Funding profile:

In the year, OCI announced a commitment of €190 million (£162 million) to Origin II Fund. OCI’s total commitments of £1,015 million are expected to be funded over the next five years through the following means:

• Cash and available credit: at year-end, cash and available credit was £382 million. During the year, OCI agreed a £175 million revolving credit facility with major lenders, thereby increasing OCI’s flexibility and liquidity. There is an option to increase the facility by a further £50 million subject to agreement by all parties.
• Proceeds from future realisations: the staggered profile of the Oakley Fund Investments is expected to generate regular and ongoing proceeds for OCI as the Funds progress through their life cycle. Fund I is now closed and Fund II is in the latter stage of its life cycle, while Fund III is within its realisation phase and is expected to generate significant proceeds over the short and medium term. Fund IV is moving into its realisation phase, with its first full exit and a partial exit completed in 2022. As the Oakley portfolio matures, the Oakley Funds will distribute disposal proceeds to OCI, which will support a thoughtful capital management plan designed to maximise shareholder return over the long term.
• Direct investments: at year-end, Direct Investments were £219 million, comprised of equity and a loan to Time Out and preferred equity in North Sails. These are expected to be realised in the short to medium term, in line with the Board’s stated ambition to focus on Oakley Fund Investments.

The additional considerations below are factored in when assessing OCI’s unfunded commitments against its liquidity sources:

• Uncalled commitments: Oakley Funds are not expected to call all commitments as the manager aims to retain flexibility. Therefore, a proportion of commitments are likely to remain uncalled.
• Net cash flows: Oakley Fund Investments have historically started to return cash during the investment period, with the cash available to fund future cash requirements. Therefore, the net cash funding requirement is likely to be substantially lower than fund commitments, based upon historical performance.
• The Board aims to strike the right balance between maximising NAV growth through commitments to, and deployment via, the Oakley Funds and other capital allocation considerations, and ensuring an appropriate cash contingency is maintained.

Modelled cash flow forecasts are stress tested to give comfort that the amounts being committed are sufficient to optimise NAV growth while also ensuring adequate liquidity to meet these future fund commitments. The OCI Board is, therefore, confident that it will have sufficient funds to meet its commitments through the investment horizon of the Funds.