Annual Financial Report

RNS Number : 8238F

CVC Credit Partners European Opps.

11 March 2020

FOR IMMEDIATE RELEASE

RELEASED BY BNP PARIBAS SECURITIES SERVICES S.C.A., JERSEY BRANCH FINAL RESULTS ANNOUNCEMENT

THE BOARD OF DIRECTORS OF CVC CREDIT PARTNERS EUROPEAN OPPORTUNITIES LIMITED ANNOUNCE FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2019

SUMMARY

Key performance indicators summary

As at 31 December 2019, the Company's Euro and Sterling NAV per share was €1.0013 and £1.0534 respectively and Euro and Sterling share price (bid price)¹ was €0.9550 and £0.9820 respectively, representing a 4.62% discount and 6.78% discount to NAV. The Company's² ongoing charges ratio remained constant at 1.19% for the year ended 31 December 2019 (ongoing charges 31 December 2018 restated³: 1.19%). The Company successfully met its dividend target of €0.0550 per Euro Share and £0.0550 per Sterling Share.

Further information in respect of the Company's key performance indicators, some of which the Board considers to be its APMs, can be found in the Financial Highlights and Performance Summary section below, within the Executive Summary below and within the Useful Information for Shareholders below.

Significant events during the year ended 31 December 2019

Refer below for details regarding significant events during the year.

Purpose

The Company is an investment company, and its scope is restricted to that activity. In that context, the Company's purpose is to provide investors with sustainable long term returns by investing in a diversified portfolio of principally European corporate debt. In fulfilling the Company's purpose, the Board seeks to consider the views of all stakeholders and is mindful of the impact that the Company has on the society in which it operates.

Investment objective, policy and strategy

The Company's investment objective is to provide shareholders with regular income returns and capital appreciation from a diversified portfolio of predominantly sub-investment grade debt instruments. The Company's investment policy is to invest predominantly in debt instruments issued by companies domiciled in, or with material operations in Western Europe across various industries. The Company's investments are focused on the senior secured obligations of such companies, but investments are also made across the capital structure of such borrowers. Refer below for the Company's full investment objective and policy.

Going concern and viability

The Directors consider it appropriate to adopt the going concern basis in preparing the financial statements and have a reasonable expectation that the Company will continue to be viable for a period of at least three years from the date of this report. Refer below for further details.

Board members

On 21 February 2019, Stephanie Carbonneil was appointed as a non-executive Director of the Company. There were no others changes to the Board members during the year. Each Board member's biography can be found below.

Investment Vehicle Manager's Report

Refer below for the Investment Vehicle Manager's Report.

Directors' remuneration, Corporate Governance Report and Report of the Audit Committee

There have been no changes to Directors' remuneration during the year. Refer below for details of the Directors' current remuneration; the Directors' and Corporate Governance report; and the Report of the Audit Committee.

Financial statements

The Company's full financial results can be found in the accompanying financial statements below.

¹ - Source: Bloomberg

² - The Company's ongoing charges are considered to be APMs which are calculated according to the methodology outlined below and differ to the ongoing costs disclosed within the Company's KIDs which follows the methodology prescribed by EU rules. For example, the ongoing charges disclosed in the Company's KIDs are based on average ongoing charges over the past three years whereas the ongoing charges ratio disclosed in this report is based on ongoing charges incurred during the year ended 2019 only. The Company's most current KIDs and an accompanying explanatory note reconciling the two different ongoing charges ratios are available on the Company's website ( www.ccpeol.com/news-documents ).

³ - R efer below for details of the revised ongoing charges methodology and the restatement of the ongoing charges ratio for 2018.

strategic report

financial highlights and performance summary

Key performance indicators

NAV, share price and premium / discount¹

			As at 31 December 2019	As at 31 December 2018

NAV per Euro Share			€1.0013	€1.0404
Euro Share price (bid price)²			€0.9550	€1.0600
(Discount)/premium to NAV (based on published NAV)			(4.62)%	1.88%
NAV per Sterling Share			£1.0534	£1.0762
Sterling Share price (bid price)²			£0.9820	£1.0750
(Discount)/premium to NAV (based on published NAV)			(6.78)%	(0.11)%

Period highs and lows	2019	2019	2018	2018
	High	Low	High	Low

NAV per Euro Share	€1.0503	€0.9836	€1.1071	€1.0404
Euro Share price (bid price)²	€1.0600	€0.9400	€1.1200	€1.0500
NAV per Sterling Share	£1.0911	£1.0329	£1.1393	£1.0762
Sterling Share price (bid price)²	£1.0900	£0.9740	£1.1600	£1.0700

NAV total return¹ vs benchmark

NAV total return³ increased by 34.99% for Euro Shares and 41.24% for Sterling Shares from IPO (being 25 June 2013). NAV total return is net of issue costs and includes dividends. Any dividends received by a shareholder are assumed to have been reinvested in the Company's assets.

Please refer below for NAV total return for Euro and Sterling Shares versus Credit Suisse Western European High Yield Index (hedged in Euros) Total Return and Credit Suisse Western European Leveraged Loan Index (hedged in Euros) Total Return:

Ongoing charges¹

The ongoing charges⁴ ratio is calculated according to the Association of Investment Companies ( AIC) methodology using the actual costs incurred in the year which are likely to recur in the foreseeable future and which relate to the operation of the Company³, divided by the average net assets during the year. The ongoing charge for the year ended 31 December 2019 was 1.19% (2018 restated⁵: 1.19%).

Dividend history


Year ended	Total dividend paid per Euro Share	Total dividend paid per Sterling Share
2014	€0.0350	£0.0350
2015	€0.0500	£0.0500
2016⁶	€0.0625	£0.0625
2017⁷	€0.0525	£0.0525
2018	€0.0550	£0.0550
2019	€0.0550	£0.0550

Dividends paid during the year ended 31 December 2019


Payment date	Dividend paid per Euro Share	Dividend paid per Sterling Share
22/03/2019	€0.01375	£0.01375
14/06/2019	€0.01375	£0.01375
13/09/2019	€0.01375	£0.01375
29/11/2019	€0.01375	£0.01375

Please refer to note 16 for further information subsequent to the reporting year.

¹ - T he Company considers share price premium / discount, NAV total return and ongoing charges to be Alternative Performance Measures. Further details of these can be found below.

² - Source: Bloomberg

³ - Sources: BNP Paribas Securities Services, Bloomberg

⁴ - The Company's ongoing charges are considered to be APMs which are calculated according to the methodology outlined below and differ to the ongoing costs disclosed within the Company's KIDs which follows the methodology prescribed by EU rules. For example, the ongoing charges disclosed in the Company's KIDs are based on average ongoing charges over the past three years whereas the ongoing charges ratio disclosed in this report is based on ongoing charges incurred during the year ended 2019 only. The Company's most current KIDs and an accompanying explanatory note reconciling the two different ongoing charges ratios are available on the Company's website ( www.ccpeol.com/news-documents ).

⁵ - R efer below for details of the revised ongoing charges methodology and the restatement of the ongoing charges ratio for 2018.

⁶ - As a result of the Company amending the frequency of its dividend payments to a quarterly basis rather than a semi-annual basis during 2016, shareholders received an additional €0.0125 and £0.0125 dividend per Euro and Sterling Share respectively.

⁷ - During the course of 2017, the Company increased its target annual dividend to 5.5 cents per Euro Share and 5.5 pence per Sterling Share.

chairman's statement

Introduction

I am pleased to have the opportunity to report to you on the Company's performance in 2019. NAV total returns for the Sterling and Euro share classes issued by the Company returned 3.07% and 1.56% respectively. Allocations to the Company's two sub-strategies, being performing credit and credit opportunities, ended the year at 61% and 39% respectively (2018 - 64% and 36%).

Performance in Context

When I drafted my statement to accompany the 2018 strategic report, I noted that returns in that year had been disappointing compared to target, and so it has proved again in 2019, yet for good reason.

The major impact on portfolio returns during 2019 has been the increasing focus of portfolio investors on the higher rated tranches of leveraged capital structures, and away from lower rated, particularly in the US market. This overriding influence has existed in response to ongoing concerns in credit markets about the geopolitical and macroeconomic outlook, notwithstanding historically low default rates and supportive monetary policy stances by central banks.

The Investment Vehicle Manager shares these concerns and continued to hold overweight allocations to the performing credit strategy, particularly in higher rated credits, as 2019 progressed. This allocation, and the securities selection process involved, proved successful and consequently this strategy contributed gross returns to the underlying Investment Vehicle of approximately 7% during 2019. It is notable that this was achieved in an environment of continuing broadly based excess demand for yield amongst the global investment community, which saw new issuance yields at the higher quality end of the leveraged credit markets (term loan B) remain tight, with spreads over the risk free rate staying in the region of 3.6%, as they have done with limited volatility since the beginning of 2018.

Conversely, the Company's allocation to credit opportunities proved frustrating from a performance perspective. The defensive behaviour of markets during the year meant that less capital and less focus was deployed by market participants generally to these types of credits, irrespective of the perceived value opportunities available. This resulted in delays to necessary restructurings and exit events, and a lack of value recognition in a market pricing sense. As a result, our credit opportunity assets did not contribute meaningfully to performance in 2019, although they have already provided good returns in early 2020.

You will interpret from the above that the apparent sanguinity of, in particular, equity markets during 2019 has masked some very real sustainability issues, hence the Investment Vehicle Manager's relatively defensive positioning and focus on capital preservation, rather than chasing yield. This has now proved prescient.

Current Market Conditions and Outlook

Risk assets started 2020 in fine form, but investors will be well aware of what has happened since then, principally as a result of the global spread of the virus known as SARS-CoV-2, and the disease caused by it, known as Covid-19. The Investment Vehicle Manager published a note on this topic on 2 March 2020 (at https://www.ccpeol.com/media/1377/market-update-note-covid-19-coronavirus.pdf ), which sets out the current view. Market reaction to the ongoing spread of Covid-19 and, as I write, the impact of the OPEC+ decision to dramatically increase oil supply, has been swift and dramatic, in part as a result of the very high ratings ascribed to risk assets. The Investment Vehicle remains defensively positioned, whilst remaining alert to the value opportunities that market dislocations inevitably bring. The Investment Vehicle holds no material exposure to the oil and gas sector.

Corporate Activities & Liquidity

The Company has continued to effect issuance and repurchase operations consistent with the premia or discount to net asset value at which the Company's shares are trading. Much has been said and written about fund liquidity during the course of 2019 as a result of idiosyncratic corporate failures, and whilst the range of problematic asset pools has proved very limited, the focus by investors and regulators has been heightened. It continues to be the policy of the board to provide liquidity to investors through the terms of the Company's quarterly tender mechanism, our ability to do so being supported by the liquidity of the Investment Vehicle's asset pool. Both our policy, and underlying market liquidity remain unchanged.

Total Return Target

The Company has continued to pay a coupon of 5.5% on an assumed par share price for 2019.

Investors noting the total return performance for 2019 shown above will, of course, be aware that this coupon includes a material proportion of historic undistributed capital gains which is inevitable given the continued declines in yields available in primary issuance and the secondary market for quality credits, as referenced above.

It is not the strategy of the Board, or the Investment Vehicle Manager, to seek to improve the current yield of the portfolio by either increasing the level of gearing in the underlying portfolio, nor seeking increased coupons in the more high risk parts of capital structures, given the cautious approach to portfolio construction outlined in detail in the Investment Vehicle Manager's report, particularly given current events.

The Board and the Investment Vehicle Manager have for some time been reviewing the total returns that the Company's investment strategy is capable of delivering given the yield compression in the leveraged loan markets that we have seen for a number of years, set alongside the availability of attractive scalable credit opportunities positions that fit the Investment Vehicle Manager's rigorous selection criteria, and the time that those opportunities take to mature.

The outcome of those discussions is that the medium-term total return target, originally set at IPO, is now being reset to a target of 8% per annum over the medium term, which the Board regards as being over a rolling five year period. The Investment Vehicle Manager believes that this target is realistic and achievable given current and reasonably foreseeable market conditions and the manner in which the portfolio of the Investment Vehicle is positioned and constructed. In that context, the Board will also be considering, over the coming quarter, the significant differences in both value and timing terms of the cash returns flowing from the performing credit and credit opportunities asset pools and whether it makes sense to more accurately match future dividend distributions to those cash flows.

Corporate Governance and Social Responsibility Considerations

The Board has focussed a significant amount of time during 2019 on calibrating its form and function to ensure that it accords with enhanced and emerging expectations on the part of investors and regulators. An external review of Board and individual director performance was conducted, which yielded valuable confirmation of compliance alongside helpful suggestions for enhancements, and there have been and continue to be, regular engagements with the Investment Vehicle Manager in relation to how social responsibility factors are incorporated into the investment decision making and monitoring process. Our reporting on these factors within our published materials will continue to expand over time.

As always, I would like to thank my fellow Directors, the portfolio management team at the Investment Vehicle Manager, our advisors and investment bankers for their support and wise counsel, and I would also like to extend thanks to all of our shareholders for your continuing commitment to the Company.

Richard Bol é at

Chairman

11 March 2020

Executive summary

This Executive Summary is designed to provide information about the Company's business and results for the year ended 31 December 2019. It should be read in conjunction with the Chairman's Statement and the Investment Vehicle Manager's report which gives a detailed review of investment activities for the year and an outlook for the future.

Corporate summary

The Company is a closed-ended investment company limited by shares, registered and incorporated in Jersey under the Companies (Jersey) Law 1991 on 20 March 2013, with registration number 112635. The Company's Share capital consists of Euro Shares and Sterling Shares which are denominated in Euro and Sterling respectively. The Company's Euro Shares and Sterling Shares are listed on the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange. The Company also has two Management Shares in issue. Details of the shares in issue are detailed below.

The Company is self-managed and the Directors have invested the net proceeds from share issues into Compartment A of an existing European credit opportunities investment vehicle, CVC European Credit Opportunities S.à r.l. (the "Investment Vehicle"), managed by CVC Credit Partners Investment Management Limited (the "Investment Vehicle Manager").

The Company is a member of the AIC and is regulated by the Jersey Financial Services Commission.

Significant events during the year ended 31 December 2019

Non-executive Director Appointment

On 21 February 2019, the Company announced that Stephanie Carbonneil had been appointed as a non-executive Director of the Company.

Publication of a Prospectus

On 29 March 2019, the Company published a prospectus in respect of a 12-month placing programme for up to 500 million placing shares, being new ordinary shares (to be denominated as either Euro Shares, Sterling Shares and/or US Dollar Shares) and/or C shares (to be denominated as either Euro C Shares, Sterling C Shares and/or US Dollar C shares).

Placing of Ordinary Shares

On 7 June 2019, the Company announced that it had raised £23,690,667, representing 21,945,963 new Sterling Shares at a placing price of £1.0795 per share.

Sale of treasury shares

The Company completed the following sale of Euro and Sterling treasury shares during the year. All treasury shares were sold at a premium to the relevant published NAV.

	Euro Shares	Sterling Shares
Treasury shares sold	2,050,000	3,600,000
Gross proceeds received	€2,148,077	£3,915,520

Contractual quarterly tenders

The Company completed the following tenders under its Contractual Quarterly Tender mechanism during the year. All of the shares tendered were transferred into the Company's name and held in treasury.

Quarterly tender	Settlement date	Euro Shares tendered	Euro Share tender price	Sterling Shares tendered	Sterling Share tender price
December 2018	15/02/2019	-	-	144,501	£1.0662
March 2019	17/05/2019	1,575,007	€1.0313	5,861,033	£1.0708
June 2019	14/08/2019	-	-	4,396,358	£1.0615
September 2019	12/11/2019	1,665,000	€0.9970	24,749,347	£1.0435

On 15 November 2019, the Company announced that it had received tender applications in respect of the December 2019 tender for 81,693,230 Sterling Shares and 2,455,926 Euro Shares. In respect of the Sterling Share tender elections, a pro rata scaling back was carried out due to the Sterling tender elections received exceeding 24.99% of the quarterly restriction announced on 1 October 2019. As a result of the pro rata scaling back, the Company rejected tender applications received in respect of 4,896,934 Sterling shares.

Certain shareholders elected for any residual shares not purchased by the Company as part of the December 2019 Tender to be retained in escrow until the March 2020 Tender, at which point they will be eligible for repurchase by the Company in priority to shares subsequently tendered at the March 2020 Tender. The aggregate number of Sterling Shares that will be retained in escrow is 322,476.

The total number of Euro share tender elections were accepted in full. Refer to note 16 for details regarding the settlement of the December 2019 tender.

Voluntary conversions

Following requests made by shareholders, the Company converted a total of 542 Euro Shares into 446 Sterling shares and 4,931,995 Sterling Shares into 5,847,668 Euro Shares under the monthly conversion facility during the year ended 31 December 2019.

Dividends

The Company announced and paid four quarterly dividends totalling € 0.0550 and £ 0.0550 (2019: € 0.0550 and £ 0.0550 ) per Euro Share and Sterling Share respectively in 2019. Refer to note 12 for full details of each quarterly dividend.

Scrip dividend

The Company issued the following shares under the scrip dividend scheme during the year.

Scrip share issue date	Euro scrip reference price	Euro Shares issued	Sterling scrip reference price	Sterling Shares issued
25/03/2019	€1.04900	336,017	£1.07750	29,296
14/06/2019	€1.04750	344,573	£1.08458	35,273
06/09/2019	€0.98350	107,767	£1.03000	42,442

On 25 October 2019, the Company announced that it had suspended the scrip dividend scheme until further notice, as a result of the limited take-up of the facility by investors when weighed against the costs of operation.

Purpose

Investment Objective and Policy

Investment objective

The Company's investment objective is to provide shareholders with regular income returns and capital appreciation from a diversified portfolio of predominantly sub-investment grade debt instruments.

Company asset allocation

The Company's investment policy is to invest predominantly in debt instruments issued by companies domiciled in, or with material operations in, Western Europe across various industries. The Company's investments are focused on the senior secured obligations of such companies, but investments are also made across the capital structure of such borrowers.

The investment policy of the Investment Vehicle is subject to the following Investment Limits:

· A minimum of 50 per cent. of the Investment Vehicle's gross assets will be invested in senior secured obligations (which, for the purposes of this investment limit will include cash and cash equivalents).

· A minimum of 60 per cent. of the Investment Vehicle's gross assets will be invested in obligations of companies/borrowers domiciled, or with material operations, in Western Europe.

· A maximum of 7.5 per cent. of the Investment Vehicle's gross assets will be invested at any given time in obligations of a single borrower subject to a single exception at any one time permitting investment of up to 15 per cent. in order to participate in a loan to a single borrower, provided the exposure is sold down to a maximum of 7.5 per cent. within 12 months of acquisition.

· A maximum of 7.5 per cent. of the Investment Vehicle's gross assets will be invested in credit loan obligation securities.

· A maximum of 25 per cent. of the Investment Vehicle's gross assets will be invested in CVC Capital Portfolio Company debt obligations calculated as invested cost as a percentage of the Investment Vehicle's gross assets.

The Investment Vehicle is permitted to borrow up to an amount equal to 100 per cent. of the NAV of the Investment Vehicle at the time of borrowing. The Investment Vehicle's borrowings as a percentage of the Investment Vehicle's NAV as at 31 December 2019 stood at 21.62% (31 December 2018: 22.37%).

General

The investment objective and investment policy of the Investment Vehicle are consistent with the investment objective and investment policy of the Company. In the event that changes are made to the investment objective or investment policy of the Company or of the Investment Vehicle (including the Investment Limits and/or the Borrowing Limit), the Directors will seek Shareholder approval for changes which are either (a) material in their own right or, (b) when viewed as a whole, together with previous non-material changes, constitute a material change from the published investment objective or policy of the Company.

Company borrowing limit

The Company may borrow up to 15 per cent. of the NAV of the Company for the sole purpose of purchasing or redeeming its own shares otherwise than pursuant to Contractual Quarterly Tenders. As at 31 December 2019, the Company did not have any borrowings (31 December 2018: no borrowings).

Investment strategy and approach

The Company has given effect to its investment policy by subscribing for Preferred Equity Certificates, (the "PEC's"), Series 4 and 5, issued by the Investment Vehicle. Series 4 and 5 PECs are denominated in Euro and Sterling respectively and are income distributing.

The Investment Vehicle Manager's investment strategy for the Investment Vehicle is to make investments across approximately 40 to 60 companies based on detailed fundamental analysis of the operations and market position of each company and its capital structure.

The Investment Vehicle Manager invests in the debt of larger companies and invests in companies with a minimum EBITDA of €50 million or currency equivalent at the time of investment. The Investment Vehicle Manager believes that the debt of larger companies offers a number of differentiating characteristics relative to the broader market:

(i) larger, more defensive market positions;

(ii) access to broader management talent;

(iii) multinational operations which may reduce individual customer, sector or geographic risk and provide diverse cashflow;

(iv) levers such as working capital and capital expenditure which can be managed in the event of a slowdown in economic growth; and

(v) wider access to both debt and equity capital markets.

Based on the market opportunity, the Investment Vehicle Manager invests in a range of different credit instruments across the capital structure of target companies (including, but not limited to, senior secured, second lien and mezzanine loans and senior secured, unsecured and subordinated bonds). Assets are sourced in both the new issue and secondary markets, using the sourcing networks of the Investment Vehicle Manager and in certain circumstances the CVC Group more broadly. The Investment Vehicle Manager's access to deals is supported by the network of contacts and relationships of its leadership team and investment professionals, as well as the strong positioning of the CVC Group in the European leveraged finance markets. CVC Capital Portfolio Companies are one of the largest sponsor led issuers of leveraged loan deals in Europe¹.

Each investment considered by the Investment Vehicle Manager is built around an investment thesis and generally falls into one of two categories:

1. Performing Credit; and

2. Credit Opportunities.

The Investment Vehicle Manager analyses the risk of credit loss for each investment on the basis it will be held to maturity but takes an active approach to the sale of investments once the investment thesis has been realised.

Further information in respect of the Investment Vehicle portfolio and performance as at 31 December 2019 can be found in the Investment Vehicle Manager's report below.

Director interests

Information on each Director is shown below.

As at the date of approval of the annual financial report, Mark Tucker held 20,000 Sterling Shares in the Company and Stephanie Carbonneil held 10,200 Sterling Shares in the Company.

No Director has any interest in any contract to which the Company is a party.

KPIs

The Board meets regularly to review performance and risk against a number of key measures. With the exception of dividends, the Company considers the below KPIs to be Alternative Performance Measures. Further details of these can be found below.

NAV total return

The Board regularly reviews and compares the NAV and share price of the Company. The Directors regard the Company's NAV total return as being the overall measure of value delivered to shareholders over the long term.

Total return reflects both NAV growth of the Company and also dividends paid to shareholders.

The NAV total return for Euro Shares and Sterling Shares has increased by 34.99% and 41.24% respectively from IPO. The Euro Shares and Sterling Shares NAV total return for the year ended 31 December 2019 was 1.56% (2018: 0.07%) and 3.07% (2018: 1.00%) respectively. Please refer to the Financial Highlights and Performance Summary above for the Euro Shares and Sterling Shares NAV total return analysis. The divergence in NAV per share performance between share classes principally derives from the risk free rate differential between Euro and Sterling.

Dividend

The Company is targeting annual dividends of around €0.0550 and £0.0550 per Euro Share and Sterling Share respectively. During 2019, S hareholders received total dividends of € 0.0550 and £ 0.0550 (2018: € 0.0550 and £ 0.0550 ) per Euro Share and Sterling Share respectively . Please refer above for the Company's dividend history from inception.

Ongoing charges

The Board reviews and compares the Company's operating expenses against budget on a monthly basis and performs an analysis of deviations. On a quarterly basis, the Board reviews the ongoing charges solely for the Company² (exclusive of the Investment Vehicle management fee) and reviews the ongoing charges of the Investment Vehicle on an annual basis.

The Company's ongoing charges for the year ended 31 December 2019 were 1.19% (2018 restated³: 1.19%). With the exception of the Investment Vehicle management fee, the above ongoing charges figure does not reflect any other costs of the Investment Vehicle.

Premium/discount

The Directors review the trading prices of the Company's Euro Shares and Sterling Shares and compare them against their respective NAVs to assess volatility in the discount or premium of the share prices to their NAVs. As at 31 December 2019, the Company's discount to NAV per Euro Share was 4.62% (2018: 1.88% premium) and discount to NAV per Sterling Share was 6.78% (2018: 0.11% premium) respectively. Please refer to the Financial Highlights and Performance Summary above for NAV and share price analysis.

Please refer below for further information on the calculation methodology applied to these KPIs.

Other measures

In addition to the above KPIs, the Board meets regularly to review the performance and risk against the below other measures:

Diversification

The Directors review the geographical, industry, asset and currency diversification of the underlying Investment Vehicle to ensure that holdings are in line with the prospectus and also to monitor the diversification risk of the underlying portfolio. Please refer to the Investment Vehicle Manager's Report below for analysis of the Investment Vehicle portfolio and note 8 for further details regarding the Investment Vehicle's risk diversification policies.

Default rates in Europe and US

The Directors regularly discuss historic and emerging default risk in Europe and the US with the Investment Vehicle Manager to help assess and understand the performance and prospective performance of the Company. Performance of the Company may be affected by the default or perceived credit impairment of investments held by the Investment Vehicle. A withdrawal of investment capital, an economic downturn and/or rising interest rates could severely disrupt the European and US markets which could impact the ability of issuers to repay principal and interest and could adversely affect the value of the Company's investment in the Investment Vehicle and by extension, the Company's NAV and/or the market price of the Company's Shares. The Directors hold monthly discussions with representatives of the Investment Vehicle Manager to assist in monitoring the above indicator.

Principal risks and uncertainties

When considering the total return of the Company, the Directors take account of the risk which has been taken in order to achieve that return. The Directors have carried out a robust assessment of the principal risks facing the Company including those which would threaten its business model, future performance, solvency or liquidity. An overview of this assessment is set out below:

Principal Risk

Mitigating Factors

Supply and demand

The value of the investments in which the Company indirectly invests are affected by the supply of primary and secondary issuers on the one hand and the continued demand for such instruments from buy side market participants on the other. A change in the supply of, or demand for, underlying investments may materially affect the performance of the Company.

The Directors are in regular communication with the Investment Vehicle Manager and receive monthly performance reports and independent data to assist in monitoring the performance of the Investment Vehicle. It is the Investment Vehicle's performance which is the main driver of the Company's performance.

Principal Risk		Mitigating Factors
Investment portfolio concentration
Risk is concentrated in sub-investment grade European corporate issuers and therefore credit risk is greater than would be the case with investments in investment grade issuers.		The Company and the Investment Vehicle have Investment Limits and risk diversification policies in place to mitigate concentration risk. Please refer to above for details of the Investment Limits and the Investment Vehicle Manager's Report below for analysis of the Investment Vehicle portfolio .

Liquidity
The Company relies on the periodic redemption mechanism offered by the Investment Vehicle to realise its investment in PECs, and on that mechanism operating in a timely and predictable manner. The Investment Vehicle's underlying investments are not inherently liquid. Investments are generally bought and sold by market participants on a bilateral basis and any reduction in liquidity caused by a reduction of demand or market dislocation may have a negative impact on the Company's ability to effectively conduct its Contractual Quarterly Tenders.		The Board holds periodic meetings at which extensive discussion of the Investment Vehicle's portfolio takes place. This includes consideration of portfolio liquidity. Please refer to note 8.2 for further details.

Foreign exchange risk
Foreign exchange risk is the risk that the values of the Company's and Investment Vehicle's assets and liabilities are adversely affected by changes in the values of foreign currencies by reference to the Company's base currency, the Euro.		The effect of foreign exchange risk at the Investment Vehicle level is actively managed by the board of the Investment Vehicle and its advisors through hedging arrangements as detailed in note 8.6. The Board monitors the NAV per share divergence between the Sterling and Euro share classes in order to identify the impacts of flow through foreign exchange risk.

Macro-economic factors
Adverse macro-economic conditions may have a material adverse effect on the performance of the Investment Vehicle's underlying assets and liabilities and on the ability of underlying borrowers to service their ongoing debt obligations.		The Board is reliant on the active portfolio management of the Investment Vehicle Manager which monitors and manages each investment on an ongoing basis. Part of this monitoring includes considering macro-economic, credit specific, event-driven and environmental and social factors in respect of each investment. This analysis helps inform the Investment Vehicle Manager's decision to buy, sell or hold each investment. The Directors are in regular communication with the Investment Vehicle Manager and receive monthly performance reports to assist in monitoring these factors.

Principal Risk		Mitigating Factors
Capital management risks
Shareholders may seek to redeem their shareholdings in the Company using the Contractual Quarterly Tender facility, subject to restrictions as detailed in note 12, which could result in the NAV of the Company falling below €75 million and as such, trigger the requirement for the Directors to convene an extraordinary general meeting and propose an ordinary resolution that the Company continues its business as a closed-ended investment company. There is a risk that a continuation resolution will not be passed which could result in the redemption by the Company of its entire holding in the Investment Vehicle.		The Company has placed restrictions within the Contractual Quarterly Tender facility that limit the amount of shares that Shareholders can redeem at each tender (refer to note 12 for details of these restrictions). The Board performs an annual modelling exercise to determine whether consecutive tender requests would prompt a continuation resolution and actively monitors the level of tenders throughout the year. The Company engages with tendering shareholders to understand the rationale behind significant tender requests. The Board and representatives of the Investment Vehicle Manager proactively engage with current and prospective shareholders and seek to understand their views on the Company. The engagement and monitoring in place by the Board allows the Company to be proactive in identifying any common themes driving significant tender requests.

Emerging Risk		Mitigating Factors
		The Company
That the post-Brexit renegotiation of the UK's trading arrangements with the EU may adversely impact the Company, the Investment Vehicle and/or the Investment Vehicle Manager's ability to manage the Investment Vehicle.		Brexit has brought no change to the basic principle that a non-EU based company, such as the Company has the ability to hold PECs issued by an EU issuer (the Investment Vehicle). It is anticipated that the Company's relationship with the Investment Vehicle will be per se unaffected by Brexit. The Investment Vehicle Manager Until Brexit the investment vehicle management agreement between the Investment Vehicle and the Investment Vehicle Manager described the services being provided by one EU entity to another whereby the Investment Vehicle Manager was authorised to provide its MiFID services within the EU on a "passported" basis. It is expected that the post-Brexit transition period will cease on 31 December 2020, and at that time, the Investment Vehicle Manager will be a "third country entity" providing its investment services to the Investment Vehicle on the basis that the Investment Vehicle is a "per se professional client" under the investment management agreement between them. The Board believes that continued provision of the investment services by the Investment Vehicle Manager to the Investment Vehicle should be exempt from registration or authorisation in Luxembourg.

Emerging Risk		Mitigating Factors
The increasing preponderance of negative interest rates in developed economies is a new feature to which leveraged credit markets have not materially been exposed in the past, and the effect on market dynamics and demand for and supply of primary issuance in that context cannot be fully analysed. Consequently, the impact on shareholder returns cannot be properly analysed with any degree of certainty.		There is as yet no evidence that negative interest rates per se have had a material impact on the operation of leveraged credit markets. The Board is keeping this issue under close review.

Reputational damage stemming from the Company's ESG-related activities and disclosures failing to meet the standard expected by shareholders. Reputational damage stemming from the Company's environmental footprint or from the Company's deemed disregard of its use of social capital.		The Company has embarked on a program to better understand the views and expectations of stakeholders in regard to ESG-related matters. The Company is a closed-ended investment company which has no employees and so its own greenhouse gas emissions and environmental footprint are minimal as is its use of social capital. The Company is exploring proportionate ways in which its minimal direct environmental and social impact may be offset.

Financial losses stemming from climate-related factors adversely impacting the capital value of securities held within the Investment Vehicle portfolio and/or the ability of those companies whose securities are held to meet their financial obligations thereunder. Reputational damage stemming from the Company's association with companies whose securities are held within the Investment Vehicle portfolio and whose ESG policies, activities or disclosures fail to meet the standards expected by stakeholders.		The consideration of such risks are embedded within the Investment Vehicle Manager's ESG policy. The Company has reviewed the ESG policy of the Investment Vehicle Manager and engages with representatives of the Investment Vehicle Manager on a continual basis in order to ensure the policy is appropriate and is implemented appropriately.

Financial losses stemming from the impact on the Investment Vehicle's Portfolio and on markets generally, arising from the spread of the Covid-19 disease and its effect on global economic activity, supply chain disruption, restrictions on human freedom of movement and consequential constraints on issuer liquidity and the availability of market financing.		The Investment Vehicle's portfolio is defensively positioned and the Investment Vehicle Manager conducts on an ongoing basis an issuer by issuer review to identify emerging impacts as circumstances develop.

Financial losses arising from revisions to the taxation of the Investment Vehicle through the introduction and implementation of new tax legislation, and thus its ability to continue to deliver current after-tax returns to the Company.		The Board and the Investment Vehicle take ongoing advice on all tax compliance matters relating to the Company and the Investment Vehicle as necessary, and keep all such developments under review.

The Company may be exposed to additional risks not disclosed above or within the Annual Financial Report as they are not considered by the Board to be principal or emerging risks. The Company assesses risks, and the mitigation thereof, on an ongoing basis and as part of its formal business risk assessment process.

Section 172(1) Statement

Through adopting the AIC Code, the Board acknowledges its duty to comply with section 172 of the UK Companies Act 2006 to act in a way that promotes the success of the Company for the benefit of its members as a whole, having regard to (amongst other things):

a) consequences of any decision in the long-term;

b) the interests of the Company's employees;

c) need to foster business relationships with suppliers, customers and others;

d) impact on community and environment;

e) maintaining reputation; and

f) act fairly as between members of the company

The Board considers this duty to be inherent within the culture the Company and a part of its decision-making process.

The Company's culture is one of openness, transparency and inclusivity. Respect for the opinions of its diverse stakeholders features foremost as does its desire to implement its operations in a sustainable way, conducive to the long term success of the Company.

Information on how the Board has engaged with its stakeholders and promoted the success of the Company, through the decisions it has taken during the year, whilst having regard to the above, is outlined below.

The principal decisions section below outlines decisions taken during the year which the Board believes has the greatest impact on the Company's long term success. The Board considers the factors outlined under section 172 and the wider interests of stakeholders as a whole in all decisions it takes on behalf of the Company.

Stakeholder engagement

Who	Why we engage	How we engage	Outcome
Shareholders	Shareholders enable the Company to give effect to its purpose through the commitment of risk capital. Their continued support is imperative to the effective implementation of the Company's investment strategy, under the terms of the Company prospectus as issued from time to time.	The Company's monthly factsheets and market announcements are published on the Company's website ( www.ccpeol.com ). More detailed communications are made to Shareholders on a biannual basis through the publication of the half-yearly and annual financial reports. Also, representatives of the Investment Vehicle Manager hold regular meetings with both current and potential shareholders and periodically hosts investor events. The Board, in conjunction with the input of the Corporate Brokers, has arranged, and will continue to periodically arrange, meetings with Shareholders for the primary purpose of remaining cognisant of Shareholder views on a wide range of topics relevant to their shareholding in the Company.	Shareholders receive relevant information allowing them to make informed decisions about their investments. The Board receives the views of Shareholders allowing it to consider these views throughout its deliberations, including the drafting of its disclosures in its half year and full year financial reports.
The Investment Vehicle Manager	The Board needs to inform itself as to the effectiveness of the operation of the Investment Vehicle and its investment program. In addition, the Investment Vehicle Manager provides investor relations support to the Company and the Board works with the Investment Vehicle Manager to support the investor relations function on a regular basis.	The Investment Vehicle Manager reports on the performance of the Investment Vehicle to the Board on a regular basis. In addition, the Board meets with representatives of the Investment Vehicle Manager on a regular basis in order to develop and monitor its sales and marketing strategy.	The Company is well managed, receives appropriate and timely advice and guidance and has an appropriate, open and transparent relationship with the Investment Vehicle Manager.
Corporate brokers	The Board needs to understand the manner in which the Company's shares trade, and to understand the opinions of shareholders and market participants as expressed to the Company's Corporate Brokers from time to time. Relationships with corporate brokers, other than the Company's Corporate Brokers, increases the public profile of the Company.	The Corporate Brokers are kept updated on the strategy of the Company so that they can publish relevant research information and engage meaningfully with potential investors. The sales team receives regular contact and helps the Company to participate in exchange volume and provide liquidity for investors. The Board receives formal updates from the Corporate Brokers on a quarterly basis. Representatives of the Investment Vehicle Manager interact with a number of corporate brokers, other than the Company's Corporate Broker, and are occasionally invited to present at broker shareholder conferences.	The Board is able to properly implement its capital management strategies in the context of the premium or discount at which the Company's shares trade, along with dealing with any concerns expressed by investors through the Corporate Brokers.
Research partnerships	To reach a wider audience of current and potential investors, thus providing potentially greater trading liquidity in the Company's shares.	Representatives of the Investment Vehicle Manager arrange presentations about the Company with research firm, Edison and with wealth managers.	Demand for the Company's shares is increased.
Regulators	The Board regards full compliance with the various regulatory and statutory rules to which it is subject as a key governance objective.	The Company interacts with regulators through formal submissions of information on a periodic basis (for example, periodic financial statements). The Company interacts more formally with regulators, and seeks their guidance, where required.	The Company's regulatory framework remains current. Applicable laws and regulations are fully considered during the Board's deliberations.
Association of Investment Companies	In order to inform the Board as to emerging legislative and regulatory developments and market conditions, and to allow the Company to interact with the wider investment community and thus identify trends and potential opportunities.	The Company is an active member of the AIC and Board members regulatory attend and actively participate in AIC sponsored events.	The Board and representatives of Investment Vehicle Manager are well informed and positioned to identify market trends, opportunities and emerging risks as well as expand the network of the Company.
Auditors	To ensure that the annual audit process operates effectively, efficiently and predictably, and to calibrate the Company's operational disclosure with other market participants.	The Audit Committee meets with the Auditors formally on a biannual basis and more frequently where required. The Auditors provide valuable feedback on the Company and those of its service providers that have a delegated responsibility for areas of accounting and internal control.	Shareholders and the market receive audited financial information consistent with the requirements of the exchange on which the Company's shares trade.
Third party service providers	To receive operational, compliance and associated reports and to satisfy the Board as to the effective operation of the systems and internal controls operated by service providers on behalf of the Company.	The Board oversees the performance of third party service providers. Refer below for further information.	The Company's operations and internal controls are effective, efficient and compliant.
Wider Society	As a responsible corporate citizen the Company recognises that its operations have an environmental footprint and an impact on wider society.	The Board meet with stakeholders to remain current in their understanding of stakeholder views relating to environmental and social matters.	The Board have commenced a program to offset the impact of the Company's operations on the community in which it operates.

Principal decisions

Decision	Impact on long term success	Stakeholder considerations
Placing programme	Subject to market conditions, raise additional capital allowing the Company to benefit from a more diverse portfolio, a more diverse shareholder base and a reduction in the total expense ratio. It will also serve, prima facie, to increase liquidity in the Company's shares on the secondary market.	The Board believes that raising additional capital allows the Company to benefit from a more diverse investment portfolio (thereby reducing risk), create a more diversified shareholder base and reduce the total expense ratio of the Company. To that effect and in response to ongoing demand for shares from investors, the Board considered that the placing programme was in Shareholders' interests and on 25 October 2018, detailed proposals to the Company's Shareholders at an extraordinary general meeting. Those proposals were duly accepted by a majority of the Company's Shareholders and the Company published a prospectus programme on 29 March and subsequently placed Sterling Shares on 7 June 2019.
Appointment of fourth Director	Enhancing the diversity of gender, culture and skills in relation to the Board of Directors.	The Board believes that the appointment of Stephanie Carbonneil, who brings nearly 20 years of investment banking, portfolio management and distribution experience, is in the interest of all of the Company's stakeholders as it creates greater board diversity of gender and culture and further enhances the skills at the Board's disposal and the Company's governance arrangements.
Dividend policy	Delivering targeted dividend returns to shareholders.	The Board understands that reliable income distributions though dividends are of significant importance to shareholders. The Board maintained its target annual dividend for the year of around €0.0550 and £0.0550 per Euro Share and Sterling Share respectively. During 2019, the Company has met this target. When determining the level of dividend on an ongoing basis, the Board considers market conditions and the interests of Shareholders in the short and medium term, against the long-term interests of preserving value created by the Investment Vehicle. The Board re-examines dividend policy on a periodic basis to ensure that it is compatible with the performance of underlying assets and is reflective of cash flows from those assets.

Employee engagement

The Company has no employees.

Business relationships

The Board considers its business relationships with stakeholders to be important to the ongoing success of the Company and is proactive in fostering these relationships. For details on the nature of these relationships and how the Company fosters relationships with its stakeholders, refer to the stakeholder engagement section above. The Board also considers the impact principal decisions have on its stakeholders, which is detailed in the principal decisions section above.

Life of the Company

The Company has an indefinite life. In accordance with the Articles, the Directors are required to propose an Ordinary Resolution that the Company continues its business as a closed-ended investment company (the "Continuation Resolution") if the following occur:

(i) the Company NAV falls below €75 million; or

(ii) the Directors are required to convene "class closure meetings" for all classes of shares in issue. A class closure meeting is required if a share class is delisted for any reason, or, if in any rolling 12 month period, the average daily closing market price (as derived from the market data published by Bloomberg or any successor market data service thereto) of any class of shares during such 12 month period is 10 per cent. or more below the average NAV per Share (calculated inclusive of current year income).

If a Continuation Resolution is not passed, the Directors are required to put forward proposals within six months for the reconstruction or reorganisation of the Company to the shareholders for their approval.

These proposals may or may not involve winding up the Company and, accordingly, failure to pass the Continuation Resolution will not necessarily result in the winding up of the Company. A failure to pass a Continuation Resolution may result in the redemption by the Company of its entire holding of PECs.

Going concern

Under the Listing Rules, the AIC Code and applicable regulations, the Directors are required to satisfy themselves that it is reasonable to assume that the Company is a going concern from the date of approval of the financial statements.

After reviewing the Company's budget and cash flow forecast for the next financial year, the Directors are satisfied that, at the time of approving the financial statements, no material uncertainties exist that may cast significant doubt concerning the Company's ability to continue for a period of at least twelve months from the date of approval of the financial statements. The Directors consider it is appropriate to adopt the going concern basis in preparing the financial statements.

Viability Statement

Under the AIC Code, the Directors are required to make a Viability Statement which explains how they have assessed the prospects of the Company, over what period they have done so and why they consider that period to be appropriate, taking into account the Company's current financial position and principal risks. The principal risks faced by the Company are described above.

The prospects of the Company are driven by its investment objectives, investment policy and investment strategy as summarised above, and also by the conditions existing in the markets in which the Company's ordinary shares trade and in which the Investment Vehicle invests and financial markets generally.

In assessing the prospects of the Company, the Directors have, in addition to taking into account the principal risks facing the Company, taken into account the Company's current financial position. Their assessment has included a robust process encompassing an examination of the:

(i) Investment Vehicle Manager's view of the investment opportunity and the conditions existing in the markets in which the Investment Vehicle is exposed and financial markets generally, including scenario analysis, stress tests and volatility and return comparisons;

(ii) liquidity and fundamental prospects of the underlying positions of the Investment Vehicle;

(iii) extent to which the Company directly or indirectly uses gearing;

(iv) liquidity of the PECs in which the Company invests; and

(v) impact on the Company's viability under scenarios stemming from the application of the Contractual Quarterly Tender facility.

Based on the results of their assessment of the above processes, and in the absence of any unforeseen circumstances, the Directors have concluded that a period of three years from the date of this statement is an appropriate period over which to assess the prospects of the Company as the principal risks, mitigating controls and investment strategy and policy are not expected to materially change over this period. This period reflects the effect of significant redemption requests received from shareholders under the Contractual Quarterly Tender mechanism, coupled with no further issuances of ordinary shares by the Company, before a Continuation Resolution would be proposed as a result of the NAV falling below €75 million.

The Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due within at least this period of assessment. The Directors are also of the opinion that given the information available to them at the date of these financial statements, the Company will be able to continue to conduct its commercial activities in a manner consistent with its investment objectives for the foreseeable future.

Social and environmental responsibility

The Board acknowledges that the Company, in addition to utilising financial capital, is also a user of social capital, particularly in Jersey, the jurisdiction in which the Company operates. The Board further acknowledges that the Company has an environmental footprint that is in addition to and distinct from that of the Investment Vehicle and its portfolio companies. The Directors are considering the Company's use of social capital and the environmental impact of the operation of the Company upon wider society. The Company has commenced the design stage of a program to redress the imbalance that exists in the Company's use of social capital and the environmental impact resulting from the operation of the Company. The Board anticipates that it will describe the tangible actions it expects the Company will take in this regard in the Company's 2020 half yearly report.

Climate-related financial disclosures

2019 was a year in which stakeholders placed an increasingly significant emphasis on the demand for companies to disclose the risks they face resulting from the effects of climate change. In 2018, as disclosed in the Company's annual financial report of that year, the Company formally lent its support to the Financial Stability Board's Task Force on Climate-related Financial Disclosures. The Company's 2019 half year financial report provided further disclosure born from the Company's climate-related engagement with the Investment Vehicle Manager. In the latter half of 2019, the Company received further explanations and output from the Investment Vehicle Manager which have shaped and continue to shape the Board's oversight of the Company's climate-related financial risks. The Board has implemented a policy to actively engage with stakeholders for the purpose of informing the Board of the environmentally related views of stakeholders which the Board will take into account as it further develops the Company's policy in this area.

Modern slavery

The Company would not fall into the scope of the UK Modern Slavery Act 2015 (as the Company does not have any turnover derived from goods and services) if it was incorporated in the UK. Furthermore, as a closed-ended investment company, the Company has a non-complex structure, no employees and its supply chain is considered to be low risk given that suppliers are typically professional advisers based in either the Channel Islands or the UK. Based on these factors, the Board have considered that it is not necessary for the Company to make a slavery and human trafficking statement.

Future strategy

The Board continues to believe that the investment strategy and policy adopted by the Investment Vehicle is appropriate for and is capable of meeting the Company's objectives.

The overall strategy remains unchanged and it is the Board's assessment that the Investment Vehicle Manager's resources are appropriate to properly manage the Investment Vehicle's portfolio in the current and anticipated investment environment.

Please refer to the Investment Vehicle Manager's report for detail regarding performance of the Investment Vehicle's investments and the main trends and factors likely to affect the future development, performance and position of those investments.

This Strategic Report was approved by the Board of Directors on 11 March 2020 and signed on its behalf by:

Richard Bol é at Mark Tucker

Chairman Audit Committee Chairman

¹ - Source: Dealogic. Data from the period from 1 January 2017 to 30 June 2018.

³ - Refer below for details of the revised ongoing charges methodology and the restatement of the ongoing charges ratio for 2018.

Board members

All the Directors are independent and non-executive.

CHAIRMAN

Richard Michael Boléat, aged 56. Appointed 20 March 2013.

Richard Boléat, FCA. Richard Boléat is a Fellow of the Institute of Chartered Accountants in England & Wales, having trained with Coopers & Lybrand in Jersey and the United Kingdom. After qualifying in 1986, he subsequently worked in the Middle East, Africa and the UK for a number of commercial and ﬁnancial services groups before returning to Jersey in 1991. He was formerly a Principal of Channel House Financial Services Group from 1996 until its acquisition by Capita Group plc ('Capita') in September 2005. Richard led Capita's ﬁnancial services client practice in Jersey until September 2007, when he left to establish Governance Partners, L.P., an independent corporate governance practice.

Alongside his role at the Company, he currently acts as Senior Independent Director and Audit Committee Chairman of M&G Credit Income Investment Trust plc and Chairman of SME Credit Realisation Fund Limited, both of which are listed on the London Stock Exchange. He is regulated in his personal capacity by the Jersey Financial Services Commission and is a member of AIMA.

Directors

Mark Richard Tucker, aged 57. Appointed 20 March 2013.

In 1997 Mark joined Arborhedge Investments, Inc. (formally HFR Investments, Inc.) a Chicago based, boutique broker dealer specialising in the placement of hedge fund interests to institutions globally. Mark served as the President and Chief Executive Officer of Arborhedge until his return to Jersey in 2002, after which he remained a director and shareholder until 2012. Previously, Mark held a variety of retail and private banking roles in Jersey with both HSBC and Cater Allen Bank.

In 1988 Mark relocated first to London, where he joined

GNI Limited in a financial futures business development role, and later to New York where he was responsible for the alternative investment program of Gresham Asset Management, Inc. and later for the asset allocation and manager selection activities of Mitsui & Company.

Mark is personally regulated by the Jersey Financial Services Commission in the conduct of financial services business, and is an Associate of the Chartered Institute of Bankers, a Chartered Fellow of the Chartered Institute for Securities and Investment. Mark also serves as a non-executive director to several other offshore structures.

David Alan Wood, aged 65. Appointed 20 March 2013.

David was a founding partner of CVC Cordatus (a predecessor to CVC Credit Partners Group) in 2006 and retired in April 2012. He was a member of CVC Credit Partners Advisory Board until April 2015. With 36 years of industry experience, David joined from Deutsche Bank where he was Co-Head of European Leveraged Finance. Prior to this, he was a Managing Director at JP Morgan/Chase Manhattan where he worked in leveraged finance and corporate banking.

Stephanie Carbonneil, aged 45. Appointed 21 February 2019.

Stephanie is a senior investment professional and is currently Head of Investment Trusts at Allianz Global Investors. She has experience in portfolio management specifically in institutional funds of funds and private wealth management. She also has broad experience in management of multi-asset funds and manager selection across European Equities, US and Emerging Equities, Global Emerging Equities, High Yield and European Fixed Income.

Stephanie has extensive knowledge of best practices in asset management through the implementation of a disciplined selection process and capital allocation to best in class managers. She has particularly strong experience in business development based on the combination of strong asset management technical expertise and experience as fund allocator. She also has been involved in implementing a diversity program whilst in a previous role at Architas.

Investment vehicle manager's report

Summary

The gross attribution delivered by each strategy for the year has been consistent with the Investment Vehicle Manager's objectives. The portfolio was cautiously positioned throughout the year given geo-political and macro overlay impacting lower rated, lower quality or stressed corporate credit. The strategy to allocate to a core income generating performing credit portfolio in this environment allowed for positive attribution on a total return basis whilst experiencing mark-to-market movements in the credit opportunities strategy, where the gross return has been flat. Looking to 2020, the Investment Vehicle Manager feels that the credit opportunities segment of the portfolio is positioned well to deliver upside from existing levels.

Portfolio

As at 31 December 2019 the Investment Vehicle portfolio was invested in-line with investment policy, was diversified with 83 issuers¹ (of which a range of 40 - 60 typically represent the core drivers of performance) (31 December 2018: 86) across 29 (31 December 2018: 28) different industries and 13 (31 December 2018: 17) different countries, and had exposure of no more than 2.7% (31 December 2018: 2.8%) to any single issuer.

Portfolio statistics²

	As at 31 December 2019	As at 31 December 2018
PercentageofPortfolioin FloatingRateAssets	86.7%	86.5%
PercentageofPortfolioin FixedRateAssets	10.3%	12.8%
Percentage of Portfolio in Other	3.0%	0.7%
W ei g h tedAveragePrice³	94.7	90.4
Y iel d toMaturity ("YTM")	6.6%	7.7%
CurrentYield	5.7%	5.8%
W ei g h tedAverageFixedRateCoupon	7.7%	7.9%
W ei g h tedAverageFloatingRate plusMargin	4.8%	5.1%

5 Largest Issuers as at 31 December 2019
Issuer	%ofGrossAssets	Industry	Country
Civica	2.7	Electronics	UK
Concordia	2.7	Healthcare & Pharmaceuticals	UK
Swissport	2.5	Diversified/Conglomerate Service	Switzerland
Doncasters	2.4	Diversified/Conglomerate Service	UK
Dubai World	2.3	Diversified/Conglomerate Service	UAE

5 Largest Issuers as at 31 December 2018
Issuer	%ofGrossAssets	Industry	Country
Dubai World	2.8	Diversified/Conglomerate Service	UAE
Civica	2.7	Electronics	UK
Celsa	2.6	Metals and Mining	Spain
Nidda Healthcare	2.6	Healthcare and Pharmaceuticals	Germany
Ambac	2.2	Finance	U.S.

5 Largest IndustryPositions as at 31 December 2019¹
Healthcare and Pharmaceuticals	13.2%
Retail Store	10.4%
Diversified/Conglomerate Service	10.0%
Chemicals, Plastics and Rubber	7.2%
Broadcasting and Entertainment	6.0%

5 Largest IndustryPositions as at 31 December 2018¹
Healthcare and Pharmaceuticals	12.3%
Retail Store	9.9%
Broadcasting and Entertainment	8.8%
Diversified/Conglomerate Service	8.5%
Chemicals, Plastics and Rubber	7.9%

G e ographicalBreakdownbyissuercountry¹	As at 31 December 2019	As at 31 December 2018
UK	24.5%	22.6%
Germany	14.5%	12.3%
France	14.3%	11.9%
Netherlands	13.6%	10.9%
U.S.	10.5%	16.9%
Spain	8.6%	6.0%
Switzerland	3.0%	0.0%
Italy	2.9%	2.2%
Finland	2.7%	2.7%
UAE	2.7%	3.4%
Other	2.7%	11.1%

CurrencyBreakdown	As at 31 December 2019	As at 31 December 2018
EUR	65.3%	54.3%
USD	20.2%	30.6%
GBP	14.5%	15.1%

A sse t Breakdown	As at 31 December 2019	As at 31 December 2018
Loans (1st Lien)	63.6%	62.0%
Senior Secured Bonds	14.3%	14.6%
Cash	11.5%	15.3%
Structured	4.4%	2.3%
Loans (2nd Lien)	4.2%	6.2%
Senior Unsecured Bonds	1.5%	5.1%
Other	3.3%	0.8%
Shorts	-2.8%	-6.3%

¹ E x cludes 23 (31 December 2018: 12) structured finance positions.

² Note: all metrics exclude cash unless otherwise stated.

³ A verage market price of the portfolio weighted against the size of each position.

Performance

The Euro Share and Sterling Share NAV total return for the year ended 31 December 2019 was 1.56% (2018: 0.07%) and 3.07% (2018: 1.00%) respectively.

By strategy: (i) The Core Income segment of the portfolio delivered 3.3% to gross⁴ portfolio performance; and (ii) the Credit Opportunities segment of the portfolio delivered a gross 0.0% return, which equates to a 0.0% gross portfolio performance contribution based on a 41% average allocation of the portfolio.

The Credit Suisse Western European Leveraged Loan Index, hedged to EUR, was up 5.03% for 2019, as compared to 0.55% for 2018. The Credit Suisse Western European High Yield Index, hedged to EUR was up 11.05% for 2019, as compared to -3.85% for 2018.

⁴ Excluding fund expenses, management and performance fees.

Market review

2019 started with central bank policy designed to extend global growth in response to the significant drawdown in global risk assets at the end of 2018. There were sustained periods of volatility as the market digested trade negotiations between the US and China as well as monitoring geo-political concerns across Europe and in the US. Overall, the steady improvement in news flow helped reverse market sentiment regarding recession risk and, as such, risk assets had a very strong year, albeit still heavily weighted in higher quality, large, global corporates.

Across the loan market, total new issuance in European Loans for 2019 was €80.95bn, down from €97.20bn in 2018 and €120.40bn in 2017. In European High Yield ("HY"), total new issuance was €74.13bn, up from €63.47bn in 2018 but still below the record issuance of €93.55bn in 2017.⁵

2019 loan volumes were relatively evenly weighted between acquisitions at 54% and refinancings at 45%, with the balance being general corporate purposes. Euro issuance dominated the market, comprising 94% of the volume, with Brexit uncertainty being an influencing factor.⁵

This mergers and acquisitions ("M&A") theme continued to add to the size of the European loan market, breaking records by hitting €214bn⁵ for the year. Cross border transactions also continued as corporates sought to access global capital pools as well as to diversify balance sheet financing.

On the demand side, including interest in the asset class from global insurance and pension allocators, with CLO arbitrage remaining attractive in Europe the expansion of the institutional CLO market has continued in 2019 where volumes came in at €29.8bn from 72 deals, versus €27.3bn from 66 deals in 2018. On the back of tightening AAAs in the latter part of the year, the European Loan market, having held pricing steady at E+390-400bps for the first 9 months of the year, tightened as deals priced in the E+370bps context.⁵

Across the European High Yield market there was tightening up through the year in response to both the Federal Reserve rate cut as well as the next announced round of European Central Bank asset purchases. Single B new issue spreads ended the year at 470bps versus 674bps at the end of 2018. Looking to the BB space, spreads tightened from 395bps to 313bps. The spread differential between the risk classes compressed from 279bps to 157bps.Within new issuance, most was focused on refinancing, at 69%, with only 16% being involved in M&A. Again, Euro issuance dominated, accounting for 93% of the volumes.⁵

European HY funds saw a net inflow for the year of €7.6bn, which comprises €3.0bn being added to passively managed Exchange Traded Funds ("ETFs"), a net €62m coming out of short duration funds, while Global HY funds saw an inflow of €1.5bn, taking total European HY Assets Under Management ("AUM") to €77bn.⁶

In the US, HY fund flows saw retail demand for bonds increase in 2019 following record withdrawals in 2018, as an accommodative Federal Reserve and rapid decline in Treasury yields boosted demand for fixed income assets. The HY bond asset class saw $18.0bn of retail inflows in 2019, being its largest inflows since 2012. This contrasts with 2018 where HY funds experienced a record $46.9bn of outflows. The year also saw a significant inflow of money into ETFs of +$13bn versus only +$5bn for actively managed funds.⁷

An area within sub investment grade credit which has not been nearly as heavily reported on through the year has been the bifurcation in performance of high-quality credit versus that of the lower quality spectrum. This has been as a result of credit investors remaining very cautious on the macro picture despite the market technicals being very supportive. Data from the US HY market showed spreads compress in both the BB and B risk categories, 144bps in BB from 5.44% to 4.00% Yield to Worst ("YTW") by the end of December and 153bps in B from 7.41% to 5.88%, while the CCC space saw only 31bps of yield compression from 12.74% to 12.43%, evidence of an up-tiering in credit quality away from the most speculative issuers.⁸

This bifurcation can also be seen in the US loan market, where 2019 saw the yield (based on a 3 year life) on BB and B tighten 151bps and 128bps respectively to 4.29% and 6.36%, while CCC rated loans widened 106bps to 15.29%⁹. In the European HY market this was seen with BB and B secondary trading YTW spreads tightening 127bps and 185bps respectively to 2.09% and 5.38%, while CCC spreads widened 16bps to 11.72%.¹⁰

Sources

⁵ LCD, an offering of S&P Global Market Intelligence - January 2020

⁸ Credit Suisse High Yield Index

⁹ Credit Suisse Leveraged Loan Index

¹⁰ Credit Suisse Western European High Yield Index

Portfolio overview

As discussed throughout the year, across performing credit new issue volumes and pricing have remained attractive and drove portfolio positioning. As of December close, performing credit positions (including cash of 11.5%) represented 61.3% of the portfolio trading at a weighted average price of 99.8 and at a YTM of 4.6%, delivering 4.3% cash yield to the portfolio.

The credit opportunities portfolio has been extremely active throughout 2019 and likely the most active throughout the last two years. Work flows have included a number of restructurings and refinancings to position the portfolio to generate strong capital gains through the next 12 to 24 months. In addition, the portfolio has increased its exposure to secondary CLO equity where an attractive arbitrage presented itself, and to new issue CLO debt that has priced at the widest levels per historic averages, in contrast with the broader market where tightening is anticipated. As at December close, credit opportunities positions represented 38.7% of the portfolio, trading at a weighted average price of 88.6 and at a YTM of 9.5%, whilst delivering 6.8% cash yield to the portfolio.

At the end of 2019, the weighted average EBITDA remained above EUR 480m, 75%+ in senior secured positions with floating rate instruments being the core at 86.7% of the portfolio, trading at a market adjusted leverage multiple of 5.9x maintaining strong LTVs. The current yield has remained flat in the year, moving slightly to 5.7%, from 5.8% as at December 2018, trading at a weighted average market price of the blended portfolio of 94.7.

With a core focus on higher quality senior secured loans coupled with the idiosyncratic nature of several situations in the credit opportunities portfolio, the strategy underperformed the broader liquid sub Investment Grade indices. Despite concerns around global growth and geopolitics, central bank policy (rates and QE) has supported the on-going positive technical flows into liquid risk assets, including HY globally, whilst the technical flows across global loans have been mixed, where outflows continue in the US whilst CLO creation supports the lower volumes of new issue demand.

Conclusion and outlook

We believe that the themes of weaker global growth and political tension will remain while central banks continue to be a significant driver of market sentiment and performance. We will continue to monitor global macro events throughout 2020 which can impact risk assets coming out of a very positive 2019.

The Investment Vehicle Manager's focus will remain to actively manage the performing portfolio in seeking relative value and actively trading the new issue market to deliver stable core income to the portfolio. In credit opportunities, as discussed, there continues to be a significant flow of opportunities to benchmark existing exposures while the work undertaken during the last 12 months has started to generate positive momentum in line with our original investment thesis.

CVC Credit Partners Investment Management Limited

Investment Vehicle Manager

Andrew Davies

Partner

11 March 2020

The indices referred to herein (including the Credit Suisse Western European HY Index hedged to Euro and the Credit Suisse Western ELLI hedged to Euro) are widely recognised, unmanaged indices of market activity and have been included as general indicators of market performance. The Credit Suisse Western European HY Index is a market cap weighted benchmark index designed as an objective proxy for the investable universe of the Western European high yield debt market. The Credit Suisse Western European Leveraged Loan indices are designed to mirror the investable universe of the Western European leveraged loan market. There are significant differences between the types of investments made or expected to be made by the Investment Vehicle and the investments covered by the indices, and the methodology for calculating returns. For example, the Credit Suisse Western European HY Index does not take transaction costs (bid-offer spreads) into account and for the month during which a coupon is paid, the cash flow is reinvested at a fixed money-market rate until the end of the month. Additionally, the Credit Suisse Western ELLI assumes that coupon payments are reinvested into an index at the beginning of each period. In contrast, the Investment Vehicle Manager may have discretion whether to reinvest such payments during any relevant investment period. It should not be assumed that the Investment Vehicle will invest in any specific equity or debt investments, such as those that comprise the indices, nor should it be understood that there will be a correlation between the Investment Vehicle's returns and those of the indices. It should not be assumed that correlations to the indices based on historical returns will persist in the future. No representation is made that the Investment Vehicle will replicate the performance of any of the indices. The indices are included for general, background informational purposes only and recipients should use their own judgment to appropriately weight or discount their relevance to the Investment Vehicle.

DIECTORS' and corporate goverNance REPORT

The Directors present the Annual Financial Report for the Company for the year ended 31 December 2019. The results for the year are set out in these accounts.

Statement as to disclosure of information to the auditor

The Directors who held office at the date of approval of this Directors' Report confirm that, so far as they are each aware, there is no relevant audit information of which the Company's auditors are unaware and that they have taken the steps that they ought to have taken as Directors to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

Financial risk management objectives and policies

The Board is responsible for the Company's system of risk management and internal control and meets regularly in the form of periodic Board meetings to assess the effectiveness of such controls in managing and mitigating risk.

The Board confirms that it has reviewed the effectiveness of the Company's system of risk management and internal control for the year ended 31 December 2019, and to the date of approval of this Annual Financial Report. The Board has taken into consideration the Financial Reporting Council (FRC)'s, "Guidance on Risk Management, Internal Control and Related Financial and Business Reporting" to ensure that the Company's system of risk management and internal control is designed and operated effectively, in line with best practice guidance provided by the FRC.

The key financial risks that the Directors believe the Company is exposed to include credit risk, liquidity risk, market risk, interest rate risk, valuation risk and foreign currency risk. Please refer to note 8 for reference to financial risk management disclosures, which explains in further detail the above risk exposures and the policies and procedures in place to monitor and mitigate these risks.

The Company has appointed BNP Paribas Securities Services S.C.A. to act as administrator (the "Administrator"). The Administrator has established an internal control framework to provide reasonable but not absolute assurance on the effectiveness of the internal controls operated on behalf of its clients. The effectiveness of these controls is assessed by the compliance and risk departments on an on-going basis and by periodic review by external parties. The Company's Compliance Officer presents an assessment of their review to the Board in line with the compliance monitoring program on a quarterly basis which has revealed no matters of concern.

Fair, balanced and understandable

In assessing the overall fairness, balance and understandability of the Annual Financial Report and Financial Statements the Board has performed a comprehensive review to ensure consistency and overall balance.

Borrowing limits

The Company does not have any external borrowings. The Directors may, if they feel it is in the best interests of the Company, borrow funds subject to the appropriate resolutions of shareholders. The Investment Vehicle holds external loans and borrowings as disclosed in note 7.

Greenhouse gas emissions

Please refer to the Strategic Report - "Principal risks and uncertainties" for disclosure regarding greenhouse gas emissions above.

Share capital and voting rights

The Company has two classes of ordinary shares, being Euro Shares and Sterling Shares.

The Company held the following number of shares in treasury as at 31 December 2019:

6,368,590 (2018: 5,178,583) Euro Shares held as treasury shares

50,107,138 (2018: 18,555,899) Sterling Shares held as treasury shares

Excluding shares held in treasury, the Company had the following number of shares in issue as at 31 December 2019:

131,275,614 Euro Shares (2018: 125,830,138 Euro Shares)

326,202,252 Sterling Shares (2018: 340,632,066 Sterling Shares)

Each Euro Share holds 1 voting right, and each Sterling Share holds 1.17 voting rights. As at 31 December 2019, the total number of voting rights of the Euro Shares of no par value was 131,275,614 (representing 25.59% of the total voting rights) and of the Sterling Shares is 381,656,635 (representing 74.41% of the total voting rights). As at 31 December 2019, the total number of voting rights in the Company was 512,932,249 (2018: 524,369,655) .

Acquisition of own shares

The Board has the authority to purchase its own shares under the terms and conditions of the Contractual Quarterly Tender facility as summarised in note 12. Details of the shares tendered and repurchased during the year are given in the Strategic Report above.

Shareholders' interests

As at 31 December 2019, the Company had been notified in accordance with Chapter 5 of the DTRs (which covers the acquisition and disposal of major shareholdings and voting rights), of the following shareholders that had an interest of greater than 5% in the Company's issued share capital.

	Percentage of total voting rights (%)
Quilter plc	20.87
Investec Wealth & Investment Limited	6.92
FIL Limited	6.73
Canaccord Genuity Group Inc	6.02

Between 31 December 2019 and 11 March 2020, the Company received notification that Quilter plc's percentage of total voting rights had decreased to 1.80%.

Events after the reporting date

The NAV total return of the Euro Shares and Sterling Shares since the 1 January 2020 to 21 February 2020 has increased by 1.65% and 2.10% respectively. The Directors are not aware of any other matters that might have a significant effect on the Company in subsequent financial periods not already disclosed in this report or the attached financial statements under note 16.

AGM

The Company will hold the 2020 AGM on 1 May 2020. The notice and details of the resolutions being proposed will be circulated in a separate letter and will be available shortly afterwards on the Company's website https://www.ccpeol.com/news-documents .

All resolutions proposed at the 2019 AGM held on 24 April 2019 were passed without significant votes cast against any of the resolutions.

Corporate governance statement

a) Corporate governance codes

In February 2019, the AIC released the AIC Code for accounting periods beginning on or after 1 January 2019 following the release of the revised UK Code in July 2018. The AIC Code provides specific corporate governance guidelines to investment companies that enables the Company to meet its obligations under the UK Code. The Company has reported against the AIC Code in the Statement of Compliance section below and detailed the Company's governance arrangements in sections c) through f). The Board believes this allows shareholders to make a comprehensive assessment of how the Company has complied with the principles and provisions of the AIC Code.

Copies of the AIC Code and the UK Code can be found on the respective organisations' websites (www.theaic.co.uk and www.frc.org.uk ). The AIC Code includes an explanation of how the AIC Code adapts the principles and provisions set out in the UK Code to make them relevant for investment companies.

b) Statement of Compliance

In reporting on the Company's compliance with the AIC Code, the Company has adopted a comply or explain approach.

The Directors believe that during the year under review the Company has complied with all of the principles and provisions of the AIC Code insofar as they apply to the Company's business, with the exception of the following:

· Relationship with the manager (provisions 16 and 17);

· New companies (provision 21); and

· Remuneration Committee (provision 40 and 52).

Relationship with the manager (provisions 16 and 17)

As a self-managed fund, the Company does not have a manager. Therefore, provisions 16 and 17 are not applicable to the Company.

New companies (provision 21)

This provision relates to the appointment of the chair and board of a new company. As the Company was incorporated during 2013, this provision is not applicable to the Company.

Remuneration Committee (provision 40 and 52)

During the year, matters pertaining to the remuneration of the Board were considered and resolved by the entire Board. The Board notes that provision 40 of the AIC Code recommends the establishment of a remuneration committee. During January 2020, the Board established a Nomination and Remuneration Committee which will be responsible for, inter alia, remuneration matters. The Company will therefore be in compliance with this provision in 2020. Further details on the Nomination and Remuneration Committee can be found below.

c) The Board and Committees

The Board

The Board consists of four non-executive directors:

· Richard Boleat (Chairman);

· Mark Tucker (Audit Committee Chairman and Senior Independent Director);

· Stephanie Carbonneil (Nomination and Remuneration Committee Chair); and

· David Wood (non-executive Director).

All of the Directors were appointed on 20 March 2013, with the exception of Stephanie Carbonneil who was appointed on 21 February 2019. All of the Directors are independent of the Investment Vehicle Manager.

On 3 December 2019, Mark Tucker was appointed as Senior Independent Director. In this role, he provides support to the Chairman and serves as an alternate contact point for stakeholders.

Please refer above for the biographies of each Director.

Directors' duties and responsibilities

As a self-managed investment company , the Board is responsible for all decision making.

The Board meets periodically throughout the year, monitors the Company's share price and NAV on a timely basis and holds regular discussions with the Investment Vehicle Manager to discuss performance of the Investment Vehicle portfolio, whilst considering ways in which future share price and overall performance can be enhanced. The Board is responsible for the safeguarding of the assets of the Company and taking reasonable steps for the prevention and detection of fraud and other irregularities. The Investment Vehicle Manager, together with the Company Secretary, also ensure that all Directors receive, in a timely manner, all relevant management, regulatory and financial information relating to the Company and the Investment Vehicle portfolio. Directors unable to attend a Board meeting are provided with the Board papers and can discuss issues arising in the meeting with the Chairman or another Director.

Individual Directors may, at the expense of the Company, seek independent professional advice on any matter that concerns them in the furtherance of their duties.

Committees

The Board has established two committees, namely the Audit Committee, which was in operation throughout the year, and the Nomination and Remuneration Committee . Given the expansion of the Board during the year, the Board considered it appropriate to establish a Nomination and Remuneration Committee in January 2020. Matters pertaining to that Committee were dealt with by the entire Board during the year under review. Items relevant to a management engagement committee were considered by the Board as a whole.

Attendance at scheduled meetings of the Board and its committees

Directors	Board Quarterly		Board Ad hoc		Audit Committee
	Total	Attended	Total	Attended	Total	Attended
Richard Bol é at	4	4	13	11	4	4
Mark Tucker	4	4	13	12	4	4
David Wood	4	4	13	8	4	4
Stephanie Carbonneil¹	3	3	12	9	4	4

¹ - appointed on 21 February 2019

Audit Committee

The Audit Committee operates within clearly defined terms of reference. The terms of reference for the Audit Committee are available on the Company's website. Meetings of the Audit Committee are held at least three times a year at appropriate times in the reporting and audit cycle, and otherwise as required.

The Audit Committee membership comprises all of the Directors. The Chairman of the Board is a member of this Committee, but he does not chair it, which is considered appropriate given that he is a Fellow of the Institute of Chartered Accountants in England and Wales and also has extensive knowledge of the financial services industry.

Mark Tucker is the Chairman of the Audit Committee, who the Board considers has recent and relevant financial experience.

The report on the role and activities of this Committee and its relationship with the external Auditors is set out in the Report of the Audit Committee below.

Nomination and Remuneration Committee

Stephanie Carbonneil was appointed the Chair of the Nomination and Remuneration Committee upon its establishment in January 2020. Prior to its inception, matters pertaining to nomination and remuneration of the Board were considered and resolved by the entire Board. The new Nomination and Remuneration Committee membership comprises Stephanie Carbonneil and David Wood.

The performance of the Board was evaluated by an external party during the year (see below for further details). The performance of each individual Director was reviewed by the entire Board and the Senior Independent Director evaluated the performance of the Chairman, in conjunction with feedback from the other Directors. It was concluded that each Director is independent of the Company.

From 2020, the Nomination and Remuneration Committee will undertake an evaluation of the Board on an annual basis and engage with external parties to perform an external board evaluation on a periodic basis. The performance of each Director will be considered as part of a formal review by the Nomination and Remuneration Committee.

Directors' appointment, retirement and rotation

Subject to the Articles, Directors may be appointed by the Board. The AIC Code provision 23 states that all non-executive Directors should be submitted for re-election on an annual basis. In compliance with the AIC Code, the Board has resolved that all Directors will stand for re-election at each AGM, including the forthcoming AGM to be held on 1 May 2020.

Board independence and composition

The Chairman, Richard Boléat, was independent of the Investment Vehicle Manager at the time of his appointment and remains so. The Chairman is responsible for the leadership of the Board and ensuring its effectiveness in all aspects of its role.

All other Directors are considered independent of the Investment Vehicle Manager. David Wood was a founding partner of CVC Cordatus (a predecessor to CVC Credit Partners Group) but retired in April 2012. He was a member of CVC Credit Partners Advisory Board, which is an advisory body established to comment on strategic plans, budgets and markets, until April 2015 and sat on the CVC Credit Partners Conflicts Committee until 18 December 2019. David Wood also held an investment in a CVC fund until 5 December 2019.

The Directors consider that there are no factors which compromise the Chairman's or other Directors' independence and that they all contribute to the affairs of the Company in an adequate manner. The Board reviews the independence of all Directors on an ongoing basis. The Company Secretary, BNP Paribas Securities Services S.C.A., Jersey Branch, through its representatives, acts as Secretary to the Board and its committees and in doing so it: assists the Chairman in ensuring that all Directors have full and timely access to all relevant documentation; organises induction of any new Directors; is responsible for ensuring that the correct Board procedures are followed; and advises the Board on corporate governance matters.

Tenure and succession policy

The Board shares the view of the AIC that in the context of Investment Companies, such as the Company, length of service, in and of itself, does not lead to a close relationship with the Investment Vehicle Manager that would affect a Director's independence. This is particularly so in the context of a self-managed fund.

The Board recognises that to carry out its duties successfully and for the benefit of the Company and its stakeholders, corporate knowledge of the type that is acquired over time, is beneficial to the Company and its stakeholders. Consequently, it is the Company's policy that appointments are made with the expectation that a non-executive director will commit to serve a minimum three-year term.

The Board regularly and critically examines and evaluates its membership and that of its committees, and its succession requirements. In doing so the Board takes into consideration: each member's continued satisfactory performance; gender diversity; diversity of thought and previous experience; and continued prepossession of the skills identified by the Board as being essential to the Company's long-term success. It is against this backdrop that the policy adopted by the Company does not include fixed terms of service for non-executive directors, including the position of Chairman.

The Company has adopted this policy on tenure and succession as it considers it appropriate to the Company's purpose and business model and it considers that this policy facilitates the Company's efforts in striving to achieve its objectives via the Company's investment policy as described above.

The Company's tenure and succession policy will be kept under regular review. Further, in compliance with the AIC Code, and as stated above the Board has resolved that all Directors shall stand for re-election at each AGM. It is the intention of the Chairman and Senior Independent Director to directly seek the views of major shareholders on the matter of board tenure during the course of 2020.

The Board is of the opinion that the above described tenure and succession policy is in the best interests of the Company and its stakeholders.

Board diversity

The Board is made up of one female and three male Directors. The Board has due regard for the benefits of experience and diversity in its membership, including gender, and strives to meet the right balance of individuals who have the knowledge and skillset to aid the effective functioning of the Board and maximise shareholder returns while mitigating the risk exposure of the Company.

The Board supports the recommendations of the Davies Report. However, it does not consider it appropriate or in the interest of the Company and its shareholders to set prescriptive targets for gender or other diversity measures on the Board. The Board is committed to ensuring that any vacancies arising are filled by the most qualified candidates who have complementary skills or who possess skills and experience which fill any gaps in the Board's knowledge or experience irrespective of gender, race or creed. The Company has no employees.

Directors' professional development

The Board believes that keeping up-to-date with key credit industry developments is essential for the Directors to maintain and enhance their effectiveness.

Directors are given the opportunity to discuss training and development needs with the Chairman and are expected to take responsibility for identifying their training needs and to take steps to ensure that they are adequately informed about the Company and their responsibilities as a Director. The Chairman is responsible for agreeing and reviewing with each Director their training and development needs.

When a new Director is appointed to the Board, they are provided with all relevant information regarding the Company and their duties and responsibilities as a Director. In addition, a new Director will also spend time with representatives of the Investment Vehicle Manager in order to learn more about its processes and procedures.

The Board is confident that all its members have the knowledge, ability and experience to perform the functions required of a Director of the Company.

Director's remuneration and annual evaluation of the Board, Audit Committee and individual Directors

The Nomination and Remuneration Committee will review the fees paid to the Directors and compare these with the fees paid by reasonably comparable listed companies on an annual basis.

An evaluation of the performance of the Board as a whole, its committees and individual directors is undertaken on an annual basis. The Nomination and Remuneration Committee will take the lead on future annual evaluation exercises, which will consider the balance of skills, experience, independence, knowledge, diversity (including gender), how the Board works together as a unit and other factors relevant to its effectiveness. The evaluation also considers the Board's and committee performance, constitution and terms of reference to ensure that they are operating effectively. The evaluation is externally facilitated on a regular basis.

During the year, the Board engaged Boardroom Dialogue Group to carry out an external board evaluation. The Company does not have any other business relationships with Boardroom Dialogue Group. The evaluation focused on evaluating the Board and Audit Committee, principally against the guidance outlined in the AIC Code and with account taken of other best practice guidance including the Glass Lewis 2019 guidelines; the UK and Ireland Proxy Voting Guidelines issued by ISS; and the FRC publication, Guidance on Board Effectiveness.

The results of the board evaluation were positive and a number of limited recommendations were made to further enhance the good governance of the Company. The Board has already implemented a number of the recommendations and the remaining recommendations have formed a part of the Board's rolling action plan.

d) Board meetings and relations with the Investment Vehicle Manager

Primary focus

The Board receives regular reports from the Investment Vehicle Manager on the performance of the Investment Vehicle's investments. These are presented periodically to the Board by a representative of the Investment Vehicle Manager.

As the Company is self-managed, the Chairman assumes the responsibility of ensuring that relevant financial information, including Investment Vehicle investment portfolio analysis and financial plans, including budgets and forecasts, are available to the Board and discussed at Board meetings. The Chairman encourages open debate to foster a supportive and co-operative approach for all participants.

The Board applies its primary focus to the following:

- investment performance, ensuring that the investment objective and strategy of the Company are met;

- ensuring investment holdings are in line with the Company's prospectus;

- reviewing and monitoring financial risk management and operating cash flows, including cash flow forecasts and budgets for the Company; and

- reviewing and monitoring of the key risks to which the Company is exposed as set out in the Strategic Report.

At each relevant meeting the Board undertakes reviews of key investment and financial data, transactions and performance comparisons, share price and NAV performance, marketing and shareholder communication strategies, peer group information and industry issues.

Review of NAV and share price of each share class

The Directors review the trading price of the Company's ordinary shares and compare them against their NAV to assess volatility in the discount or premium of the share at which the ordinary shares are trading.

Overall strategy

The Board meets regularly to discuss and consider the investment objective, policy and approach of the Company to ensure sufficient attention is given to the overall strategy of the Company.

The Board considers whether the investment policy continues to meet the Company's objectives. The Board believes that the overall strategy of the Company remains appropriate.

Monitoring and evaluation of service providers

The Board reviews the performance of the Company's third-party service providers together with their anti-bribery and corruption policies to ensure that they comply with the Corruption (Jersey) Law 2006, the Bribery Act 2010, the Criminal Finances Act 2017 and ensure their continued competitiveness and effectiveness and ensure that performance is satisfactory and in accordance with the terms and conditions of the respective appointments.

As part of the Board's ongoing evaluation of third party service providers, it considers and reviews on a periodic basis contractual arrangements with the major service suppliers of the Company.

The Directors have adopted a procedure whereby they are required to report any potential acts of bribery and corruption in respect of the Company that come to their attention to the Company's Compliance Officer.

e) Shareholder communications

Shareholder profile and communication

An analysis of the substantial shareholders of the Company's shares is provided to the Board on a quarterly basis.

The Board views shareholder relations and communications as a high priority and the Board aims to have a thorough understanding of the views of shareholders. The Chairman and the Senior Independent Director are available for discussion about governance and strategy with major shareholders and the Chairman ensures communication of shareholders' expressed views to the Board. Shareholders wishing to communicate with the Chairman, or the Senior Independent Director, may do so by any conventional means. The Directors welcome the views of all shareholders and place considerable importance upon them.

The main method of communication with shareholders is through the half-year and annual financial reports which aim to give shareholders a clear and transparent understanding of the Company's objectives, strategy and results. This information is supplemented by the publication of monthly factsheets, and the weekly estimated and monthly NAV of the Company's Euro Shares and Sterling Shares on the London Stock Exchange, via a Regulatory Information Service.

The Company's website (www.ccpeol.com) is regularly updated with monthly factsheets and provides further information about the Company, including the Company's financial reports and announcements. The maintenance and integrity of the Company's website is the responsibility of the Directors. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

The Board believes that the AGM provides an appropriate forum for investors to communicate with the Board, and encourages participation. The AGM will be attended by at least the Chairman of the Company and the Chairman of the Audit Committee.

The Board has also instigated a programme of quarterly investor calls, to allow investors and other interested parties to receive an update on the previous quarter's performance and market conditions. It also provides a forum for questions to be posed to the Chairman and representatives of the Investment Vehicle Manager.

Other communications

All substantive communications regarding any major corporate issues are discussed by the Board taking into account representations from all relevant stakeholders.

f) Internal control and Risk Management Systems

A description of the main features of internal controls and risk management systems in relation to the financial reporting process can be found below.

Alternative Investment Fund Manager Directive (AIFMD)

The Company (which is a non-EU AIF for the purposes of the AIFM Directive and related regimes in EEA member states) is a self-managed fund and therefore acts as the deemed AIFM of the Company. The Company is authorised as an Alternative Investment Fund Services Business as defined under Article 2(11) of the Financial Services (Jersey) Law 1998 and as such, fulfils the role of Alternative Investment Fund Manager.

In 2014, the Company registered with the Jersey Financial Services Commission, being the Company's competent regulatory authority, as a self-managed non-EU Alternative Investment Fund (AIF), and has registered with the UK Financial Conduct Authority, under the relevant NPPRs.

In 2015, the Company registered with the Finnish Financial Supervisory Authority, Belgium Financial Services and Markets Authority, Danish Finanstilsynet, Luxembourg Commission de Surveillance du Secteur Finacier and Swedish Finansinspektionen, under the relevant NPPRs of each jurisdiction.

In 2017, the Company registered with Central Bank of Ireland, under the relevant NPPR.

As the Company is non-EU domiciled, no depositary has been appointed in line with the AIFM Directive, however BNP Paribas Securities Services S.C.A., Jersey Branch has been appointed to act as custodian.

Information relating to the current risk profile of the Company and the risk management systems employed by the Company to manage those risks, as required under paragraph 4(c) of Article 23 of the AIFM Directive, is set out in note 8 - financial risk management. Please refer above for the Board's assessment of the principal risks and uncertainties facing the Company.

Table of AIFM remuneration

The total fees paid to the Board by the Company are disclosed within the Directors' remuneration report below and disclosed in note 6.

Article 22(2)(e) and 22(2)(f) of the AIFM Directive is not deemed applicable as the AIFM has no staff. No other remuneration costs have been incurred with the exception of those costs incurred by the Board as referenced above.

This Directors' and Corporate Governance Report above was approved by the Board of Directors on 11 March 2020 and signed on its behalf by:

Richard Bol é at Mark Tucker

Chairman Audit Committee Chairman

REPORT OF THE AUDIT COMMITTEE

It is my pleasure to present this report describing the activities of the Audit Committee in respect of the 2019 financial year.

Membership

The Board has established an Audit Committee which operates within clearly defined Terms of Reference, which are published on the Company's website.

In February 2019 the Audit Committee welcomed new member Stephanie Carbonneil whose biography is above. The Audit Committee comprises all of the Directors. All of the Audit Committee's members have recent and relevant financial experience and one is a Fellow of the Institute of Chartered Accountants in England and Wales. The Audit Committee as a whole has competence relevant to the sector in which the Company operates.

In 2019, the Audit Committee formally convened on four occasions. The members' attendance record can be found above.

Role of the Audit Committee

The main role of the Audit Committee is to protect the interests of the Company's shareholders regarding the integrity of the half-yearly financial report and the annual financial report of the Company and manage the Company's relationship with the external auditor.

The Audit Committee's key duties are:

- to review and monitor the fairness and balance of the financial statements of the Company including its half-year financial report and annual financial report to shareholders, reviewing any significant financial reporting issues and judgements which they contain;

- to advise the Board on whether the Committee believes that the annual report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, position, business model and strategy;

- to identify and disclose those risks considered by the Audit Committee to be significant to their financial reporting process;

- to consider and make recommendations to the Board in relation to the appointment, re-appointment and removal of the external Auditors and to negotiate their remuneration and terms of engagement on audit and non-audit work;

- to meet regularly with the external Auditor in order to review their proposed audit programme of work and the subsequent Audit Report and to assess the effectiveness of the audit process and the level of fees paid in respect of audit and non-audit work; and

- to annually assess the external Auditor's independence, objectivity, effectiveness, resources and expertise.

In addition to the work streams that stem from the roles of the Audit Committee as described above, the Audit Committee was also instrumental in a number of other areas during the year, including work that shaped the Company's social and environmental activities and consideration of the risks faced by the Company that are climate-related. Disclosures on these activities appear within the Strategic Report above. The Committee was also instrumental in an exercise to support the Board in making its Viability Statement which appears within the Strategic Report above.

Significant risks related to the financial statements

The Audit Committee view the below as significant risks:

Title to and the existence of the Company's investments

Procedures to confirm the Company's title to and the existence of the Company's investments are embedded within the Company's periodic asset valuation, share issuance, monthly conversation and quarterly tender processes. Accordingly, title to and existence of the Company's investments are confirmed by the Board regularly.

Valuation of Investments

The risk of misstatement due to errors in the valuation of the Investment Vehicle's, and thus the Company's, investments is an issue of significance to the Audit Committee. This risk is mitigated by regular Board meetings in which a review of the valuation of the Investment Vehicle's investments is included. Additionally, the Audit Committee regularly interviews representatives of the Investment Vehicle Manager in order to gain assurances as to the continued appropriateness of the valuation methodology.

External audit process

The Audit Committee met formally with the Auditor prior to the commencement of the audit and agreed an audit plan that would adopt a risk-based approach. The Audit Committee and the Auditor agreed that a significant portion of the Audit effort would include an examination of revenue recognition with respect to investment income and an examination of the procedures in place at the Administrator and at the Investment Vehicle Manager in respect of the valuation of the Company's investments and the underlying portfolio of assets respectively.

Upon completion of the audit, the Audit Committee discussed with the Auditor the effectiveness of the audit and concluded that the audit had been effective on the grounds that:

- The audit plan had been met;

- The Auditor had demonstrated a good understanding of the Company's business;

- No risks to audit quality had been identified;

- The Auditor demonstrated a robustness of process and perceptiveness in handling key accounting issues and judgements; and

- All issues that arose during the audit were satisfactorily resolved.

Additionally, procedures employed by the Auditors, described above, are viewed by the Audit Committee as being appropriate and sufficiently robust for the Audit Committee to gain sufficient assurance as to the effectiveness of the audit.

Non-audit services

The Company has adopted a policy such that the provision of non-audit services by the Company's auditors is considered and approved by the Audit Committee on a case by case basis, taking into account relevant law, regulation, the Ethical Standard 2016 as issued by the FRC and other applicable professional requirements.

The following factors are assessed when considering the provision of non-audit services by the Auditors:

- Threats to independence and objectivity resulting from the provision of such services and any safeguards in place to eliminate or reduce these threats to a level where they would not compromise the Auditor's independence and objectivity;

- The nature of the non-audit services;

- Whether the skills and experience of the audit firm makes it the most suitable supplier of the non-audit service; and

- The fees incurred, or to be incurred, for non-audit services both for individual services and in aggregate, relative to the audit fee, including special terms and conditions (for example, contingent fee arrangements).

During the course of the year the Auditor was engaged to conduct a review of the Company's half-yearly financial report for the six months ended 30 June 2019, to provide compliance with HMRC's reporting fund regime and the provision of regulatory advice.

The fees for the year-end audit were €64,782 (£58,500) (2018: € 64,197 (£56,800)). Fees for non-audit services were € 11,178 (£9,800) (2018: € 10,737 (£9,500)) for the review of the half year report, €7,413 (£6,500) (2018: €15,823 (£14,000)) for compliance with the reporting fund regime and €15,967 (£14,000) (2018: €nil (£nil)) for the provision of regulatory advice.

The Audit Committee undertakes an annual assessment of the independence of the Auditor prior to the commencement of the audit, this includes:

- Discussing with the Auditor the threats to their independence and the safeguards applied to mitigate such threats;

- Considering all of the relationships between the Company and the Auditor;

- Reviewing and confirming no relationships between the Company and the Auditor which could impact independence and objectivity;

- Reviewing the level of fees paid by the Company in proportion to the overall fee income of the firm, office and partner; and

- Reviewing the Auditor's policies and processes for maintaining independence and monitoring compliance with relevant requirements.

Auditor independence

Based on the above criteria the Audit Committee was satisfied as to the independence of the Auditor during the year ended 31 December 2019 and throughout the course of the audit.

Auditor appointment

The Company's current external Auditor is Ernst & Young LLP, who were appointed on 19 August 2013.

The Audit Committee considers the reappointment of the external auditor, including the rotation of the audit engagement partner, each year. The external auditor is required to rotate the audit engagement partner responsible for the Company audit every five years. The current audit engagement partner was appointed by the Auditor prior to the commencement of the Company's 2018 external audit.

The Committee reviews a number of factors when considering proposing the re-appointment/appointment of an auditor including:

- Effectiveness and quality of the previous audit (if applicable);

- Independence;

- Qualification, expertise and resources; and

- Consideration as to whether it would be appropriate to recommend an external audit tender be conducted earlier than the maximum best practice ten-year period.

After considering the above the Audit Committee provided the Board with its recommendation to the shareholders on the reappointment of Ernst & Young LLP as external auditor for the year ending 31 December 2020.

Accordingly, a resolution proposing the reappointment of Ernst & Young LLP as the Company's Auditor will be put to shareholders at the AGM. There are no contractual obligations restricting the Committee's choice of external auditor and the Company does not indemnify its external auditor.

Internal controls

The Board is responsible for ensuring that suitable systems of risk management and internal control are implemented by the third-party service providers to the Company. The Directors have reviewed BNP Paribas Securities Services' ISAE 3402 report (Report on the description of controls placed in operation, their design and operating effectiveness for the period from 1 October 2018 to 30 September 2019) on Fund Administration and are pleased to note that no significant issues were identified.

In accordance with the FRC's Internal Control: Guidance to Directors, and the FRC's Guidance on Audit Committees, the Board confirms that there is an on-going process for identifying, evaluating and managing the significant internal control risks faced by the Company.

As the Company does not have any employees it does not have a "whistleblowing" policy in place. The Company delegates its day to day administrative operations to third-party providers who are monitored by the Board and who report on their policies and procedures to the Board. Accordingly, the Board believes an internal audit function is not required.

I welcome feedback from all shareholders as to the form and content of this annual report.

For and on behalf of the Audit Committee

Mark Tucker

Audit Committee Chairman

11 March 2020

Directors' Statement of Responsibilities

The Directors are responsible for preparing the Annual Financial Report and financial statements in accordance with applicable Jersey law and International Financial Reporting Standards as adopted by the European Union (IFRSs).

Jersey Law requires the Directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Company at the end of the year and of the profit or loss of the Company for that year.

In preparing these financial statements, the Directors should:

· select suitable accounting policies and apply them consistently;

· make judgments and estimates that are reasonable;

· state whether applicable accounting standards have been followed, 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 Company will continue in business.

The Directors are responsible for keeping proper accounting records that disclose, with reasonable accuracy at any time, the financial position of the Company and enable them to ensure that the financial statements comply with the Companies (Jersey) Law 1991. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities.

The Directors confirm to the best of their knowledge that:

· the financial statements, which have been prepared in accordance with IFRS, give a true and fair view of the assets, liabilities, financial position and profit of the Company; and

· the Strategic Report includes a fair review of the development and performance of the business and the position of the Company, together with a description of the principal risks and uncertainties that they face.

The Annual Report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company's performance, position, business model and strategy.

Richard Bol é at Mark Tucker

Chairman Audit Committee Chairman

11 March 2020

directors' Remuneration report

Annual remuneration statement

This report meets the relevant rules of the Listing Rules of the Financial Conduct Authority and the AIC Code and describes how the Board has applied the principles relating to Directors' remuneration. The Board established a separate Nomination and Remuneration Committee in January 2020. Further details can be found above.

Changes to the Board

On 21 February 2019, Stephanie Carbonneil was appointed to the Board. There were no other changes to the Board during the year. In accordance with Company policy, all Directors will stand for reappointment at the forthcoming Annual General Meeting to be held on the 1 May 2020.

Table of Directors' Remuneration

Component	Director	Annual Rate (£)	Purpose of reward
Annual fee	All Directors: - Richard Boléat (Chairman) - Mark Tucker - David Wood - Stephanie Carbonneil¹	65,000 43,750 42,500 42,500	For commitment as Directors
Additional fee	Chairman of the Audit Committee: - Mark Tucker Chairwoman of the Nomination and Remuneration Committee: - Stephanie Carbonneil	6,250 5,000²	For additional responsibilities and time commitment
Expenses		Ad hoc	Reimbursement of expenses paid

¹ - Effective from 21 February 2019.

² - Effective from 1 January 2020.

No other remuneration or compensation was paid or is payable by the Company during the period to any of the Directors. There has been no change to the Company's remuneration policy as detailed below.

The Company has no employees. Accordingly, there are no differences in policy on the remuneration of Directors and the remuneration of employees.

No Director is entitled to receive any remuneration which is performance-related.

Remuneration policy

The determination of the Directors' fees is a matter for the Board. The Board considers the remuneration policy annually to ensure that it remains appropriately positioned. As part of this process, Directors review the fees paid to the boards of directors of similar companies. No Director is involved in decisions relating to their own remuneration.

Directors are remunerated in the form of fees, payable quarterly in advance. No Director has any entitlement to a pension, and the Company has not awarded any share options or long-term performance incentives to any of the Directors.

Directors are authorised to claim reasonable expenses from the Company in relation to the performance of their duties.

The Company's policy is that the fees payable to the Directors should reflect the time spent by the Board on the Company's affairs and the responsibilities borne by the Directors and should be sufficient to enable high calibre candidates to be recruited. The policy is for the Chairman of the Board and Chairman or Chairwoman of Committees to be paid a higher fee than the other Directors in recognition of their more onerous roles and more time spent. The Board may amend the level of remuneration paid within the limits of the Company's Articles of Association.

The Company's Articles of Association limit the aggregate fees payable to the Directors to a total of €500,000 per annum.

Service contracts and policy on payment on loss of office

Directors have agreed letters of appointment with the Company. No Director has a service contract with the Company and Directors' appointments may be terminated at any time by one month's written notice with no compensation payable at termination upon leaving office for whatever reason.

Dates of letters of appointment

Directors	Effective Date
Richard Boléat		20 March 2013
Mark Tucker		20 March 2013
David Wood		20 March 2013
Stephanie Carbonneil		21 February 2019

Director interests

As at the date of approval of the financial statements, the following Directors held the following number of shares in the Company:

Director	Sterling Shares	Euro Shares
Mark Tucker	20,000	Nil
Stephanie Carbonneil	10,200	Nil

Transactions in the Company's shares by Directors are outlined in note 6. No Director has any other interest in any contract to which the Company is a party. No Director has held or holds any management shares in the Company.

Information of each Director is shown above.

Statement of consideration of shareholder views

An ordinary resolution to ratify the Directors' remuneration report will be proposed at the Annual General Meeting on 1 May 2020.

Stephanie Carbonneil

Nomination and Remuneration Committee Chair

11 March 2020

Independent auditor's report to the MEMBERS of cvc credit partners european opportunities limited

Opinion

We have audited the financial statements of CVC Credit Partners European Opportunities Limited (the 'Company') for the year ended 31 December 2019 which comprise the Statement of Comprehensive Income, the Statement of Financial Position, the Statement of Changes in Net Assets, the Statement of Cash Flows and the related notes 1 to 17, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as adopted by the European Union ('IFRSs').

In our opinion, the financial statements:

► give a true and fair view of the state of the Company's affairs as at 31 December 2019 and of its loss for the year then ended;

► have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; and

► have been properly prepared in accordance with the requirements of the Companies (Jersey) Law 1991.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report below. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to principal risks, going concern and viability statement

We have nothing to report in respect of the following information in the Annual Report, in relation to which the ISAs (UK) require us to report to you whether we have anything material to add or draw attention to:

► the disclosures in the Annual Report set out above that describe the principal risks and explain how they are being managed or mitigated;

► the Directors' confirmation set out above in the Annual Report that they have carried out a robust assessment of the principal risks facing the entity, including those that would threaten its business model, future performance, solvency or liquidity;

► the Directors' statement set out above in the financial statements about whether they considered it appropriate to adopt the going concern basis of accounting in preparing the financial statements, and their identification of any material uncertainties to the Company's ability to continue to do so over a period of at least twelve months from the date of approval of the financial statements;

► whether the Directors' statement in relation to going concern required under the Listing Rules is materially inconsistent with our knowledge obtained in the audit; or

► the Directors' explanation set out above in the Annual Report as to how they have assessed the prospects of the Company, over what period they have done so and why they consider that period to be appropriate, and their statement as to whether they have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment, including any related disclosures drawing attention to any necessary qualifications or assumptions.

Overview of our audit approach

Key audit matters

► Inappropriate revenue recognition with respect to investment income

► Valuation of investments

► Existence of investments and completeness and accuracy of investment transactions

Materiality

► Overall materiality of €5.4m (2018: €5.4m) which represents 1% (2018: 1%) of the net assets attributable to shareholders.

Key audit matters

This report includes details of those audit risks that have the greatest impact on our audit approach and focus of effort. We have identified those audit risks within this report that we consider to be key audit matters. Key audit matters are selected from the matters we communicate to you at planning that in our opinion are of most significance to the current period audit and required significant attention in performing the audit. In accordance with ISA (UK) 701 key audit matters are included in our audit opinion.

Risk

Our response to the risk

Key observations communicated to the Audit Committee

Inappropriate revenue recognition with respect to investment income

Refer to Note 3 of the Financial Statements (below)

The ability to generate dividend yield for shareholders that is funded from investment income (rather than capital gains arising on the disposal of investments) is a key strategic objective of the Company.

Investment income is primarily generated in the form of distributions from the Investment Vehicle. Given the importance that the Company's ability to generate a consistent level of investment income has on the Company's dividend yield objectives; we consider that the recognition of investment income represents a fraud risk and thus a significant risk.

For the year ended 31 December 2019 the Company recognised Investment Income of €31.1m (2018: €28.5m).

We performed the following procedures:

► Updated our understanding of the nature of the investment income attributable to the Company from the Investment Vehicle.

► Updated our understanding of how this risk is considered and managed by the Directors, the Investment Vehicle Manager and the Administrator and performed walkthroughs to confirm the design effectiveness of the process.

► Traced the investment income received in the year to bank statements.

► Performed recalculations of the foreign currency translations from Sterling to Euros.

► Obtained distribution notices from the Administrator and agreed these to the income recorded in the year.

► Recalculated the investment income attributable to the Company from the Investment Vehicle based on the Company's ownership of the Investment Vehicle.

Based on the work performed, we have no matters to report to the Audit Committee.

Valuation of investments

Refer to the Report of the Audit Committee - per the financial statements (above); Accounting policy 2.4 (below); and Note 7 of the Financial Statements (below).

There is a risk that investment values are misstated or that valuations are incorrectly calculated through errors in the valuation of the Preferred Equity Certificates ('PECs') held by the Company.

At the year end, the Company held 130,144,171.50 Euro and 324,425,319.07 Sterling PECs (2018: 124,305,615.27 Euro and 338,776,091.72 Sterling PECs) with a total value of €535.4m (2018: €537.6m).

We performed the following procedures:

► Updated our understanding of how this risk is considered and managed by the Directors and the Investment Vehicle Manager by performing walkthrough procedures to evaluate the design and implementation of controls and by reading through minutes of meetings in relation to the valuation process.

► Understood the Administrator's systems and controls in respect of investment valuation and performed walkthroughs to confirm the design effectiveness of the process. Additionally, obtained the ISAE 3402 report and the related bridging letter from the Administrator to consider the impact of any significant deficiencies, identified in this report, to our audit.

► Obtained an understanding of the current valuation methodology used by the Investment Vehicle (CVC European Credit Opportunities S.À R.L.) through discussion with the auditors of the Investment Vehicle, and review of relevant documentation to support the discussion.

► Understood the scope of any work conducted by the Board during the year, including outputs and actions arising from the meetings conducted in relation to the valuation process. This included assessing whether the nature of the information that has been considered is sufficient to enable a conclusion on the valuation of investments as reported in the financial statements.

► Viewed key reports and other communications presented to the Board that addressed valuation methodology and data inputs used to assist with the above procedure.

► Agreed the valuation of the PECs to the audited financial statements of the Investment Vehicle, taking into account the ownership percentages.

► Reviewed a sample of the underlying investment valuations to reasonably verify that year end valuations of the underlying investments of the PECs are in line with IFRS 13: Fair value measurement.

► Considered whether the Board's assumptions around liquidity adjustments to NAV are appropriate by considering the historic trading and redemption activity in the NAV and agreeing PEC redemptions to the bank statements.

Based on the work performed, we have no matters to report to the Audit Committee.

Existence of investments and completeness and accuracy of investment transactions

Refer to the Report of the Audit Committee - per the financial statements (above); Accounting policy 2.4 (below); and Note 7 of the Financial Statements (below).

There is a risk that investments presented in the financial statements do not exist or the Company does not have legal title to these.

The individual investments are significant in value and the process that is involved in the completion of a purchase and/or a disposal of the PECs takes an extended period of time. As a result, there is an increased inherent risk that incomplete or inaccurate transactional information with regards to the PECs would result in a material misstatement in the reported results and financial position of CVC Credit Partners European Opportunities Limited.

We performed the following procedures:

► Updated our understanding of how this risk is considered and managed by the Directors, the Investment Vehicle Manager (CVC Credit Partners Investment Management Limited) and the Administrator and performed walkthroughs to confirm the design effectiveness of the process.

► Obtained the PEC registers independently from Saltgate, the Investment Vehicle Company Secretary, and agreed the holdings to that disclosed in the accounts.

► Agreed a sample of investment trades in the year to agreements and traced cash movements to bank statements.

► Reviewed the Financial statements of the underlying fund to check the existence of assets in which PEC invests.

► Reviewed minutes of board meetings and other internal reports for indications of significant investment transactions not appropriately recorded.

Based on the work performed, we have no matters to report to the Audit Committee.

An overview of the scope of our audit

Tailoring the scope

Our assessment of audit risk, our evaluation of materiality and our allocation of performance materiality determine our audit scope for the Company. This enables us to form an opinion on the financial statements. We take into account: size, risk profile, the organisation of the Company and effectiveness of controls, including controls and changes in the business environment when assessing the level of work to be performed. All audit work was performed directly by the audit engagement team.

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements on the audit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence the economic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent of our audit procedures.

We determined materiality for the Company to be €5.4m (2018: €5.4m), which is 1% (2018: 1%) of Net Assets. We believe that net assets are the most important financial metric on which the Company's members would judge the performance of the Company.

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the Company's overall control environment, our judgement was that performance materiality was 75% (2018: 75%) of our planning materiality, namely €4.0m (2018: €4.0m). We have set performance materiality at this percentage based on our understanding of the entity and past experiences with the audit.

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of €0.3m (2018: €0.3m), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light of other relevant qualitative considerations in forming our opinion.

Other information

The other information comprises the information included in the Annual Report set out above and below, other than the financial statements and our auditor's report thereon. The Directors are responsible for the other information.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

In this context, we also have nothing to report in regard to our responsibility to specifically address the following items in the other information and to report as uncorrected material misstatements of the other information where we conclude that those items meet the following conditions:

► Fair, balanced and understandable set out on above - the statement given by the Directors that they consider the Annual Report and financial statements taken as a whole is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy, is materially inconsistent with our knowledge obtained in the audit; or

► Audit committee reporting set out above - the section describing the work of the Audit Committee does not appropriately address matters communicated by us to the Audit Committee; or

► Directors' statement of compliance with the UK Corporate Governance set out above - the parts of the Directors' statement required under the Listing Rules relating to the Company's compliance with the UK Corporate Governance Code containing provisions specified for review by the auditor in accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure from a relevant provision of the UK Corporate Governance Code.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters in relation to which the Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:

► proper accounting records have not been kept by the Company, or proper returns adequate for our audit have not been received from branches not visited by us; or

► the financial statements are not in agreement with the Company's accounting records and returns; or

► we have not received all the information and explanations we require for our audit.

Responsibilities of Directors

As explained more fully in the Directors' Statement of Responsibilities set out above, the Directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located 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 Company's members, as a body, in accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the Company'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 Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Sarah Williams

for and on behalf of Ernst & Young LLP

London

11 March 2020

Notes:

1. The maintenance and integrity of the CVC Credit Partners European Opportunities Limited website is the responsibility of the Directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site.

2. Legislation in Jersey governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of comprehensive income

For the year from 1 January 2019 to 31 December 2019

		Year ended 31 December 2019	Year ended 31 December 2018
	Notes	€	€
Income
Investment income	3	31,095,835	28,466,122
Tender fee income	3	446,411	86,705
Net losses on financial assets held at fair value through profit or loss	7	(16,030,827)	(23,883,674)
Foreign exchange gain/(loss) on financial assets held at fair value through profit or loss	7	25,378,912	(4,868,354)
Foreign exchange (loss)/gain on ordinary shares	12	(25,430,737)	4,867,850
Other net foreign currency exchange gains through profit or loss		80,886	2,655
		15,540,480	4,671,304
Expenses
Operating expenses	4	(1,236,885)	(1,214,447)
Partial termination fee	4	-	(19,807)
		(1,236,885)	(1,234,254)

Profit before finance costs and taxation		14,303,595	3,437,050

Finance costs
Placing programme costs	5	(303,108)	(269,111)
Share issue costs	5	(336,348)	(628,236)
Dividends paid	5, 12	(28,397,993)	(26,433,503)

Loss before taxation		(14,733,854)	(23,893,800)
Taxation	2.13	-	-
Decrease in net assets attributable to shareholders from operations		(14,733,854)	(23,893,800)

Basic and diluted loss per Euro Share	12	(€0.031196)	(€0.054283)

Basic and diluted loss per Sterling Share (Sterling equivalent)	12	(£0.027353)	(£0.048028)

All items in the above statement are derived from continuing operations.

The Company has no items of other comprehensive income, and therefore the decrease in net assets attributable to ordinary shareholders from operations for the year is also the total comprehensive loss.

The notes below form an integral part of these financial statements.

Statement of financial position

As at 31 December 2019

		31 December 2019	31 December 2018
	Notes	€	€
Assets
Financial assets held at fair value through profit or loss	7	535,409,935	537,640,863
Financial assets receivable	7	-	448,289
Prepayments		37,530	33,962
Cash and cash equivalents		2,072,319	1,208,254
Total assets		537,519,784	539,331,368

Liabilities
Payables	9	(195,553)	(366,166)
Total liabilities		(195,553)	(366,166)

Net assets attributable to shareholders	13	537,324,231	538,965,202

The financial statements above and below were approved by the Board of Directors on 11 March 2020 and signed on its behalf by:

Richard Bol é at Mark Tucker

Chairman Audit Committee Chairman

The notes below form an integral part of these financial statements.

statement of changes in net assets

For the year ended 31 December 2019

		Net assets attributable to shareholders
		2019
	Note	€
As at 1 January 2019		538,965,202
Issuance and subscriptions arising from conversion of ordinary shares	12	39,955,230
Redemption payments arising on conversion and tender of ordinary shares	12	(52,293,084)
Decrease in net assets attributable to shareholders from operations		(14,733,854)
Net foreign currency exchange loss on opening ordinary shares and ordinary shares issued during the year	12	25,430,737
As at 31 December 2019		537,324,231

For the year ended 31 December 2018

		Net assets attributable to shareholders
		2018
	Note	€
As at 1 January 2018		507,678,132
Issuance and subscriptions arising from conversion of ordinary shares	12	66,177,156
Redemption payments arising on conversion and tender of ordinary shares	12	(6,128,436)
Decrease in net assets attributable to shareholders from operations		(23,893,800)
Net foreign currency exchange gain on opening ordinary shares and ordinary shares issued during the year	12	(4,867,850)
As at 31 December 2018		538,965,202

The notes below form an integral part of these financial statements.

Statement of cash flows

For the year ended 31 December 2019

		Year ended 31 December 2019	Year ended 31 December 2018
	Note	€	€
Cash flows from operating activities

Loss before taxation¹		(14,733,854)	(23,893,800)

Adjustments to reconcile loss before tax to net cash flows:
-
- Net losses on investments held at fair value through profit or loss	7	16,030,827	23,883,674
- Foreign exchange (gain)/loss on financial assets held at fair value through profit or loss	7	(25,378,912)	4,868,354
- Foreign currency exchange loss/(gain) on ordinary shares	12	25,430,737	(4,867,850)
- Placing programme costs	5	303,108	269,111
- Share issue costs	5	336,348	628,236
- Dividends paid	12	28,397,993	26,433,503
Changes in working capital:
- (Increase)/decrease in prepayments		(3,568)	2,894
- Increase/(decrease) in payables		1,461	(61,958)
Net cash provided by operating activities		30,384,140	27,262,164

Cash flows from investing activities
Purchase and subscriptions of financial assets held at fair value through profit or loss²		(39,622,857)	(65,559,633)
Proceeds from redemption of financial assets held at fair value through profit or loss	7	51,650,159	6,026,868
Net cash provided by/(used in) investing activities		12,027,302	(59,532,765)

Cash flows from financing activities
Proceeds from issuance and subscriptions arising from conversion of ordinary shares	12	39,955,230	66,177,156
Payments from redemption of ordinary shares	12	(52,293,084)	(6,128,436)
Placing programme costs		(475,182)	(97,037)
Share issue costs	5	(336,348)	(628,236)
Dividends paid	12	(28,397,993)	(26,433,503)
Net cash (used in)/provided by financing activities		(41,547,377)	32,889,944

Net increase in cash and cash equivalents in the year		864,065	619,343
Cash and cash equivalents at beginning of the year		1,208,254	588,911
Cash and cash equivalents at the end of the year		2,072,319	1,208,254

¹ Includes cash receipts relating to investment income of €31,094,502 (2018: €28,466,122), interest income of €1,333 (2018: €nil) and tender fee income of €446,411 (2018: €86,705).

² Includes receivables outstanding at 30 September 2019 relating to financial assets receivable amount to €nil (2018: €448,289).

The notes below form an integral part of these financial statements.

NOTES TO THE FINANCIAL STATEMENTS

1. General information

The Company was incorporated on 20 March 2013 and is registered in Jersey as a closed-ended Investment Company. Euro Shares and Sterling Shares were admitted to the Official List of the UK Listing Authority and admitted to trading on the Main Market of the London Stock Exchange on 25 June 2013.

The Company's registered address is IFC1, The Esplanade, St Helier, Jersey, JE1 4BP.

2. Accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to the years presented.

2.1 Basis of preparation

(a) Statement of Compliance

The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board (IASB) together with the interpretations of the International Accounting Standards and Standing Interpretations Committee as approved by the International Accounting Standards Committee (IASC) which remain in effect. The financial statements give a true and fair view of the Company's affairs and comply with the requirements of the Companies (Jersey) Law 1991.

The liquidity method of presentation is followed in the Statement of Financial Position. Please refer to note 8.2 for maturity profiles.

(b) Basis of measurement

These financial statements have been prepared on the historical cost basis except for the revaluation of financial assets held at fair value through profit or loss and ordinary shares that are held at amortised cost, being the amount they can be redeemed at.

The Company's functional currency is the Euro, which is the currency of the primary economic environment in which it operates. The Company's performance is evaluated and its liquidity is managed in Euros. Therefore the Euro is considered as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in Euros, except where otherwise indicated, and are rounded to the nearest Euro.

(d) Critical accounting estimates and judgements

The preparation of financial statements in conformity with IFRS requires the Company to make judgements, estimates and assumptions that affect items reported in the Statement of Financial Position and Statement of Comprehensive Income and the disclosure of contingent liabilities at the date of the financial statements. It also requires management to exercise its judgement in the process of applying the Company's accounting policies.

Although these judgements, estimates and assumptions are based on best knowledge of current facts, circumstances and, to some extent, future events and actions, the actual results may ultimately differ from those estimates, possibly significantly. Valuation of financial assets is considered a significant estimate and is monitored by the Audit Committee to ensure that judgements, estimates and assumptions made and methodologies applied are appropriate and in accordance with IFRS 13. Please refer to note 2.4(c) for details regarding fair value estimation of financial assets and note 7 for IFRS 13 disclosures.

As outlined above in note 2.1(c) the Directors have used their judgement to determine that the Company's presentational and functional currency is Euro.

(e) New standards, amendments and interpretations

The Company applies for the first time IFRS 16 - Leases and IFRIC 23 - Uncertainty over Income Tax Treatments, which became effective on 1 January 2019. As the Company does not participate in leasing arrangements and the Directors have determined that, as at 31 December 2019, the Company has no uncertain tax positions, these standards/interpretations do not have an impact on the Company's financial statements.

(f) Standards, amendments and interpretations issued but not yet effective

Standards that become effective in future accounting periods and have not been adopted by the Company:

International Financial Reporting Standards (IFRS)	Effective for periods beginning on or after
· IFRS 17 - Insurance Contracts	1 January 2021

As the Company does not participate in insurance contracts in the normal course of its business, the Directors believe that the application of this standard will not have an impact on the Company's financial statements.

A number of amendments and interpretations to existing standards have been issued, but are not yet effective, that are not relevant to the Company's operations. The Directors believe that the application of these amendments and interpretations will not impact the Company's financial statements when they become effective.

2.2 Going concern

After reviewing the Company's budget and cash flow forecast, the Directors are satisfied that, at the time of approving the Annual Financial Report, no material uncertainties exist that may cast significant doubt concerning the Company's ability to continue for a period of at least twelve months from the date of approval of the financial statements. The Directors consider it appropriate to adopt the going concern basis in preparing the financial statements.

2.3 Foreign currency translations

Transactions in foreign currencies are translated to Euro at the foreign exchange rate on the transaction date. Monetary assets and liabilities denominated in foreign currencies at the Statement of Financial Position date are translated to Euro at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the Statement of Comprehensive Income.

2.4 Financial instruments

Financial assets

(a) Classification

The Company classifies its investments as financial assets held at fair value through profit or loss. These financial assets do not possess contractual terms which give rise to cash flows on specified dates that are solely payments of principal and interest and therefore these financial assets default to this classification. Financial assets also include cash and cash equivalents as well as other receivables which are measured at amortised cost.

(b) Recognition, measurement and derecognition

Purchases and sales of investments are recognised on the trade date - the date on which the Company commits to purchase or sell the investment. Financial assets at fair value through profit or loss are measured initially and subsequently at fair value. Transaction costs are expensed as incurred and movements in fair value are recorded in the Statement of Comprehensive Income.

Financial assets are derecognised when the rights to receive cash flows from the investments have expired or the Company has transferred substantially all risks and rewards of ownership.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company holds PECs issued by the Investment Vehicle. These investments are not listed or quoted on any securities exchange and are not traded regularly and, on this basis, no active market exists.

The Company relies on the board of the Investment Vehicle making fair value estimates of an equivalent basis to those that would be made under IFRS. As at 31 December 2019, the Directors reviewed documentary evidence of the valuation of Investment Vehicle investments and scrutinised fair value estimates used to gain assurances as to the appropriateness and robustness of the valuation methodology applied by the Investment Vehicle to its underlying portfolio assets and hence to the Company investments in the Investment Vehicle. The Directors then incorporated those fair value estimates into the Company's Statement of Financial Position.

(d) Valuation process

The Directors interviewed representatives of the Investment Vehicle Manager in order to verify how the PECs are valued and the composition of the NAV of the PECs as of the date of the Statement of Financial Position.

The Directors are in regular communications with the Investment Vehicle Manager and receive monthly performance reports from the Investment Vehicle Manager in respect of the Investment Vehicle and its underlying investments, which are presented to the Directors by the Investment Vehicle Manager and discussed by these parties.

The Directors consider the impact of general credit conditions on the valuation of both the PECs and Investment Vehicle portfolio, as well as specific credit events in the European corporate environment. The Directors also analyse the Investment Vehicle portfolio in terms of both investment mix and fair value hierarchy.

PECs

The PECs are valued taking into consideration a range of factors including the audited NAV of the Investment Vehicle as well as available financial and trading information of the Investment Vehicle and of its underlying portfolio; the price of recent transactions of PECs redeemed and advice received from the Investment Vehicle Manager; and such other factors as the Directors, in their sole discretion, deem relevant in considering a positive or negative adjustment to the valuation.

Investment Vehicle portfolio

The Directors also discuss the Investment Vehicle Manager's monthly valuation process to understand the valuation methodology of Level 3 debt securities and CLOs held in the Investment Vehicle portfolio. As part of this they consider the assumptions used and significant fair value changes during the period.

Investments in CLOs are primarily valued based on the bid price as provided by the third party pricing service, and may be amended following consideration of the Net Asset Value (NAV) published by the administrator of the CLOs. Furthermore, such a NAV is adjusted when necessary, to reflect the effect of the time passed since the calculation date, liquidity risk, limitations on redemptions and other factors. Depending on the fair value level of a CLOs assets and liabilities and on the adjustments needed to the NAV published by that CLO, the Compartment classifies the fair value of these investments as Level 3.

Investments in debt securities for which there are a limited number of broker quotes and for which no other evidence of liquidity exists and investments in unlisted equity and private equity companies that are not quoted in an active market are classified as Level 3. For debt securities with a limited number of broker quotes, these are then valued by considering in detail the limited broker quotes available for evidence of outliers (which may skew the average) which, if existent, are then removed, and then by calculating the average of the remaining quotes. For debt securities and unlisted equity or private equity companies for which there are no broker quotes, the Investment Vehicle Manager produces a pricing memorandum for the Compartment drawing on the International Private Equity Valuation guidelines, which is discussed, reviewed and accepted by the Investment Vehicle board and the independent service provider.

If the Investment Vehicle Manager and the independent service provider have difficulty in establishing an agreed upon valuation for an asset, they will discuss and agree alternative valuation methods.

Financial Liabilities

(a) Classification

As disclosed in note 2.7, the Company classifies its ordinary shares as financial liabilities held at amortised cost. Financial liabilities also include payables excluding accruals which are also held at amortised cost.

(b) Recognition, measurement and derecognition

Financial liabilities are recognised initially at fair value plus any directly attributable incremental costs of acquisition or issue and are subsequently carried at amortised cost. Financial liabilities are derecognised when the obligation specified in the contract is discharged, cancelled or expires.

Ordinary shares are carried at amortised cost being the carrying amount of ordinary share value at which investors have the opportunity to partially tender their shareholding in accordance with the Company's Quarterly Contractual Tender facility.

2.5 Operating expenses, placing programme costs and share issue costs

Operating expenses, placing programme costs and share issue costs are recognised on an accruals basis and are recognised in the Statement of Comprehensive Income.

2.6 Dividends payable

Dividends are recognised as finance costs in the Statement of Comprehensive Income and are accrued from the ex-dividend date.

2.7 Ordinary shares

In accordance with IAS 32 - Financial Instruments: Presentation, the ordinary shares are classified as a financial liability rather than equity due to the redemption mechanism of the ordinary shares, in addition to there being two share classes which have different characteristics. Please refer to note 12 for further details.

2.8 Management shares

The management shares are the most subordinate share class and therefore these are classified as equity. Please refer to note 11 for further detail.

2.9 Investment income

Investment income relates to quarterly income distributions received from the Investment Vehicle based on income returns and capital appreciation from a diversified portfolio of sub-investment grade debt instruments. The Company is entitled to receive income distributions every quarter, which will equate to not less than 75% of the net income of the Company's investment in the Investment Vehicle. Investment income is recognised as investment income in the Statement of Comprehensive Income when income distributions are declared by the Investment Vehicle.

2.10 Cash and cash equivalents

Cash and cash equivalents include cash in hand and deposits held at call with banks. Cash equivalents are short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

2.11 Segmental reporting

The Directors view the operations of the Company as one operating segment, being the investment business. All significant operating decisions are based upon analysis of the Company's investments as one segment. The financial results from this segment are equivalent to the financial results of the Company as a whole, which are evaluated regularly by the chief operating decision-maker (the Board with insight from the Investment Vehicle Manager).

2.12 Contingent liabilities and provisions

A contingent liability is a possible obligation depending on whether some uncertain future event occurs; or a present obligation but payment is not probable or the amount cannot be measured reliably. A provision is recognised when:

- the Company has a present legal or constructive obligation as a result of past events;

- it is probable that an outflow of resources will be required to settle the obligation; and

- the amount has been reliably estimated.

2.13 Taxation

Profits arising in the Company for the 2019 year of assessment will be subject to Jersey tax at the standard corporate income tax rate of 0% (2018: 0%).

2.14 Capital risk management

The Board defines capital as financial resources available to the Company. The Company's capital as at 31 December 2019 comprises its net assets attributable to shareholders at a total of €537,324,231 (2018: €538,965,202).

The Company's objectives when managing capital are to:

- safeguard the Company's ability to continue as a going concern;

- provide returns for shareholders; and

- maintain an optimal capital structure to minimise the cost of capital.

The Board monitors the capital adequacy of the Company on an on-going basis and the Company's objectives regarding capital management have been met.

Under the Code of Practice for Alternative Investment Funds and AIF Services Business, the Company, as a self-managed AIF is required to have an initial capital of at least €300,000. With the exception of the aforementioned, the Company has no other internally or externally imposed capital requirements.

3. Investment income

	Year ended 31 December 2019	Year ended 31 December 2018
	€	€
Investment income	31,094,502	28,466,122
Bank interest income	1,333	-
Total investment income	31,095,835	28,466,122

Tender fee income

The tender price pursuant to the Contractual Quarterly Tender facility is calculated based on the NAV per share (calculated as at the final business day in each quarter or such other date as the Directors in their absolute discretion may determine from time to time) less £0.01 or €0.01 per share respectively (being 1% of the original placing price of £1.00 and €1.00 per share (the "Original Placing Price")) , which is retained by the Company. In addition, a €1,000 administration fee is withheld from the redemption proceeds of each tendering Shareholder. The Company recognises retained redemption proceeds of 1% and the administration fee as tender fee income.

During the year, 3,240,007 Euro Shares and 35,151,239 Sterling Shares have been tendered by shareholders which generated tender fee income of € 446,411 (2018: €86,705). Refer to note 12 for further details on the Contractual Quarterly Tender facility.

4. Operating expenses

	Year ended 31 December 2019	Year ended 31 December 2018
	€	€
Directors' fees (see note 6)	221,633	179,490
Administration fees	196,666	220,344
Advisor fees	188,765	123,742
Regulatory fees	159,865	124,756
Registrar fees	76,999	85,728
Audit fees	64,782	64,197
Professional fees	56,482	170,812
Brokerage fees	46,986	46,729
Non-audit fees paid to the Auditor	34,558	26,560
Commission fees	-	22,578
Sundry expenses	190,149	149,511
Total operating expenses	1,236,885	1,214,447

Non-audit fees paid to the Auditor

Non-audit fees paid to the Auditor relate to interim review services amounting to €11,178 (2018: €10,737), compliance with the reporting fund regime amounting to €7,413 (2018: €15,823) and provision of regulatory advice amounting to €15,967 (2018: €nil).

Advisor fees

The Investment Vehicle Manager agreed to provide the services of Mr. Justin Atkinson to assist with the marketing and promotion of the Company's shares. The Investment Vehicle Manager recharges the Company for Mr. Atkinson's cost. During the year, Advisor fees incurred were €188,765 (2018: €123,742).

Commission fees

Commission fees relate to the commission payable to Conversion SPV Limited (the "Conversion Vehicle"). During the year, Commission fees incurred were €nil (2018: €22,578). Refer to note 12 for further details on the treasury share convertor mechanism.

Partial termination fees

No partial termination fees were incurred during the year (2018: €19,807). In respect of Contractual Quarterly Tenders in the period from inception until the 31 March 2018 Contractual Quarterly Tender, the Company, in accordance with the agreement between the Company and the Corporate Services Manager, paid partial termination fees ranging between 2.5% and 0.5% of the Original Placing Price. Following the 31 March 2018 Contractual Quarterly Tender, no further partial termination fees were incurred.

5. Finance costs

Placing programme costs

During the year, the Company incurred placing programme fees of €303,108 (2018: €269,111), which represents legal fees of €245,152, placing agent fees of €40,848 and printing fees of €17,108. No further placing programme fees have been accrued.

Share issue costs

The costs of the sale of treasury shares and placing of new ordinary shares have been expensed in the Statement of Comprehensive Income and amounted to a total of €336,348 (2018: €628,236).

Dividends paid

Refer to note 12 for further information on dividends paid.

6. Directors' fees and interests

During the year ended 31 December 2019, the Directors of the Company were remunerated for their services as follows:

Richard Boléat (Chairman) - £65,000 (2018: £65,000) per annum

Mark Tucker - £43,750 (2018: £43,750) per annum

David Wood - £42,500 (2018: £42,500) per annum

Stephanie Carbonneil - £42,500 (2018: £nil) per annum

Mark Tucker in his capacity as the Chairman of the Audit Committee receives an additional £6,250 (2018: £6,250) for his services in this role.

Stephanie Carbonneil was appointed as a non-executive Director of the Company on 21 February 2019 and receives remuneration of £42,500 per annum. In respect of the year ended 31 December 2019, Stephanie Carbonneil received pro-rated annual remuneration from the date of her appointment. With effect from 1 January 2020, Stephanie Carbonneil will receive an additional £5,000 per annum for her services as Remuneration and Nomination Committee Chairwoman.

Refer to note 4 for details of total Directors fees during the year.

On 3 July 2019, Mark Tucker purchased 10,000 Sterling Shares at a price of £1.0447 per share, with a total market value of £10,447 and on 4 October 2019, purchased 10,000 Sterling Shares at a price of £0.981157 per share, with a total market value of £9,812.

On 9 October 2019, Stephanie Carbonneil purchased 10,200 Sterling Shares at a price of £0.98032 per share, with a total market value of £9,999.

No pension contributions were payable in respect of any of the Directors. The Company has no employees.

Richard Boléat acts as the enforcer of the CCPEOL Purpose Trust. Please refer to note 15 for further detail.

During the year, David Wood held an investment in a CVC fund and sat on the CVC Credit Partners Conflicts Committee (the "Conflicts Committee"). As at 31 December 2019, David Wood no longer held any investments in CVC funds and had resigned from the Conflicts Committee.

CVC Credit Partners Group established an independent Conflicts Committee of independent directors drawn from its group board and the boards of certain of its funds and investment vehicles for the purpose of providing review and guidance to the relevant investment committee with respect to any situation where there is the potential for (or perception of) a material conflict of interest. Any such conflict is required to be presented to the Conflicts Committee by the relevant portfolio manager and, if necessary, CVC Credit Partners Group's chief executive officer and/or chief investment officer.

7. Financial assets held at fair value through profit or loss

	31 December 2019	31 December 2018
	€	€
PECs - Unquoted investment*	535,409,935	537,640,863

* In addition, as at 31 December 2019, the Company recognised financial assets receivable of €nil (2018: €448,289) relating to PECs awaiting settlement. The below breakdown does not incorporate PEC's awaiting settlement.

As at the year ended 31 December 2019, the Company held 130,144,171.50 Euro and 324,425,319.07 Sterling PECs (2018: 124,305,615.27 Euro and 338,776,091.72 Sterling PECs). Please refer below for reconciliation of PECs from 1 January 2018 (excluding PEC's awaiting settlement):

	Euro PECs	Sterling PECs

As at 1 January 2018	121,787,192.73	294,111,377.53
Subscriptions	7,673,698.84	43,624,900.35
Monthly conversions	(1,249,866.30)	1,078,668.81
Quarterly tenders	(3,905,410.00)	(38,854.97)
As at 31 December 2018	124,305,615.27	338,776,091.72
Subscriptions	3,263,089.14	25,609,265.53
Monthly conversions	5,796,907.09	(4,905,493.18)
Quarterly tenders	(3,221,440.00)	(35,054,545.00)
As at 31 December 2019	130,144,171.50	324,425,319.07

Fair value hierarchy

IFRS 13 requires an analysis of investments valued at fair value based on the reliability and significance of information used to measure their fair value.

The Company categorises its financial assets and financial liabilities according to the following fair value hierarchy detailed in IFRS 13, that reflects the significance of the inputs used in determining their fair values:

Level 1: Quoted market price (unadjusted) in an active market for an identical instrument.

Level 2: Valuation techniques based on observable inputs, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using: quoted market prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3: Valuation techniques using significant unobservable inputs. This category includes all instruments where the valuation technique includes inputs not based on observable data and the unobservable variable inputs have a significant effect on the instrument's valuation. This category includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments.

As at 31 December 2019
	Level 1	Level 2	Level 3	Total
Financial assets	€	€	€	€
Financial assets held at fair value through profit or loss	-	-	535,409,935	535,409,935

Financial liabilities
Ordinary shares¹	503,742,730	-	-	503,742,730

As at 31 December 2018
	Level 1	Level 2	Level 3	Total
Financial assets	€	€	€	€
Financial assets held at fair value through profit or loss	-	-	537,640,863	537,640,863

Financial liabilities
Ordinary shares¹	540,974,315	-	-	540,974,315

¹ - As disclosed in note 2.7, the Company classifies its ordinary shares as financial liabilities held at amortised cost. Please note for disclosure purposes only, ordinary shares have been disclosed at fair value using the quoted price in accordance with IFRS 13. The estimated fair values may differ from the values that would have been realised had a ready market existed and the difference could be material.

The fair value of investments is assessed on an ongoing basis by the Board.

Level 3 reconciliation

The following table shows a reconciliation of all movements in the fair value of financial assets held at fair value through profit or loss categorised within Level 3 between the beginning and the end of the reporting period.

	31 December 2019
	€
Balance as at 1 January 2019	537,640,863
Purchases	34,222,460
Subscriptions arising from conversion	5,848,686
Redemption proceeds arising from conversion	(5,953,452)
Redemption proceeds arising from quarterly tenders	(45,696,707)
Realised loss on financial assets held at fair value through profit or loss	(564,223)
Unrealised loss on financial assets held at fair value through profit or loss	(15,466,604)
Foreign exchange gain on financial assets held at fair value through profit or loss	25,378,912
Balance as at 31 December 2019	535,409,935

Net loss on financial assets held at fair value through profit or loss for the year ended 31 December 2019	(16,030,827)

During 2019, there were no reclassifications between levels of the fair value hierarchy.

	31 December 2018
	€
Balance as at 1 January 2018	507,308,415
Purchases	63,383,294
Subscriptions arising from conversion	1,728,050
Redemption proceeds arising from conversion	(1,726,986)
Redemption proceeds arising from quarterly tenders	(4,299,882)
Realised gain on financial assets held at fair value through profit or loss	358,217
Unrealised loss on financial assets held at fair value through profit or loss	(24,241,891)
Foreign exchange loss on financial assets held at fair value through profit or loss	(4,868,354)
Balance as at 31 December 2018	537,640,863


Net loss on financial assets held at fair value through profit or loss for the year ended 31 December 2018	(23,883,674)

During 2018, there were no reclassifications between levels of the fair value hierarchy.

Quantitative information of significant unobservable inputs - Level 3 - PECs

Description	31 December 2019	Valuation technique	Unobservable input	Range (weighted average)
	€

PECs	535,409,935	Adjusted net asset value	Discount for lack of liquidity	0-3%

Description	31 December 2018	Valuation technique	Unobservable input	Range (weighted average)
	€

PECs	537,640,863	Adjusted net asset value	Discount for lack of liquidity	0-3%

The Board believes that it is appropriate to measure the PECs at the NAV of the investments held at the Investment Vehicle, adjusted for discount for lack of liquidity. Please refer to note 2.4 for valuation methodology of PECs.

The net asset value of the Investment Vehicle attributable to each PEC unit is € 1.1778 (2018: € 1.1610).

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy - Level 3 - PECs

The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy together with a quantitative sensitivity analysis as at 31 December 2019 and comparative are as shown below:

As at 31 December 2019

Description

Input

Sensitivity used

Effect on fair value

€

PECs

Discount of lack of liquidity

(16,062,298)

As at 31 December 2018

Description

Input

Sensitivity used

Effect on fair value

€

PECs

Discount of lack of liquidity

(16,129,226)

The following tables, detail the investment holding of the Company at the Investment Vehicle level, categorising these assets according to the fair value hierarchy in accordance with IFRS 13 and detailing the quantitative information of significant unobservable inputs of the Level 3 investments held. The below disclosure has been included to provide an insight to shareholders, of the asset class mix held by the Investment Vehicle portfolio. It is important to note that as at 31 December 2019, the Company held a 65.92% (2018: 68.91%) interest in the PECs issued by the Investment Vehicle. This disclosure has not been apportioned according to the Company's PEC holding, as the Board believes to do so would be misleading and not an accurate representation of the Company's investment in the Investment Vehicle.

The below information regarding the financial assets at fair value through profit or loss for the Investment Vehicle has been included for information purposes only.

Financial assets and liabilities at fair value through profit or loss - (for Investment Vehicle)
31 December 2019
	Level 1	Level 2	Level 3
Financial assets	€'000	€'000	€'000	€'000
Equity securities
Equities and warrants	4,532	-	16,315	20,847
Debt securities
Corporate bonds and other debt securities	149,696	531,027	115,933	796,656
CLOs including Asset Backed Securities	-	-	41,999	41,999
Forward currency contracts	-	14,941	-	14,941
Total	154,228	545,968	174,247	874,443
Financial liabilities
Corporate bonds and other debt securities sold short	19,208	7,510	-	26,718
Total	19,208	7,510	-	26,718

Financial assets and liabilities at fair value through profit or loss - (for Investment Vehicle)
31 December 2018
	Level 1	Level 2	Level 3
Financial assets	€'000	€'000	€'000	€'000
Equity securities
Equities and warrants	863	-	4,123	4,986
Debt securities
Corporate bonds and other debt securities	178,807	554,304	57,401	790,512
CLOs including Asset Backed Securities	2,372	-	20,322	22,694
Total	182,042	554,304	81,846	818,192
Financial liabilities
Corporate bonds and other debt securities sold short	51,371	5,729	-	57,100
Forward currency contracts	-	2,198	-	2,198
Total	51,371	7,927	-	59,298

Transfers between Level 2 and Level 3 - (for Investment Vehicle)

During 2019, following further developments in the liquidity of certain debt securities, investments of the Investment Vehicle with a market value of EUR 38.8 million as at 31 December 2019 were reclassified from Level 2 to Level 3 (31 December 2018: EUR 11.7 million). There were also investments reclassified from Level 3 to Level 2 having a market value of EUR 17.5 million as at 31 December 2019 (31 December 2018: EUR 34 million).

Level 3 reconciliation - (for Investment Vehicle)

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the reporting year.

	Equities and Warrants	Corporate bonds and other debt securities	CLOs (including Asset Backed Securities)	Total
	€'000	€'000	€'000	€'000
Balance as at 1 January 2018	905	107,608	30,069	138,582
Total gains / (losses) in statement of comprehensive income during the year	3,218	1,512	(3,964)	766
Purchases / subscriptions	-	31,196	12,894	44,090
Sales / redemptions	-	(63,332)	(18,677)	(82,009)
Transfers into and out of Level 3	-	(19,583)	-	(19,583)
Balances as at 31 December 2018	4,123	57,401	20,322	81,846

Total gains / (losses) in statement of comprehensive income during the year	(10,768)	3,286	(1,786)	(9,268)
Purchases / subscriptions	22,960	36,556	37,741	97,257
Sales / redemptions	-	(12,937)	(14,278)	(27,215)
Transfers into and out of Level 3	-	31,627	-	31,627
Balances as at 31 December 2019	16,315	115,933	41,999	174,247

Total unrealised gains and losses at 31 December 2018 included in Statement of Comprehensive Income for assets held at the end of the year	3,218	(824)	(3,799)	(1,405)

Total unrealised gains and losses at 31 December 2019 included in Statement of Comprehensive Income for assets held at the end of the year	(10,768)	2,214	(991)	(9,545)

Quantitative information of significant unobservable inputs - Level 3 - (in Investment Vehicle)

Description	31 December 2019	Valuation technique	Unobservable input	Range (weighted average)
Description	€'000	Valuation technique	Unobservable input	Range (weighted average)
Equities and warrants	12,623	Market multiples	Average EBITDA multiple of peers including discount to average multiple	5.6x - 8.0x
Equities and warrants	3,692	Broker quotes / other methods	Specific valuations of the industry: expert valuation	N/A
Corporate bonds and other debt securities	115,933	Broker quotes / Market multiples / Discounted Cash Flow	Cost of market transactions / Multiple of listed companies / management information	N/A
CLOs (including Asset Backed Securities)	41,999	Broker quotes / other methods	Specific valuations of the industry: expert valuation	N/A

Description	31 December 2018	Valuation technique	Unobservable input	Range (weighted average)
Description	€'000	Valuation technique	Unobservable input	Range (weighted average)
Equities and warrants	4,123	Broker quotes / other methods	Specific valuations of the industry: expert valuation	N/A
Corporate bonds and other debt securities	57,401	Broker quotes / Market multiples / Discounted Cash Flow	Cost of market transactions / Multiple of listed companies / management information	N/A
CLOs (including Asset Backed Securities)	20,322	Broker quotes / other methods	Specific valuations of the industry: expert valuation	N/A

The Investment Vehicle board and the Investment Vehicle Manager have valued the CLO positions at bid-prices as at 31 December 2019 and 31 December 2018, as they believe this is the most appropriate value for these positions. The Investment Vehicle board and the Investment Vehicle Manager believe that where certain securities are classified as Level 3 due to limited number of broker quotes, there is still sufficient supporting evidence of liquidity to value these at an undiscounted bid price.

Sensitivity analysis to significant changes in unobservable inputs within Level 3 hierarchy - Level 3 - (for Investment Vehicle)

Description	Input	Sensitivity used	Effect on fair value €'000
Equities and warrants	Market multiples	1x	3,879/(4,345)
Equities and warrants	Discount to broker quotes / valuation method	20 %	738/(738)
Corporate bonds and other debt securities	Discount to broker quotes / valuation method	10 %	11,593/(11,593)
CLOs (including Asset Backed Securities)	Discount to broker quotes / other methods	20 %	8,400/(8,400)

Description	Input	Sensitivity used	Effect on fair value €'000
Equities and warrants	Discount to broker quotes / valuation method	20 %	825/(825)
Corporate bonds and other debt securities	Discount to broker quotes / valuation method	10 %	5,740/(5,740)
CLOs (including Asset Backed Securities)	Discount to broker quotes / other methods	20 %	4,064/(4,064)

The below information regarding loans and borrowings for the Investment Vehicle, which are financial liabilities held at amortised cost, has been included for information purposes only.

	Effective interest rate (EIR, %)	Maturity	31 December 2019	31 December 2018
			€'000	€'000
Current interest-bearing loans and borrowings
Interest on loan - Bank			364	396
			364	396
Current interest-bearing loans and borrowings
Loan - Bank (principal EUR 175 million)	1.60%	18-Dec-20	174,497	173,941
			174,497	173,941
Total loans and borrowings at year end			174,861	174,337

The effective interest rate (EIR) is the combination of the nominal interest rate of Euribor + 3 months + 1.28% and the amortisation of the arrangement fee of EUR 1.66 million. The EUR 175 million loan is shown net of the arrangement fee, which is expensed via the EIR over 3 years.

There is collateral cash of EUR 42 million and assets with a market value of EUR 266 million pledged in support of the loan with the Bank (31 December 2018: EUR 155 million and assets with a market value of EUR 225 million pledged in support of the loan with the Bank).

8. Financial risk management

The main risks arising from the Company's financial instruments are credit risk, liquidity risk, market risk, interest rate risk, valuation risk and foreign currency risk.

8.1 Credit risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company. The Board has in place monitoring procedures in respect of counterparty risk which is reviewed on an ongoing basis.

The Company's credit risk is attributable to its financial assets at fair value through profit or loss, financial assets receivable and cash and cash equivalents.

In the opinion of the Board, the carrying amounts of financial assets best represent the maximum credit risk exposure to the Company. T he Company's financial assets exposed to credit risk amounted to the following:

	31 December 2019	31 December 2018
	€	€
Financial assets held at fair value through profit or loss	535,409,935	537,640,863
Financial assets receivable	-	448,289
Cash and cash equivalents	2,072,319	1,208,254
Total assets	537,482,254	539,297,406

All cash is placed with BNP Paribas Securities Services S.C.A., Jersey Branch.

BNP Paribas Securities Services S.C.A, Jersey Branch, is a wholly owned subsidiary of BNP Paribas Securities Services S.A. which is publicly traded and a constituent of the S&P 500 Index with a long standing credit rating of A+ (2018: A) from Standard & Poor's.

The Company is indirectly exposed to credit risks associated with the investments held by the Investment Vehicle. These credit risks include (among others): (i) the possibility that earnings of an underlying issuer may be insufficient to meet its debt service obligations; (ii) an underlying issuer's assets declining in value; (iii) the declining creditworthiness of the Investment Vehicle's financial counterparties; and (iv) the declining creditworthiness, default and potential for insolvency of issuers during periods of rising interest rates and/or economic downturn. An economic downturn and/or rising interest rates could severely disrupt the leveraged finance market and adversely affect the value of the Investment Vehicle's investments and the ability of issuers to repay principal and interest. In turn, this may adversely affect the performance of the Investment Vehicle and, by extension, the Company's business, financial condition, results of operations, NAV and/or the market prices of the ordinary shares.

The Board discusses the creditworthiness of the Investment Vehicle's underlying portfolio constituents and banking counterparties (e.g. banks, money market funds and the issuers of the debt securities) with the Investment Vehicle Manager on a periodic basis.

The Company's investment exposure at the Investment Vehicle, categorised according to the credit rating of the issuers, is: AAA 1%, BB 4%, B 70%, CCC 11% and 14% not rated. Cash and cash equivalents exposure is with institutions rated A+ 24% and A 76%. Derivative financial instruments market value exposure is with institutions rated A+ 24% and A 76%.

Financial assets receivable as at 31 December 2018 were fully received by the Company during the year ended 31 December 2019.

8.2 Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulties in realising assets or otherwise raising funds to meet financial commitments. Given that the PECs issued by the Investment Vehicle and held by the Company are not traded on a stock exchange, the Company relies on the periodic redemption mechanism provided by the Investment Vehicle in order to realise its investments in the Investment Vehicle, and on mechanisms operating in accordance with their contracted terms. The Company does not have any control over the redemption mechanism operated by the Investment Vehicle.

Please refer above - "Principal risks and uncertainties" and note 12 for detail regarding the election to tender available to ordinary shareholders and applicable restrictions.

The Company may redeem PECs in accordance with its contracted rights. However, if the Investment Vehicle receives applications to redeem Investment Vehicle Interests in respect of any redemption date and it determines (in its sole judgement) that there is insufficient liquidity to make redemptions without prejudicing existing investors in the Investment Vehicle, then the Investment Vehicle is entitled to suspend or scale down the redemption requests on a pro rata basis so as to only carry out redemptions that will not prejudice remaining investors.

As such, in circumstances where the Company wishes to redeem part or all of its holdings in the Investment Vehicle, it may not be able to achieve this on a single redemption date. This may also result in restrictions on the Company's ability to complete or to conduct Contractual Quarterly Tenders.

In certain circumstances, whether prior to or following a NAV determination date, (being the quarterly Investment Vehicle valuation date), the Investment Vehicle directors may, at their discretion, suspend all calculations, payments and redemptions of the outstanding Investment Vehicle Interests (including the Company's Investment Vehicle Interests).

In the event of a material adverse event occurring in relation to the Investment Vehicle or the market in which it operates generally, the ability of the Company to realise its investment and prevent the possibility of further losses could, therefore, be limited by its restricted ability to realise its investment in the Investment Vehicle. This delay could materially affect the value of the PECs and the timing of when the Company is able to realise its investments in the Investment Vehicle, which may adversely affect the Company's business, financial condition, results of operations, NAV and/or the market prices of the ordinary shares.

The table below shows the residual contractual maturity of the Company's financial assets and liabilities as at 31 December 2019:

	Less than 1 year	1 to 5 years	More than 5 years	No maturity date	Total
	€	€	€	€	€
Financial assets
Financial assets held at fair value through profit or loss¹	-	-	-	535,409,935	535,409,935
Financial assets receivable	-	-	-	-	-
Cash and cash equivalents	2,072,319	-	-	-	2,072,319
Total undiscounted financial assets	2,072,319	-	-	535,409,935	537,482,254

Financial liabilities
Payables	(195,553)	-	-	-	(195,553)
Ordinary shares²	-	-	-	(537,324,231)	(537,324,231)
Total undiscounted financial liabilities	(195,553)	-	-	(537,324,231)	(537,519,784)

¹ - The Company has not classified financial assets held at fair value through profit or loss into maturity bands as the Board has determined to do so would be misleading given the Company's contractual quarterly tender mechanism as set out in note 12.

² - The Company has not classified the ordinary shares into maturity bands as the Board has determined that to do so would be misleading. Details of the Company's financial liabilities in relation to the ordinary shares, which are carried at amortised cost, are set out in note 12.

The table below shows the residual contractual maturity of the financial assets and liabilities as at 31 December 2018:

	Less than 1 year	1 to 5 years	More than 5 years	No maturity date	Total
	€	€	€	€	€
Financial assets
Financial assets held at fair value through profit or loss¹	-	-	-	537,640,863	537,640,863
Financial assets receivable	448,289	-	-	-	448,289
Cash and cash equivalents	1,208,254	-	-	-	1,208,254
Total undiscounted financial assets	1,656,543	-	-	537,640,863	539,297,406

Financial liabilities
Payables	(366,166)	-	-	-	(366,166)
Ordinary shares²	-	-	-	(538,965,202)	(538,965,202)
Total undiscounted financial liabilities	(366,166)	-	-	(538,965,202)	(539,331,368)

In the ordinary course of business the Directors expect the Company's Contractual Quarterly Tenders to be funded by redemptions from the Investment Vehicle, excepting cumulative quarterly tenders received in an amount equal to or less than £100,000 which may initially, at the discretion of the Directors, be funded from the Company's working capital.

8.3 Market risk

Market risk is the risk that the Company's performance will be adversely affected by changes in the markets in which it invests. The Company holds a single investment in the form of PECs in the Investment Vehicle which is the main driver of the Company's performance.

At the Investment Vehicle level, performance is driven by the portfolio of the Investment Vehicle and therefore consideration of the market risks to which the Company is exposed should be taken.

The Investment Vehicle is required to hold at least 60 per cent of its gross assets in companies domiciled in, or with material operations in, Western Europe. As such, the Company and the Investment Vehicle could be particularly exposed to any deterioration in the current European economic climate.

In addition, the Investment Vehicle does not have any restrictions on the amount of investments it can make in a single industry. As such, any significant event which affects a specific industry in which the Investment Vehicle has significant exposure could materially and adversely affect the performance of the Investment Vehicle and, by extension, the Company's ordinary shares.

In order to avoid excessive concentrations of risk, the Investment Vehicle's private placement memorandum includes specific guidelines on maintaining a diversified portfolio. These guidelines are detailed in investment and borrowing limits section detailed above. The Board receives from third-party service providers the results of investment and borrowing restriction monitoring exercises performed over the investment portfolio. During the year ended 31 December 2019, the Company was in compliance with all investment and borrowing limits.

Continued or recurring market deterioration may materially adversely affect the ability of an issuer whose debt obligations form part of the Investment Vehicle portfolio to service its debts or refinance its outstanding debt. Further, such financial market disruptions may have a negative effect on the valuations of the Investment Vehicle investments (and, by extension, on the NAV and/or the market price of the Company's ordinary shares), and on liquidity events involving such Investment Vehicle investments. In the future, non-performing assets in the Investment Vehicle's portfolio may cause the value of the Investment Vehicle's portfolio to decrease (and, by extension, the NAV and/or the market price of the Company's ordinary shares to decrease). Adverse economic conditions may also decrease the value of any security obtained in relation to any of the Investment Vehicle investments. The Board receives frequent presentations and reporting at board meetings from the Investment Vehicle Manager which allows it to monitor the performance of the Investment Vehicle's investment portfolio.

Please refer below for sensitivity analysis on the Statement of Comprehensive Income and NAV of the Company, if the fair value of the PECs at the year-end increased or decreased by 5%:

Current value	2019	Increase by 5%	Decrease by 5%
	Total
Euro PECs	€131,166,585	€6,558,329	€(6,558,329)
Sterling PECs (Euro equivalent)	€404,243,350	€20,212,168	€(20,212,168)
Financial assets held at fair value through profit or loss	€535,409,935	€26,770,497	€(26,770,467)

Sterling PECs	£342,231,079	£17,111,554	£(17,111,554)

Current value	2018	Increase by 5%	Decrease by 5 %
	Total
Euro PECs	€130,095,245	€6,504,762	€(6,504,762)
Sterling PECs (Euro equivalent)	€407,545,618	€20,377,281	€(20,377,281)
Financial assets held at fair value through profit or loss	€537,640,863	€26,882,043	€(26,882,043)

Sterling PECs	£366,135,673	£18,306,784	£(18,306,784)

The above calculations are based on the investment valuation at the Statement of Financial Position date and are not representative of the period as a whole, and may not be reflective of future market conditions.

8.4 Interest rate risk

Interest rate movements affect the fair value of investments in fixed interest rate securities and floating rate loans and on the level of income receivable on floating rate loans and cash deposits.

The Company invests in PECs which are non-interest bearing and therefore the majority of the Company's interest rate exposure arises in the fair value of the underlying Investment Vehicle portfolio which is largely invested in the debt securities of companies domiciled in, or with material operations in, Western Europe.

As at 31 December 2019, the Investment Vehicle held interest bearing financial assets at fair value through profit or loss of €838.7m (2018: €813.2m) and financial liabilities at fair value through profit or loss of €26.7m (2018: €59.3m). Most of these investments in debt securities carry variable interest rates and have various maturity dates. Interest rate risk on fixed interest instruments is considered to be part of market risk on fair value and is monitored by the Board on a monthly basis. In addition, as at 31 December 2019, the Company was exposed to interest rate risk arising on the Investment Vehicle's receivables and payables on unsettled trades of €57.8m (2018: €26.9m) and €40.6m (2018: €79.9m) respectively and loans and borrowings of €174.5m (2017: €173.9m).

The Company is also exposed to changes in interest rates on cash and cash equivalents held directly of £2,072,319 (2018: £1,208,254). The Board considers this risk to be immaterial to the Company.

8.5 Valuation risk

Valuation risk is the risk that the valuation of the Company's investments in the Investment Vehicle, and accordingly the periodic calculation of the NAV of the Company's Sterling and Euro Shares, does not reflect the true value of the Company's proportionate interest in the Investment Vehicle's underlying investment portfolio.

The Investment Vehicle's portfolio may at any given time include securities or other financial instruments or obligations which are very thinly traded, for which no ready market exists or which are restricted as to their transferability under applicable securities laws. These investments may be extremely difficult to value accurately.

Further, because of overall size or concentration in particular markets of positions held by the Investment Vehicle, the value of its investments at which they can be liquidated may differ, sometimes significantly, from their carrying values. Third party pricing information may not be available for certain positions held by the Investment Vehicle and therefore investments held by the Investment Vehicle may be valued based on valuation techniques using unobservable inputs. In light of the foregoing, there is a risk that an Investment Vehicle interest holder, such as the Company, which redeems all or part of its investment while the Investment Vehicle holds such investments, could be paid an amount less than it would otherwise be paid if the actual value of the Investment Vehicle's investment was higher than the value designated for that investment by the Investment Vehicle. Similarly, there is a risk that a redeeming Investment Vehicle interest holder might, in effect, be overpaid at the time of the applicable redemption if the actual value of the Investment Vehicle's investment was lower than the value designated for that Investment by the Investment Vehicle, in which case the value of the Investment Vehicle interests to the remaining Investment Vehicle interest holders would be reduced.

The board of the Investment Vehicle monitors and reviews the PEC valuation process on an ongoing basis and the Board of the Company monitors and reviews the Company's NAV production process on an ongoing basis.

8.6 Foreign currency risk

Foreign currency risk is the risk that the values of the Company's assets and liabilities are adversely affected by changes in the values of foreign currencies by reference to the Company's functional currency.

The functional currency of the Company and the Investment Vehicle is the Euro. Certain of the Investment Vehicle's assets are typically denominated in other currencies. Accordingly, the Investment Vehicle is subject to foreign currency exchange risks and the value of its assets may be affected by fluctuations in foreign currency exchange rates. The Investment Vehicle uses a third party professional foreign exchange manager to seek to materially fully hedge the foreign currency exposures to which it is exposed. However, it may not be possible for the Investment Vehicle to hedge against a particular change or event at an acceptable price or at all. In addition, there can be no assurance that any attempt to hedge against a particular change or event would be successful, and any such hedging failure could materially and adversely affect the performance of the Investment Vehicle and, by extension, the Company's business, financial condition, results of operations, NAV and/or the market prices of the ordinary shares.

Subscription monies for Sterling Shares issued by the Company have been used to fund subscriptions for Sterling-denominated PECs and such monies may then be converted to Euro by the Investment Vehicle for operating purposes. The holders of Sterling Shares will therefore be subject to the foreign currency fluctuations between Sterling and Euro. Although the Investment Vehicle has in place a hedging programme, there is no guarantee that any such hedging arrangements will be successful. In addition, the costs and any benefit of hedging such foreign currency exposure will be allocated solely to the Sterling-denominated PECs (and, as a consequence, to the Company's Sterling Shares).

This may result in fluctuations in the value of the Sterling and Euro PEC's which would result in similar variances within the NAV per Share of the Euro Shares and the Sterling Shares issued by the Company, and so in variations between the market prices of Euro Shares and the Sterling Shares.

As the Company's Sterling and Euro share classes separately invest into Sterling and Euro PEC's respectively, there is no material foreign currency risk at the Company level and therefore the Company only has exposure to material foreign currency movements at the Investment Vehicle level.

The below information regarding the foreign currency risk for the Investment Vehicle has been included for information purposes only.

The following table indicates the currencies to which the Investment Vehicle had significant exposure as at its financial year end on its financial assets and liabilities. The analysis calculates the total effect of a reasonably possible movement of principal currency rates against the EUR on the net assets attributable to PEC holders with all other variables held constant, and includes the impact of the hedging programme undertaken by the Investment Vehicle.

Currency	Change in currency rate	Effect on net assets attributable to PEC holders and on the change in net assets attributable to PEC holders from operations
			2019	2018
			€'000	€'000
GBP	10%		69	(55)
USD	10%		528	(258)

An equivalent decrease in each of the aforementioned currencies against the EUR would have resulted in an equivalent but opposite impact.

9. Payables

	31 December 2019	31 December 2018
	€	€
Advisor fees	100,985	59,981
Auditor's fees	29,826	32,245
Administration fees	17,278	31,195
Placing programme accruals	-	172,074
Other payables	47,464	70,671
Total payables	195,553	366,166

10. Contingent liabilities and commitments

As at 31 December 2019, the Company had no contingent liabilities or commitments (2018: nil).

11. Stated capital

	Number of shares	Stated capital	Number of shares	Stated capital
	31 December 2019	31 December 2019	31 December 2018	31 December 2018
		€		€
Management shares	2	-	2	-

Management shares

Management shares are non-redeemable, have no par value and no voting rights, and also no profit allocated to them in the earnings per share calculation.

12. Ordinary shares

	Number of shares¹	Stated capital	Number of shares¹	Stated capital
	31 December 2019	31 December 2019	31 December 2018	31 December 2018
		€		€
Euro Shares	131,275,614	132,407,216	125,830,138	126,908,872
Sterling Shares	326,202,252	406,162,876	340,632,066	398,568,337
Total	457,477,866	538,570,092²	466,462,204	525,477,209²

¹ - Excludes 6,368,590 (2018: 5,178,583) Euro Shares and 50,107,138 (2018: 18,555,899) Sterling Shares held as treasury shares.

² - Excludes € (1,245,861) (2018: € 13,487,993) relating to the decrease since inception (2018: increase) in net assets attributable to shareholders from operations.

	31 December 2019 Total
	€
Balances as at 1 January 2019	525,477,209
Issue of ordinary shares	34,106,544
Subscriptions arising from conversion of ordinary shares	5,848,686
Redemption payments arising from conversion of ordinary shares	(5,953,452)
Redemption payments arising from quarterly tenders of ordinary shares	(46,339,632)
Foreign currency exchange loss on ordinary shares	25,430,737
Balances as at 31 December 2019	538,570,092¹

	31 December 2018 Total
	€
Balances as at 1 January 2018	470,296,339
Issue of ordinary shares	64,449,101
Subscriptions arising from conversion of ordinary shares	1,728,055
Redemption payments arising from conversion of ordinary shares	(1,726,992)
Redemption payments arising from quarterly tenders of ordinary shares	(4,401,444)
Foreign currency exchange gain on ordinary shares	(4,867,850)
Balances as at 31 December 2018	525,477,209¹

¹ - Excludes € (1,245,861) (2018: € 13,487,993) relating to the decrease since inception (2018: increase) in net assets attributable to shareholders from operations.

The Company has two classes of ordinary shares, being Euro Shares and Sterling Shares.

Each Euro Share holds 1 voting right, and each Sterling Share holds 1.17 voting rights. Each Share has no par value.

As at 31 December 2019, the Company had 137,644,204 (inclusive of 6,368,590 treasury shares) (2018: 131,008,721 (inclusive of 5,178,583 treasury shares)) Euro Shares and 376,309,390 (inclusive of 50,107,138 treasury shares) (2018: 359,187,965 (inclusive of 18,555,899 treasury shares)) Sterling Shares in issue.

Sale of treasury shares

Excluding shares sold to the Conversion Vehicle as detailed below and shares sold as part of the placing of treasury shares, the Company completed the sale of 2,050,000 (2018: 6,550,000) Euro and 3,600,000 (2018: 22,107,240) Sterling treasury shares during the year ended 31 December 2019.

Share issuance

On 7 June 2019, the Company issued 21,945,963 Sterling Shares at a price of £1.0795 per Sterling Share.

Voluntary conversion

The Company offers a monthly conversion facility pursuant to which holders of ordinary shares of one class may convert such shares into ordinary shares of any other class, subject to regulatory considerations.

Such conversion is effected on the basis of the ratio of the NAV per class to be converted (calculated in Euro less the costs of effecting such conversion and adjusting any currency hedging arrangements and taking account of dividends resolved to be paid), to the NAV per class of the shares into which they will be converted (also calculated in Euro), in each case on the relevant conversion calculation date being the first business day of the month. During the year 542 (2018: 1,435,149) Euro Shares were converted into 446 (2018: 1,236,403) Sterling Shares and 4,931,995 (2018: 149,325) Sterling Shares were converted into 5,847,668 (2018: 173,268) Euro Shares.

Treasury share convertor mechanism

At the 2016 Annual General Meeting the Company requested, and received, shareholder approval to create a mechanism whereby treasury shares held by the Company be converted from one currency denomination to another in accordance with the procedure set out in the Articles. As the conversion cannot take place while the treasury shares are held by the Company, it was proposed that a facility be created so that some or all of the treasury shares be sold to a related party, who would be willing to facilitate the conversion of the treasury shares from one currency denomination to another. The treasury share convertor mechanism was put in place to provide the Company with a means of converting one class into another to meet demand in the market from time to time.

Accordingly, on the 11 September 2017, the Company established the Trust, a business purpose trust established under Jersey law. The purpose of the Trust is the facilitation of the conversion of the treasury shares by the incorporation of a company, the Conversion Vehicle, who would purchase treasury shares from the Company, convert them into shares of the other currency denomination and sell those converted shares back to the Company. The Chairman of the Company was appointed as the enforcer of the Trust.

On 21 June 2018, the Company announced the sale of 41,564,426 Euro treasury shares to the Conversion Vehicle, which completed on 22 June 2018. Subsequently, the Company issued a facilitation request pursuant to the Share Subscription, Conversion and Repurchase Agreement to the Conversion Vehicle requiring the Conversion Vehicle to convert those 41,564,426 Euro Shares held by it into Sterling Shares. The 41,564,426 Euro Shares were converted into 35,477,357 Sterling Shares at a ratio of 0.853551, calculated in accordance with the share conversion provisions appearing in the Company's Articles.

On 28 June 2018 the conversion process was completed, with the Company purchasing 35,477,357 Sterling Shares from the Conversion Vehicle and holding them in treasury. The transactions had no material impact on the Company's liquidity or NAV.

The treasury share convertor mechanism was not utilised during the year ended 31 December 2019.

Contractual Quarterly Tender facility

As the Company has been established as a closed-ended vehicle, there is no right or entitlement attaching to the ordinary shares that allows them to be redeemed or repurchased by the Company at the option of the shareholder.

The Company has, however, established a Contractual Quarterly Tender facility that enables shareholders to tender their shares in the Company in accordance with a stated contracted mechanism.

T he Directors believe that the Company's Contractual Quarterly Tender facility serves to provide shareholders with additional liquidity when compared with other listed closed-ended investment companies.

The offer of Contractual Quarterly Tenders is subject to annual shareholder approval and subject to the terms, conditions and restrictions as set out in the Company's prospectus. The Company is subject to annual shareholder approval to tender each quarter for up to 24.99 per cent. of the shares of such class in issue at the relevant quarter record date, (being the date on which the number of shares then in issue will be recorded for the purposes of determining the restrictions), subject to a maximum annual limit of 50 per cent. of the shares of such class in issue.

However, it is important to note that Contractual Quarterly Tenders, if made, are contingent upon certain factors including, but not limited to, the Company's ability to finance tender purchases through submitting redemption requests to the Investment Vehicle to redeem a pro rata amount of Company Investment Vehicle Interests.

Factors, including restrictions at the Investment Vehicle level on the number of PECs which can be redeemed, may mean that sufficient Company Investment Vehicle Interests cannot be redeemed and, consequently, tender purchases in any given quarter may be scaled back on a pro rata basis.

Shareholders should therefore have no expectation of being able to tender their shares to the Company successfully on a quarterly basis.

In addition to the Contractual Quarterly Tender facility, the Directors seek annual shareholder approval to grant them the power to make ad hoc market purchases of shares. If such authority is subsequently granted, the Directors will have complete discretion as to the timing, price and volume of shares to be purchased. Shareholders should not place any reliance on the willingness or ability of the Directors so to act.

In the absence of the availability of the Contractual Quarterly Tender facility shareholders wishing to realise their investment in the Company will be required to dispose of their shares on the stock market.

Accordingly, shareholders' ability to realise their investment at any particular price and/or time may be dependent on the existence of a liquid market in the shares.

Liquidity risks associated with the Contractual Quarterly Tender facility are set out in note 8.2.

During the year 3,240,007 (2018: 3,933,116) Euro Shares and 35,151,239 (2018: 39,701) Sterling Shares were redeemed as part of the Contractual Quarterly Tender facility and subsequently held by the Company in the form of treasury shares. Refer above for details. Treasury shares do not carry any right to attend or vote at any general meeting of the Company. In addition, the Contractual Quarterly Tenders and the voluntary conversion facility are not available in respect of Treasury shares.

Dividends

The ordinary shares of each class carry the right to receive all income of the Company attributable to such class of ordinary share, and to participate in any distribution of such income made by the Company and within each such class such income shall be divided pari passu among the shareholders in proportion to the shareholdings of that class. During the year ended 2019, the Company declared and paid dividends based on the investment income received from the Investment Vehicle during the year.

The Company issued 788,357 Euro Shares and 107,011 Sterling Shares during the year ended 31 December 2019 under its scrip dividend scheme.

Please refer below for amounts recognised as dividend distributions to ordinary shareholders in the years ended 31 December 2019 and 31 December 2018.

	Ex-dividend date	Payment date	£ equivalent	€
Euro - €0.01375 per share¹	07/02/2019	22/03/2019	-	1,732,898
Sterling - £0.01375 per share¹	07/02/2019	22/03/2019	4,720,204	5,383,474

Euro - €0.01375 per share¹	02/05/2019	14/06/2019	-	1,757,953
Sterling - £0.01375 per share¹	02/05/2019	14/06/2019	4,626,240	5,276,307

Euro - €0.01375 per share¹	01/08/2019	13/09/2019	-	1,762,683
Sterling - £0.01375 per share¹	01/08/2019	13/09/2019	4,879,038	5,564,627

Euro - €0.01375 per share¹	07/11/2019	29/11/2019	-	1,796,676
Sterling - £0.01375 per share¹	07/11/2019	29/11/2019	4,492,156	5,123,375
				28,397,993

¹ - Recognised in the year ended 31 December 2019

	Ex-dividend date	Payment date	£ equivalent	€
Euro - €0.01375 per share²	01/02/2018	16/03/2018	-	1,699,464
Sterling - £0.01375 per share ²	01/02/2018	16/03/2018	4,086,727	4,618,959

Euro - €0.01375 per share²	03/05/2018	15/06/2018	-	1,667,639
Sterling - £0.01375 per share ²	03/05/2018	15/06/2018	4,137,625	4,676,487

Euro - €0.01375 per share²	09/08/2018	21/09/2018	-	1,677,370
Sterling - £0.01375 per share ²	09/08/2018	21/09/2018	4,508,799	5,095,986

Euro - €0.01375 per share²	01/11/2018	14/12/2018	-	1,723,034
Sterling - £0.01375 per share ²	01/11/2018	14/12/2018	4,666,856	5,274,564
				26,433,503

² - Recognised in the year ended 31 December 2018

Please refer to note 16 for further information subsequent to the reporting period.

Loss per share

	31 December 2019	31 December 2019	31 December 2018	31 December 2018
	£ equivalent	€	£ equivalent	€
Euro Shares
Decrease in net assets for the year	-	(3,998,326)	-	(6,726,758)
Results per share	-	(0.031196)	-	(0.054283)

Sterling Shares
Decrease in net assets for the year	(9,412,859)	(10,735,528)	(15,188,962)	(17,167,042)
Results per share	(0.027353)	(0.031196)	(0.048028)	(0.054283)

Loss per share has been calculated on a weighted average basis. The weighted average number of ordinary shares held during the year ended 31 December 2019 was 472,293,052 (2018: 440,169,556), comprising 128,166,181 (2018: 123,919,771) Euro Shares and 344,126,871 (2018: 316,249,785) Sterling Shares.

There have been no transactions involving the Company's Euro or Sterling Shares between 1 January 2020 and 11 March 2020 other than those disclosed in note 16, which were issued at a premium to the 31 December 2019 NAV.

13. Net asset value per ordinary share

	31 December 2019	31 December 2019	31 December 2018	31 December 2018
	£ equivalent	€	£ equivalent	€

Euro Shares
NAV	-	131,442,171	-	130,913,946
NAV per ordinary share	-	1.0013	-	1.0404

Sterling Shares
NAV	343,618,405	405,882,060	366,589,934	408,051,256
NAV per ordinary share	1.0534	1.2443	1.0762	1.1979

Net assets attributable to shareholders	-	537,324,231	-	538,965,202

NAV per share has been calculated based on the share capital in issue as at year end, excluding shares held in treasury. The issued share capital as at 31 December 2019 comprised of 131,275,614 Euro Shares (31 December 2018: 125,830,138) and 326,202,252 Sterling Shares (31 December 2018: 340,632,066).

14. Reconciliation of liabilities arising from financing activities

	2019	2018
	€	€
Opening Balance	538,965,202	507,678,132

Cash flow movements
Proceeds from issuance and subscriptions arising from conversion of ordinary shares	39,955,230	66,177,156
Payments from redemption of ordinary shares	(52,293,084)	(6,128,436)
Placing programme costs	(475,182)	(97,037)
Share issue costs paid	(336,348)	(628,236)
Dividends paid	(28,397,993)	(26,433,503)

Non cash flow movements
Decrease/(increase) in placing programme payables	172,074	(172,074)
Foreign currency exchange loss/(gain) on ordinary shares	25,430,737	(4,867,850)
Profit before finance costs and taxation	14,303,595	3,437,050
Closing Balance	537,324,231	538,965,202

15. Related party disclosure

The Directors are entitled to remuneration for their services and certain Directors hold Sterling shares in the Company. Please refer to note 6 for further detail.

Transactions between the Company and the Trust and Conversion Vehicle are disclosed in note 4 and 12.

Richard Boleat acts as the enforcer of the Trust, a business purpose trust established under Jersey law and settled by the Company. The role has arisen as a result of the implementation of the resolution passed at the Company's Annual General Meeting on 4 April 2016 which authorised the Company to make arrangements to enable the conversion of treasury shares held by the Company from time to time from one currency denomination to another. The position is unremunerated and represents an alignment of interests with those of the Company.

As at 31 December 2019, Quilter plc beneficially held 107,072,086 (20.87%) of the voting rights of the Company and therefore was considered to be in a position of significant influence. On 25 February 2020, the Company announced that it had received notification that Quilter plc's percentage of total voting rights had decreased to 1.80%. At this time, Quilter plc was no longer considered to be in a position of significant influence.

The below information regarding select related party disclosures for the Investment Vehicle has been included for information purposes only.

During the year, there were EUR 29 million (31 December 2018: EUR 2.7 million) of buy transactions from, or purchases into, and EUR 99.7 million (31 December 2018: EUR 3.3 million) of sell transactions with, or sales out of, other CVC Credit Partners managed investment vehicles.

During 2019, the Investment Vehicle subscribed for EUR 128.7 million (31 December 2018: EUR 66.4 million) and redeemed EUR 102.3 million (31 December 2018: EUR 63.5 million) debt securities in sixteen companies where CVC Capital Partners also had an interest (31 December 2018: twelve companies). These positions were entered into pari passu with third party investors. The holdings of the Investment Vehicle in companies where CVC Capital Partners also had an interest amounted to EUR 157.6 million as at 31 December 2019 (31 December 2018: EUR 123.7 million).

16. Material events after the Statement of Financial Position date

Management has evaluated subsequent events for the Company through 11 March 2020, the date the financial statements were available to be issued, and has concluded that the material events listed below do not require adjustment of the financial statements.

Sale of treasury shares

On 7 February 2020, the Company sold 100,000 Euro treasury shares at a price of € 1.0063 per Euro treasury share.

On 17 February 2020, the Company sold 250,000 Euro treasury shares at a price of € 1.0063 per Euro treasury share.

Ordinary share conversion

On 16 December 2019, the Company announced it had received applications from shareholders to convert 500,000 Sterling Shares into Euro Shares on 31 January 2020. On 27 January 2020, the Company subsequently announced the applicable conversion ratio was 1.241554 Euro Share per Sterling Share and that an application will be made for the admission of 620,777 Euro Shares to the Official List of the UKLA and to be admitted to trading on the main market of the London Stock Exchange. Dealings in the shares will commence on 31 January 2020.

On 20 January 2020, the Company announced it had received applications from shareholders to convert 340,000 Sterling Shares into Euro Shares. On 21 February 2020, the Company subsequently announced the applicable conversion ratio was 1.256415 Euro Share per Sterling Share and that an application will be made for the admission of 427,181 Euro Shares to the Official List of the UKLA and to be admitted to trading on the main market of the London Stock Exchange. Dealings in the shares will commence on 28 February 2020.

Contractual quarterly tender

In accordance with the announcement made on 15 November 2019 where the Company announced it had received applications from shareholders to tender 76,796,296 Sterling Shares and 2,455,926 Euro Shares under the December 2019 Contractual Quarterly Tender, the Company, on 23 January 2020, announced a tender price per share of £1.0434 and € 0.9913 respectively. On 14 February 2020, the December 2019 Contractual Quarterly Tender completed with 76,796,296 Sterling Shares and 2,455,926 Euro Shares being repurchased and transferred into the Company's name and held as treasury shares.

On 10 February 2020, the Company announced it had received applications from shareholders to tender 1,804,283 Euro Shares and 14,871,329 Sterling Shares under the March 2020 Contractual Quarterly Tender.

Dividend declaration

On 27 January 2020, the Company declared a dividend of £0.01375 per Sterling Share and €0.01375 per Euro Share payable on 28 February 2020 to shareholders on the register as at 7 February 2020.

Holdings in the Company

On 25 February 2020, the Company announced that it had received notification that Quilter plc's percentage of total voting rights had decreased to 1.80%.

17. Controlling party

In the Directors' opinion, the Company has no ultimate controlling party.

USEFUL INFORMATION FOR SHAREHOLDERS (UNAUDITED)

Alternative performance measures disclosure

In accordance with ESMA Guidelines on APMs the Board has considered what APMs are included in the Annual Financial Report and financial statements which require further clarification. An APM is defined as a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework. APMs included in the financial statements, which are unaudited and outside the scope of IFRS, are deemed to be as follows:

NAV total return vs benchmark

The NAV total return measures how the NAV per Euro Share and Sterling Share has performed over a period of time, taking into account both capital returns and dividends paid to shareholders. The Company quotes NAV total return as a percentage change from the initial issuance of Euro and Sterling Shares to 31 December 2019. It assumes that dividends paid to shareholders are reinvested back into the Company therefore future NAV gains are not diminished by the paying of dividends.

The Board monitors the Company NAV total return against the Credit Suisse Western European High Yield Index (hedged in Euros) Total Return and Credit Suisse Western European Leveraged Loan Index (hedged in Euros) Total Return.

Please refer above for NAV total return vs benchmark analysis.

NAV to market price discount

The NAV per share is the value of the Company's assets, less any liabilities it has, divided by the total number of Euro and Sterling Shares. However, because the Company ordinary shares are traded on the London Stock Exchange's Main Market, the share price may be higher or lower than the NAV. The difference is known as a premium or discount. The Company's premium or discount to NAV is calculated by expressing the difference between the period end respective share class price (bid price) and the period end respective share class NAV per share as a percentage of the respective NAV per share.

At 31 December 2019, the Company's Euro Shares and Sterling Shares traded at €0.9550 (2018: €1.0600) and £0.9820 (2018: £1.0750) respectively. The Euro Shares traded at 4.62% discount (2018: 1.88% premium) to the NAV per Euro Share of €1.0013 (2018: €1.0404) and the Sterling Shares traded at a 6.78% discount (2018: 0.11% discount) to the NAV per Sterling Share of £1.0534 (2018: £1.0762).

Ongoing charges

The ongoing charges ratio for the year ended 31 December 2019 was 1.19% (2018 restated¹: 1.19%). The Company has chosen the AIC's methodology for calculating an ongoing charges figure. The Company's ongoing charges ratio is based on annualised ongoing charges of €6,542,520 (2018 restated: €6,367,684) divided by average NAV in the period of €549,430,274 (2018: €536,557,740).

Calculating ongoing charges

The ongoing charges are based on actual costs incurred in the year excluding any non-recurring fees in accordance with the AIC methodology. Expense items have been excluded in the calculation of the ongoing charges figure when they are not deemed to meet the following AIC definition:

"Ongoing charges are those expenses of a type which are likely to recur in the foreseeable future, whether charged to capital or revenue, and which relate to the operation of the investment company as a collective fund, excluding the costs of acquisition/disposal of investments, financing charges and gains/losses arising on investments. Ongoing charges are based on costs incurred in the year as being the best estimate of future costs."

With the exception of the Investment Vehicle management fee, the Company's ongoing charge does not reflect any other costs of the Investment Vehicle².

¹ - R efer below for details of the revised ongoing charges methodology and the restatement of the ongoing charges ratio for 2018.

Revised ongoing charges methodology

In prior periods, the Company has incorporated the Investment Vehicle management fee in the Company's ongoing charges ratio based on the Company's proportional holding of PECs in the Investment Vehicle as at the reporting date.

As the Investment Vehicle management fee is calculated and is payable by the Investment Vehicle on a monthly basis, the Board considers that a fairer presentation is to include the management fee based on the Company's proportional holding of PECs in the Investment Vehicle throughout the period.

The Board has adopted this revised methodology to the ongoing charges calculation and, for comparability, has restated the Investment Vehicle management fee included within the 2018 ongoing charges calculation from €4,689,573 to €5,324,489. Accordingly, the restated 2018 ongoing charges ratio is 1.19%.

Please refer below for ongoing charges reconciliation for the years ended 31 December 2019 and 31 December 2018:

	31 December 2019 €	31 December 2018 (restated) €
Total operating expenses for the year:	1,236,885	1,214,447
Expenses excluded from the calculation of ongoing charges figures, in accordance with AIC's methodology:
Professional fees	(39,435)	(148,674)
Sundry expenses	(119,056)	(22,578)
Total ongoing charges for the year (excluding Investment Vehicle management fee)	1,078,394	1,043,195
Add: Investment Vehicle management fee²	5,464,126	5,324,489
Total ongoing charges for the year (including Investment Vehicle management fee)	6,542,520	6,367,684

² The Company's ongoing charge includes €5,464,126 (2018 restated: €5,324,489) which represents the Company's pro-rated share of the Investment Vehicle's management fee, based on the Company's percentage holdings of PECs in the Investment Vehicle throughout the period.

Calculating an average NAV

The AIC's methodology for calculating average NAV for the purposes of the ongoing charges figure is to use the average NAV at each official NAV calculation date. On this basis the average NAV figure has been calculated using the monthly NAVs throughout the year ended 31 December 2019.

GLOSSARY

Administrator		BNP Paribas Securities Services S.C.A., Jersey Branch

Advisor fees		Cost of services provided by Mr Justin Atkinson to assist with the marketing and promotion of the Company's shares

AGM		Annual General Meeting

AIC		Association of Investment Companies

AIC Code		AIC Code of Corporate Governance, February 2019

AIFM		Alternative Investment Fund Manager

APMs		Alternative Performance Measures

Auditor		Ernst & Young LLP

Borrowing Limit		Up to an amount equal to 100 per cent of the NAV of the Investment Vehicle at the time of borrowing

CLOs		Collateralised Loan Obligations

Company		CVC Credit Partners European Opportunities Limited

Conflicts Committee		CVC Credit Partners Conflicts Committee

Continuation Resolution		An ordinary resolution proposed by the Directors that the Company continue its business as a closed-ended investment company

Conversion Vehicle		Conversion SPV Limited

Compartment		Compartment A of the Investment Vehicle

Credit Opportunities		Refers to investments where the Investment Vehicle Manager anticipates an event in a specific credit is likely to have a positive impact on the value of its investment. This may include events such as a repayment event before maturity, a deleveraging event, a change to the economics of the instrument such as increased margin and/or fees or fundamental or sentiment driven change in the value. The Investment Vehicle Manager seeks relative value opportunities which involve situations where market technicals have diverged from credit fundamentals often driven by selling by mandate constrained investors, CLO managers or hedge funds rebalancing their portfolios, macro views affecting different credit instrument types or sales by banks. The Investment Vehicle Manager has additional flexibility compared to mandate constrained capital and believes these assets have potential for capital gains and early cash flow generation based on the acquisition prices
CVC Group		CVC Group being the Investment Vehicle Manager and CVC Credit Partners Group Holding Foundation, together with its direct and indirect subsidiaries and their respective affiliates and excluding any funds managed and/or advised by the CVC Group

DTRs		Disclosure Guidance and Transparency Rules

FRC		Financial Reporting Council

IFRS 13		IFRS 13 - Fair Value Measurement

IPO		Initial Public Offering on 25 June 2013

Investment Limits		As defined within the section entitled "Company asset allocation" above

Investment Vehicle		CVC European Credit Opportunities S.à r.l.

Investment Vehicle Manager		CVC Credit Partners Investment Management Limited

KIDs		Key Information Documents

KPIs		Key Performance Indicators

NAV		Net Asset Value

NPPRs		National Private Placement Regimes

Original Placing Price		£1.00 and €1.00 per share

PEC's		Preferred Equity Certificates

Performing Credit		Generally refers to senior secured loans and senior secured high yield bonds sourced in both the primary and secondary markets. The investment decision is primarily driven by a portfolio decision around liquidity, cash yield and volatility

Trust		CCPEOL Purpose Trust

UK Code		The UK Corporate Governance Code 2018

Viability Statement		A statement made by the Directors explaining how they assessed the prospects of the Company, over which period they have done so and why they consider that period to be appropriate

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CVC Income & Growth Limited NPV GBP (CVCG)

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Registered Office		Advocates to the Company
IFC1, The Esplanade		(as to Jersey law)
St Helier, Jersey JE1 4BP		Bedell Cristin 26 New Street St Helier, Jersey JE2 3RA

Investment Vehicle Manager		Custodian
CVC Credit Partners Investment Management Limited		BNP Paribas Securities Services S.C.A., Jersey Branch
111 Strand, London WC2R 0AG		IFC1, The Esplanade St Helier, Jersey JE1 4BP

Corporate Services Manager		Auditor
CVC Credit Partners Investment Services Management Limited		Ernst & Young LLP 25 Churchill Place
1 Waverly Place, Union Street St Helier, Jersey JE1 1SG		Canary Wharf London, E14 5EY

Corporate Brokers		Administrator and Company Secretary
Goldman Sachs International Peterborough Court, 133 Fleet Street		BNP Paribas Securities Services S.C.A., Jersey Branch
London EC4A 2BB		IFC1, The Esplanade St Helier, Jersey JE1 4BP
Winterflood Securities Limited The Atrium Building Cannon Bridge House 25 Dowgate Hill London EC4R 2GA		BNP Paribas Securities Services S.C.A. Jersey Branch is regulated by the Jersey Financial Services Commission.
Solicitors to the Company		Registrar
(as to English law)		Computershare Investor Services (Jersey)
Herbert Smith Freehills LLP Exchange House Primrose Street London EC2A 2EG		Limited Queensway House Hilgrove Street St Helier Jersey JE1 1ES