The members present their annual report and financial statements for the year ended 31 March 2025.
The principal activity of the limited liability partnership continued to be that of the provision of fund management services and advice.
Overview
YFM Equity Partners LLP ('the LLP') and its subsidiaries (together ‘the Group’) back ambitious UK small businesses and help them to scale up, accelerate growth and fund ownership transitions with flexible equity solutions.
The business operates through the LLP’s subsidiaries, notably YFM Private Equity Limited, which is authorised and regulated by the Financial Conduct Authority as a full scope Alternative Investment Fund Manager (AIFM) under the Alternative Investment Fund Managers Directive.
Our investment strategy is centred on creating value for our investors and portfolio companies through active management and strategic support.
It has been a positive year for YFM, continuing the growth in its business, both from a headcount and AUM perspective. The number of staff grew from 50 at the start of the year to 62 at 31 March 2025, adding expertise across the New Investment and Portfolio teams, as well as investing in our capabilities in Revenue Operations, Direct Origination, Talent and ESG.
The Group’s funds deployed just shy of £100m in the year, with £63.9 million invested into 10 new investments, and a further £34.5 million deployed into 15 existing portfolio companies to help accelerate their growth. The managed funds also achieved positive realisations, enabling the return of significant capital to investors.
The Group’s VCTs achieved a successful £75 million fundraise in the 2024/25 tax year, reflecting the strong standing of the British Smaller Companies VCTs in the market.
We have also continued to develop the Group, launching a refreshed brand and accompanying new website. The Group’s investment in its marketing function continues to prove beneficial, with the Group outperforming competitors in terms of tier one press coverage, social media interactions and, since the new website launch, site visits.
Finally, the Group moved into new offices in both London and Leeds this year, reflecting the Group’s ongoing growth.
The Group’s key performance indicators are its total assets raised and managed by the Group; the income generated; and the satisfaction of its staff.
From a financial perspective, the Group’s revenue totalled £18.9 million (2024: £16.1 million), a 17% increase on prior year, reflecting continued assets under management (‘AUM’) growth. Costs were £9.5 million (2024: £8.2 million), increasing by 16% on prior year due to the above-mentioned ongoing investment in the Group.
Overall, the firm achieved a strong result, generating a profit after tax and members' remuneration of £3.8 million, a 9% increase on last year’s £3.5 million.
The Group continues to build its AUM. Including the Group’s managed VCTs’ April 2025 allotment, AUM has risen to circa £750 million.
Staff satisfaction levels remain high; the team is stable, with an average tenure of c. 7.2 years at the year-end date.
Performance risk
The Group manages alternative investment funds. Its ability to continue to trade relies on the performance of its funds and its success in raising new funds in the future. This will be determined both by the prevailing market conditions when funds are raised, and the performance of previous funds. In the event that fund performance falls below expectations, future fundraising may be difficult. This risk is mitigated through: (i) having a clear investment strategy; (ii) a robust investment process; and (iii) strong management and support of assets through the portfolio phase of ownership.
Regulatory risk
As a financial services business authorised and regulated by the FCA, the Group is subject to relevant FCA regulations. The Group is therefore exposed to the risk that it may breach one or more regulatory rules, including those governing the maintenance of appropriate levels of regulatory capital. The Group closely monitors its current and forecast regulatory capital position, ensuring that it will at all times have sufficient headroom above the requirements. Furthermore, it has in place a comprehensive risk and control framework which it reviews on an ongoing basis and amends where appropriate in response to changes in its activities or developments in the external regulatory environment.
Financial risk
The Group maintains a robust financial risk management framework designed to identify, assess, and mitigate a wide range of financial and operational risks. Liquidity risk is actively managed through rigorous cash flow monitoring and oversight. Investment risks in managed funds, including concentration, performance, and valuation risks, are addressed through clearly documented processes, regular compliance oversight, and governance by the Investment Approval and Valuation Committees. The finance team operates independently from the investment team, ensuring objectivity in valuations and regulatory compliance. Additionally, the Group has implemented comprehensive controls to mitigate risks related to fraud, financial crime, and regulatory breaches, supported by annual training, internal audits, and a strong governance structure. These measures collectively ensure that the Group remains resilient and responsive to evolving financial risks while safeguarding investor interests and maintaining regulatory compliance.
The Group is committed to engaging with its key stakeholders, including investors, employees, and portfolio companies. Our governance structure ensures that decision-making processes are transparent and aligned with our strategic objectives. We foster a culture of diversity, equity, and inclusion (DEI) and prioritise the wellbeing and development of our staff. We have implemented an ESG Policy that guides our investment decisions and ensures that we create long-term value for our stakeholders.
Looking ahead, the firm is well positioned to continue its growth. The Group’s managed VCTs have a good reputation in the market and a strong long term track record, which makes them well placed to continue their positive progress. The Group’s managed buyout funds have been performing well, with several strong exits achieved in the past two years. Staff within the Group remain strongly engaged, and we continue to see opportunities for further expansion of the team to continue the Group’s growth.
The members' drawing policy allows each member to draw a proportion of their profit share, subject to the cash requirements of the business.
A member's capital requirement is linked to their share of profit and the financing requirement of the limited liability partnership. There is no opportunity for appreciation of the capital subscribed. Just as incoming members introduce their capital at "par", so the retiring members are repaid their capital at "par".
The designated members who held office during the year and up to the date of signature of the financial statements were as follows:
In accordance with the limited liability partnership's membership agreement, a notice proposing that Saffery LLP be reappointed as auditor of the limited liability partnership will be put at a general meeting.
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (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 limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the limited liability partnership will continue in business.
The members are responsible for keeping adequate accounting records that are sufficient to show and explain the limited liability partnership’s transactions and disclose with reasonable accuracy at any time the financial position of the limited liability partnership and enable them to ensure that the financial statements comply with the Companies Act 2006 (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). They are also responsible for safeguarding the assets of the limited liability partnership and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
We have audited the financial statements of YFM Equity Partners LLP (the 'limited liability partnership') for the year ended 31 March 2025 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
Basis for opinion
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the members' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the limited liability partnership’s ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the members with respect to going concern are described in the relevant sections of this report.
Other information
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 specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the limited liability partnership’s financial statements to material misstatement and how fraud might occur, including through discussions with the members, discussions within our audit team planning meeting, updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations that are of significance in the context of the limited liability partnership by discussions with members and by updating our understanding of the sector in which the limited liability partnership operates.
Laws and regulations of direct significance in the context of the limited liability partnership include The Companies Act 2006 as applied to limited liability partnerships and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related financial statement items including a review of financial statement disclosures. We reviewed the limited liability partnership's records of breaches of laws and regulations and correspondence with relevant authorities to identify potential material misstatements arising. We discussed the limited liability partnership's policies and procedures for compliance with laws and regulations with members of management responsible for compliance.
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
There are inherent limitations in the audit procedures described above 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 would become aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
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 limited liability partnership's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 as applied to limited liability partnerships. 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 limited liability 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.
The statement of comprehensive income has been prepared on the basis that all operations are continuing operations.
YFM Equity Partners LLP is a limited liability partnership incorporated in England and Wales. The registered office is 4th Floor, 2 Bond Court, Leeds, England, LS1 2JZ.
The group conists of YFM Equity Partners LLP and all of its subsidiaries.
These financial statements have been prepared in accordance with the Statement of Recommended Practice "Accounting by Limited Liability Partnerships" issued in December 2021, together with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.
The financial statements are prepared in sterling, which is the functional currency of the limited liability partnership. Monetary amounts in these financial statements are rounded to the nearest £.
The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The limited liability partnership is a qualifying entity for the purposes of FRS 102, being a member of a group where the parent of that group prepares publicly available consolidated financial statements, including this company, which are intended to give a true and fair view of the assets, liabilities, financial position and profit or loss of the group. The limited liability partnership has therefore taken advantage of exemptions from the following disclosure requirements for parent limited liability partnership information presented within the consolidated financial statements:
Section 7 ‘Statement of Cash Flows’: Presentation of a statement of cash flow and related notes and disclosures;
Section 33 ‘Related Party Disclosures’: Compensation for key management personnel.
In the LLP financial statements, the cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.
The group financial statements incorporate those of YFM Equity Partners LLP and its subsidiaries. The limited liability partnership and its subsidiary undertakings comprise a medium-sized group due to turnover and monthly average employees being within the threshold for a medium size group. Subsidiaries acquired during a year are consolidated using the purchase method. Their results are incorporated from the date that control passes.
All financial statements are made up to 31 March 2025. Where necessary, adjustments due to disclosure requirements of section 1a of FRS 102 being applied on an individual basis are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group being FRS 102.
All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation.
At the time of approving the financial statements, the members have a reasonable expectation that the limited liability partnership has adequate resources to continue in operational existence for the foreseeable future. Thus the members continue to adopt the going concern basis of accounting in preparing the financial statements.
Turnover is recognised at the fair value of the consideration received or receivable for services provided in the normal course of business, and is shown net of VAT and other sales related taxes. Turnover is recognised as it is due for fund management services provided in line with relevant agreements.
Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within ‘Members' remuneration charged as an expense’ in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as amounts due from members within members’ interests.
Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.
Profits are divided only after a decision by the LLP or its representative, so the LLP has an unconditional right to refuse payment. Such profits are classed as equity rather than as liabilities. They are therefore shown as a residual amount available for discretionary division among members in arriving at the result for the year and are shown as appropriations of equity when they are allocated.
Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.
Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the limited liability partnership. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.
At each reporting period end date, the group reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The group has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally 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.
Basic financial assets, which include debtors, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.
If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the group transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the group after deducting all of its liabilities.
Basic financial liabilities, including creditors are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the group's obligations expire or are discharged or cancelled.
The tax expense represents the sum of current tax and deferred tax incurred by subsidiary companies. The LLP is not, itself, subject to corporation tax.
Current tax
The tax currently payable is based on taxable profit for the year. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. The resulting current or deferred tax expense or income is presented in the same component of comprehensive income or equity as the transaction or other event that resulted in the tax expense or income. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the limited liability partnership is demonstrably committed to terminate either the the partnership agreement of an partner or the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.
An analysis of the group's turnover is as follows:
The average number of persons (excluding members) employed by the group during the year was:
Their aggregate remuneration comprised:
The LLP had no tangible fixed assets at 31 March 2025.
Details of the limited liability partnership's subsidiaries at 31 March 2025 are as follows:
Registered office address:
1 4th Floor, 2 Bond Court, Leeds, England, LS1 2JZ,
2 Exchange Tower, 19 Canning Street, Edinburgh, EH3 8EH
Chandos Fund GP Limited was dissolved on 13 May 2025.
The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.
At the year end there were outstanding contributions amounting to £31,570 (2024: £19,201).
In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.
At the reporting end date the group had outstanding commitments for future minimum lease payments under non-cancellable operating leases, which fall due as follows: