year ended 31 December 2024
There were no capital commitments at 31 December 2024 or 31 December 2023.
The LLP is under the control of SFM UK Holdings Limited, the managing member of the LLP.
The ultimate parent company is Soros Fund Management LLC, a Delaware limited liability company. In the opinion of the designated members, there is no one single ultimate controlling party.
The smallest group of undertakings preparing consolidated financial statements including the LLP is headed by SFM UK Holdings Limited. The largest group of such undertakings is headed by Soros Fund Management LLC.
The financial statements of SFM UK Holdings Limited are available from the Registrar of Companies in the United Kingdom.
The ultimate parent company is Soros Fund Management LLC, a Delaware limited liability company. In the opinion of the designated members, there is no one single ultimate controlling party.
The smallest group of undertakings preparing consolidated financial statements including the LLP is headed by SFM UK Holdings Limited. The largest group of such undertakings is headed by Soros Fund Management LLC.
The financial statements of SFM UK Holdings Limited are available from the Registrar of Companies in the United Kingdom.
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