This is the thirteenth annual letter we have written since starting Flambard Williams, and it is the one that has been hardest to draft. The year just ended was, in many respects, the most productive of our firm's history. It was also a year in which we made decisions we would, with hindsight, make differently. Both deserve discussion.
The year in summary.
We deployed approximately £130 million of fresh capital across nine positions in the year ended 30 June 2025. We exited three positions — two real estate and one growth equity — at returns that were, on balance, better than we underwrote at acquisition. We marked our portfolio at year-end with appropriate conservatism, and the implied compounded return on capital deployed since inception remains in the band we communicated to principals when we started this firm. We are aware of the temptation to publish more precise numbers in a letter of this kind. We have always declined.
Beyond the financial summary, we hired three colleagues — one in distressed credit research, one in renewable energy underwriting, and one in operations — and we strengthened our advisory bench with two appointments. The firm now operates with twelve full-time professionals, which is the size we have, for the past three years, said we would not exceed. We continue to believe that further scale would require us to accept compromises on the way we work that we are not willing to accept.
The positions we are most proud of.
Three positions deserve specific mention.
The London listed-building development we co-acquired in November 2024. This is a long-dated, complex restoration of a Grade II listed property in St James's, alongside a developer we have known for nine years. The acquisition price reflected the previous owner's exhaustion with a decade-long planning process. We took 70% of the equity at terms that, by our analysis, will produce one of the best risk-adjusted returns of our recent vintage. The work to underwrite this position took eleven months. The execution will take five years. We expect to look back on it as one of the most patient pieces of capital we have deployed.
The European loan portfolio acquisition in March 2025. A €180 million performing-but-unrefinanceable senior real estate loan portfolio, acquired from an institution that had marked the position to a value materially below what we paid. The work was forensic; the structure was bespoke; the alignment with our specialist servicer was unusually good. The first three borrowers in the portfolio have already refinanced or recapitalised at terms that, alone, would have justified the position. The remainder is being worked through methodically.
The grid-balancing battery storage joint venture in the UK and Netherlands. Four sites, two operational and two in late-stage development, alongside a developer who has been a partner of this firm since 2019. The economics combine contracted capacity revenues with merchant upside; the geographic distribution mitigates single-market regulatory risk; and the operating partner is among the best in this business. We expect to expand this position over the coming twenty-four months.
The mistakes we made
Three positions are worth discussing in this section, in the spirit of the rule we set ourselves: we will write about our mistakes with at least the same clarity we write about our successes.
1. We over-paid for a US-based applied-AI position
In late 2024, we participated in a primary equity raise for an applied-AI business serving a regulated industry. The thesis was sound. The business has subsequently performed in line with our underwriting. The mistake was the price. We paid a premium to the comparable transactions of three months earlier, on the assumption that the cycle would continue to support the multiples we were seeing. The cycle did not. The position is currently held at a marked-down value relative to our entry. We expect, over five-plus years, the underlying business performance to recover the entry premium. We do not expect this to be one of our better positions, and we accept the responsibility for that.
2. We were slow on a distressed real estate opportunity in Madrid
We had been studying a specific Madrid commercial real estate position for nearly a year. Our diligence was substantially complete. Our investment committee was supportive. We delayed committing for what we believed at the time were appropriate process reasons. In that delay, the opportunity was acquired by a continental competitor who paid approximately what we would have paid and who we believe will earn a return materially better than we earn on most of our European positions of comparable risk.
The lesson is one we keep relearning: process discipline is essential, but process discipline that produces hesitation in the face of a position we have already underwritten is a different and lesser thing. We have adjusted our committee cadence accordingly.
3. We held a renewable energy position too long
One of our earliest renewable energy positions — an onshore wind portfolio acquired in 2018 — was at the end of its contracted PPA period during the year. We had several opportunities to refinance and re-contract at attractive terms during 2023 and 2024. We chose to wait, on the analysis that an even better moment would arrive. It did not. The eventual re-contracting in early 2025 was at terms perhaps 80% as attractive as what we could have achieved a year earlier. The opportunity cost is real.
We held the position for the right reasons during its initial period. We held it for a moment too long during its rollover. The discipline of selling — or refinancing — when the terms are good, rather than waiting for terms that may not appear, is a discipline we have not yet fully internalised across the firm.
"We will write about our mistakes with at least the same clarity we write about our successes."
The standards we hold ourselves to.
The firm operates under a small set of standards that we revisit each year and, on occasion, update. They are not principles in the abstract. They are commitments to specific behaviours, against which we evaluate ourselves.
We co-invest our own capital in every position we take. This was our standard at the founding of the firm, and it remains our standard now. Every position on our balance sheet has at minimum 5% of partner capital alongside the principal capital. The economic alignment is, for us, the precondition of the investment relationship.
We do our own underwriting. We have not, since we started this firm, outsourced primary diligence on any position. Every memorandum is written by a partner. Every model is built in-house. Every operator reference is taken personally. This is slow, and we believe it is correct.
We hold positions for the duration they were underwritten for. We do not flip. We do not exit on cycle. We exit when the thesis has been realised or when the thesis has been disproved. The positions discussed earlier in this letter remain open precisely because their theses are still in their middle innings.
We protect the confidence of every counterparty. The firm's reputation is the only asset that compounds without limits. We do not name our investors. We do not name our co-investors. We do not name our operating partners. The work we do is, in nearly every case, work that requires this discretion to be the precondition.
The year ahead
We expect the next twelve months to produce more opportunities than we will be able to take on. The European distressed cycle, which we have written about in detail, is producing a set of acquisitions that exceeds what we believed possible eighteen months ago. The energy transition, particularly at the transmission and grid-edge layers, is opening structurally attractive infrastructure positions. Applied AI in regulated industries continues to produce the most compelling private-market opportunities we are seeing in technology.
The discipline of the year ahead will be exactly what it has always been: deploying selectively, underwriting forensically, structuring carefully, and holding patiently. We expect to deploy somewhat more capital than the year just ended. We do not expect to deploy materially more positions. The work of finding the right opportunities, and the work of saying no to the wrong ones, is the work that distinguishes this firm. That has not changed, and it is not going to.
Closing
To the principals who have placed capital alongside us this year: thank you. The trust is the only thing we have, and we are aware of it every day. To the operators we work with: thank you. The work is yours as much as ours, and we are proud to be invested alongside you. To my partners and colleagues at the firm: thank you. We have built something we are proud of, and we will do better next year than we did this one. That has been our commitment from day one and it will be our commitment until the day we wind this firm up.
I will write again next year.