JPEL Private Equity : Half-year Report - 2023

DocuSign Envelope ID: F7E674E4-DF0E-4847-979B-527FB017B2F1

JPEL Private Equity Limited

Unaudited Interim Report and Condensed Financial Statements

for the period ended 31 December 2023

DocuSign Envelope ID: F7E674E4-DF0E-4847-979B-527FB017B2F1

Table of Contents

Financial Summary (Company Information)	1
Overview, Investment Strategy, Investment Policy & Leverage	2
Chairman's Statement	3
Corporate Actions	5
Statement of Principal Risks and Uncertainties	6
Responsibility Statement	7
Manager's Report	8
Portfolio Review
Top 10 Investments
Condensed Interim Financial Statements: Unaudited
Condensed Interim Statement of Comprehensive Income	11
Condensed Interim Statement of Financial Position	12
Condensed Interim Statement of Changes in Equity	13
Condensed Interim Statement of Cash Flows	14
Notes to the Condensed Interim Financial Statements	15
Information about the Company	26

Forward looking statements including opinions or expectations about any future events contained in this report are based on a variety of estimates and assumptions. These estimates and assumptions are inherently uncertain and are subject to numerous business, industry, market, regulatory, geopolitical, competitive and financial risks that are outside of the Company's or the Board's control. As such, there can be no assurance that any such estimates and assumptions will prove accurate.

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Financial Summary (Company Information)

	31 December 2023
US$ Equity Shares
Net Asset Value ("NAV") per Share	$1.50
Share Price	$0.97
Shares in Issuance	21.6m
Statement of Financial Position (extract)
Investments at Fair Value	$29.1m
Bank Deposits	$3.6m
Other Assets1	$0.3m
Credit Facility	-
Other Liabilities2	($0.5m)
US$ Equity NAV3	$32.4m

PERFORMANCE AS AT 31 DECEMBER 2023

JPEL Performance Since Inception4

Past performance is not an indication of future performance.

1. Includes distribution receivable and prepayments.
2. Includes fee accruals and other payables.
3. Numbers may not sum due to rounding.
4. Source: Manager, Bloomberg as at 31 December 2023. NAV and trading prices are given on a per Equity Share basis

1JPEL Private Equity Limited

Unaudited Interim Report and Condensed Financial Statements 31 December 2023

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Overview, Investment Strategy, Investment Policy & Leverage

OVERVIEW

JPEL Private Equity Limited ("JPEL" or the "Company") is a Guernsey registered and incorporated closed ended investment company with a Premium Listing on the London Stock Exchange (LSE: JPEL).

The investment advisor of the Company is FCF JPEL Management LLC (the "Manager"). The Manager is a Delaware limited liability company and an affiliate of Fortress Investment Group LLC ("FIG" or "Fortress"). The Manager is a "relying advisor" of Fortress, pursuant to applicable SEC guidance.

The Company has entered into a management agreement with the Manager, subject to the overall supervision of the board of directors of the Company (the "Directors" or the "Board"). All Directors are independent of the Manager. The Directors have overall responsibility for the Company's investment policy and the Company's activities.

The key measure of performance used by the Board and shareholders to assess the Company's performance is the Net Asset Value (or "NAV") which is prepared on a quarterly basis by IQ EQ Fund Services (Guernsey) Limited (the "Administrator" or "IQ-EQ").

INVESTMENT STRATEGY & INVESTMENT POLICY

Following the retirement of JPEL's 2017 zero dividend preference shares in October 2017 and change to the Company's investment policy, the Manager is effecting an orderly realisation of the investments and other assets comprised in the Company's portfolio and will seek to realise such investments and assets in order to maximise returns to US$ Equity shareholders (as defined below).

This realisation of the investments will include the Manager exploring the private equity secondary market for the Company's legacy fund interests as well as holding the direct investment portfolio until maturity, if the Manager believes that market pricing would be more favourable than realising such investments before their maturity.

The Company has not and will not make any new investments save for follow-on investments associated with existing investments to meet capital calls with respect to its undrawn commitments to underlying investments or to preserve or protect the value of its existing investments.

LEVERAGE

The Company has the ability to borrow up to 30% of its adjusted total of capital and reserves subject to and in accordance with the limitations and conditions in its articles of incorporation ("Articles"). As part of its leverage policy, the Company may borrow: (i) for short-term or temporary purposes as is necessary for the settlement of transactions; (ii) to facilitate the operation of the over-commitment policy; or (iii) to meet ongoing expenses. The Directors and the Manager will not incur any short-term borrowings to facilitate any tender or redemption of US$ Equity Shares (the "Shares" or "US$ Equity Shares" and the holders of such US$ Equity Shares being the "US$ Equity shareholders" and, for the time being the "shareholders") unless such borrowings have a repayment period of 180 days or less. The Company is indirectly exposed to borrowings to the extent that subsidiaries and underlying funds in its portfolio are themselves leveraged.

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Unaudited Interim Report and Condensed Financial Statements 31 December 2023

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Chairman's Statement

During the six-month period ending 31 December 2023, JPEL's US$ Equity Share price decreased 10.2% to $0.97 while the Company's NAV per US$ Equity Share decreased $0.13, or 8.0%, to $1.50 from $1.63 over the same period. On 10 November 2023, the Board approved and JPEL executed its twelfth mandatory redemption and returned $6.0 million to US$ Equity shareholders.

NAV AND SHARE PRICE PERFORMANCE

During the six-month period, JPEL's NAV per US$ Equity Share decreased 8.0%, to $1.50 from $1.63. The decline in NAV is primarily due to mark to market adjustments in JPEL's investment in Blue River Capital I and Genuine Idea Investments Ltd as well as the completion of JPEL's 12th mandatory redemption that was completed in the period. JPEL distributed $6.0 million to shareholders at a NAV of $1.61 per share, the prevailing NAV at the time the mandatory redemption was announced.

Subsequent to 31 December 2023, JPEL's US$ Equity Share price declined to $XX on 10 March 2024. As of 10 March 2024, JPEL traded at a 35.6% discount to prevailing NAV.

Including the return of capital through JPEL's twelfth mandatory redemption, holders of JPEL's US$ Equity Shares experienced a 65% increase in shareholder value1 from 30 June 2016 through 31 December 2023. By way of example, if a US$ Equity Shareholder owned $1.00 of JPEL in June 2016, the total return would be $1.65 at December 2023 ($1.60 from mandatory redemptions and $0.05 in remaining shareholder equity).

US$ Equity Shareholder Value

Source: Manager, Bloomberg as at 31 December 2023.

RETURN OF CAPITAL

On 10 November 2023, the Company completed its twelfth mandatory redemption and returned approximately $6.0 million to shareholders. Inclusive of this mandatory redemption, JPEL has returned $531.7 million to US$ Equity shareholders, or approximately 109.7% and 138.3% of prevailing NAV and market capitalization, respectively at the time of the Company's initial mandatory redemption.

As JPEL continues to run-off its portfolio organically, the Board engages in regular dialogue with shareholders including a variety of options for the Company with a goal of maximising value for all shareholders.

1. "Shareholder value" includes the impact of the mandatory redemptions as well as JPEL's increase in share price.
2. Distributions are shown on a cash basis. Distributions from JPEL's investment in ROC Capital Trust are reflected on the date that JPEL received the distribution from ROC Capital Trust.

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Unaudited Interim Report and Condensed Financial Statements 31 December 2023

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Chairman's Statement (continued)

DISTRIBUTION ACTIVITY2

During the twelve months ending December 2023, JPEL received $7.4 million of gross distributions or 18.1% of the prior year's private equity portfolio value. During this period, JPEL did not fund any capital calls.

CAPITAL POSITION

As of 31 December 2023, the Company did not have any leverage.

MARKET OUTLOOK

As global markets continue to be affected by well documented macroeconomic factors, the JPEL portfolio may be impacted, similar to other private equity funds, in timing, valuation, or amounts of realisation activity. As a result, distributions in 2024 are likely to be unpredictable.

The current portfolio is mature with a weighted average age of 12.6 years at 31 December 2023. The Board and the Manager anticipate that the majority of the JPEL portfolio will continue to be wound down within the next three years. However, the Board and the Manager will continue to look at all options that they believe will maximise shareholder value for the assets individually and the company as a whole.

CONCLUSION

Both the Board and Manager are working closely and remain focused on maximising value in the portfolio and returning capital to US$ Equity shareholders. In conclusion, I would like to thank shareholders for the support that they have placed in the Company.

Sean Hurst

Chairman

14 March 2024

4JPEL Private Equity Limited

Unaudited Interim Report and Condensed Financial Statements 31 December 2023

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Corporate Actions

CORPORATE ACTIONS

• On 6 December 2023, the Company held its Annual General Meeting (the "AGM"). The following is a summary all of the resolutions the Company sought approval for at the AGM. All resolutions were approved at the meeting.
• • Special Resolutions:
  • 1. To renew the Company's authority to make purchases of up to 15 per cent of its own issued Shares pursuant to any proposed Tender Offer; and
    2. To renew the Company's general authority to make market purchases of up to 14.99 per cent of its own issued Shares.
  • Ordinary Resolutions:
  • 1. To approve and adopt the annual report and financial statements of the Company for the year ended 30 June 2023;
    2. To re-elect PricewaterhouseCoopers CI LLP as Auditors of the Company;
    3. To re-authorise the Directors to determine the Auditors' remuneration;
    4. To re-authorise and agree the remuneration of the Directors in accordance with the Articles;
    5. To re-elect Trina Le Noury as a non-executive, independent director of the Company, who retires by rotation;
    6. To re-elect Anthony (Tony) Dalwood as a non-executive, independent director of the Company, who retires by rotation; and
    7. To re-elect Sean Hurst as a non-executive, independent director of the Company, who retires by rotation.
• On 8 November 2023, JPEL announced that the twelfth mandatory redemption of the Company's US$ Equity Share class announced on 24 October 2022 had been completed.

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Statement of Principal Risks and Uncertainties

The Company's investments and the underlying portfolio companies are materially affected by a variety of risks and uncertainties in the global financial markets and economic conditions throughout the world. The risks described below are the principal risks which are considered by the Board to be material to the shareholders of the Company. Greater detail on these risks is provided in note 3 of the Condensed Interim Financial Statements (the "financial statements"). The Directors consider that the principal risks and uncertainties have not changed materially since the year end and are not expected to change materially for the remaining six months of the financial year, except as discussed in the Chairman's Statement.

• Market risk: Market risk embodies the potential for both gains and losses and includes interest rate risk, currency risk and price risk. The Manager works to mitigate risk by creating a diversified portfolio, focusing on achieving a balance across Manager, investment styles, industrial sectors and geographical focus;
• Interest rate risk: Interest rate risk refers to the Company's exposure to changes in interest rates, primarily relating to cash and cash equivalents and floating rate debt obligations. External interest bearing liabilities are limited in size by the Company's internal policies;
• Currency risk: Currency risk arises from the possibility that fluctuations in foreign currency exchange rates will affect the value of the Company's assets and liabilities, the NAV and the market price of the US$ Equity Shares. As at 31 December 2023, the Company has no currency hedges in place to partially mitigate fluctuations in its foreign exchange exposure;
• Price risk: Price risk is the risk that the value of the instrument will fluctuate as a result of changes in market prices (other than those arising from interest rate risk or currency risk), whether caused by factors specific to an individual investment, its issuer, or factors affecting all instruments traded in that market;
• Credit risk: Credit risk is the risk that an issuer or counterparty will be unable or unwilling to meet a commitment that it has entered into with the Company. The Company's exposure to credit risk is managed on an ongoing basis by the Manager and on a quarterly basis by the Board;
• Liquidity risk: The Company's financial instruments primarily include investments in unlisted equity investments that are not publicly traded and therefore may be illiquid. As a result, the Company may not be able to liquidate some of its investments in these instruments at an amount close to their fair value should such liquidation be necessary to meet liquidity requirements, including the need to meet outstanding undrawn commitments and other obligations as and when these fall due; and
• Other risks: The Company is exposed to various other risks with respect to its financial assets including valuation risk, reliance on the Manager, political and regulatory risk.

Related Party Transactions

Related party transactions are reported in note 11 of the financial statements.

Going Concern

The Directors have examined significant areas of possible credit and liquidity risk and have satisfied themselves that no material uncertainties exist. The Directors have taken into consideration the Company's expected cash flows for a period exceeding twelve months from the date of approval of the financial statements, in respect of follow-on investments and ongoing fees. Given the Company's current cash position combined with the expected distributions over the same period, the Directors believe the Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of approval of the financial statements. After due consideration of this, the Directors believe it is appropriate to adopt the going concern basis in preparing the financial statements. However, as discussed in the Chairman's Statement, the Manager and the Board continue to explore strategic solutions which may accelerate the Company's realisation strategy.

6JPEL Private Equity Limited

Unaudited Interim Report and Condensed Financial Statements 31 December 2023

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Responsibility Statement

The Directors confirm to the best of their knowledge:

1. The financial statements have been prepared in accordance with International Accounting Standard 34 Interim Financial Reporting;
2. This report includes a fair review of the information required by the FCA's Disclosure Guidance and Transparency Rules 4.2.7R; and
3. This report includes a fair review of the information required by the FCA's Disclosure Guidance and Transparency Rules 4.2.8R.

This report was approved by the Board on 14 March 2024 and the above Responsibility Statement was signed on its behalf by

Sean Hurst

Chairman

7JPEL Private Equity Limited

Unaudited Interim Report and Condensed Financial Statements 31 December 2023

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Manager's Report

PORTFOLIO REVIEW

JPEL's portfolio is diversified globally across multiple investment strategies and industries as at 31 December 2023. The Company engaged in a single segment of business, as detailed in note 1 to the financial statements, and the diversification analysis is provided as supplementary information.

Investment Type1

As at 31 December 2023, direct investments comprise 67% (30 June 2023: 65%) of the portfolio, while secondary investments make up 20% (30 June 2023: 24%) of JPEL's portfolio NAV. Primary investments comprised 9% (30 June 2023: 8%) of JPEL's portfolio while funded primaries made up 2% (30 June 2023: 3%) of JPEL's portfolio NAV.

Investment Strategy1

Buyout Fund Sizes2

As at 31 December 2023, buyout funds constitute approximately 66% (30 June 2023: 70%) of JPEL's portfolio. Within this strategy, the majority of the Company's investments are with fund managers that focus on small to medium sized buyouts, which generally utilise less leverage.

JPEL's exposure to real estate and venture capital stand at 13% (30 June 2023: 12%) and 12% (30 June 2023: 11%),

respectively, in each category. JPEL maintains a 7% (30 June 2023: 6%) allocation to special situation funds which includes

mezzanine, debt, turnaround and distressed funds. JPEL's exposure to infrastructure stands at 2% (30 June 2023: 1%).

1. Based on 31 December 2023 market value of investments, percentages based on underlying fund-level values.
2. Fund classifications for buyout strategies are based on total fund commitments: Small: $0 - $500 million; Medium: $500 - $2,000 million; and Large: over $2,000 million. Co- investments allocated by size of underlying sponsor fund.

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Unaudited Interim Report and Condensed Financial Statements 31 December 2023