The members present their annual report and financial statements for the year ended 31 December 2025.
The principal activity of Capstone Investment Advisors (UK), LLP ('the limited liability partnership') is to establish investment management relationships and to provide investment management services. The limited liability partnership is regulated by the Financial Conduct Authority as a MIFIDPRU firm.
The designated members who held office during the year and up to the date of signature of the financial statements were as follows:
Policy on members' drawings and capital
The members' drawing policy allows each member to draw a proportion of their profit share, subject to the cash requirements of the business.
A member's capital requirement is linked to their share of profit and the financing requirement of the limited liability partnership. There is no opportunity for appreciation of the capital subscribed. Just as incoming members introduce their capital at "par", so members are repaid their capital at "par".
Members' interests
During the year discretionary profits of £18,577,370 were allocated to members.
The auditor, Moore Kingston Smith LLP, is deemed to be reappointed under section 487(2) of the Companies Act 2006.
STREAMLINED ENERGY AND CARBON REPORTING
This report represents the greenhouse gas (“GHG”) emission quantified by the business for the financial year ending 31st December 2025.
The report has been prepared under the Companies (Directors’ report) and Limited Liability Partnerships (Energy and Carbon Report) Regulations 2018, under which we are required to disclose our UK Energy use and associated GHG emissions. Specifically, we are required to report UK energy usage and emission derived from purchased electricity, gas and transport.
UK GHG emissions: |
| 2025 | 2024 | ||
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| (Kgs CO2e) | (Kgs CO2e) |
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Scope 1 |
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| - | 1,571 |
Scope 2 – location-based |
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| 47,340 | 33,334 | |
Scope 3 |
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| - | - |
Total location-based emissions |
| 47,340 | 34,905 | ||
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Scope 2 – market-based |
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| - | 34,292 | |
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Kgs CO2e / Sq. ft.1 |
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| 2.35 | 2.28 | |
Kgs CO2e / £m Revenues |
|
| 781.7 | 796.9 | |
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Energy consumed in UK operations: |
| 2025 | 2024 | ||
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| (kWh) | (kWh) |
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Fuel combustion: natural gas |
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| - | 8,590 | |
Purchased electricity |
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| 267,442 | 160,995 | |
Total energy consumed |
| 267,442 | 169,585 | ||
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Reporting Scope
The organisation boundary is defined using an operational control approach. The organisation included within this disclosure is Capstone Investment Advisors (UK) LLP.
The operational boundaries have been determined with reference to the requirements of SECR comprising:
Scope 1 for stationary gas emissions and company owned vehicle emissions.
Scope 2 for purchased electricity emission. Both location- and market-based emissions.
Scope 3 for staff vehicle emissions where travel is reimbursed.
Methodology
The report has been prepared in reference to the GHG Protocol Corporate Standard and the operational boundaries defined above.
Natural gas emissions have been calculated using kWh consumption data across the UK sites under operational control.
Purchased electricity emissions have been calculated using kWh consumption data across the UK sites under operational control.
Emissions have been calculated using the 2025 conversion factors published by the UK Government.
There are no material omission from the mandatory reporting scope.
Energy efficiency initiatives
The limited liability partnership has taken steps to improve the energy efficiency of its operations and reduce its carbon footprint. The actions taken include:
Green energy suppliers,
Proactive management and monitoring of temperatures in offices, office temperature is maintained between 21-23 degrees using air conditioning in some areas and a building fan system in others. All airflow is turned down between 8pm and 8am.
Ensuring lighting is turned off whenever possible, including the use of lighting sensors in the office space.
The members are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.
Company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) requires the members to prepare financial statements for each financial year. Under that law the members have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice. Under company law (as applied by The Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008) the members must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the limited liability partnership and of the profit or loss of the limited liability partnership for that period. In preparing these financial statements, the members are required to:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether they have been prepared in accordance with UK adopted international accounting standards, 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 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 Capstone Investment Advisors (UK), LLP (the 'limited liability partnership') for the year ended 31 December 2025 which comprise the Statement of Comprehensive Income, the Balance Sheet, the Reconciliation of Members' Interests, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).
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
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the limited liability partnership.
Our approach was as follows:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006 as applied to limited liability partnerships by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, the Limited Liability Partnerships SORP, UK financial reporting standards as issued by the Financial Reporting Council, UK taxation legislation and regulations applicable to companies regulated by the Financial Conduct Authority.
We obtained an understanding of how the limited liability partnership complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
Use of our report
This report is made solely to the Limited Liability Partnership’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006 (as applied by the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008). Our audit work has been undertaken so that we might state to the Limited Liability Partnership’s members those matters which we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to any party other than the Limited Liability Partnership and the Limited Liability Partnership’s members as a body, for our work, for this report, or for the opinions we have formed.
The Profit and Loss Account has been prepared on the basis that all operations are continuing operations.
Capstone Investment Advisors (UK), LLP is a limited liability partnership incorporated in England and Wales. The registered office is UK House, 2nd Floor, 2 Great Titchfield Street, London, United Kingdom, W1D 1NN.
The limited liability partnership's principal activities are disclosed in the Members' Report.
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 pound.
The financial statements, which are those of Capstone Investment Advisors (UK), LLP as an individual entity, have been prepared on the historical cost convention. The principal accounting policies adopted are set out below.
The financial statements of the limited liability partnership are drawn up to 31 December each year.
The financial statements have been prepared on a going concern basis. The LLP provides services to other group entities and is dependent on them for its income. The members have considered the LLP’s forecasts and projections, including reasonably possible downside scenarios, and have a reasonable expectation that the LLP will continue in operational existence and meet its liabilities as they fall due for at least 12 months from the date of approval of these financial statements.
In forming this view, the members have taken into account the financial position and forecast performance of the wider group and have obtained a letter of support from the parent entity confirming that it will continue to provide financial support to the LLP for at least 12 months from the date of approval of these financial statements.
Turnover represents the fair value of services provided during the period to the ultimate parent company. Turnover is recognised as contract activity progresses and the right to consideration is earned. Fair value reflects the amount expected to be recoverable from the ultimate parent company and is based on services provided and expenses incurred, but excludes VAT.
Members' participation rights are the rights of a member against the LLP that arise under the members' agreement (for example, in respect of amounts subscribed or otherwise contributed remuneration and profits).
Members' participation rights in the earnings or assets of the LLP are analysed between those that are, from the LLP's perspective, either a financial liability or equity, in accordance with section 22 of FRS 102. A member's participation rights including amounts subscribed or otherwise contributed by members, for example members' capital, are classed as liabilities unless the LLP has an unconditional right to refuse payment to members, in which case they are classified as equity.
All amounts due to members that are classified as liabilities are presented within 'Loans and other debts due to members' and, where such an amount relates to current year profits, they are recognised within Members' remuneration charged as an expense in arriving at the relevant year’s result. Undivided amounts that are classified as equity are shown within ‘Members' other interests’. Amounts recoverable from members are presented as debtors and shown as 'Amounts due from members' within members’ interests.
Where there exists an asset and liability component in respect of an individual member’s participation rights, they are presented on a gross basis unless the LLP has both a legally enforceable right to set off the recognised amounts, and it intends either to settle on a net basis or to settle and realise these amounts simultaneously, in which case they are presented net.
Once an unavoidable obligation has been created in favour of members through allocation of profits or other means, any undrawn profits remaining at the reporting date are shown as ‘Loans and other debts due to members’ to the extent they exceed debts due from a specific member.
The LLP classifies automatic or discretionary profit distributions as operating cash flows, because they are in substance paid for services rendered to the LLP as part of its revenue generating activities.
Tangible fixed assets are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the profit and loss account.
At each reporting date fixed assets are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying value. If the estimated recoverable amount is lower, the carrying value is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.
If an impairment loss subsequently reverses, the carrying value of the asset is increased to the revised estimate of its recoverable amount, but not in excess of the amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.
Debtors
Short term debtors are measured at transaction price, less any impairment. Loans and other debtors receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.
Creditors
Short term trade creditors and other current creditors payable on demand are measured at the transaction price. Other financial liabilities, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.
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 limited liability partnership 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.
Derivatives, including interest rate swaps and forward foreign exchange contracts, are not basic financial instruments. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. Changes in the fair value of derivatives are recognised in profit or loss in finance costs or finance income as appropriate, unless hedge accounting is applied and the hedge is a cash flow hedge.
Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.
Financial liabilities are derecognised when the limited liability partnership’s obligations expire or are discharged or cancelled.
The taxation payable on the partnership profits is solely the personal liability of the individual members consequently neither partnership taxation nor related deferred taxation arising in respect of the partnership are accounted for in these financial statements.
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of stock or fixed assets.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the limited liability partnership is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
The limited liability partnership contributes to personal pension schemes of certain individual employees. Contributions payable are charged to the profit and loss account in the year they are payable.
Rentals payable under operating leases, including any lease incentives received, are charged to the profit and loss account on a straight line basis over the term of the relevant lease.
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.
A member’s share in the profit or loss for the year is accounted for when profits are allocated. Unallocated profits and losses are included within other reserves. The treatment of members' remuneration in the profit and loss account is determined by reference to the nature of the participation rights that give rise to the remuneration. If the members' remuneration gives rise to a liability it is charged as an expense. Amounts subscribed or otherwise contributed by members are classified and accounted for, according to the substance of the contractual arrangement, as either financial assets, financial liabilities or equity capital. Equity capital is any capital that is repayable to the member only at the discretion of the limited liability partnership.
Deferred compensation
The LLP has a remuneration policy whereby a portion of the compensation for the year for eligible employees is deferred and may be subject to forfeiture. Payment to participating employees will depend on whether they remain in the employment of the LLP and on their performance over the deferral period.
Deferred remuneration is recognised as an expense evenly over the deferral period once an obligation exists, it is probable that the LLP will be required to pay the deferred remuneration and the amount can be measured reliably.
In the application of the limited liability partnership’s accounting policies, the members are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
The members do not consider there to be any key estimates or judgements applicable to the limited liability partnership.
The average number of persons (excluding members) employed by the partnership during the year was:
Their aggregate remuneration comprised:
The limited liability partnership operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the limited liability partnership in an independently administered fund.
In the event of a winding up the amounts included in "Loans and other debts due to members" will rank equally with unsecured creditors.
Any reduction in members' other interests are subject to approval by the limited liability partnership's managing committee.
At the reporting end date the limited liability partnership had outstanding commitments for future minimum lease payments under non-cancellable rental operating leases, which fall due as follows:
At the balance sheet date £nil (2024: £22,238) is included in debtors in relation to balances owing from companies in which the ultimate controlling party has an interest. These amounts are interest free, unsecured and repayable on demand.
At the balance sheet date £nil (2024: £2,717,319) is included in creditors in relation to balances owed to companies in which the ultimate controlling party has an interest. These amounts are interest free, unsecured and repayable on demand.
The LLP is the sole member of Capstone Investment Advisors Foundation UK, a UK registered charity. Whilst the charity is controlled by its trustees, the LLP as sole member has the power to appoint and remove the majority of the director/trustees of the charity and hence the charity is technically a subsidiary. The charity has not been consolidated in these financial statements on the grounds it is not material for the purpose of showing a true and fair view. The charity raised c. £145,000 from fundraising events in the year which it intends to distribute in accordance with its charitable objectives in the current year.
During the year the limited liability partnership provided management services to Capstone Investment Advisors, LLC totalling £60,558,913 (2024: £43,236,777).
As part of the LLP's remuneration policy, unvested deferred compensation amounts for which a provision has not been recognised is £3,420,126 (2024: £1,546,144).