MIFIDPRU 8 DISCLOSURE

Date: 30 June 2026

FCA Firm Reference Number: 489934

This disclosure is made in accordance with MIFIDPRU 8 of the FCA Handbook.

Remuneration disclosures required under MIFIDPRU 8.6 are published as a separate Remuneration Disclosure Statement in the Financial Statement and do not form part of this document.

1. Introduction and Basis of Disclosure

Pearl Diver Capital LLP (“Pearl Diver” or “the Firm”) is a limited liability partnership incorporated in the United Kingdom on 21 August 2008 and authorised and regulated by the Financial Conduct Authority (“FCA”) since 8 January 2009 (Firm Reference Number 489934).

Under the FCA's Investment Firm Prudential Regime (“IFPR”), the Firm is classified as a non-SNI (non-Small and Non-Interconnected) MIFIDPRU investment firm. As a non-SNI firm, Pearl Diver is required to make periodic public disclosures under MIFIDPRU 8 of the FCA Handbook, covering its governance and risk management objectives, own funds, own funds requirements, and (separately) remuneration.

This document sets out the Firm's disclosures in respect of:

  • Risk management objectives (MIFIDPRU 8.2);

  • Governance arrangements (MIFIDPRU 8.3); and

  • Own funds held and own funds requirements (MIFIDPRU 8.4).

Disclosures relating to remuneration policies and practices (MIFIDPRU 8.6) are addressed in the Firm's separate Remuneration Disclosure Statement in its Annual Financial Statement and are not repeated in this document.

The disclosure is made with reference to the Firm's financial position and its Annual ICARA (Internal Capital and Risk Assessment) process and Wind-Down Plan for the period 1 July 2025 to 30 June 2026. The disclosure will be reviewed and, where necessary, updated at least annually, and following any material change to the Firm's business model, risk profile, or capital position, in accordance with MIFIDPRU 8.1.9R.

2. Risk Management Objectives and Policies

2.1 Business model and risk appetite

Pearl Diver's business is limited to the provision of investment advisory services to fund vehicles that invest in CLOs and SRTs. The Firm does not deal on its own account, does not hold client money or custody assets (and is accordingly not subject to the FCA's CASS rules), does not act as a market maker, does not appoint tied agents or appointed representatives, and does not provide corporate finance advice, personal investment advice, or pension advice. The Firm advises institutional fund clients only and does not provide services directly to retail clients.

Reflecting this narrow, advisory-only operating model, the Firm's Board (the Managing Partners) has set the Firm's overall risk appetite as low. The Firm also considers the risk of misalignment between its business model and the interests of its clients and the wider market to be low.

2.2 The ICARA process

The Firm operates an Internal Capital and Risk Assessment (“ICARA”) process, reviewed at least annually and following any material change to its business, in accordance with MIFIDPRU 7.4. The ICARA process is used to identify and assess potential harms that could arise from the Firm's ongoing operations to (i) its clients and counterparties, (ii) the markets in which it operates, and (iii) the Firm itself, as well as the potential harms that could arise from an orderly wind-down of the Firm's business.

The Firm considers both individual and correlated risk events. Where potential harms cannot be adequately mitigated through the Firm's systems and controls, the Firm holds own funds and liquid assets in accordance with the overall financial adequacy rule (MIFIDPRU 7.4.7R).

2.3 Key risks identified and mitigants

The principal categories of risk identified by the Firm as part of its ICARA process, and the mitigants applied to each, are summarised below.

  • Business and concentration risk: the Firm advises multiple fund vehicles with multi-year fee arrangements and diversified investor bases. No single client, fund or counterparty represents a concentration that would be expected to have a material impact on the Firm's revenue. New funds are launched sequentially.

  • Operational risk: the Firm mitigates operational risk through internal controls, segregation of duties, oversight by its Compliance function, multiple layers of investment and operational approval. The Firm maintains professional indemnity insurance, which is reviewed annually; insurance is treated as a risk mitigant rather than as a substitute for financial resources under the overall financial adequacy rule.

  • Liquidity risk: the Firm does not hold client money or assets. Liquid assets held by the Firm consist of cash. The Firm reviews its liquidity position, including any foreign currency exposure on an ongoing basis as part of its ICARA process.

  • Wind-down risk: the Firm maintains a dedicated Wind-Down Plan which sets out the scenarios that could lead to a wind-down, the associated triggers, and the financial and non-financial resources required to achieve an orderly wind-down without material detriment to clients, counterparties or the market.

2.4 Stress testing and monitoring

As part of its ICARA process, the Firm has considered severe but plausible stress scenarios, including: failure to launch a new fund within the expected timeframe; early wind-down of multiple funds within a short period; a cyber incident causing temporary loss of revenue-generating operations; reputational damage affecting future client mandates; and significant staff turnover or illness. In each scenario, the Firm has assessed the impact on its own funds and liquid assets and concluded that it would retain sufficient financial resources to continue to meet the overall financial adequacy rule, with partner drawings available to be suspended as a management action if required to preserve capital.

The Firm monitors its capital and liquidity position monthly against its own funds and liquid assets thresholds (including the early warning indicator set at 110% of the own funds threshold requirement, and an internal 125% monitoring level used to trigger consideration of recovery actions). The adequacy of the ICARA process as a whole is formally reviewed at least annually.

3. Governance Arrangements

3.1 Legal structure and governing body

Pearl Diver Capital LLP is a limited liability partnership. The Firm's governing body comprises its Managing Partners, supported by the Firm's Chief Operating Officer / Chief Compliance Officer. The governing body is responsible for setting the Firm's business strategy, risk appetite and risk management framework, and for overseeing the Firm's financial and operational performance.

Given the size, nature and complexity of the Firm's business – an investment adviser that does not deal on own account, hold client money, or provide complex or high-risk regulated activities – the Firm considers its current governance arrangements to be proportionate to its business model.

3.2 Role of the governing body

The governing body:

  • approves and reviews the Firm's business model and strategy;

  • sets and reviews the Firm's risk appetite, which the Firm has determined to be low, consistent with its advisory-only business model;

  • reviews monthly management information, including financial results, capital adequacy and liquidity metrics;

  • reviews and approves the Firm's ICARA process and the underlying assessment of potential harms, own funds and liquid assets requirements, and wind-down analysis, at least annually and following any material change to the Firm's business or operating model; and

  • reviews and approves the Firm's Wind-Down Plan at least annually, with implementation of the Plan (in the event of a wind-down) to be led by the Managing Partners and Chief Operating Officer.

 

4. Own Funds

The table below sets out the composition of the Firm's own funds as at 30 June 2026, being the reference date for the Firm's most recent Annual ICARA Report.

Own funds item Amount (£)

Common Equity Tier 1 Capital (“CET1 Capital”) 2,534,000

Additional Tier 1 (“AT1”) capital –

Tier 2 (“T2”) capital –

Total own funds 2,534,000

The Firm's own funds consist entirely of Common Equity Tier 1 capital, comprising members' capital contributions and retained reserves; the Firm holds no Additional Tier 1 or Tier 2 capital instruments. As an LLP that does not deal on its own account and does not hold complex or illiquid assets on its balance sheet, the Firm applies no material regulatory deductions in arriving at its own funds figure.

5. Own Funds Requirements

Under MIFIDPRU 4, the Firm's own funds requirement is the higher of:

  • its Permanent Minimum Capital Requirement (“PMR”);

  • its Fixed Overhead Requirement (“FOR”); and

  • its K-factor requirement, calculated by reference to the K-factors applicable to its regulated activities.

Own funds requirement Amount (£)

Permanent Minimum Capital Requirement (PMR) 75,000

K-factor requirement 262,000

Fixed Overhead Requirement (FOR) 621,000

Own funds threshold requirement (higher of the above and the ICARA harms assessment) 621,000

As at 30 June 2026, the Firm held own funds of £2,534,000 against an own funds threshold requirement of £621,000, representing a surplus of £1,913,000. The Firm monitors this position monthly, with an early warning indicator set at 110% of the threshold requirement and an internal management trigger at 125%, to ensure that any deterioration in the Firm's capital position is identified and addressed on a timely basis.

In addition to its own funds requirement, the Firm is required under MIFIDPRU 7.7 to hold liquid assets of at least its basic liquid assets requirement, which the Firm has determined to be £207,000 as at the reference date. The Firm holds only cash as a liquid asset for these purposes and monitors its liquidity position, alongside its own funds position, on a monthly basis.