Pollen Street Group (LON:POLN) reported what management described as a “very strong year” for 2025, driven by fundraising momentum, higher fee-paying assets under management, and continued profitability from its balance sheet investment company. Executives said the private capital manager ended the year with total AUM of £7.1 billion and fee-paying AUM of £5.2 billion, supported by growth across both private equity and private credit strategies.
Fundraising and AUM growth
Chief Executive Officer Lindsey McMurray said 2025 featured strong AUM growth “in both strategies,” with total AUM up 30% year-on-year to £7.1 billion. Fee-paying AUM increased by £1.3 billion to £5.2 billion, which management highlighted as improving visibility into future management fee income.
In the Q&A, management said re-up rates from existing limited partners were “short of 100%, but not much short of 100%,” while also describing increasing participation from new investors, including U.S. pension plans and their advisory consultants.
Strategy commentary: private equity and credit
McMurray described Pollen Street as focused on mid-market opportunities across Europe, concentrating on financial and business services. She said the firm operates two “complementary strategies”:
- Private equity: control investments in mid-market businesses, working with management on operational improvement, product development, international expansion, and M&A.
- Private credit: senior asset-backed lending secured on diversified, cash-generative asset pools and structured with downside protection designed to withstand macroeconomic stress.
In private equity, management said Fund V was “deploying well,” with nine investments completed and 55% of capital committed, a pace described as in line with expectations. The company also noted that exits from Fund III were “healthy,” and that it was “turning our mind to Fund IV too.” Later in Q&A, management said Fund III had completed three exits and that it was considering additional exits in 2026.
In private credit, McMurray said the firm sees structural tailwinds as investors seek non-correlated returns and stable income streams. She emphasized bilateral borrower relationships, in-house diligence, and fund structures without liquidity mismatch. She also stated the strategy has low exposure to AI disruption because the firm lends against tangible assets with predictable cash flows. Management said Credit Fund IV deployment was tracking fundraising, with roughly 50% of raised capital deployed in a “well-diversified portfolio.”
During Q&A, the company said it does not participate as a junior partner in syndicated credit positions, stating that the percentage of such deals is “none” and that it leads diligence and engages advisors to its own standards.
Financial performance: revenue mix, fees, and investment company returns
Management reported group revenue of £114 million. McMurray said 71% of revenues were generated by the asset manager, up from 62% two years earlier, while the investment company contributed £32.9 million of income for the year.
Goldsmith outlined a revenue model he characterized as predictable, tied to long-duration LP commitments (typically 8–10 years) and management fees calculated as a fixed percentage of fee-paying AUM. He gave an example that Private Equity Fund V, with €1.5 billion of commitments and a 2% management fee, produces €30 million per year in management fee revenue until the first close of Fund VI, after which fees move to an invested-cost basis.
For 2025, management fee income was £69.9 million, including £8.4 million of catch-up fees. Goldsmith said this represented 28% growth versus 2024, or 24% growth excluding catch-up fees. Performance fees were £11.2 million, in line with the prior year; Goldsmith said second-half performance fees were significantly higher than the first half due to greater credit deployment and seasonality in private equity returns.
The investment company’s reported net investment income was £32.9 million, up 4% year-on-year, representing a 9.9% return on net investment assets. Goldsmith said this included £2.4 million of dilution from equalization effects; adjusting for that, he cited an underlying return of 10.6%.
Costs, profitability, and carry allocation changes
Fund management costs were £49.4 million, up 25% compared to 2024. Goldsmith attributed part of the increase to the timing mismatch between fundraising-related costs (including team incentives and placement agent fees) and when capital becomes fee-paying after deployment. He noted that the group had £800 million of uninvested capital in credit at year-end, which he said had increased further with closes in Q1 and would become fee-paying as it is deployed.
Despite higher costs, Goldsmith said fund management EBITDA increased 17% to £31.7 million, and he noted that the business had consolidated the margin improvement achieved in 2024. McMurray separately referenced group EBITDA of £64.6 million.
A notable governance update involved carried interest allocation. Goldsmith said the board decided future funds should have flexibility in the “house share” of carried interest rather than fixing it at 25% across all funds. For Private Credit Fund IV, he said an additional allocation to certain team members would reduce the house share to 17%. He added that, due to the larger-than-expected fundraise, there was “no change in the group’s financial guidance” as a result. In response to analyst questions, management said the change was not related to team departures but to incentivizing a broader contributing pool, including business development hires made toward the end of the fundraising period.
Outlook and 2026 priorities
Looking ahead, Goldsmith said the group was on track to be “in line or ahead of expectations” for the current year, with no change to guidance. He also said the company had increasing visibility on reaching its £10 billion AUM target, which management expects to achieve with the next generation of flagship private equity and private credit funds.
McMurray said the firm’s priorities for 2026 center on scaling the platform, investing for growth, and continuing to deliver returns. Near-term objectives include completing the Credit Fund IV fundraising in the next few weeks, considering additional credit vehicles given demand for the senior strategy, and preparing for Private Equity Fund VI. On Fund VI timing, management indicated it would be a focus “probably” in the first half of 2027.
McMurray also reiterated plans to grow fee-paying AUM through deployment of approximately £800 million of capital already raised and said the company will continue investing in the team and internal technology and data capabilities while improving profitability over time. Management noted that investment company income supports the dividend, and that growing profits in the asset manager could provide additional capital allocation options alongside the progressive dividend policy and ongoing share buyback program referenced by Goldsmith.
About Pollen Street Group (LON:POLN)
Pollen Street was founded in 2013. It is a listed alternative asset manager dedicated to the financial and business services sectors. Pollen Street has complementary activities in managing third-party assets (as an asset manager) and on-balance sheet investments (as an investment company), delivering growth through dedicated private equity and credit strategies.
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