Half-year Report

P2P GLOBAL INVESTMENTS PLC

INTERIM REPORT FOR THE PERIOD FROM 1 JANUARY 2019 TO 30 JUNE 2019

The Directors are pleased to present the Interim Report and Financial Statements of P2P Global Investments plc (the "Company") for the period ended 30 June 2019, a copy of the Company's Interim Report will shortly be available to view and download from the Company's website, www.p2pgi.com

Neither the contents of the Company's website nor the contents of any website accessible from hyperlinks on the Company's website (or any other website) is incorporated into or forms part of this announcement.

Strategic Report

INVESTMENT OBJECTIVE

The investment objective of P2P Global Investments plc (the "Company") and its subsidiaries (together, the "Group") is to provide shareholders with an attractive level of dividend income through exposure to investments in alternative finance and related instruments. The Company wants to achieve investment diversification across originators, geographies, loan asset classes. The policy was updated on 19 December 2017, with the aim of using the Company's revised strategy to capitalise on opportunities that present themselves to enhance the Company's returns.

Financial and Operational Highlights

Chairman's Statement

INTRODUCTION

I am pleased to present P2P Global Investments PLC's Interim Report, which covers the period from 1 January 2019 to 30 June 2019.

While 2018 was a period of repositioning, the first six months of 2019 has seen the continuation of the clear investment strategy implemented by the Investment Manager. The Investment Manager continues to deliver on their strategy of focusing on proven specialist partners within the UK, rebuilding the US business with a focus on specialist assets while at the same time actively exploring opportunities in Europe.

The approach remains unchanged as the investment focus remains on specialist asset classes and building relationships with strong new partners that provide security and attractive risk adjusted yields. The legacy book of loans originated through predominately unsecured consumer Platforms remains in run off, as part of this, there has been continued progress made in this transition with 90 per cent[12] of the portfolio at 30 June 2019 now invested in continuing assets and the legacy portfolio, predominantly US and UK consumer assets originated before the change in investment manager, down to 10 per cent.

The underlying portfolio performance remained stable with strong returns, ahead of target on the continuing portfolio offset in part by the discontinued portfolio and non-yielding equity assets. The effect of fund expenses & leverage were stable during the period. The drag caused by the discontinued assets continues to manifest itself in below target net returns. As previously announced the Company's equity investment in Urica Limited was written down in June 2018. Following the write down, the Company no longer has any material credit exposure related to Urica. There remains some administration work to complete the final aspects of the workout and closure of the platform, which is expected to be completed before the end of the year.

During the year the Company introduced five new Platforms, with three benefiting from structural protection with the borrower providing first loss equity. In April 2019, the Company successfully completed the £187 million securitisation of Funding Circle loans ("SBOLT 2019"). This transaction improved the financing terms of the portfolio with the majority of the senior bonds sold and the junior tranches retained. The Company ceased purchasing loans from Funding Circle in Q4 2018 as part of the strategy to focus on structured loans which offer downside protection.

INVESTMENT PERFORMANCE AND DIVIDENDS

The Company delivered an annualised Net Asset Value ("NAV") return of 5.1 per cent (H1 2018: 3.3 per cent) and declared dividends of 24.0 pence (H1 2018: 24.0 pence) per ordinary share in relation to the first half of 2019. The dividend payments were fully covered by earnings and the special distributable reserve was not utilised. The dividend return was 4.8 per cent (H1 2018: 4.8 per cent).

The Group experienced expected credit losses of £11.3 million (H1 2018: £19.6 million) which is 42 per cent lower than the comparable prior year period. The significant reduction shows the continued progress that has been made in transitioning the portfolio to secured and specialist asset classes. The continued reduction in exposure to certain mainstream consumer assets through natural runoff is the key driver behind the reduction in bad debt.

The Company has continued to increase its exposure during the year to property backed and structured lending where the originator has first loss equity ahead of the Company's exposure. Throughout the first half of 2019 the Company has continued to build its allocation of these assets, building this part of the portfolio to over 66 per cent of the continuing portfolio. Strong partnerships have been developed with several new lenders.

Following the refinancing of the Company's topco debt facility at the end of 2018 the Group has implemented two new asset specific leverage structures. These provide a more flexible leverage strategy tailored to the assets within the structures as well as aligning the currency of the leverage currency with the underlying assets of the Group. This reduces the need for foreign currency hedging.

Following the period end, on 23 August 2019 the Company reached an agreement to sell the entirety of its interests in Castlehaven Finance ("Castlehaven"), an alternative development and bridging finance lender in Ireland, to Avenue Capital Group. Since the Company partnered with Castlehaven in 2016 it has provided financing to it in excess of €385 million. The sale of the Company's interests includes a 25 per cent equity stake along with other loan and debt interests. The gross proceeds from the sale are approximately €250 million a portion of which is payable on a deferred basis. This represents a modest premium to the Company's holding value of those interests.

SHARE PRICE AND BUYBACKS

The Company's share price (at close) was 844.0 pence (30 June 2018: 805.0 pence), with the discount narrowing to 12.5 per cent at 30 June 2019 (30 June 2018: 15.8 per cent). The shares traded at a discount to NAV in the range of -10.8 per cent to -15.9 per cent during the first half of the year. As part of its investment strategy, the Company has continued with its share buyback program and during the first half of 2019 1,172,033 (H1 2018: 2,239,467) ordinary shares in issue were repurchased at an average price of 819.7 pence per ordinary share (H1 2018: 803.0 pence per ordinary share).

OUTLOOK

The Board is confident that the continued commitment to the investment strategy has positioned the Company to allow it to take advantage of attractive opportunities that present themselves and allows us to grow and diversify our portfolio. The strategy has been effective since it has been implemented, and therefore we plan to continue in the same fashion. The clear strategy in place will need to be protected, refined and advanced so that the strong discipline in assessing risk adjusted returns is maintained allowing the fund to remain well positioned to manage a range of different market conditions as they arise. The proceeds from Castlehaven will be steadily re-deployed in coming months. The Board will continue to be vigilant on the performance of the Company and will monitor the progress against the uncertainty over Brexit combined with rising consumer debt levels and changes to the real estate environment.

In addition, were there to be a change of UK Government, the Group may also face new risks as a result of a change in government policy. Although current market conditions remain benign, UK economic growth remains behind its long-term average and the longer-term economic outlook and impact of Brexit remains uncertain. Beyond Brexit the Group is also monitoring the recent cut in US interest rates for the first time in more than a decade.

Stuart Cruickshank

Chairman

12 September 2019

Investment Manager's Report

The Company is dedicated to investing in credit assets originated by non-bank lending Platforms and other originators of alternative credit assets globally. The Company provides investors with access to lending opportunities which PSC Credit Holdings LLP (the "Investment Manager") believes has potential to provide attractive risk-adjusted returns through the cycle. The Investment Manager is a member of the Pollen Street Capital group ("PSC"). PSC is an investment management group focussed on investing in financial and business services. The Investment Manager has also appointed a sub Investment Manager ("Sub-Manager"), Pollen Street Capital (US), LLC, an affiliate of the Investment Manager and an SEC registered investment adviser.

The returns are delivered through the Investment Manager's focus on high-quality underwriting of borrowers in markets that are underserved by mainstream finance providers. The Company partners with specialist lenders who offer attractive products based upon understanding of particular sectors and target customer groups. These players are often better at servicing these markets based upon focus, expertise, efficiency and entrepreneurialism. In many cases, they also share risk by putting their own balance sheet capital at risk. The Investment Manager aims to partner with the highest quality originators in order to access investment opportunities in direct lending assets and, where there is an aligned strategic opportunity, certain equity stakes.

The Investment Manager has significant experience in lending markets, providing the Company with both deep insight to high quality underwriting and access to the Investment Manager's established eco-system, enabling whole of market, high-quality origination flow and portfolio acquisition opportunities.

H1 2019 HIGHLIGHTS

The continuing portfolio has achieved the target net return, as the underlying structural enhancements has allowed for stable performance aligned with strong returns. This has however been offset in part by the legacy portfolio and non-yielding equity assets.

While significant progress has been made in transitioning the portfolio to more attractive asset classes and reducing the exposure to the low yielding and volatile legacy assets which have shown continued underperformance, their impact is still felt. Although the legacy portfolio continues to run off and has reduced from 48 per cent in December 2017 to 10 per cent1 at 30 June 2019, the returns on the portfolio continue to be lower than expected. This is driven predominately by the UK Consumer portfolio where the overall net yield is significantly below target and has displayed monthly volatility particularly in the first two months of the year. The total expected credit loss charge excluding IFRS9 stage 1 charge for the UK Consumer portfolio was £4.1 million. This was predominately made up of stage 3 credit impaired assets and represents 37 per cent of the total charge for the period even though the gross assets make up 18 per cent of the portfolio. Results in the period have also been significantly impacted by the previously announced write down of the remaining exposure of amortising English and French invoice finance receivables that had been originated through Urica Europe Limited.

The Company continues to try and improve the performance of all legacy assets and is optimising the run off. However this legacy portfolio remains a drag on the Company's overall profitability and whilst still material its impact is reducing month on month and the Manager continues to seek to improve performance and accelerate the run off through improving servicing and tactically disposing of loans where possible.

As the legacy portfolio amortises, the Investment Manager has been reinvesting the available capital into more specialist and secured asset classes which exhibit lower volatility and a better coverage ratio of income to expected credit losses. Initially, the Company focused on peer-to-peer lending, which targets one specific approach to origination mainly in unsecured consumer & SME lending. However, the alternative lending market is much larger than this and strong partnerships are being built among numerous originators with access to a broader market that has the potential to provide attractive returns for investors on a risk-adjusted basis. The continuing portfolio has maintained its growth and now makes up 90 per cent of the total portfolio. 66 per cent of the continuing portfolio is composed of structured loans. These are facilities provided to lenders where the lender retains the first loss. Each facility has been designed to deliver stable returns with downside protection and a strong alignment of interest with the borrower. 28 per cent of the continuing portfolio is composed of whole loans. These are pools of loans acquired from the loan originator by the Company. 21 per cent of these loans are secured on assets, typically on property with the underlying borrower providing first loss equity.

Strong partnerships are continuing to develop across all sectors with four exciting relationships in the US and UK leading to new lending opportunities in the period. These new partners have highly experienced teams and the deal structures created deliver alignment of interests between both parties so that the arrangements can reach beyond being simply providers of capital but secure long-term relationships. The relationships and expertise created are difficult to replicate and help provide more stable and attractive returns. Within these new partnerships the Investment Manager seeks to be fully involved in the active feedback loop on both the control and input into underwriting decisions, the customer journey, and proactive collections.

Within the continuing portfolio 18 per cent is SME lending, 23 per cent is consumer lending, 53 per cent is real estate lending and 6 per cent is equity. The majority of the Consumer loan exposure is made up of structured loans where the originator has first loss equity ahead of the Company's exposure, with the remainder being unsecured loans in markets that have demonstrated consistent and attractive risk adjusted margins. This portfolio consists of UK, European, US and Australasian exposure. The SME portfolios are domestically focused and reflect the underlying performance of the UK economy and our credit risk appetite. Whilst performance on these loans have been above target there has been some continued deterioration which the Investment Manager continues to monitor. Within the Real Estate sector the credit quality remains good with minimal impairments/stressed loans, the impairment charge in the period was a release of £0.2 million as exposure continues to be written in line with a prudent, through the cycle risk appetite with conservative LTVs, good underlying borrowers and proven management teams.

During the period the Company also successfully completed its fifth securitisation, Small Business Origination Loan Trust 2019-1 DAC ("SBOLT 2019"). This was a £187 million transaction that was collateralised by unsecured loans to SMEs originated through the online lending platform operated by Funding Circle Limited ("Funding Circle"). The transaction reduced the cost of funding, and offered matched duration funding which will enhance the Company's returns. The Company ceased purchasing loans from Funding Circle in Q4 2018 as part of the strategy to focus on asset secured lending.

The Investment Manager's policy of a prudent leverage strategy with a steady reduction of the cost and complexity of the facilities has seen the Group implement two new asset specific leverage structures, to help ascertain a more flexible leverage strategy allowing it align leverage currency with the underlying assets of the Group and therefore reducing the need for foreign currency hedging.

The Investment Manager is acutely aware of the continued dislocation between the current share price and the underlying value of the portfolio. On this basis the Company continued its share buyback program throughout the first half of 2019, with 1,172,033 (H1 2018: 2,239,467) ordinary shares in issue being repurchased at an average price of 819.7 pence per ordinary share (H1 2018: 803.0 pence) which contributed 0.45 per cent to the NAV return. As well as being accretive to NAV, it is expected to assist in closing the share price's current discount to NAV, this has improved with the discount narrowing to 12.5 per cent at 30 June 2019 (30 June 2018: 15.8 per cent).

FINANCIAL PERFORMANCE

Gross earnings for the first six months of the year were £50.2 million (H1 2018: £52.5 million), a decrease of 4.4 per cent on the prior period which is driven by the reduced impact of the legacy portfolio which although has a lower net yield, does contribute a higher gross yield as well and a decrease in the net assets of the Company. Total assets have decreased to £1,150.9 million at the period end (30 June 2018: £1,276.2 million). Profit for the period after tax was £16.6 million (H1 2018: £8.7 million), an increase of 91 per cent which is reflective of the improved performance of the continuing portfolio which has seen a significant decrease in expected credit losses in the period. This translated into basic earnings per share of 22.20 pence (30 June 2018: 11.2 pence), and an annualised NAV return of 5.1 per cent for the period.

In our initial guidance, we were targeting returns to cover a dividend of at least 15.0 pence per quarter by the end of Q2 2018 or a dividend yield of 6.0 per cent (based on issue price). As shown in the chart on page 10 of the interim accounts, we have not met these expectations due to the impact of large one off items from the legacy portfolio such as Urica and the continued drag of the overall legacy portfolio. Dividends of 12.0 pence per quarter were paid out in the first half of the wholly from revenue reserves.

The NAV per share (cumulative of income) is 964.1 pence per ordinary share at 30 June 2019, which, including dividends declared or paid, is equivalent to a NAV return of 23.52 per cent since inception (taking into account 2.49 per cent reduction for the introduction of IFRS 9 on 1 January 2018). Additionally, the share price of the Company at 30 June 2019 was 844.0 pence per share, representing a 12.5 per cent discount to NAV (cumulative of income). We are disappointed that the Group continues to trade behind its net asset position, and because of that we have maintained the share buyback program. Performance and dividend history can be seen on page 10 of the interim accounts.

OUTLOOK

There exists a substantial opportunity for non-bank capital to earn attractive risk adjusted returns by targeting under-served specialist asset classes with high quality products that meet customer needs. While the performance from the inherited legacy portfolio continues to be more volatile than expected, the Investment Manager has made substantial progress in repositioning the portfolio towards structured and secured assets, a program which will continue through the second half of 2019.

To date, there has been minimal impact from the UK referendum vote to leave the European Union. However, looking ahead, the situation will continue to be monitored to address the economic challenges and opportunities that may arise as the long-term effects of Brexit become clearer. In the current more competitive mainstream lending environment it is particularly important to maintain prudence and discipline. In addition, with household borrowing at high levels, and the regulatory framework remaining an ever present factor as consumer credit regulation continues to develop, it is intended to proceed with caution. The Group's business model, combined with its approach to risk, stands it in good stead to find suitable pockets of risk adjusted return. The focus on specialist markets allows us access to enhanced credit performance and allows deployment of the Company's funds in assets which deliver strong returns.

Statement of Principle Risks and Uncertainties

The principal risks facing the Company are substantially unchanged since the date of the annual report for the year ended 31 December 2018 and continue to be as set out in the Strategic Report section of the annual report. Risks faced by the Company include, but are not limited to operational, investment, market, interest rate, currency risk, concentration of foreign exposure, liquidity, credit, gearing and regulatory.

Top Ten Holdings

As at 30 June 2019 the value of the top 10 assets totalled £202.5 million which equated to 28 per cent of net assets.

Responsibility Statement of the Directors

For the Period from 1 January 2019 to 30 June 2019 

The directors, being the persons responsible, confirm that to the best of their knowledge:

a) the set of Unaudited Consolidated Financial Statements contained within the half-yearly financial report have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as adopted by the European Union, as required by the Disclosure and Transparency Rule 4.2.4R, and gives a true and fair view of the assets, liabilities and financial position of the Group;

b) the Interim Management Report includes a fair review, as required by Disclosure and Transparency Rule 4.2.7R, of important events that have occurred during the first six months of the financial year, their impact on the set of Consolidated Financial Statements, and a description of the principal risks and perceived uncertainties for the remaining six months of the financial year; and

c) the Interim Management Report includes a fair review of the information concerning related parties transactions as required by Disclosure and Transparency Rule 4.2.8R.

Signed on behalf of the Board of Directors by:

Stuart Cruickshank

Chairman

12 September 2019

Financial Statements

Consolidated Statement of Financial Position

AS AT 30 JUNE 2019

The financial statements as shown below were approved by the Board of Directors on 12 September 2019 and signed on its behalf by:

Stuart Cruickshank

Chairman

12 September 2019

Consolidated Statement of Comprehensive Income

FOR THE PERIOD ENDED 30 JUNE 2019 (UNAUDITED)

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above Statement derive from continuing operations. There is no other comprehensive income.

Consolidated Statement of Comprehensive Income (Continued)

FOR THE PERIOD ENDED 30 JUNE 2018 (UNAUDITED)

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above Statement derive from continuing operations. There is no other comprehensive income.

Consolidated Statement of Comprehensive Income (Continued)

FOR THE YEAR ENDED 31 DECEMBER 2018 (AUDITED)

The total column of this statement represents the Group's Consolidated Statement of Comprehensive Income, prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies ("AIC"). All items in the above Statement derive from continuing operations. There is no other comprehensive income.

Consolidated Statement of Changes in Shareholders' Funds

FOR THE PERIOD FROM 1 JANUARY 2019 TO 30 JUNE 2019 (UNAUDITED)

FOR THE PERIOD FROM 1 JANUARY 2018 TO 30 JUNE 2018 (UNAUDITED)

Consolidated Statement of Changes in Shareholders' Funds (Continued)

FOR THE YEAR ENDED 31 DECEMBER 2018 (AUDITED)

Consolidated Cash Flow Statement

FOR THE PERIOD FROM 1 JANUARY 2019 TO 30 JUNE 2019 (UNAUDITED)

Notes to the Consolidated Financial Statements

1. GENERAL INFORMATION

P2P Global Investments plc (the "Company") is a closed-ended investment company incorporated in the United Kingdom on 6 December 2013 with registered number 8805459. The Company is a publicly listed company and commenced operations on 30 May 2014.

The investment objective of the Company is to provide shareholders with an attractive level of dividend income and capital growth through exposure to investments in alternative finance and related instruments.

The Company's investment manager is PSC Credit Holdings LLP (the "Investment Manager"). Pollen Street Capital (US) LLC, an affiliate of the Investment Manager and an SEC registered investment adviser, was appointed as sub investment manager (the "Sub-Manager") to the Company. The Investment Manager has, pursuant to the Sub-Management Agreement, delegated certain of its responsibilities and functions, including those in relation to its discretionary management of the Company's portfolio of credit assets, to the Sub-Manager.

The Investment Manager is authorised as an Alternative Investment Fund Manager ("AIFM") under the Alternative Investment Fund Managers Directive ("AIFMD"). The Company is defined as an Alternative Investment Fund and is subject to the relevant articles of the AIFMD.

The Company invests, directly and indirectly, in consumer loans, secured real estate loans, small and medium sized enterprises ("SME") loans, advances against corporate trade receivables and/or purchases of corporate trade receivables ("Credit Assets") which have been originated via Platforms. The Company will typically seek to invest in Credit Assets with targeted net annualised returns of 5 to 15 per cent. The Company will seek to purchase Credit Assets directly (via Platforms or via other originators) and may also invest in such assets indirectly via funds, partnerships or special purpose vehicles (including those managed by the Investment Manager, the Sub-Manager or their affiliates) that it deems suitable with a view to enhancing Shareholder returns and providing diversification of the Company's assets.

As at 30 June 2019, the Company had total issued equity in the form of 86,306,803 ordinary shares (31 December 2018: 86,306,803), (30 June 2018: 86,306,803) of which 74,916,368 (31 December 2018: 76,088,401), (30 June 2018: 77,596,082) were outstanding and 11,390,435 (31 December 2018: 10,218,402), (30 June 2018: 8,710,721) were held as treasury shares. These shares are listed on the Premium listing segment of the Official List of the UK Listing Authority and trade on the London Stock Exchange's main market for listed securities.

Citco Fund Services (Ireland) Limited (the "Administrator") has been appointed as the Administrator of the Company. The Administrator is responsible for the Company's general administrative functions, such as the calculation and publication of the Net Asset Value ("NAV") and maintenance of the Company's accounting records.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

The Company's financial statements are prepared in accordance with International Accounting Standard 34 - Interim Financial Reporting ("IAS 34"). They comprise standards and interpretations approved by the International Accounting Standards Board ("IASB") and International Financial Reporting Committee ("IFRC"), interpretations issued by the International Accounting Standard Committee ("IASC") that remain in effect, to the extent they have been adopted by the European Union. The financial statements are also in compliance with relevant provisions of the Companies Act 2006 as applicable to companies reporting under IAS 34. The results for the half year ended 30 June 2019 constitute non-statutory accounts within the meaning of Section 435 of the Companies Act 2006 and have not been audited by the Company's Auditor. They do not include all financial information required for full annual financial statements. The latest published accounts which have been delivered to the Registrar of companies are for the year ended 31 December 2018; the report of the Auditor thereon was unqualified and did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. The comparative figures for the year ended 31 December 2018 have been extracted from those accounts.

The financial statements have been prepared on a going concern basis under the historical cost convention, as modified by the valuation of investments at fair value. The Directors consider that the Group and Company has adequate financial resources to enable it to continue operations for a period no less than 12 months from the reporting date. Accordingly, the Directors believe that it is appropriate to adopt the going concern basis in preparing the Group's and Company's financial statements.

The principal accounting policies adopted by the Company are consistent with those set out on pages 65 - 85 of the Annual report 2018. Where presentational guidance set out in the Statement of Recommended Practice ("SORP") for investment trusts issued by the Association of Investment Companies ("AIC") in November 2014 is consistent with the requirements of IFRS, the Directors have sought to prepare the financial statements on a basis compliant with the recommendations of the SORP.

(b) Consolidation

Subsidiaries are investees controlled by the Company. The Company controls an investee if it is exposed to, or has the rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The Company reassesses whether it has control if there are changes to one or more elements of control. The Company does not consider itself to be an investment entity for the purposes of IFRS 10, as it does not hold substantially all of its investments at fair value. Consequently, it consolidates its subsidiaries rather than treating its subsidiaries as investments at fair value through profit or loss. At the Company level, the Company's investments in its subsidiaries are measured at fair value which is represented as net asset value.

Associates are entities over which the Group has significant influence, but does not control, generally accompanied by a shareholding of between 20 per cent and 50 per cent of the voting rights.

No associates are presented on the Statement of Financial Position using the equity accounting method as the Group elects to hold such investments at fair value through profit and loss. This treatment is permitted by International Accounting Standard ("IAS") 28 Investment in Associates and Joint Ventures, which also permits investments held by entities that are venture capital organisations, mutual funds or similar entities to be excluded from its measurement methodology requirements where those investments are designated, upon initial recognition, as at fair value through profit or loss and accounted for in accordance with IFRS 9 Financial Instruments. Changes in fair value of associates are recognised in the Statement of Comprehensive Income in the period in which the change occurs.

The disclosures required by Section 409 of the Companies Act 2006 for associated undertakings are included in Note 13 to the financial statements.

As at 30 June 2019, the Company controls seven legal entities listed below as well as eight Trusts which are subsidiaries that the Company controls (together "the Group").

During the first half of 2019, the Company controlled one legal entity listed below as well as one Trust which were subsidiaries that the Company controlled at some point in the year, however were not controlled at year end.

The Company invests in a special purpose vehicle, Eaglewood SPV I LP (the "SPV") and at 30 June 2019 is the sole Limited Partner in that SPV and controls it. The principal activity of Eaglewood SPV I LP is to invest in alternative finance investments and related instruments, including marketplace loans, which is aligned with the Company's investment objective. The Company's position with regards to the SPV is that of an investor where its maximum loss is restricted to its investment in the vehicle and in return for this receives a quarterly income distribution.

The Company controls Eaglewood Income Fund I, LP (the "Eaglewood Fund"), a Delaware limited partnership established on 3 February 2012, through the control of the SPV. As at 30 June 2019, the SPV is the sole limited partner in the Eaglewood Fund. The Eaglewood Fund is an open ended private investment fund, offering monthly subscriptions and quarterly redemptions, with 90 days' notice. The Eaglewood Fund is managed by the Investment Manager, Pollen Street Capital (US), LLP. It employs a strategy that primarily involves leveraged investment in monthly amortising unsecured US consumer loans originated by a single Platform with terms of three to five years.

The Company controls Marketplace Originated Consumer Assets 2016-1 PLC ("MOCA 2016"), a public limited company incorporated under the Law of England and Wales. MOCA 2016 is a securitisation vehicle for UK consumer loans and operates in a pre-determined manner. The Company is considered to control MOCA 2016 by virtue of being its sponsor whilst having exposure to the variable returns of the vehicle through the holding of junior notes issued by it.

The Company also controls P2P BL-2 Limited ("P2P BL-2"), a private limited company incorporated with limited liability under the Law of England and Wales. The Company is considered to control P2P BL-2 by virtue of being its sponsor while having exposure to the variable returns of the vehicle through the holding of junior note issued by it. P2P BL-2 was incorporated in March 2017.

The Company also controls Marketplace Originated Consumer Assets 2017-1 PLC ("MOCA 2017") a public limited company incorporated under the Law of England and Wales. MOCA 2017 is a securitisation vehicle for UK consumer loans and operates in a pre-determined manner. The Company is considered to control MOCA 2017 by virtue of being its sponsor whilst having exposure to the variable returns of the vehicle through the holding of junior notes issued by it. MOCA 2017 was incorporated in November 2017.

The Company also controls Small Business Origination Loan Trust 2019-1 DAC ("SBOLT 2019") a public limited company incorporated in Ireland, SBOLT 2019 is a securitisation vehicle for unsecured loans made to small and medium-sized enterprises ("SMEs") incorporated in the UK and operates in a pre-determined manner. The Company is considered to control SBOLT 2019 from April 2019 by virtue of being its sponsor whilst having exposure to the variable returns of the vehicle through the holding of junior notes issued by it. SBOLT 2019 was incorporated in April 2019.

The Company controls CH Mercury Note Issuer DAC ("CH") a public limited company incorporated in Ireland, CH is a special purpose vehicle for development and bridging finance loans. The Company is considered to control CH through holding 100 per cent of the issued shares. The Company was formed in November 2018 but only became active in February 2019.

The Company also controls a number of trusts ("Trusts") through its control of the SPV and the Eaglewood Fund. The SPV and the Eaglewood Fund control a Trust if they are exposed to, or have the rights to, variable returns from their involvement with the Trust and have the ability to affect those returns through its power over the Trust. As at 30 June 2019, the SPV is the sole beneficial owner of EW-PFL Trust, SPV I Loan Trust, Payoff Consumer Loan Trust, PSC 1803 Autoloan Trust, PSC 2018F Loan Trust and PSC Rocketloans Prime Consumer Loan Trust while the Eaglewood Fund is the sole beneficial owner of Eaglewood LC Trust. During the year the Company also closed one trust; Eaglewood Consumer Loans Trust 2014-1.

The Company did control P2P BL-3 PLC ("P2P BL-3"), a public limited company incorporated with limited liability under the Law of England and Wales incorporated in June 2017. The Company was previously considered to control P2P BL-3 by virtue of being its sponsor while having exposure to the variable returns of the vehicle through the holding of junior note issued by it. During the period all loans were novated out the Company is in the process of liquidation therefore the Company is no longer exposed to variable returns.

All entities within the Group have co-terminus reporting dates.

Intra-group balances and transactions, and any unrealised income and expenses (except for currency transaction gains or losses) arising from intra-group transactions, are eliminated in preparing the Consolidated Financial Statements.

 (c) Critical accounting estimates and judgements

The preparation of the half yearly report requires management to make estimates and assumptions that affect the reported income and expense, assets and liabilities and disclosure of contingencies at the date of the half yearly report. Although these estimates and assumptions are based on the management's best judgement at that date, actual results may differ from these estimates. There have been no significant changes in the basis upon which estimates have been determined compared to that applied at 31 December 2018.

All values are rounded to the nearest thousand pounds unless otherwise indicated.

3. FAIR VALUE MEASUREMENT

Financial instruments measured and reported at fair value are classified and disclosed in one of the following fair value hierarchy levels based on the significance of the inputs used in measuring its fair value:

Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities.

Level 2 - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

Level 3 - Pricing inputs for the asset or liability that are not based on observable market data (unobservable inputs).

An investment is always categorised as Level 1, 2 or 3 in its entirety. In certain cases, the fair value measurement for an investment may use a number of different inputs that fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgement and is specific to the investment.

Level 3 investment in a fixed income security issued by a fund is valued based on the NAV as calculated by the fund's Administrator at the balance sheet date. The constitutional and offering documentation of the fund sets out the valuation methodology, the applicable generally accepted accounting principles and the frequency, by which its assets are to be valued and the NAV are to be calculated. No adjustments have been determined to be necessary to the NAV as supplied by the Administrator as this reflects the fair value of the underlying investments under the relevant valuation methodology. The NAV is the value of all the assets of the fund less its liabilities to creditors (including provisions for such liabilities) determined in accordance with applicable accounting standards. The NAV of the fund is sensitive to movements in interest rates due to its investment in fixed rate loans.

The other investments in fixed income securities included within Level 3 of the hierarchy are valued based on, if available, recent transactions and otherwise broker quotes. The investments in unquoted equities are valued using several different techniques, primarily recent transactions and recent rounds of funding by the investee entities.

The Group's Level 2 positions are valued by the Administrator, acting in their capacity as the External Valuer, in accordance with the valuation policy. Fixed income positions are valued using prices from an independent market data provider. Forward foreign exchange contracts are valued using interpolated FX forward points from Bloomberg. The option contracts are valued using yield curves from Bloomberg.

The following table analyses within the fair value hierarchy the Group's assets and liabilities measured at fair value at 30 June 2019:

There were no transfers between the levels during the period ended 30 June 2019.

The following table analyses within the fair value hierarchy the Group's assets and liabilities measured at fair value at 30 June 2018:

The following table analyses within the fair value hierarchy the Group's assets and liabilities measured at fair value at 31 December 2018:

The following table presents the movement in the Group's Level 3 positions for the period ended 30 June 2019.

The net change in realised/unrealised gains and losses is recognised within net gains on investments in the Consolidated Statement of Comprehensive Income.

following table presents the movement in the Group's Level 3 positions for the period ended 30 June 2018.

* During the period, there was a reclass of £5,362,587 from fixed income to loans at amortised cost.

The net change in realised/unrealised gains and losses is recognised within net losses on investments in the Consolidated Statement of Comprehensive Income.

The following table presents the movement in the Group's Level 3 positions for the year ended 31 December 2018.

* On 1 January 2018 there was a reclassification of £54,818,513 from fixed income to loans at amortised cost on the adoption of IFRS 9.

The net change in realised/unrealised gains and losses is recognised within net losses on investments in the Consolidated Statement of Comprehensive Income.

Quantitative information regarding the unobservable inputs for the Group's Level 3 positions as at 30 June 2019 is given below:

Quantitative information regarding the unobservable inputs for the Group's Level 3 positions as at 30 June 2018 is given below:

Quantitative information regarding the unobservable inputs for the Group's Level 3 positions as at 31 December 2018 is given below:

4. INCOME AND GAINS ON INVESTMENTS

* Loss on foreign exchange also includes fair value movements on derivatives taken out to economically hedge fair value exposures.

5. EARNINGS PER SHARE

Basic earnings per share is calculated using the number of shares held at year end, excluding the number of shares purchased by the Company and held as treasury shares.

The Company has not issued any shares or other instruments that are considered to have dilutive potential.

6. FINANCIAL INSTRUMENTS AND ASSOCIATED RISKS

Management of risk

The Group's financial instruments may comprise:

·; Loans;

·; Listed and unquoted equities and investment funds held in accordance with the Group's investment objective and policies;

·; Derivative instruments which could include forward currency contracts and options; and

·; Cash, liquid resources and short term debtors and creditors that arise from its operations.

The risks identified by IFRS 7 arising from the Group's financial instruments are market risk (which comprises market price risk, interest rate risk and foreign currency risk), liquidity risk, and credit risk.

The sensitivity analysis in this note is used by management to measure the Group's exposure to these risks. The Board reviews and agrees policies for managing each of these risks, which are summarised below. These policies have remained unchanged since the beginning of the accounting period.

The investment objective and operating environment of the Subsidiaries are consistent with that of the Company. Therefore the risks and uncertainties detailed below are applicable to both the Company and the Group.

In seeking to implement the investment objectives of the Group while limiting risk, the Group is subject to the investment limits restrictions set out in the Credit Risk section of this note.

Market risk

Market risk is the risk of loss arising from movements in observable market variables such as foreign exchange rates, equity prices and interest rates. The Group is exposed to market risk primarily through its Financial Instruments.

The Investment Manager regularly reviews the investment portfolio and industry developments to ensure that any events which may impact the Group are identified and considered. This also ensures that any risks affecting the investment portfolio are identified and mitigated to the fullest extent possible.

Market price risk

The Group is exposed to price risk arising from the investments held by the Group for which prices in the future are uncertain. Primarily, the exposure arises from investment in money market funds, fixed income products and equities. Refer to Note 3 for further details on the sensitivity of the Group's Level 3 investments to price risk.

The value of certain investments held by the Group is determined by market forces and there is accordingly a risk that market prices can change in a way that is adverse to the Group's performance. The Group has adopted a number of investment restrictions which are set out in the prospectus which limit the exposure of the Group to market risk.

Interest rate risk

Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments.

The Group is exposed to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows.

Loans held by the Group at amortised cost, with a fixed interest rate, are not exposed to interest rate changes. Fixed income securities with fixed interest rates are exposed to fair value interest rate risk. As at 30 June 2019, the Group had 2.63 per cent (30 June 2018: 2.39 per cent, 31 December 2018: Nil per cent) of the total assets with a fixed interest rate.

Financial instruments with a floating interest rate that resets as market rates change are exposed to cash flow interest rate risk. At 30 June 2019 the Group had 4.41 per cent (30 June 2018: 7.46 per cent, 31 December 2018: 9.42 per cent) of total assets classified as cash and cash equivalents and 0.50 per cent (30 June 2018: 1.99 per cent, 31 December 2018: Nil per cent) of fixed income securities with floating interest rates. At 30 June 2019, if interest rates had increased/decreased by 1 per cent with all other variables held constant, the change in the value of future expected interest cash flows of these assets would have been £0.7 million (30 June 2018: £1.2 million, 31 December 2018: £1.1 million). 1 per cent is considered to be a reasonably possible movement in interest rates.

The Group has entered into various credit facilities which are subject to a variable interest rate. As at 30 June 2019 the Group had £0.4 million (30 June 2018: £0.5 million, 31 December 2018: £0.4 million) drawn down under these facilities. Please see Note 10 for further details.

The Group does not intend to hedge interest rate risk on a regular basis. However, where it enters floating-rate liabilities against fixed-rate loans, it may at its sole discretion seek to hedge out the interest rate exposure, taking into consideration amongst other things the cost of hedging and the general interest rate environment.

Currency risk

Currency risk is the risk that the value of net assets will fluctuate due to changes in foreign exchange rates. Relevant risk variables are generally movements in the exchange rates of non-functional currencies in which the Group holds financial assets and liabilities.

The assets of the Group are invested in Credit Assets and other investments including unquoted equities which are denominated in US Dollars, Euros, Pounds Sterling and other currencies. Accordingly, the value of such assets may be affected favourably or unfavourably by fluctuations in currency rates. The Group hedges currency exposure between Pounds Sterling and any other currency in which the Group's assets may be denominated, in particular US Dollars and Euros.

Concentration of foreign currency exposure

The Investment Manager monitors the fluctuations in foreign currency exchange rates and may use forward foreign exchange contracts to hedge the currency exposure of the Group's non GBP denominated investments. The Investment Manager re-examines the currency exposure on a regular basis in each currency and manages the Group's currency exposure in accordance with market expectations.

The below table presents the net exposure to foreign currency at 30 June 2019. The table includes forward foreign exchange contracts at their notional exposure value and excludes all GBP assets and liabilities recorded on the Consolidated Statement of Financial Position.

If the GBP exchange rate simultaneously increased/decreased by 10 per cent against the above currencies, the impact on profit would be an increase/decrease of £0.4 million. 10 per cent is considered to be a reasonably possible movement in foreign exchange rates. The total GBP exposure as at 30 June 2019 is £353.8 million.

The below table presents the net exposure to foreign currency at 30 June 2018. The table includes forward foreign exchange contracts at their notional exposure value and excludes all GBP assets and liabilities recorded on the Consolidated Statement of Financial Position.

If the GBP exchange rate simultaneously increased/decreased by 10 per cent against the above currencies, the impact on profit would be an increase/decrease of £1.1 million. 10 per cent is considered to be a reasonably possible movement in foreign exchange rates. The total GBP exposure as at 30 June 2018 is £330.5 million.

The below table presents the net exposure to foreign currency at 31 December 2018. The table includes forward foreign exchange contracts at their notional exposure value and excludes all GBP assets and liabilities recorded on the Consolidated Statement of Financial Position.

If the GBP exchange rate simultaneously increased/decreased by 10 per cent against the above currencies, the impact on profit would be an increase/decrease of £3.7 million. 10 per cent is considered to be a reasonably possible movement in foreign exchange rates. The total GBP exposure as of 31 December 2018 is £368.2 million.

Liquidity risk

Liquidity risk is defined as the risk that the Group may not be able to settle or meet its obligations on time or at a reasonable price. Ordinary shares are not redeemable at the holder's option.

The Investment Manager manages the Group's liquidity risk through active capital management, including monitoring of amortising cash flows, monitoring of debt requirements and monitoring and forecasting of cash flows.

Financial liabilities consisting of forward foreign exchange contracts, amounts due to brokers, dividends and interest payable, broker fees payable, and accrued expenses and other liabilities are all due within three months.

The liquidity profile of the Group's borrowings is detailed in Note 10.

Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Group's credit risks arise principally through exposures to loans acquired by the Group, which are subject to risk of borrower default and disclosed as loans held at amortised cost on the Statement of Financial Position. The ability of the Group to earn revenue is completely dependent upon payments being made by the borrower of the loan acquired by the Group through a Platform. The Group (as a lender member) will receive payments under any loans it acquires through a Platform only if the corresponding borrower through that Platform (borrower member) makes payments on the loan.

Consumer loans are typically unsecured obligations of borrowers. They are not secured by any collateral, not guaranteed or insured by any third party and not backed by governmental authority in any way. Secured consumer loans will be secured against collateral. SME loans are typically not secured against collateral but are backed by personal guarantees of the business' director(s). Real estate loans and structured facilities are secured against collateral. The Group must rely on the collection efforts of the Platforms and their designated collection agencies and has no direct recourse against borrower members.

The Platforms will undertake the primary credit risk assessment when originating loans or receivables. The investment manager, in selecting Platforms from which to acquire loan exposures, conducts detailed initial due diligence on, including but not limited to, their credit risk assessment processes, their operational systems and controls plus their ongoing viability. It also conducts due diligence on an ongoing basis and monitors the performance of acquired loans and the entire platform loan book if available. The investment manager also re-underwrites some loans originated by Platforms. As at 30 June 2019, this comprises all secured real estate loans only. This is due to the bespoke nature of the underlying collateral and their large size.

As at 30 June 2019, the Group has not directly originated any loans that do not involve Platforms.

The Group will invest across various Platforms, asset classes, geographies (primarily United States and Europe) and credit bands in order to ensure diversification and to seek to mitigate concentration risks.

Loans at amortised cost

The table below provides details of the loans at amortised cost held by the Group at 30 June 2019.

The financial assets recorded in each stage have the following characteristics:

The following tables analyse loans by type of exposure and geography and represent the concentration of exposures on which credit risk is managed as at 30 June 2019.

The following tables analyse loans by type of exposure and geography and represent the concentration of exposures on which credit risk is managed as at 30 June 2018.

The following tables analyse loans by type of exposure and geography and represent the concentration of exposures on which credit risk is managed as at 31 December 2018.