Half-year Report

RNS Number : 2721A

CVC Credit Partners European Opps.

28 September 2020

CVC Credit Partners European Opportunities Limited

Half Yearly Results Announcement for the period ended 30 June 2020

HALF YEARLY BOARD report

chairman's statemenT

Introduction

I am pleased to have the opportunity to report to you on the Company's performance in H1 2020, a period of time that is without precedent for reasons that I do not need to state. NAV total returns for the Sterling and Euro share classes issued by the Company for the period were -7.95% and -8.45% respectively. Allocations to the Company's two sub-strategies, being performing credit and credit opportunities, ended the period at 38.1% (61.3% at 31 December 2019) and 61.9% (38.7% at 31 December 2019), the sharp movements in risk allocations arising from the very substantial dislocations seen across risk asset markets during the period.

Performance in Context

The Company's portfolio entered 2020 defensively positioned, which caused a drag on relative performance as markets tracked higher through January and February, but then protected performance as markets fell sharply as Covid-19 progressed from being a largely domestic Chinese concern into a global pandemic in short order. As is inevitable in such a situation, asset class performance became much more closely correlated and liquidity became scarce. The Investment Vehicle Manager's response to these events was principally focussed on seeking to protect the portfolio by reallocating to defensive assets, a strategy that worked well. The Investment Vehicle Manager's report below provides much more detail. The negative impact on the Company's performance was nevertheless significant, as shown in the performance statistics above.

Current Market Conditions and Outlook

Performance of risk assets as a whole since 30 June has been startling. Investors will be aware of the headline performance of US equity indices, and leveraged credit assets have also experienced a strong rally. This is evident in the Company's most recent estimated net asset value per share announcement as at 11 September 2020, which show Sterling and Euro Share class net asset value per share at £0.9790 and €0.9208 respectively, which are approximately 8% below those metrics at 31 December 2019, having been as much as 22.15% below those levels as recently as 3 April 2020. It is certainly the case that levered issuers have suffered less in terms of performance and balance sheet damage than markets were anticipating during Q2, but much of the credit for the rally in risk assets generally must go to the willingness and ability of developed market central banks to provide stimulus and liquidity under what has become known as the "whatever it takes" model. It is hard to see how central banks might go about meaningfully withdrawing the current levels of stimulus and support without creating "cliff edge" risks for their economies, particularly noting the current acceleration of Covid-19 prevalence in Europe, so our base case is that the status quo will be maintained in the short to medium term, providing ongoing support to credit markets.

Corporate Activities & Liquidity

At the Company's annual general meeting in May 2020, shareholders supported the Company's proposals to provide greater flexibility in the application of the Company's tender program to take account of tightening market liquidity, such that a reduction in the level of quarterly tender acceptance could be imposed in the event that market liquidity was constrained at the relevant period ends. Pleasingly, no such restriction has been necessary and all tenders submitted for Q2 2020 were met in full. Market liquidity is presently such that the board does not anticipate the imposition of any discretionary restriction for the Q3 2020 tender and thereafter, but of course this guidance is qualified to the extent that liquidity tightens as a result of unforeseen and unforeseeable developments in the prevalence of Covid-19 and indeed other potential extreme market impactful events.

Distribution Policy

On 24 April 2020, the Company published the following announcement: "The impact of the Covid-19 epidemic on markets as a whole and leveraged credit markets in particular has served to reconfirm the Board's view that it is desirable to reassess the Company's dividend distribution basis. As a result, and after detailed discussion with the Investment Vehicle in respect of sustainability in the medium term, the Board has determined with immediate effect to reset the Company's dividend target at 4 pence per sterling share / 4 cents per Euro share for the next 12 months. For the avoidance of doubt, the Board's previously stated medium term total return target of 8%, remains unchanged. It is the board's intention to seek to restore the annual dividend target to the previous level in due course if market conditions so justify." The Board has given full and detailed consideration to the Company's distribution policy in the light of the performance of the Investment Vehicle's underlying portfolio, its base case assumptions for the near term, and the Company's regulatory obligations, and has concluded that an increase to the Company's dividend target to 4.5 pence per Sterling Share / 4.5 cents per Euro Share is appropriate and warranted. This increase will take effect from the next dividend declaration date. The distribution policy will be kept under review as performance and market conditions dictate.

Corporate Governance and Social Responsibility Considerations

The board's focus during Q2 and through the summer has inevitably been orientated toward Covid-19 prevalence, its impact on leveraged credit markets and the consequences for the Company's performance and its capital management and distribution policies. Notwithstanding this, good progress has been made in developing and enhancing the Company's social responsibility policies and reporting, particularly in relation to climate change reporting, and I would draw the content of the report below to your attention in that regard. In formulating the Company's approach in this area, the board has been assisted by the team at BSR, a leading global sustainability consulting business, and I anticipate that they will continue to support the further development and refinement of the Company's sustainability and social responsibility reporting.

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 would also like to extend thanks to all of our shareholders for your continuing commitment to the Company.

Richard Boléat

Chairman

25 September 2020

executive REPORT

This Executive Report is designed to provide information about the Company's business and results for the period ended 30 June 2020. 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 period 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 and is 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 Association of Investment Companies ("AIC") and is regulated by the Jersey Financial Services Commission ("JFSC").

Significant events during the six months ended 30 June 2020

Sale of treasury shares

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

	Euro Shares	Sterling Shares
Treasury shares sold	350,000	-
Gross proceeds received	€352,205	-

Contractual quarterly tenders

The Company completed the following tenders under its Contractual Quarterly Tender mechanism during the period. 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 2019

14/02/2020

2,455,926

€0.9913

76,796,296

£1.0434

March 2020

18/05/2020

1,804,283

€0.7738

14,871,329

£0.8139

On 13 May 2020, the Company announced that it had received tender applications in respect of the June 2020 tender for 6,319,950 Euro Shares and 25,588,695 Sterling Shares. Refer to note 14 for details regarding the settlement of the June 2020 tender.

A description of the contractual quarterly tender mechanism can be found below.

Due to the Covid-19 pandemic, the Board considered it prudent to include additional powers in respect of the Contractual Quarterly Tenders June 2020 to March 2021 that would allow the Board to:

· Reduce the maximum number of shares that may be tendered for purchase in any quarter below the current limit of 24.99 per cent of the shares in issue at the relevant tender record date;

· Alter the timetable or any part thereof prospectively in respect of any quarter or quarters at any time; and

· Suspend any Contractual Quarterly Tender or the completion of any Contractual Quarterly tender for one or more quarters at any time.

The Board intends to only use these powers when it considers it appropriate and in response to the developing situation in connection with the Covid-19 pandemic.

Voluntary conversions

Following requests made by shareholders, the Company converted a total of 729,704 Euro Shares into 602,084 Sterling Shares and 1,355,238 Sterling Shares into 1,660,373 Euro Shares under the monthly conversion facility during the period ended 30 June 2020.

Dividend target

As disclosed in the Company's Annual Financial Report for the period ended 31 December 2019, the stated target annual dividend was around £0.0550 per Sterling Share and € 0.0550 per Euro Share. In the Annual Financial Report, the Company reset the medium-term total return target of the Company to 8% and noted that it would be considering 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.

On 24 April 2020, the Company announced that the impact of Covid-19 on markets as a whole and leveraged credit markets in particular had confirmed the Board's view (expressed in its Annual Financial Report for the year ended 31 December 2019) that it was desirable to reassess the Company's dividend distribution basis. As a result the Board determined to reset the annual dividend target to € 0.0400 per Euro Share and £0.0400 per Sterling Share for the next 12 months, however when market conditions allowed, it would seek to restore the annual dividend target to the previous total. The Company's previously stated medium term total return target of 8% remains unchanged.

Dividends

The Company announced and paid two quarterly dividends totalling € 0.02750 and £ 0.02750 (30 June 2019: € 0.0275 and £ 0.0275 ) per Euro Share and Sterling Share respectively in the period ended 30 June 2020. Refer to note 11 for full details of each quarterly dividend.

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 30 June 2020:

10,278,799 Euro Shares (31 December 2019: 6,368,590 Euro Shares)

141,774,763 Sterling Shares (31 December 2019: 50,107,138 Sterling Shares)

Excluding shares held in treasury, the Company had the following number of shares in issue as at 30 June 2020:

128,296,074 Euro Shares (31 December 2019: 131,275,614 Euro Shares)

233,781,473 Sterling Shares (31 December 2019: 326,202,252 Sterling Shares)

Each Euro Share holds 1 voting right, and each Sterling Share holds 1.17 voting rights. As at 30 June 2020, the total number of voting rights of the Euro Shares of no par value is 128,296,074 (31.93%) and of the Sterling Shares is 273,524,323 (68.07%). The total number of voting rights in the Company is 401,820,397.

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 wider society.

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 European corporate debt instruments.

Investment Policy

The Company's investment policy is to invest predominantly in debt instruments issued by companies domiciled, 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 limits (the "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 "borrowing limit"). The Investment Vehicle's borrowings as a percentage of the Company's NAV¹ 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 30 June 2020, the Company did not have any borrowings (31 December 2019: 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 cash flow;

(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 Group² 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 Europe³.

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

1. Performing Credit⁴; and

2. Credit Opportunities⁵.

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 30 June 2020 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 Half Yearly Financial Report, Richard Boléat held 10,000 Sterling Shares in the Company, Stephanie Carbonneil held 10,200 Sterling Shares in the Company, Mark Tucker held 30,000 Sterling Shares in the Company and David Wood held 14,492 Sterling Shares in the Company

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

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 and emerging risks facing the Company including those which would threaten its business model, future performance, solvency or liquidity. The following principal and emerging risks have been identified and are listed below.

Principal risks

Covid-19

The Company is exposed to 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.

Since the start of the Covid-19 pandemic, governments and central banks in Europe and the United States have engaged in a concerted series of policy steps which have sought to provide financial support to business. These steps have included further monetary policy loosening, provision of capital markets liquidity and direct and indirect support for business through subsidised and guaranteed lending schemes, grants to support employment and other measures. Any significant withdrawal of such features in the absence of a sustainable long term solution to the impacts of the pandemic has the potential to cause material negative consequences on the financial condition of individual issuers and the liquidity of the markets in which the Company invests.

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.

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.

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.

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.

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.

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 11, which could result in the NAV of the Company falling below €75 million and as such, triggering the requirement for the Directors to convene an extraordinary general meeting to 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.

Emerging risks

Brexit

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.

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.

Environmental Social Governance ("ESG")

There is a risk of reputational damage to the Company that may arise from ESG-related factors or from disclosures failing to meet the standard expected by the Company's stakeholders.

Financial losses stemming from climate-related factors present a risk that may materially impact 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 presents a risk that may adversely impact the share price of the Company.

Taxation

There is a risk that revisions to the taxation of the Investment Vehicle through the introduction and implementation of new or amended tax legislation will impact its ability to continue to deliver current after-tax returns to the Company.

Information on how these risks are managed is given in the Annual Financial Report for the year ended 31 December 2019. In the view of the Board these principal risks and uncertainties are as applicable to the remaining six months of the current financial year as they were in the six months under review.

The Company may be exposed to certain risks that are not disclosed within the Annual Financial Report as they are not sufficiently significant to be considered principal risks. The Company is not necessarily free from any such risks but mitigates them in accordance with its risk management framework.

Events after the reporting date

The Directors are not aware of any developments that might have a significant effect on the operations of the Company in subsequent financial periods not already disclosed in this report or the attached condensed financial statements.

Covid-19

2020 thus far has seen an increase in the volatility of global financial markets primarily due to the Covid-19 pandemic, which has resulted in global economic disruption and largely resulted in a NAV total return decline of 8.45%, in respect of the Euro Share Class, and 7.95%, in respect of the Sterling Share Class, of the Company for the six month period 30 June 2020. Whilst the continued impact of Covid-19 is difficult to estimate, its effects may continue to adversely affect economies globally and, in particular, the underlying issuers in which the Investment Vehicle invests and thereby, the Company's own NAV.

Both the Board and the Investment Vehicle Manager are actively monitoring the situation and are in frequent dialogue on the subject. The Investment Vehicle Manager continues to manage the Investment Vehicle's investments in line with the investment strategy and has commented on the impact of Covid-19 in the Investment Vehicle Manager's report below.

Further to the going concern statement below, the Board are confident that the Company has sufficient liquid resources at its disposal to remain a going concern. Both the Board and the Investment Vehicle Manager will continue to monitor the situation and take any necessary relevant steps in order to guide the Company through this period of exceptional volatility.

Going concern

Under the AIC Code of Corporate Governance ("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 as at the date of approval of this Half Yearly Financial Report.

The Directors have given regard to the ongoing impact of Covid-19 and are actively monitoring its potential impact on the Company, the Investment Vehicle and the underlying portfolio. In performing the going concern assessment, the Directors have:

· Assessed the current position and performance of the Company;

· Assessed the impact of a reduction to investment income received from the Investment Vehicle;

· Assessed the effect of continuing to operate the Contractual Quarterly Tender mechanism; and

· Performed inquiries of the Investment Vehicle Manager, the Administrator and the Registrar on their ability to execute business continuity plans in order to continue providing services to the Company.

Based on the results of the above assessments and inquiries, the Directors do not believe Covid-19 creates a material uncertainty over the Company continuing as a going concern.

In addition, after reviewing the Company's budget and cash flow forecast for the next twelve months, the Directors are satisfied that, at the time of approving these condensed 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 condensed financial statements.

The Directors consider it appropriate to adopt the going concern basis in preparing this Half Yearly Financial Report.

Climate-related financial disclosures

The Company has been a formal supporter of the Task Force for Climate Related Financial Disclosures ("TCFD") recommendations since 2018 as it believes that climate change will have material impacts on the financial performance of companies in which the IVM invests or in the universe of companies in which the IVM may invest.

The Company is at the beginning of its TCFD implementation journey and expects full implementation to be a multi-year process in order to fully implement the TCFD recommendations. During this period, collaboration with the IVM is a key area of work in order to facilitate the integration of climate-related risks and opportunities into the IVM's investment processes.

The Company plans to report on its progress in this regard twice a year - through its Half Year and Annual Financial Reports.

Governance

The Company will integrate climate-related risks into its governance structure and has identified the following initial steps that it will take during the next 12 months:

· Increase awareness of climate-related risks and opportunities to the Board to enhance its effectiveness in engaging with the IVM on these topics. The Company will add climate change as an item under the Board of Directors' continued professional development in line with the Board's belief that climate-related risks and opportunities are key developments in the credit industry that the Directors should keep up-to-date with.

· Include climate as a priority agenda topic in discussions with the Investment Vehicle Manager at each quarterly board meeting with a view to better understanding the climate-related risks and opportunities present in the investment portfolio of the Investment Vehicle.

· Receive regular climate-related policy and regulation updates from independent specialists to allow early compliance with changes in regulations and best practice guidance.

Strategy

The Company's climate-related risks and opportunities are closely linked to those of the Investment Vehicle. Therefore, the Company has been engaging with the IVM in order to better understand and monitor climate-related risks and opportunities. It started by reviewing the IVM's ESG policies and understanding the extent to which the IVM is integrating climatic and ESG considerations into its due diligence and decision-making process.

The Company plans to continue its collaboration with the IVM and to encourage further collaboration and engagement of the IVM with investee companies in order to better understand the climate-related risks and opportunities embedded within the Investment Vehicle's investment portfolio.

Risk Management

In mid-2020, the Company shared guidance and resources with the IVM to identify, assess and manage climate-related risks and opportunities. It also included a framework for the IVM to initiate a top-down approach to identify and better manage climate-related risks and opportunities at a sector level throughout the investment portfolio. This included the following:

· First, the Company established a common typology of physical (including extreme events such as hurricanes) and transitional risks (including policy and legal shifts) using the TCFD's risk classification.

· Second, the Company provided a framework to the IVM to conduct a high-level climate-related risk and impact assessment of its underlying positions, thereby showing which TCFD risks are material and for which sectors.

The Company is aware that climate-related changes present risks and opportunities for the IVM, that the degree and mechanism by which they do may be material and may vary by strategy, investment holding period, sector type and at the underlying investee company level. The framework the Company has provided to the IVM gives the IVM guidance on diligencing current and potential investee companies on their physical and transitional climate-related risks and how they are being managed. The Company has also provided resources, including industry reports, guidance, and identified third-party data providers that the IVM can consult in developing its approach of climate-related risk management.

The Company will continue to work with the IVM in developing plans to mitigate material climate-related risks and the Company expects the IVM to incorporate these mitigants into its investment processes.

Metrics & Targets

The Company is prioritising tracking climate-related risks and opportunities in the investment portfolio of the Investment Vehicle. The Company plans to work with the IVM to request portfolio companies report and disclose their operational (Scope 1 and 2) greenhouse gas emissions along with their plans to reduce these emissions. The Company recognizes the importance of value chain (Scope 3) emissions; however due to the higher complexity of quantifying Scope 3, the Company will prioritize Scope 1 and 2 and over the medium to longer term request Scope 3 emissions data from portfolio companies.

Given the type and structure of the Company, the Board believes that the Company's own impact is minimal.

Looking forward

The approach described above covers the assets of the Investment Vehicle. The Company recognises that enhancements to this approach will be needed in areas where the data to conduct the necessary analysis is currently limited, or where the tools available to the IVM remain in a nascent stage of development. This applies to the evaluation of physical and transitional climate-related risks. These are challenges the Company is working to resolve and progress over time will be reported in the Company's Annual and Half Year Financial Reports. In response to these challenges, the company has laid out the following steps to take its commitment to TCFD recommendations further:

· The Company has identified investors' initiatives (e.g., Climate Action 100+, UK and US SIF, PRI's Transition Pathway Initiative) to be important avenues to increase its understanding and deepen its risk mitigation strategy. The Company has begun to explore participation in these groups.

· The Company will continue engaging with the IVM to identify, assess and better manage climate-related risks and opportunities related to the Investment Vehicle investment portfolio. The Company will do this by periodically providing resources and guidance to ensure the IVM activities are aligned with leading practices; and will provide sectorial analysis of climate-related risks and opportunities for IVM consideration.

· The Company will work with the IVM to establish metrics to measure the climate-related risks and opportunities in the portfolio (e.g., percentage of portfolio companies categorized under "higher risk" sectors, Scope 1&2 (and subsequently Scope 3) greenhouse gas emissions data of portfolio companies) and will request semi-annual reporting on these metrics in the IVM report contained in the Company's Half Year and Annual Financial Reports.

Future strategy

The Board continues to believe that the investment strategy and policy adopted by the Investment Vehicle is appropriate for and capable of meeting the Company's objectives. The overall strategy remains unchanged and it is the Directors' 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 to date of the Investment Vehicle's investments and the main trends and factors likely to affect the future development, performance and position of those investments.

¹ Pro-rated for the Company's interest in the Preferred Equity Certificates issued by the Investment Vehicle of 65.92% as at 31 December 2019 (31 December 2018: 68.91%).

² 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.

³ Source: Dealogic. Data from the period from 1 January 2017 to 30 June 2018.

⁴ "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.

⁵ "Credit Opportunities" refers to investments where the Investment Vehicle Manager anticipates an event in a specific credit situation 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.

Board members

All the Directors are non-executive.

CHAIRMAN

Richard Michael Boléat. 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

Stephanie Carbonneil, 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.

Mark Richard Tucker. 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 regulated in his personal capacity by the Jersey Financial Services Commission, is an Associate of the Chartered Institute of Bankers and 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. Appointed 20 March 2013.

David was a founding partner of CVC Cordatus (a predecessor to CVC Credit Partners Group) from 2006 until his retirement 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.

investment vehicle manager's report

Summary

The gross attribution delivered by each strategy for the first half of the year has been consistent with the risk / return profile the Investment Vehicle Manager would have expected during this period of unprecedented volatility. The market pullback was sharp, wide-spread and indiscriminate. The recovery has been more measured and asymmetrical.

The portfolio was cautiously positioned at the opening of the year, focusing on defensive high-quality names, and proactively managed early in the Covid-19 crisis, reducing risk in key sectors such as travel, leisure, gaming and retail, whilst also reducing exposure in instruments and issuers with lower liquidity.

The portfolio has rebounded strongly, with the credit opportunities segment being the key driver, whilst the performing strategy has continued to provide a resilient performance and good income. Going forward through 2020 and beyond, the Investment Vehicle Manager believes that the credit opportunities segment of the portfolio is positioned well to deliver further upside from existing levels, whilst core income will remain a key income generator.

Portfolio

As at 30 June 2020 the Investment Vehicle portfolio was invested in-line with investment policy, was diversified with 99 issuers¹ (of which a range of 40 - 60 typically represent the core drivers of performance) (31 December 2019: 83) across 29 (31 December 2019: 29) different industries and 12 (31 December 2019: 13) different countries, and had exposure of no more than 3.1% (31 December 2019: 2.7%) to any single issuer.

Portfolio Statistics²

	As at 30 June 2020	As at 31 December 2019
PercentageofPortfolioin FloatingRateAssets	86.4%	86.7%
PercentageofPortfolioin FixedRateAssets	11.9%	10.3%
Percentage of Portfolio in Other	1.7%	3.0%
W ei g h tedAveragePrice³	86.9	94.7
Y iel d toMaturity ("YTM")	10.4%	6.6%
CurrentYield	7.1%	5.7%
W ei g h tedAverageFixedRateCoupon	7.5%	7.7%
W ei g h tedAverageFloatingRate plusMargin	5.1%	4.8%

5 Largest Issuers as at 30 June 2020
Issuer	%ofGrossAssets	Industry	Country
Keter Group	3.1	Chemicals, Plastics and Rubber	Netherlands
Concordia	3.0	Healthcare and Pharmaceuticals	UK
Colouroz	2.9	Chemicals, Plastics and Rubber	Germany
Tipico	2.8	Hotels, Motels, Inns and Gaming	Germany
Civica	2.7	Electronics	UK

5 Largest Issuers as at 31 December 2019
Issuer	%ofGrossAssets	Industry	Country
Civica	2.7	Electronics	UK
Concordia	2.7	Healthcare and 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 IndustryPositions as at 30 June 2020¹
Healthcare and Pharmaceuticals	14.0%
Chemicals, Plastics and Rubber	10.4%
Retail Stores	9.4%
Hotels, Motels, Inns and Gaming	9.2%
Electronics	6.3%

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%

G e ographicalBreakdownbyissuercountry¹	As at 30 June 2020	As at 31 December 2019
UK	24.8%	24.5%
Netherlands	17.8%	13.6%
Germany	15.2%	14.5%
France	14.2%	14.3%
U.S.	13.1%	10.5%
Spain	6.2%	8.6%
Finland	2.7%	2.7%
Sweden	2.4%	1.1%
Luxembourg	2.2%	1.0%
Other	1.4%	9.2%

CurrencyBreakdown	As at 30 June 2020	As at 31 December 2019
EUR	67.5%	65.3%
USD	18.6%	20.2%
GBP	13.9%	14.5%

A sse t Breakdown	As at 30 June 2020	As at 31 December 2019
Loans (1st Lien)	68.5%	63.6%
Senior Secured Bonds	14.0%	14.3%
Cash	8.2%	11.5%
Loans (2nd Lien)	3.2%	4.2%
Structured	2.8%	4.4%
Senior Unsecured Bonds	2.7%	1.5%
Other	1.9%	3.3%
Shorts	-1.3%	-2.8%

Performance

The Euro Shares and Sterling Shares NAV total return for H1 2020 was -8.45% (31 December 2019: 1.56%) and -7.95% (31 December 2019: 3.07%) respectively. The Q2 2020 returns were 15.37% and 16.18% respectively.

By strategy: (i) The Core Income segment of the portfolio delivered -0.1% to gross⁴ portfolio performance; and (ii) the Credit Opportunities segment of the portfolio delivered a gross -7.4% return, which equates to a -13.4% gross portfolio performance contribution based on a 55% average allocation of the portfolio.

The Credit Suisse Western European Leveraged Loan Index, hedged to EUR, was down -3.80% for H1 2020, as compared to being up 5.03% for the year ended 31 December 2019. The Credit Suisse Western European High Yield Index, hedged to EUR, was down -5.77% for H1 2020, as compared to being up 11.05% for the year ended 31 December 2019.

¹ E x cludes 15 (31 December 2019: 23) 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.

⁴ Excluding fund expenses, management and performance fees.

Market Review

2020 started where 2019 left off, with improving relations between the US and China, and positive macro and micro indicators coupled with supportive Central Bank actions, all being reflected in equities and credit markets. January and early February looked like we were in for a stable grind higher.

By mid-February, it was clear that Covid-19 was no longer contained in China and was now fast becoming a global pandemic. Few assets were left untouched as investors, corporates and consumers started to understand the full extent of the impact on economies as they shut down. The Euro High Yield ("HY") and Euro Loan indices were down 15%⁵ and 14%⁶ respectively for the Q1 2020 period. In North America, U.S. High Yield was down 14%⁷, U.S. Loans were down 13%⁸ and the S&P 500 was down 20% for the same period. Credit markets hit a low on the indices on March 23rd with European HY YTD returns being as low as -19.32%.⁵ As the quarter ended, in Europe, the average loan price dropped from 97.29 at the end of February to 83.64 at the end of March⁶, this being the lowest level since Q4 2011 in the middle of the Euro crisis. Ratings bifurcation remained a key theme, with Europe Loans seeing single B asset returns for March down -14.00%, CCCs -20.39% whilst higher quality BBs were down -9.15%.⁶

Central banks and governments were quick to react, with Europe reiterating its 'Whatever It Takes' approach to providing market support and liquidity whilst governments announced guarantee programs and wide-ranging fiscal stimulus. In North America, the Fed turned to successful 2008 liquidity programs such as TALF (Term Asset-Backed Securities Loan Facility) and updated its asset purchase list to even include HY ETFs. New programs were introduced, such as the Payday Protection Program.

Q2 saw the impact of Covid-19 and the subsequent lockdown measures come through corporate earnings, GDP numbers and unemployment figures. That being said, investors were built confidence of a recovery as the united support from central banks and governments was considered, whilst better than expected quarterly performance numbers became apparent. In fact, the S&P 500 had its best quarter since Q4 1998 with a 20.5% increase and markets mostly shrugged off the resurgence in Covid-19 infections across some US states and focused on the improving macro data. In general, there was a strong rebound in employment data and PMIs (Purchasing Manager's Index) during the month, that supported both credit and equity markets.

For Q2, European Loans were up 11.89%⁶ while HY was 9.32%⁵, taking the YTD performance to -3.80%⁶ and -5.77%⁵ respectively. Within loans, the average cash price on the index ended the quarter at 92.74, up from 83.64 at the end of March but still below the 98.32 at the beginning of the year. The average price for BBs was 96.82, single Bs 94.30 and CCCs 79.43.⁶

As expected, new issues in the Loan and HY markets were significantly impacted. Total new issuance in European Loans for H1 2020 was €38.07bn (€17.22bn in January, €8.12bn February), at a very similar level to the €39.30bn seen in H1 of the prior year. In European HY, total new issuance for H1 was €37.17bn (€13.00bn in January, €6.41bn February), up on €29.73bn in the prior year. After a strong start to the year, March and April saw muted issuance. The market opened up in May and ramped into a strong June (June Loan and HY volumes were €7.51bn & €13.66bn respectively). Loan spreads widened out 85.8bps from January through to the end of June, reflecting the new risk premium (E+352.5bps to E+438.3bps), while HY saw single B spreads widen by 99bps and BB by 28bps from Q4 2019 taking Q2 2020 to 5.69% and 3.41% respectively.⁹ Access to primary markets in the early stages of recovery was divided more along sectoral lines than rating quality, with the initial wave of issuance tilted towards more defensive sectors including Technology, Media and Telecoms ("TMT") and Healthcare.¹⁰ Through June we saw secured debt issuance from large players in those sectors seeking liquidity, such as the cruise operators and theme parks.

CLO creation slowed through March and April, before entering the market and buying discounted assets to aid the asset / liability arbitrage, with a total of €10.11bn of pricing in H1 2020 (versus €14.72bn for H1 of the prior year). AAA pricing widened to an average of 172bps, up from 95bps where it closed 2019.⁹

European High Yield funds saw a slower recovery in retail demand than their investment grade counterparts, with inflows in the second quarter recovering just under two-thirds of the withdrawals seen in the period to March. Year to date, cumulative redemptions currently stand at €3bn, or around 4% of AUM.¹⁰

Global high yield funds (typically with a mandate to invest across € & $) experienced a wave of record demand for US high yield in April and May to finish the second quarter as the only subcategory within high yield with net positive cumulative flows for the year at €1.1bn (5.8% of AUM).¹⁰

Portfolio Overview

As Covid-19 took hold of global markets in February, the Investment Vehicle Manager proactively reacted, reducing exposure in those industries and geographies that were expected to be materially affected, and those names where a downgrade to CCC was a concern. Capital was held in cash or the core income book was rotated into (i) more defensive sectors (such as TMT and Healthcare), (ii) higher rated names and (iii) selective new issue where pricing and structure reflected the news flow, in order to have a more stable base whilst generating decent income. As of June close, performing credit positions (including cash) represented 38.1% of the portfolio, trading at a weighted average price of 96.1 and at a YTM of 4.6%, delivering 4.0% cash yield to the portfolio.

In line with the active management of the performing book in the face of the Covid-19 outbreak, the Investment Vehicle Manager was equally busy with the credit opportunities portfolio, again focused on industries and geographies, but also those with lower trading liquidity and those corporates that were forecasted as having risk to cashflow or liquidity. During the peak of the volatility, the Investment Vehicle Manager held significantly higher cash balances as a defensive mechanism, peaking at 25%, eventually deploying into quality performing names which were caught in the wider market down-draft coupled with a handful of existing and new situations in the credit opportunities space, many picking up significant gains into the close of June.

The Investment Vehicle Manager would note, individual earnings reports and guidance for Q2 and Q3 respectively have tended to be better than the expected, owing to swift cost action and supportive fiscal or government programs. Within the small structured finance portfolio, having actively traded this book through Q1 and early Q2, this portfolio recovered with the broader market as the underlying collateral value appreciated through the quarter and spreads tightened.

There is convexity in the credit opportunities book, with the weighted average price at 30 June being 83.0. There are many positives expected to play out to their underwritten thesis over the coming 12 to 18 months, underpinning expected performance. At June month end, credit opportunities positions represented 61.9% of the portfolio, with a YTM of 13.4%, whilst delivering a 7.0% cash yield to the portfolio.

For June 2020, t he weighted average EBITDA remained above EUR 500m, 80%+ in senior secured positions with f loating rate instruments being the core at 86.4% of the total portfolio, trading at a market adjusted leverage multiple of 5.9x maintaining strong LTVs . The current yield of 7.1% compares with 5.7% as at December 2019, trading at a weighted average market price of the blended portfolio of 86.9.

Conclusion and Outlook

On balance, the Investment Vehicle Manager is pleased with the portfolio performance and recovery through Q2. Since March, the portfolio has outperformed the market due to our active management at the height of the volatility as well as through the recovery of the credit opportunities segment of the portfolio.

Worth noting in June, Dubai World, one of the largest credit opportunities positions, was repaid at 100 (traded as low as 88 in March) through a refinancing supporting the underwriting and credit thesis. The Investment Vehicle Manager believes a number of these events will move towards our exit thesis in the quarters to come, further underpinning the performance of the strategy.

Excitingly, across credit opportunities, new opportunities are abundant, however we are being very selective on industries, geographies and individual issuers as we believe that the recovery in credit is still at an early stage.

CVC Credit Partners Investment Management Limited

Investment Vehicle Manager

Andrew Davies

Partner

25 September 2020

Andrew Davies, Partner. Joined CVC in 2010

Andrew leads CVC's global Credit Opportunities and Special Situations team and is based in London.

Prior to joining CVC, Andrew was at Greenwich Street Capital Partners where he was responsible for sourcing, trading, analysis and portfolio management of assets across the capital structure.

Andrew is a graduate of the University of the Witwatersrand, Johannesburg, South Africa.

Sources

⁵ Credit Suisse Western European High Yield Index

⁶ Credit Suisse Western European Leveraged Loan Index

⁷ Credit Suisse High Yield Index

⁸ Credit Suisse Leveraged Loan Index

⁹ LCD, an offering of S&P Global Market Intelligence - July 2020

Past performance is not indicative of future results. There can be no assurance that the Investment Vehicle will be able to implement its investment strategy, achieve its investment objective or avoid substantial losses.

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.

Directors' Statement of Responsibilities

The Directors are responsible for preparing the Half Yearly Financial Report in accordance with applicable Jersey law and regulations.

The Directors confirm to the best of their knowledge that:

· the unaudited condensed financial statements within the Half Yearly Financial Report have been prepared in accordance with IAS 34 - Interim Financial Reporting, as adopted by the European Union ("EU") and gives a true and fair view of the assets, liabilities, financial position and profit or loss of the Company as at 30 June 2020, as required by the Financial Conduct Authority's ("FCA") Disclosure Guidance and Transparency Rule ("DTR") 4.2.4R; and

· the Chairman's Statement, the Investment Vehicle Manager's Report, the Executive Report and the notes to the condensed financial statements include a fair review of the information required by:

a) DTR 4.2.7R, being an indication of important events that have occurred during the six months ended 30 June 2020 and their impact on the unaudited condensed financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

b) DTR 4.2.8R, being related party transactions that have taken place during the six months ended 30 June 2020 and that have materially affected the financial position or performance of the Company during that period.

Richard Bol é at Mark Tucker

Chairman Audit Committee Chairman

25 September 2020

INDEPENDENT REVIEW REPORT TO CVC CREDIT PARTNERS EUROPEAN OPPORTUNITIES LIMITED

Introduction

We have been engaged by CVC Credit Partners European Opportunities Limited (the 'Company') to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2020 which comprises the Condensed Statement of Comprehensive Income, the Condensed Statement of Financial Position, the Condensed Statement of Changes in Net Assets, the Condensed Statement of Cash Flows, and the related notes 1 to 15 to the Condensed Financial Statements. We have read the other information contained in the half yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed set of financial statements.

This report is made solely to the Company in accordance with guidance contained in International Standard on Review Engagements 2410 (UK and Ireland) "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our work, for this report, or for the conclusions we have formed.

Directors' Responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Company are prepared in accordance with International Financial Reporting Standards as adopted by the European Union. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting" as adopted by the European Union.

Our Responsibility

Our responsibility is to express to the Company a conclusion on the condensed set of financial statements in the half-yearly financial report based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410 (UK and Ireland), "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2020 is not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Ernst & Young LLP

London

25 September 2020

CONDENSED Statement of comprehensive income

For the six months ended 30 June 2020

		Six months ended 30 June 2020	Six months ended 30 June 2019
		(Unaudited)	(Unaudited)
	Notes	€	€
Income
Investment income	3	13,080,121	15,713,117
Tender fee income	3	1,091,101	87,567
Net losses on financial assets held at fair value through profit or loss	7	(49,562,937)	(3,874,907)
Foreign exchange (loss)/gain on financial assets held at fair value through profit or loss	7	(19,412,317)	1,480,900
Foreign exchange gain/(loss) on ordinary shares	11	19,647,714	(1,484,729)
Other net foreign currency exchange (losses)/gains through profit or loss		(95,222)	(4,792)
		(35,251,540)	11,917,156
Expenses
Operating expenses	4	(624,360)	(686,002)
		(624,360)	(686,002)

(Loss)/profit before finance costs and taxation		(35,875,900)	11,231,154

Finance costs
Placing programme costs	5	-	(304,180)
Share issue costs	5	(3,524)	(337,690)
Dividends paid	5/11	(11,135,804)	(14,196,088)

Loss before taxation		(47,015,228)	(3,606,804)
Taxation		-	-
Decrease in net assets attributable to shareholders from operations		(47,015,228)	(3,606,804)

Basic and diluted loss per Euro Share	11	(€0.121790)	(€0.007685)

Basic and diluted loss per Sterling Share (Sterling equivalent)	11	(£0.110617)	(£0.006709)

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

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

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

CONDENSED statement of financial position

As at 30 June 2020

		30 June 2020 (Unaudited)	31 December 2019 (Audited)
	Notes	€	€
Assets
Financial assets held at fair value through profit or loss	7	354,133,803	535,409,935
Prepayments		44,325	37,530
Cash and cash equivalents		2,744,465	2,072,319
Total assets		356,922,593	537,519,784

Liabilities
Payables	8	(193,348)	(195,553)
Total liabilities		(193,348)	(195,553)

Net assets attributable to shareholders	12	356,729,245	537,324,231

The condensed financial statements were approved by the Board of Directors on 25 September 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 condensed financial statements.

CONDENSED statement of changes in net assets

For the six months ended 30 June 2020 (Unaudited)

		Net assets attributable to shareholders
Note		€
As at 1 January 2020		537,324,231
Issuance and subscriptions arising from conversion of ordinary shares	11	2,400,315
Redemption payments arising on conversion and tender of ordinary shares	11	(116,332,359)
Decrease in net assets attributable to shareholders from operations		(47,015,228)
Net foreign currency exchange gain on opening ordinary shares and ordinary shares issued during the period		(19,647,714)
As at 30 June 2020		356,729,245

For the six months ended 30 June 2019 (Unaudited)

		Net assets attributable to shareholders
Note		€
As at 1 January 2019		538,965,202
Issuance and subscriptions arising from conversion of ordinary shares	11	35,198,009
Redemption payments arising on conversion and tender of ordinary shares	11	(10,471,393)
Decrease in net assets attributable to shareholders from operations		(3,606,804)
Net foreign currency exchange loss on opening ordinary shares and ordinary shares issued during the period		1,484,729
As at 30 June 2019		561,569,743

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

CONDENSED statement of cash flows

For the six months ended 30 June 2020

		Six months ended 30 June 2020	Six months ended 30 June 2019
		(Unaudited)	(Unaudited)
	Notes	€	€
Cash flows from operating activities

Loss from ordinary activities before taxation¹		(47,015,228)	(3,606,804)

Adjustments to reconcile (loss)/profit before tax to net cash flows:
- Net loss/(gain) on financial assets held at fair value through profit or loss	7	49,562,937	3,874,907
- Foreign exchange loss/(gain) on financial assets held at fair value through profit or loss	7	19,412,317	(1,480,900)
- Foreign currency exchange (gain)/loss on ordinary shares	11	(19,647,714)	1,484,729
- Placing programme costs	5	-	304,180
- Share issue costs	5	3,524	337,690
- Dividends paid	11	11,135,804	14,196,088
Changes in working capital:
- (Increase)/decrease in prepayments		(6,795)	419,124
- Decrease in payables		(2,205)	(166,106)
Net cash provided by operating activities		13,442,640	15,362,908

Cash flows from investing activities
Purchase and subscriptions of financial assets held at fair value through profit or loss	7	(2,396,791)	(35,315,892)
Proceeds from redemption of financial assets held at fair value through profit or loss	7	114,697,669	10,345,516
Net cash provided by/(used in) investing activities		112,300,878	(24,970,376)

Cash flows from financing activities
Proceeds from issuance and/or subscription arising from conversion of ordinary shares	11	2,400,315	35,198,009
Payments for redemption of ordinary shares	11	(116,332,359)	(10,471,393)
Placing programme costs	5	-	(304,180)
Share issue costs paid	5	(3,524)	(337,690)
Dividends paid	11	(11,135,804)	(14,196,088)
Net cash (used in)/provided by financing activities		(125,071,372)	9,888,658

Net increase in cash and cash equivalents in the period		672,146	281,190

Cash and cash equivalents at beginning of the period		2,072,319	1,208,254
Cash and cash equivalents at the end of the period		2,744,465	1,489,444

¹ - Includes investment income of €13,080,121 (30 June 2019: €15,713,117) and tender fee income of €1,091,101 (30 June 2019: €87,567).

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

NOTES TO THE CONDENSED 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 ("UKLA") 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 Annual Financial Report is prepared in accordance with the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority ("FCA") and with International Financial Reporting Standards ("IFRS") as adopted by the European Union which comprise standards and interpretations approved by the International Accounting Standards Board, and interpretations issued by the International Financial Reporting Standards and Standing Interpretations Committee as approved by the International Accounting Standards Committee which remain in effect. The Half Yearly Financial Report has been prepared in accordance with International Accounting Standards (IAS) 34 - Interim Financial Reporting ("IAS 34") as adopted by the European Union. They have also been prepared using the same accounting policies applied for the year ended 31 December 2019 Annual Financial Report, which was prepared in accordance with IFRS, except for new standards and interpretations adopted by the Company as set out below. The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

Definition of material (amendments to IAS 1 and IAS 8)

The International Accounting Standards Board has redefined its definition of material, issued practical guidance on applying the concept of materiality and issued proposals focused on the application of materiality to disclosure of other accounting policies. The amendments are not expected to have a material impact on the Company's financial statements.

Several other amendments and interpretations apply for the first time in 2020, but these do not have an impact on the condensed financial statements.

2.1. Going concern

· Assessed the current position and performance of the Company;

· Assessed the impact of a reduction to investment income received from the Investment Vehicle;

· Assessed the effect of continuing to operate the Contractual Quarterly Tender mechanism; and

Based on the results of the above assessments and inquiries, the Directors do not believe Covid-19 creates a material uncertainty over the Company continuing as a going concern.

2.2. 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).

2.3. Seasonality of Operations

The Company's operations are not seasonal in nature. As such, its performance is not subject to seasonal fluctuations.

3. Investment income

	Six months ended 30 June 2020	Six months ended 30 June 2019
	(Unaudited)	(Unaudited)
	€	€
Investment income	13,074,831	15,713,117
Bank interest income	5,290	-
Total investment income	13,080,121	15,713,117

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. The Company recognises retained redemption proceeds of 1% and the administration fee as tender fee income.

During the period, 4,260,209 Euro Shares (30 June 2019: 1,575,007) and 91,667,625 Sterling Shares (30 June 2019: 6,005,534) have been tendered by shareholders which generated tender fee income of € 1,091,101 (30 June 2019: €87,567).

Refer to note 11 for further details on the Contractual Quarterly Tender facility.

4. Operating expenses

	Six months ended 30 June 2020	Six months ended 30 June 2019
	(Unaudited)	(Unaudited)
	€	€
Professional fees	132,735	39,701
Directors' fees (see note 6)	118,015	106,662
Administration fees	88,268	99,367
Advisor fees	68,216	88,209
Regulatory fees	44,427	134,488
Registrar fees	41,741	50,515
Audit fees	27,867	30,749
Brokerage fees	24,913	22,448
Non-audit fees	9,800	28,635
Sundry expenses	68,378	85,228
Total operating expenses	624,360	686,002

Non-audit fees

Non-audit fees relate to interim review services amounting to €9,800 (30 June 2019: €10,882) , compliance with the r eporting fund regime amounting to €nil (30 June 2019: €1,718 ) and provision of regulatory advice amounting to €nil (30 June 2019: €16,035) .

Advisor fees

The Corporate Services Manager agreed to provide the services of Mr. Justin Atkinson to assist with the marketing and promotion of the Company's shares (the "Advisor fees"). The Corporate Services Manager recharges the Company for a proportion of Mr. Atkinson's cost. During the period, Advisor fees incurred were €68,216 ( 30 June 2019 : €88,209).

5. Finance costs

Placing programme costs

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).

No placing programme fees have been incurred during the period ended 30 June 2020. During the period ended 30 June 2019, the Company incurred placing programme fees of €304,180, which represents legal fees of €245,498, placing agent fees of €41,502 and printing fees of €17,180.

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 €3,524 (30 June 2019: €337,690).

Dividends paid

Refer to note 11 for further information on dividends paid.

6. Directors' fees and interests

The Directors of the Company are remunerated for their services as follows:

Richard Boléat (Chairman) - £65,000 (2019 : £65,000) per annum

Mark Tucker - £43,750 (2019: £43,750) per annum

David Wood - £42,500 (2019: £42,500) per annum

Stephanie Carbonneil - £42,500 (2019: £42,500) per annum

Mark Tucker in his capacity as the Chairman of the Audit Committee receives an additional £6,250 (2019: £6,250) per annum for his services in this role. With effect from 1 January 2020, Stephanie Carbonneil receives 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 period ended 30 June 2020 and 30 June 2019. Director's fees are paid gross of any taxes and expenses incurred by each Director are included within sundry expenses within note 4.

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 13 for further detail.

On 1 May 2020, David Wood purchased 14,492 Sterling Shares at a price of £0.69, with a total market value of £9,999.

On 1 May 2020, Mark Tucker purchased 10,000 Sterling Shares at a price of £0.7026, with a total market value of £7,026.

On 13 May 2020, Richard Boléat purchased 10,000 Sterling Shares at a price of £0.76772, with a total market value of £7,677.

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

	30 June 2020	31 December 2019
	(Unaudited)	(Audited)
	€	€
Preferred Equity Certificates ("PECs") - Unquoted investment	354,133,803	535,409,935

As at the period ended 30 June 2020, the Company held 127,170,866.44 Euro and 232,061,160.92 Sterling PECs (2019: 130,144,171.50 Euro and 324,425,319.07 Sterling PECs). Please refer below for reconciliation of PECs from 1 January 2019:

	Euro PECs	Sterling PECs

As at 1 January 2019	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
Subscriptions	346,649.89	-
Monthly conversions	912,386.05	(743,551.15)
Quarterly tenders	(4,232,341.00)	(91,620,607.00)
As at 30 June 2020	127,170,866.44	232,061,160.92

Fair value hierarchy

IFRS 13 'Fair Value Measurement' ("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 30 June 2020	Level 1	Level 2	Level 3	Total
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
Financial assets	€	€	€	€
Financial assets held at fair value through profit or loss	-	-	354,133,803	354,133,803

Financial liabilities
Ordinary shares¹	341,980,673	-	-	341,980,673

As at 31 December 2019	Level 1 (Audited)	Level 2 (Audited)	Level 3 (Audited)	Total (Audited)
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

¹ Please note for disclosure purposes only, ordinary shares have been disclosed at fair value using the quoted price in accordance with IFRS 13. As disclosed in note 2.7 of the 2019 Annual Financial Report, the Company classifies its ordinary shares as financial liabilities held at amortised cost.

The fair values of level 3 assets estimated above may differ upon realisation given that an active market does not exist for these assets. This difference in value could be material.

Level 3 reconciliation - Compartment A PECs

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.

		30 June 2020 (Unaudited)
		€
Balance as at 1 January 2020		535,409,935
Purchases		348,681
Subscriptions arising from conversion		2,048,110
Redemption proceeds arising from conversion		(2,073,047)
Redemption proceeds arising from quarterly tenders		(112,624,622)
Realised loss on financial assets held at fair value through profit or loss		(6,936,232)
Unrealised loss on financial assets held at fair value through profit or loss		(42,626,705)
Foreign exchange loss on financial assets held at fair value through profit or loss		(19,412,317)
Balance as at 30 June 2020		354,133,803

Net loss on financial assets held at fair value through profit or loss for the six month period ended 30 June 2020		(49,562,937)

During the six months ended 30 June 2020, there were no reclassifications between levels of the fair value hierarchy.

		31 December 2019 (Audited)
		€
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 the year ended 31 December 2019, there were no reclassifications between levels of the fair value hierarchy.

Quantitative information of significant unobservable inputs - Level 3 - PECs


Description	30 June 2020 (Unaudited)	Valuation technique	Unobservable input	Range (weighted average)
	€

PECs	354,133,803	Adjusted Net Asset Value	Discount for lack of liquidity	0-3%

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

PECs	535,409,935	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 percentage holding of PECs in the Investment Vehicle.

The net asset value of the Investment Vehicle attributable to each PEC unit is 0.9858 (31 December 2019: 1.1778).

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 30 June 2020 and comparative are as shown below:

As at 30 June 2020 (Unaudited)

Description

Input

Sensitivity used

Effect on fair value

€

PECs

Discount for lack of liquidity

(10,624,014)

As at 31 December 2019 (Audited)

Description

Input

Sensitivity used

Effect on fair value

€

PECs

Discount for lack of liquidity

(16,062,298)

The sensitivity applied in the analysis above reflects the possible impact of the worst case scenario in the 0-3% (2019: 0-3%) range that is applicable to the discount for lack of liquidity. Please refer to note 2.4 of the 2019 Annual Financial Report for valuation methodology of PECs.

The following tables below 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 30 June 2020, the Company held a 61.12% (31 December 2019: 66.17%) interest in the net assets of the Investment Vehicle. This disclosure has not been apportioned according to the Company's pro rata share of the net assets, 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)

	30 June 2020
	Level 1	Level 2	Level 3	Total
	€ '000	€ '000	€ '000	€ '000
Financial assets
Equity securities
Equities and warrants	2,659	-	8,762	11,421
Debt securities
Corporate bonds and other debt securities	125,811	462,065	78,694	666,570
CLOs including ABSs	-	-	20,635	20,635
Total	128,470	462,065	108,091	698,626
Financial liabilities
Corporate bonds and other debt securities sold short	(9,598)	(585)	-	(10,183)
Forward currency contracts	-	(3,696)	-	(3,696)
Total	(9,598)	(4,281)	-	(13,879)

	31 December 2019
	Level 1	Level 2	Level 3	Total
	€ '000	€ '000	€ '000	€ '000
Financial assets
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 ABSs	-	-	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

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

As of 30 June 2020, following further developments in the liquidity of certain debt securities, investments of the Compartment with a market value of EUR 14.5 million as at 30 June 2020 were reclassified from Level 2 to Level 3 (31 December 2019: EUR 38.8 million). There were also investments reclassified from Level 3 to Level 2 having a market value of EUR 14.1 million as at 30 June 2020 (31 December 2019: EUR 17.5 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 ABSs)	Total
	€ '000	€ '000	€ '000	€ '000
Balances as at 1 January 2019	4,123	57,401	20,322	81,846
Total (losses) / gains 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 (losses) / gains in Statement of Comprehensive Income during the year	(7,553)	(26,199)	(7,554)	(41,306)
Purchases / Subscriptions	-	26,288	5,425	31,713
Sales / Redemptions	-	(31,929)	(19,235)	(51,164)
Transfers into and out of Level 3	-	(5,399)	-	(5,399)
Balances as at 30 June 2020	8,762	78,694	20,635	108,091
Total unrealised losses and gains 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)
Total unrealised losses and gains at 30 June 2020 included in Statement of Comprehensive Income for assets held at the end of the year	(7,553)	(30,473)	(3,938)	(41,964)

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

Description	30 June 2020 € '000	Valuation technique	Unobservable input	Range (weighted average)
Equities and warrants	4,814	Market multiples	Average EBITDA multiple of peers including discount to average multiple	5.5x - 6.2x
Equities and warrants	3,948	Broker quotes / other methods	Specific valuations of the industry: expert valuation	N/A
Corporate bonds and other debt securities	3,293	Market multiples	Average EBITDA multiple of peers including discount to average multiple	8.5x
Corporate bonds and other debt securities	75,401	Broker quotes/ Discounted Cash Flow	Cost of market transactions / Management information	N/A
CLOs (including ABSs)	20,635	Broker quotes / other methods	Specific valuations of the industry: expert valuation	N/A

Description	31 December 2019 € '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 ABSs)	41,999	Broker quotes / other methods	Specific valuations of the industry: expert valuation	N/A

The Investment Vehicle board have valued the CLO positions at bid-price as at 30 June 2020 and 31 December 2019, as they believe this is the most appropriate value for these positions. The Investment Vehicle board believe that where certain credit facilities 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

Description	Input	Sensitivity used	Effect on fair value in EUR '000
Equities and warrants	Market multiples	1x	3,229/(3,228)
Equities and warrants	Discount to broker quotes / valuation method	20%	790/(790)
Corporate bonds and other debt securities	Market multiples	1x	653/(1,641)
Corporate bonds and other debt securities	Discount to broker quotes / valuation method	10%	7,540/(7,540)
CLOs (including ABSs)	Discount to broker quotes / other methods	20%	4,127/(4,127)

Description	Input	Sensitivity used	Effect on fair value in EUR '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 ABSs)	Discount to broker quotes / other methods	20%	8,400 / (8,400)

8. Payables

	30 June 2020	31 December 2019
	(Unaudited)	(Audited)
	€	€
Advisor fees	95,500	100,985
Auditor's fees	32,421	29,826
Administration fees	31,688	17,278
Other payables	33,739	47,464
Total payables	193,348	195,553

9. Contingent liabilities

As at 30 June 2020, the Company had no contingent liabilities (31 December 2019: €nil).

10. Stated capital

	Number of shares	Stated capital	Number of shares	Stated capital
	30 June 2020	30 June 2020	30 June 2019	30 June 2019
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	€	€	€	€
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 for the earnings per share calculation.

11. Ordinary shares

	Number of shares¹	Stated capital	Number of shares¹	Stated capital
	30 June 2020	30 June 2020	30 June 2019	30 June 2019
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
		€		€
Euro Shares	128,296,074	129,788,434	128,195,148	129,377,973
Sterling Shares	233,781,473	275,201,900	359,235,515	422,310,581
Total	362,077,547	404,990,334	487,430,663	551,688,554

¹ Excludes 10,278,799 (30 June 2019: 4,703,590) Euro Shares and 141,774,763 (30 June 2019: 20,961,433) Sterling Shares held as treasury shares.

			Total¹ (Unaudited)
			€
Balance as at 1 January 2020			538,570,092
Issue of ordinary shares			352,205
Subscriptions arising from conversion of ordinary shares			2,048,110
Redemption payments arising from conversion of ordinary shares			(2,073,047)
Redemption payments arising from quarterly tenders of ordinary shares			(114,259,312)
Foreign currency exchange gain on ordinary shares			(19,647,714)
Balance as at 30 June 2020			404,990,334

¹ Excludes treasury shares.

			Total¹ (Unaudited)
			€
Balance as at 1 January 2019			525,477,209
Issue of ordinary shares			33,949,233
Subscriptions arising from conversion of ordinary shares			1,248,776
Redemption payments arising from conversion of ordinary shares			(1,245,526)
Redemption payments arising from quarterly tenders of ordinary shares			(9,225,867)
Foreign currency exchange loss on ordinary shares			1,484,729
Balance as at 30 June 2019			551,688,554

¹ Excludes treasury shares.

Ordinary shares

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.

As at 30 June 2020, the Company had 138,574,873 (inclusive of 10,278,799 treasury shares) (31 December 2019: 137,644,204 (inclusive of 6,368,590 treasury shares)) Euro Shares and 375,556,236 Sterling Shares (inclusive of 141,774,763 treasury shares) (31 December 2019: 376,309,390 (inclusive of 50,107,138 treasury shares)).

Sale of treasury shares

The Company completed the sale of 350,000 Euro treasury shares during the period ended 30 June 2020, generating gross proceeds of € 352,205 and net proceeds of €348,681 after taking into account issue costs of €3,524.

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 will be 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 period, 729,704 (30 June 2019: 542) Euro Shares were converted into 602,084 (30 June 2019: 446) Sterling Shares and 1,355,238 (30 June 2019: 1,001,995) Sterling Shares were converted into 1,660,373 (30 June 2019: 1,209,969) 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 CCPEOL Purpose Trust (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.

The treasury share convertor mechanism was not utilised during the periods ended 30 June 2020 or 30 June 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 provides 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 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.

Due to the Covid-19 pandemic, the Board considered it prudent to include additional powers in respect of the Contractual Quarterly Tenders June 2020 to March 2021 that would allow the Board to:

· Reduce the maximum number of shares that may be tendered for purchase in any quarter below the current limit of 24.99 per cent of the shares in issue at the relevant tender record date;

· Alter the timetable or any part thereof prospectively in respect of any quarter or quarters at any time; and

· Suspend any Contractual Quarterly Tender or the completion of any Contractual Quarterly tender for one or more quarters at any time.

The Board intends to only use these powers when it considers it appropriate and in response to the developing situation in connection with the Covid-19 pandemic.

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 amount 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 of the 2019 Annual Financial Report.

During the period 4,260,209 (30 June 2019: 1,575,007) Euro Shares and 91,667,625 (30 June 2019: 6,005,534) Sterling Shares were redeemed as part of the Contractual Quarterly Tender facility and 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.

On 25 October 2019, the Company announced that it had suspended the scrip dividend scheme until further notice. The Company therefore issued nil Euro Shares (30 June 2019: 680,590) and nil Sterling Shares (30 June 2019: 64,569) during the period ended 30 June 2020 under its scrip dividend scheme.

Please refer below for amounts recognised as dividend distributions to ordinary shareholders in the periods ended 30 June 2020 and 31 December 2019.

	Ex-dividend date	Payment date	£ equivalent	€
Euro - €0.01375 per share¹	06/02/2020	28/02/2020	1,779,806	1,779,806
Sterling - £0.01375 per share¹	06/02/2020	28/02/2020	3,422,457	3,914,622

Euro - €0.01375 per share¹	14/05/2020	05/06/2020	1,773,850	1,773,850
Sterling - £0.01375 per share¹	14/05/2020	05/06/2020	3,206,426	3,667,526
				11,135,804

	Ex-dividend date	Payment date	£ equivalent	€
Euro - €0.01375 per share²	07/02/2019	22/03/2019	-	1,732,898
Sterling - £0.01375 per share²	07/02/2019	22/03/2019	4,720,204	5,383,474

Euro - €0.01375 per share²	02/05/2019	14/06/2019	-	1,757,953
Sterling - £0.01375 per share²	02/05/2019	14/06/2019	4,626,240	5,276,307

Euro - €0.01375 per share²	01/08/2019	13/09/2019	-	1,762,683
Sterling - £0.01375 per share²	01/08/2019	13/09/2019	4,879,038	5,564,627

Euro - €0.01375 per share²	07/11/2019	29/11/2019	-	1,796,676
Sterling - £0.01375 per share²	07/11/2019	29/11/2019	4,492,156	5,123,375
				28,397,993

¹ Recognised in the period ended 30 June 2020

² Recognised in the year ended 31 December 2019

Please refer to note 14 for further information subsequent to the reporting period.

Loss per share

	30 June 2020	30 June 2020	30 June 2019	30 June 2019
	(Unaudited)	(Unaudited)	(Unaudited)	(Unaudited)
	£ equivalent	€	£ equivalent	€
Euro Shares
Decrease in net assets for the period	-	(15,802,414)	-	(975,558)
Basic and diluted loss per share	-	(0.121790)	-	(0.007685)

Sterling Shares
Decrease in net assets for the period	(28,349,514)	(31,212,814)	(2,297,268)	(2,631,246)
Basic and diluted loss per share	(0.110617)	(0.121790)	(0.006709)	(0.007685)

Loss per share has been calculated on a weighted average basis. The weighted average number of ordinary shares held during the year ended 30 June 2020 was 386,035,834 (2019: 469,343,995), comprising 129,751,531 (2019: 126,946,894) Euro Shares and 256,284,303 (2019: 342,397,101) Sterling Shares.

There have been no new share issues of the Company's Euro or Sterling Shares between 30 June 2020 and 25 September 2020.

12. Net asset value per share

	30 June 2020	30 June 2020	31 December 2019	31 December 2019
	(Unaudited)	(Unaudited)	(Audited)	(Audited)
	£ equivalent	€	£ equivalent	€
Euro Shares
NAV	-	114,131,715	-	131,442,171
NAV per share	-	0.8896	-	1.0013

Sterling Shares
NAV	220,342,895	242,597,530	343,618,405	405,882,060
NAV per share	0.9425	1.0377	1.0534	1.2443

Net assets attributable to shareholders	-	356,729,245	-	537,324,231

NAV per share has been calculated based on the share capital in issue as at period end, excluding shares held in treasury, which as at 30 June 2020 comprised of 128,296,074 Euro Shares (31 December 2019: 131,275,614) and 233,781,473 Sterling Shares (31 December 2019: 326,202,252).

13. Related party disclosure

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

No transactions between the Company and the Trust and Conversion Vehicle occurred during the period ended 30 June 2020.

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.

14. Events after the reporting period

Management has evaluated subsequent events for the Company through 25 September 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 condensed financial statements.

June 2020 Contractual Quarterly Tender

On 7 July 2020, the Company announced it had received applications from shareholders to tender 6,319,950 Euro Shares and 25,588,695 Sterling Shares under the June 2020 Contractual Quarterly Tender.

On 7 August 2020, the Company announced that 6,319,950 Euro Shares and 25,588,695 Sterling Shares had been unconditionally accepted for purchase at a tender price of € 0.8796 and £0.9325 respectively.

September 2020 Contractual Quarterly Tender

On 11 August 2020, the Company announced it had received applications from shareholders to tender 4,000,022 Euro Shares and 7,583,983 Sterling Shares under the September 2020 Contractual Quarterly Tender.

Dividend declaration

On 16 July 2020, the Company declared a dividend of €0.0100 per Euro Share and £0.0100 per Sterling Share to shareholders on the register as at 7 August 2020, having an ex-dividend date of 6 August 2020.

July ordinary share conversion

On 27 July 2020, the Company announced that, in respect of the July monthly conversion, the applicable conversion ratio was 1.165528 Euro Shares per Sterling Share and an application will be made for the admission of 2,182,930 Euro Shares to the Official List of the UKLA and the main market for listed securities of the London Stock Exchange.

August ordinary share conversion

On 20 July 2020, the Company announced, in respect of the August monthly conversion, it had received application from shareholders to convert 500,000 Sterling Shares into Euro Shares on 28 August 2020. The Company received no requests to convert Euro Shares into Sterling Shares.

On 24 August 2020, the Company announced, in respect of the August monthly conversion, the applicable conversion ratio has 1.177528 Euro Shares per Sterling Share and an application will be made for the admission of 588,764 Euro Shares to the Official List of the UKLA and the main market for listed securities of the London Stock Exchange plc. Dealings in the shares became effective on 28 August 2020.

September ordinary share conversion

On 17 August 2020, the Company announced it had received no monthly conversion requests from shareholders in respect of the September monthly conversion.

October ordinary share conversion

On 18 September 2020, the Company announced, in respect of the October monthly conversion, it had received application from shareholders to convert 1,089,500 Sterling Shares into Euro Shares and to convert 2,607 Euro Shares into Sterling Shares on 30 October 2020.

Distribution policy

On 25 September 2020, the Company announced an increase to the Company's dividend target to 4.5 pence per Sterling Share / 4.5 cents per Euro Share. Please refer to page 3 for further information

15. Controlling party

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

SUPPLEMENTAL FINANCIAL INFORMATION

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
2016¹	€0.0625	£0.0625
2017²	€0.0525	£0.0525
2018	€0.0550	£0.0550
2019	€0.0550	£0.0550

The Company declared and paid dividends totalling €0.0275 per Euro Share and £0.0275 per Sterling Share during the six months ended 30 June 2020.

Total Return

	3 Months	6 Months	12 Months	Since inception
Euro NAV Total Return³	15.37%	(8.45%)	(8.33%)	23.59%
Sterling NAV Total Return³	16.18%	(7.95%)	(7.10%)	30.01%
Credit Suisse Western European High Yield Index (hedged in Euros) Total Return	10.98%	(5.77%)	(2.79%)	30.43%
Credit Suisse Western European Leveraged Loan Index (hedged in Euros) Total Return	11.89%	(3.80%)	(2.01%)	21.91%

¹ 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.

² During 2017, the Company increased its target annual dividend to 5.5 cents per Euro Share and 5.5 pence per Sterling Share.

³ 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 of NAV from the start of the period to the end of the period. The calculation also includes dividends paid out to shareholders and calculates the effect of reinvesting those dividends back into the Company.

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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 13 Castle Street St Helier Jersey JE1 1ES