MIFIDPRU 8 Disclosure

INTRODUCTION

Epiris LLP (“Epiris” or the “Firm”) is an investment advisory firm authorised and regulated by the UK’s Financial Conduct Authority (“FCA”).

Epiris is subject to the rules in the FCA’s Prudential sourcebook for MiFID Investment Firms (“MIFIDPRU”) and is classified under MIFIDPRU as a non-small and non-interconnected (“non-SNI”) MIFIDPRU investment firm.

This disclosure has been prepared in accordance with Chapter 8 of MIFIDPRU, on a solo entity basis, and for the year ended 31^st March 2025. Unless otherwise stated all disclosures relate to the financial year ended 31^st March 2025.

Significant Changes Since Prior Disclosure

This is the first Epiris MIFIDPRU 8 disclosure for Epiris as a non-SNI investment firm and apart from the changes required by the MIFIDPRU 8 requirements for non-SNI investment firms, there have been no significant changes to its previous MIFIDPRU 8 disclosures.

2 RISK MANAGEMENT OBJECTIVES AND POLICIES

2.1 Potential for harm associated with Epiris’ business strategy

Epiris has established and implemented a robust risk management framework that sets out the risks Epiris is exposed to, including the likelihood of such risks materialising and the systems, controls and governance arrangements in place to appropriately mitigate risk impacts. Epiris identifies risks it may be exposed to considering the nature of the activities it carries out, its business model and strategy and the jurisdictions, the market and the legal and regulatory environment in which it operates.

Epiris considers that the potential for harm associated with its business strategy is low and reflects its low-risk appetite towards macroeconomic risk, business risk, operational risk, people risk, compliance risk and cyber security risk.

As detailed within Epiris’ Internal Capital Adequacy and Risk Assessment Process (“ICARA”) process, the Firm documents its systems and controls in place in relation to the material potential harms arising to clients of Epiris, other market participants and Epiris itself. Epiris concluded that its systems and controls are comprehensive and effective to mitigate material potential harms and that any residual risk is adequately covered by Epiris’ own funds and liquid assets. Where a material potential harm cannot be managed or mitigated after the implementation of systems and controls, Epiris would consider whether it needs to hold additional own funds or liquid assets to address the harms.

During the year ended 31 March 2025, Epiris’ revenues were mainly comprised of advisory fees charged to its clients which manage the Epiris Funds. These fees were calculated by reference to investor commitments during the Epiris Fund’s investment period and invested capital following the end of the Epiris Fund’s investment period and are therefore a stable and predictable source of income.

2.2 Management of risks addressed by own funds and liquid asset requirements

Epiris is required to hold sufficient own funds and liquid assets to ensure that it can remain financially viable throughout the economic cycle and that its business can be wound down in an orderly manner minimising harm to its clients or other market participants.

Taking into account the material potential harms faced and posed by Epiris, the governance framework it operates, the stress tests it has conducted, the wind-down plans it has prepared as part of Epiris’ ICARA process, Epiris has determined that it satisfies both its own funds threshold requirements and liquid assets threshold requirements and therefore the overall financial adequacy rule and the Firm monitors compliance with these requirements on an ongoing basis.

2.3 Concentration risk

Whilst Epiris as an investment adviser has a small number of clients who manage the Epiris Funds, Epiris considers that it has minimal concentration risk as the Firm’s investment advisory revenue streams are derived from long-term fixed and binding contracts with very limited termination terms. In addition, there is no exposure to redemptions as the Epiris Funds are closed ended as well as being diversified by the broad range of limited partners providing capital commitments to the Epiris Funds.

Investors in the underlying Epiris funds are of a high credit quality. Epiris funds consist of 91 investors, diversified by a) investor type including pension funds, funds of funds, asset managers, insurance companies, high net worth individuals and b) by geography with 41% of them from the US, 49% from the UK and Europe and 10% from Asia and the rest of the world. No investor holds an interest above 15% in Epiris Fund II and 10% in the case of Epiris Fund III. Investor concentration risk is considered low.

3 GOVERNANCE ARRANGEMENTS

3.1 The role of the Executive Committee and its Sub-Committees

Epiris’ Executive Committee defines, oversees and is accountable for the implementation of the Firm’s governance arrangements. These ensure effective and prudent management of the Firm, including the segregation of duties within the Firm and the prevention of conflicts of interest, in each case in a manner that promotes the integrity of the market and the interests of clients.

Epiris’ Executive Committee is responsible for the day-to-day management of the Firm, including the direction and strategy of the Firm, the management of risks which the Firm faces from time to time and the oversight of all business activities.

Epiris’ Executive Committee meets frequently on both a formal and informal basis to receive management information and to discuss and assess the Firm’s performance against its governance objectives, as well as its performance against its key business targets.

Although Epiris is not required to establish a risk committee under MIFIDPRU 7.3.1R, the Executive Committee is assisted in the performance of its responsibilities with respect to the oversight and management of risk by a number of designated sub-committees that act under, and which are subject to the overall authority of the Executive Committee.

The sub-committees supporting the Executive Committee comprise the following:

·       The Investment Committee is chaired by Bill Priestley and its responsibilities include evaluating all investment recommendations and deciding whether potential investment opportunities, including a consideration of all risks associated with such potential investments should be recommended to the clients of Epiris. The committee similarly evaluates all divestment and/or restructuring proposals before any recommendation is made to the clients of Epiris.

·       The Remuneration Committee is chaired by Bill Priestley and its responsibilities include determining, implementing and monitoring the remuneration policies of the Firm.

·       The Portfolio Review Committee is chaired by Alex Cooper-Evans and its responsibilities include monitoring and reviewing investments in respect of the clients for which the Firm acts as investment adviser.

·       The Exit Committee is chaired by Alex Cooper-Evans and its responsibilities include monitoring and reviewing divestment and/or restructuring opportunities for the investments in respect of the clients for which the Firm acts as investment adviser.

·       The Valuation Committee is chaired by Alex Cooper-Evans and its responsibilities include the preparation of the initial valuation of the Epiris Funds’ assets, which are subject to review, challenge and approval by the clients of the Firm prior to the valuation of the Epiris Funds being completed.

·       The Finance Committee is chaired by Alex Cooper-Evans and its responsibilities include preparing, approving and monitoring the annual budget of the Firm along with assisting the clients of the Firm with the preparation of the financial statements for the Epiris Funds.

·       The ESG Committee is chaired by Alex Cooper-Evans and its responsibilities include determining the Firm’s ESG policy and the framework for its implementation and also monitoring and reviewing the ESG performance of the portfolio companies of the Epiris Funds.

·       The Compliance Committee is chaired by Alex Cooper-Evans and its responsibilities include preparing and approving the Firm’s compliance and regulatory documentation including the ICARA.

3.2 Composition of the Executive Committee 

As of 31 March 2025, the below table shows the individuals who held office as members of the Epiris Executive Committee and also sets out their directorships, excluding non-commercial directorships but including their non-executive directorships held on the boards of portfolio companies of the Epiris Funds.

Executive Committee Members*	Number of additional directorships
Bill Priestley, Managing Partner	4
Owen Wilson, Chief Investment Partner	5
Ian Wood, Head of the Investment Team	6
Alex Cooper-Evans, Chief Operating Partner	2
Charles Elkington, Partner	4
Chris Hanna, Partner	3
Mike Ebeling, Partner**	1
Kathryn Pothier, Partner	0

* Subsequent to 31 March 2025, Nicolas Vilaseco was appointed to the Epiris Executive Committee on 16 June 2025.

** Subsequent to 31 March 2025, Mike Ebeling resigned from the Epiris Executive Committee on 1 July 2025.

3.3 Risk Governance

The Executive Committee is ultimately responsible for Epiris’ overall risk management and for maintaining an appropriate internal control framework. The Chief Operating Partner reports to the Executive Committee regarding risks and where relevant ensuring that appropriate actions are taken to monitor and mitigate such risks.

Epiris has established and documented risk management policies and procedures which identify the risks relating to its activities, processes and systems and where appropriate set the level of risk tolerated by the Firm.

Epiris monitors the following:

(i) the adequacy and effectiveness of its risk management policies and procedures;

(ii) the level of compliance by the Firm and its relevant persons with the arrangements, processes and mechanisms adopted in accordance with its risk management policies;

(iii) the adequacy and effectiveness of measures taken to address any deficiencies in those policies, procedures, arrangements, processes and mechanisms, including failures by the relevant persons to comply with such arrangements, processes and mechanisms or follow such policies and procedures.

Epiris falls below the thresholds set out in MIFIDPRU 7.1.4R to form a Risk Committee as per the requirements of MIFIDPRU 7.3.1R.

3.4 Diversity Policy of the Executive Committee

Epiris is committed to promoting diversity and equal opportunities for all staff throughout Epiris, including on its Executive Committee. Epiris believes that diverse and inclusive teams make better decisions, and this informs Epiris’ recruitment and retention strategies, both across the organisation as a whole and at the level of its Executive Committee.

Epiris regularly reviews the structure, size and composition (including the skills, knowledge, experience and diversity) of the Executive Committee and may make recommendations to the Executive Committee with regard to any changes necessary to develop and maintain an appropriate level of diversity.

Epiris seeks to facilitate an appropriately diverse pool of candidates for future membership of the Executive Committee by considering diversity when making new hires and when developing the careers of existing staff and by ensuring that there is equal treatment and opportunities for staff of different genders and backgrounds.

All appointments are made on merit with regard to the individual’s skills, knowledge and experience and the combined skills, knowledge and experience and diversity of the Executive Committee as a whole.

4 OWN FUNDS

In accordance with MIFIDPRU 8.4, the table below shows a reconciliation of own funds to the balance sheet of the Firm as of 31 March 2025.

Composition of regulatory own funds
	Item	Amount (GBP thousands)	Source based on reference numbers/letters of the balance sheet in the audited financial statements
1	OWN FUNDS	12,174
2	TIER 1 CAPITAL	12,174
3	COMMON EQUITY TIER 1 CAPITAL	12,174
4	Fully paid up capital instruments	120	Pages 11 and 12
5	Share premium
6	Retained earnings	12,054	Pages 11 and 12
7	Accumulated other comprehensive income
8	Other reserves
9	Adjustments to CET1 due to prudential filters
10	Other funds
11	(-) TOTAL DEDUCTIONS FROM COMMON EQUITY TIER 1
19	CET1: Other capital elements, deductions and adjustments
20	ADDITIONAL TIER 1 CAPITAL
21	Fully paid up, directly issued capital instruments
22	Share Premium
23	(-) TOTAL DEDUCTIONS FROM ADDITIONAL TIER 1
24	Additional Tier 1: Other capital elements, deductions and adjustments
25	TIER 2 CAPITAL
26	Fully paid up, directly issued capital instruments
27	Share premium
28	(-) TOTAL DEDUCTIONS FROM TIER 2
29	Tier 2: Other capital elements, deductions and adjustments

Own Funds: reconciliation of regulatory own funds to balance sheet in the audited financial statements

				a	b	c
				Balance sheet as in published/audited financial statements	Under regulatory scope of consolidation	Cross-reference to previous table
				As at 31 March 2025 £’000s	As at 31 March 2025
Assets – breakdown by asset classes according to the balance sheet in the audited financial statements
1		Loans Receivable		4,216	n/a
2		Current Asset Investments		11,282	n/a
3		Debtors		1,265	n/a
4		Cash		2,304	n/a
		Total Assets		19,067	n/a
Liabilities – Breakdown by liability classes according to the balance sheet in the audited financial statements
1			Trade payables	153	n/a
2			Taxation and Social Security	26	n/a
3			Accruals	419	n/a
4			Deferred Advisory Fee Income	5,979	n/a
5			Other payables	316	n/a
			Total Liabilities	6,893	n/a
Shareholders’ Equity
1			Members’ capital classified as equity under FRS 102 section 22	120	n/a	Row 4
2			Other Reserves	12,054	n/a	Row 6
			Total Shareholders’ equity	12,174	n/a	Rows 1,2 and 3

5. OWN FUNDS REQUIREMENTS

As a non-SNI firm, Epiris is required to maintain own funds that is the higher of its; (i) permanent minimum requirement; (ii) fixed overhead requirement; and (iii) K-factor requirement.

Epiris’ permanent minimum capital requirement as at 31 March 2025 and subject to MIFIDPRU 2.10R and MIFIDPRU 2.12R is £65,000.

Epiris’ fixed overhead requirement calculated in accordance with MIFIDPRU 4.5 but subject to MIFIRPRU TP 2.10R and MIFIDPRU TP 2.12R is £1,559,000.

Epiris’ K-factor as at 31 March 2025 calculated in accordance with MIFIDPRU 4.6 to 4.16 and MIFIDPRU 5 but subject to MIFIDPRU TP 2.10R and MIFIDPRU 2.12R is £161,000 which can be broken down into:

K-AUM requirement	£161,000
K-CMH requirement, K-ASA requirement	N/A
K-COH requirement and K-DTF requirement	N/A
K-NPR requirement, K-CMG requirement, K-TCD requirement and the K-CON requirement	N/A

Due to the nature of Epiris’ business, its main exposure is K-AUM, which is the risk of advising on investments. The remaining K factors do not fall within the scope of Epiris’ business activities and therefore have not been considered for the purposes of this disclosure.

Epiris’ own funds requirement is £1,559,000.

Epiris meets its own funds requirements through a combination of members capital contribution and audited retained reserves.

Epiris must, at all times, hold own funds and liquid assets which are adequate, both in their amount and in their quality, to ensure that it is able to remain financially viable throughout the economic cycle and to address any material potential harms that may result from its ongoing activities; and to ensure that its business can be wound down in an orderly manner, minimising harm to consumers and other market participants.

Epiris conducts and documents its ICARA to confirm that it complies with the above mentioned overall financial adequacy rule. Epiris may hold additional own funds or additional liquid assets above its own funds requirement or basic liquid assets requirement to manage the potential harms identified.

Epiris’ ICARA is reviewed and approved by its Executive Committee at least annually or more often if deemed appropriate.

6 REMUNERATION POLICY AND PRACTICES

Epiris is subject to the requirements of the MIFIDPRU Remuneration Code set out in SYSC 19.G of the FCA’s Handbook. MIFIDPRU 8.6 of the FCA’s Handbook requires Epiris to disclose certain information on an annual basis regarding its Remuneration Policy and practices for all staff.

6.1 Epiris’ approach to remuneration

The Executive Committee of Epiris has approved the Epiris Remuneration Policy and has overall responsibility for overseeing its implementation via the Epiris’ Remuneration Committee.

The objective of Epiris’ Remuneration Policy is to ensure that the way it remunerates the Epiris staff:

·       is consistent with and promotes sound and effective risk management;

·       avoids conflicts of interests, encourages responsible business conduct, promotes risk awareness and does not encourage excessive risk taking;

·       is in line with Epiris’ business strategy, objectives, values and long-term interests; and

·       is gender neutral and respects the principle of equal pay for male and female workers for equal work or work of equal value.

6.2 Remuneration Framework

Each Partner of Epiris is remunerated by profit allocations. The structure of these differs depending on whether the Partner is an Equity Partner or a Non-Equity Partner.

The Equity Partners of Epiris receive fixed drawings which are considered to be fixed remuneration.

The Non-Equity Partners also receive fixed drawings which are considered to be fixed remuneration and additionally may also receive an allocation of NEP Profits reflecting their performance over previous financial years as well as their seniority and responsibilities. Any such NEP Profits are considered to be variable remuneration.    

Non-Equity Partners may also be awarded Additional Profits. Such Additional Profits are paid from the Epiris profit pool which is set by reference to the overall performance and profitability of Epiris. This profit pool is allocated on the basis of individual performance reviews, which take account of both financial and non-financial criteria. Such Additional Profits are considered to be variable remuneration and are not guaranteed.

Certain Partners who are considered to have a particular impact on the investment services provided by Epiris may also be awarded with carried interest in funds managed by Epiris’ clients which are considered to align the interests of these Partners with both Epiris’ clients and the funds which Epiris’ clients manage. Carried interest awarded is considered to be variable remuneration.

Epiris employees receive an annual salary which is set by reference to a range of factors, taking account of the employee’s seniority and responsibilities and the market pay for the relevant position and their annual salary is considered to be fixed remuneration.

Employees may also be awarded an annual discretionary bonus payment. Such bonuses are paid from the Epiris profit pool which is set by reference to the overall performance and profitability of Epiris. This profit pool is allocated on the basis of individual performance reviews, which take account of both financial and non-financial criteria. Such bonuses are considered to be variable remuneration and are not guaranteed.

In its consideration of variable remuneration to be awarded to Non-Equity Partners and employees, the Epiris Remuneration Committee will consider not only, nor predominantly, quantitative measurements but also qualitative matters such as training and competence, personal skills and development, risk management, client focus, service quality, fair treatment of its clients and their investors, team working and development, ethical behaviour and regulatory compliance.

6.3 Remuneration and Capital

Variable remuneration awards are made within a context of ensuring they do not affect Epiris’ ability to ensure a sound capital base. Epiris will not pay remuneration for potential future revenues whose timing and likelihood remain uncertain and will also retain sufficient sums to cover its regulatory and working capital requirements taking full account of risk management considerations. Remuneration relates only to profits actually made by Epiris and not subject to clawback.

6.4 Balance of Fixed and Variable Components of Remuneration.

The fixed and variable components of total remuneration are appropriately balanced with the fixed element being sufficiently high to enable the operation of a fully flexible policy on variable remuneration.

6.5 Material Risk Takers

The Firm’s material risk takers (“MRTs”) are those individuals whose professional activities have a material impact on the Firm’s risk profile. During the year ended 31 March 2025, the Firm had ten MRTs.

6.6 Risk adjustment

Awards of carried interest are subject to certain adjustments including malus (reducing the amount of variable remuneration awarded). This would apply when Epiris considers there are circumstances that cause a participant to be deemed to be a ‘Bad Leaver’. MRTs’ carried interest in certain Epiris Funds is also subject to clawback (requiring the MRT to make a payment equal to some or all of variable remuneration received within a specified time period) including if they are deemed to be a ‘Bad Leaver’ under the Epiris LLP Agreement.

Other variable remuneration awarded to MRTs can be subject to additional adjustments. In specific circumstances including where an MRT has (i) participated in or been responsible for conduct which has resulted in significant losses to the Firm; and/or (ii) failed to meet appropriate standards of fitness and propriety, the Firm may take one or more additional measures including malus and/or clawback.

Epiris ensures that any payments to MRTs related to the early termination of an individual’s contract with Epiris reflect the individual’s performance over time and do not reward failure.

NEP Profit entitlements are subject to the relevant Non-Equity Partner remaining a member of Epiris and not having given or received notice of resignation or termination and not having committed a material breach of the Epiris LLP Agreement.

Other Epiris variable remuneration arrangements are fully discretionary, and the Firm has ongoing discretion to reduce (including to zero) the amount of variable remuneration.

Epiris maintains processes governing its approach to risks, including how the Firm takes into account current and future risks when adjusting remuneration.

6.7 Quantitative disclosures

The figures in the table below are as at 31 March 2025, and reflect the Firm’s FCA reporting period from 1 April 2024 to 31 March 2025.

The total amount of guaranteed variable remuneration and severance payments awarded to SMFs and MRTs during the last financial year was £nil.

Total remuneration to all staff
Total fixed remuneration	£000’s
Senior management and MRTs[1]	2,637
Other staff	2,547
SUB-TOTAL	5,184
Total variable remuneration	£000’s
Senior management and MRTs	3,715***
Other staff	3,414****
SUB-TOTAL	7,129
GRAND TOTAL	12,313

*** includes carried interest not paid in cash valued at the time of its award and treated as variable remuneration of £3,009,000

****  includes carried interest not paid in cash valued at the time of its award and treated as variable remuneration of £1,670,000