Annual letter, 2025

Dear partners,

A year ago we wrote that 2025 would be mostly about raising Fund V and spending time with the companies we already had. That turned out to be roughly right. We closed the fund faster than we expected, returned more cash than in any year since 2021, and made fewer new investments than in a typical year, by choice.

The year in brief

• Fund V held its first close in February and its final close in April, at its $650 million cap.

• Fund IV made its last new investment in June and is now fully invested, with 34 companies.

• Ostra was sold to Calder Health in November, and the proceeds reached Fund III partners in December.

• Tidewater completed its first full year as a public company, and we distributed part of our holding to Fund II partners.

• Fund V made its first five investments, three of which are announced.

Fund V

We set out to raise $600 million and capped the fund at $650 million. The first close in February came to $430 million, almost all of it from partners in earlier funds. The final close followed in April. Eleven new partners joined, most of them foundations and family offices who had followed us for a fund or two before committing.

We turned away about $200 million of demand. A larger fund would have changed how we invest, and we wrote in our announcement that we did not want it to.

By the end of the year, Fund V had called 6 per cent of commitments.

Exits and distributions

Ostra. Calder Health completed its acquisition of Ostra in November. Ostra helps hospitals find and enrol patients for clinical trials, and by the time of the sale it was working with sites in eleven countries. Amira Haddad wrote about the company at the time of the sale. For Fund III, the result was the largest cash return in the fund's history so far. It took the fund's DPI from 0.4x to 0.7x. A smaller amount remains in escrow until 2027.

Tidewater. Tidewater listed in Oslo in 2024, and 2025 was its first full year as a public company. It delivered two long-duration storage projects on schedule and ended the year with a contracted order book roughly twice the size it had at listing. The share price was volatile but finished the year about 30 per cent above the listing price.

When the lock-up ended in the spring, we distributed half of Fund II's shares to its partners in kind. We kept the other half. We think the company is still early in what it can become, and Fund II, at 2.1x DPI, has already returned its capital twice over. Owning some of the shares directly is a reasonable way for its partners to share that view, or not, as each sees fit.

New investments

Fund V made five new investments in 2025. Three are public.

Priora automates prior authorisation, the process by which a doctor must seek an insurer's approval before treatment. It is slow, mostly handled by fax and phone, and responsible for a great many delayed treatments. We led the pre-seed round in March.

Kiln produces low-carbon cement. Cement accounts for a large share of the world's industrial emissions, and most alternatives fail on cost or on the strength tests that engineers rely on. Kiln's approach passed the first of those tests in the lab before we invested. We led its seed round in July.

Amperra builds software that lets utilities run home batteries, heat pumps and chargers as a single virtual power plant. We led the seed round in September, after following the founders for two years.

The other two will be announced by their founders in the first half of this year.

Fund figures

As of 31 December 2025.

Fund IV's marks held roughly flat through the year. Most of its companies raised their last rounds in 2021 and 2022, and many have since grown into those prices. A few have not, and we marked them down in the first half.

What we got wrong

Two things stand out.

We were slow to cut our reserves for two Fund IV companies whose progress had stalled. In both cases we kept money set aside for a recovery that did not come, which tied up capital that could have gone to stronger companies in the same fund. We have since tightened our annual reserve review, so that any company more than a year behind its plan has its allocation reset rather than carried forward.

We also underestimated how long Fund V's first close would take to administer. Several new partners waited too long for their documents, and that was our fault. Sofia Ortega has since brought fund administration in-house for Fund V.

Looking ahead

Fund V will make most of its new investments over the next three years. We expect between eight and ten this year, roughly evenly split between seed and Series A, and between Europe and North America.

For Funds II and III, the priority is liquidity. We will not sell good companies early to hit a number, but where a sensible secondary is available we will consider it, and we will tell you when we do.