Real Estate Credit Investments Limited (the "Company")

Interim Financial Statements for RECI LN (Ordinary Shares)

The Board of Directors of the Company announces the release of the Company's Condensed Unaudited Interim Financial Statements for the six months ended 30 September 2024.

View the Interim Financial Statements:

https://realestatecreditinvestments.com/investors/results-reports-and-presentations

A copy of the Interim Financial Statements has been submitted to the National Storage Mechanism and will shortly be available for inspection at:

https://data.fca.org.uk/#/nsm/nationalstoragemechanism

For further information please contact:

Real Estate Credit Investments Limited

Condensed Unaudited Interim Financial Statements

For the six months ended 30 September 2024

Consistent attractive dividends from credit exposure to UK and Western European real estate markets

Real Estate Credit Investments is a specialist investor in the United Kingdom and Western European real estate credit markets with a focus on fundamental credit and value

OVERVIEW

AS AT 30 SEPTEMBER 2024

Overview and Highlights

What We Offer

Defensive credit exposure to UK and Western European real estate credit markets

Granular portfolio with detailed disclosure

Attractive and stable income in a changing interest rate environment

Access to Cheyne's established real estate investment team and substantial origination pipeline

Key Figures

Net Assets

£321.8m

(31 March 2024: £326.4m)

NAV per Share

£1.45

(31 March 2024: £1.45)

Total Assets

£412.1m

(31 March 2024: £352.3m)

Net Profit

£12.9m

(30 September 2023: £15.6m)

RECI Offers:

Focus on senior secured credit, with defensive Loan-to-Values ("LTVs")

Strong governance control over its loan book

Management from Cheyne's Real Estate team

Large, experienced, well capitalised borrowers

Dividend stability without compromising risk

Conservative and flexible leverage profile

H1 2024 Total NAV Return (annualised)

9.0%

(30 September 2023: 9.4%)

Share Price

£1.28

(31 March 2024: £1.15)

Dividend Yield (annualised)

9.4%

(31 March 2024: 10.4%)

HY 2024 Dividends

6.0 pence

(30 September 2023: 6.0 pence)

OVERVIEW

At a Glance

Providing compelling risk-adjusted returns

Real Estate Credit Investments ("RECI") is a closed-ended investment company which originates and invests in real estate debt secured by commercial or residential properties in Western Europe, focusing primarily on the United Kingdom, France and Spain.

The Company's aim is to deliver a stable quarterly dividend with minimal portfolio volatility, across economic and credit cycles, through a levered exposure to real estate credit investments.

Investment Portfolio Composition

RECI's investment portfolio, a diversified book of 26 positions in real estate bonds and loans, was valued at £389.9 million, including accrued interest, as at 30 September 2024, up from £329.4 million as at 31 March 2024. The portfolio had a weighted average levered yield of 10.2% and an average LTV ratio of 59.5% as at 30 September 2024.

Investments are Predominantly in:

Self-Originated Loans and Bonds

Predominantly bilateral senior real estate loans and bonds.

Market Bonds

Listed real estate debt securities such as Commercial Mortgage Backed Securities ("CMBS") bonds.

1 The Total NAV Return measures the combined effect of any dividends paid, together with the rise or fall in the NAV per share. Total NAV Return relates to past performance and takes into account both capital returns and dividends paid to Shareholders. Any dividends received by a Shareholder are assumed to have been reinvested in the assets of the Company at its NAV per share on the ex-dividend date. Total NAV Return is considered an Alternative Performance Measure pursuant to ESMA Guidelines which is unaudited and outside of the scope of International Financial Reporting Standards.

OVERVIEW

Chairman's Statement

RECI continued to deliver a stable NAV and attractive quarterly 3 pence dividend per share

Andreas Tautscher Chairman

As this is my first Chairman's statement, I would like to start by thanking my predecessor, Bob Cowdell, both for his time as Chair of RECI but also for his support during the handover and John Hallam who recently retired from the Board after nine years of service. I would also like to welcome Mark Thompson to the Board who brings a wealth of financial and board experience. I am also happy to report my other fellow Directors have helped me to get up to speed on RECI and I have had a number of good interactions with our investment manager, Cheyne and broker, Panmure Liberum.

The period since commencement of the Company's current financial year on 1 April 2024 has seen a continuation of the geopolitical and economic themes which have challenged global markets and investor sentiment. Neither of the regional confrontations in Ukraine/Russia and Israel/Gaza show any sign of abating and in many respects have only increased in intensity in the last six months. Both conflicts represent a real risk of expanding into wider regional wars.

The "Global Elections Super Cycle" is now drawing to a close, with 66 of the 74 elections now complete. Most recently, Donald Trump was emphatically re-elected as US president and it is not yet clear to what extent he will enact his campaign promises of tax cuts, immigration curbs and trade tariffs. It is highly likely though that the president-elect's policies will lead to higher inflation and interest rates in the US together with a stronger dollar. It remains to be seen whether global trade will suffer to the extent forecast. Of more immediate impact has been the move to rate cuts with the Federal Reserve ("Fed"), Bank of England ("BoE") and European Central Bank ("ECB") cutting rates for the first time in the current cycle. Both Fed and ECB have seen inflation drop towards their 2% benchmarks. By contrast the BoE has been more conservative as UK inflation rates have proved to be more stubborn.

The move to a rate-cutting environment is welcome and it is hoped that we are finally starting to see the much predicted reversal of increases we saw in the last three years. That said many commentators (and to some extent Central Banks themselves) have managed expectations of a rapid reduction in rates to pre pandemic levels: there is still a strong expectation that we will see higher medium-term rates. The equity markets are all trading at or near highs with most outlooks remaining positive albeit with a weather eye on any further deterioration in the geopolitical tensions noted earlier. Bond markets are in a more difficult position as they try to map out where the current rate movements might lead to and how quickly.

The continuing focus on asset valuation in the alternative assets sector and the discount within the Specialist Funds Segment is potentially of greater significance to Shareholders. These factors impact RECI as there is limited differentiation by the market on our segment. That said, we feel our investment manager is well placed as their investment process and deal selection continues to identify and lend against those quality real estate assets within its preferred sectors and with fundamentals that underpin and support their valuations. It remains the case that our manager sees more opportunities than RECI is currently able to participate in, which is something we would like to address in 2025. I would also like to highlight the success of our buyback programme which has helped to reduce our discount to 11.8% at 30 September 2024.

Continuing the pivot towards senior loans which commenced in 2017, our Investment Manager has strengthened the resilience of the Company's portfolio. As at 30 September 2024, the exposure to lower risk senior loans and bonds was 87.4%; the total portfolio had a Weighted Average Life ("WAL") of 1.4 years; and the weighted average entry LTV of the Company's portfolio was 59.5% (60.1% at 30 September 2023), providing significant defensive equity headroom.

Financial Performance

RECI reported a total net profit for the half year ended 30 September 2024 of £12.9 million on half year end total assets of £412.1 million, compared with a £15.6 million net profit in the half year ended 30 September 2023, on half year end total assets of £408.5 million.

The NAV as at 30 September 2024 was £1.45 per share (£1.48 per share as at 30 September 2023). The 30 September 2024 NAV reflects the dividends of 6 pence per share declared during the half year in respect of the fourth interim dividend for the year ended 31 March 2024 and the first interim dividend of the current financial year, returning £13.4 million to Shareholders and providing an annualised total NAV return of 9.0% for the half year.

During the half year to 30 September 2024, the Company funded £104.2 million into existing investments, compared with £50.7 million in the previous half year. RECI received cash repayments and interest of £50.2 million compared with £72.6 million in the half year ended 30 September 2023.

Half Year Review

Reflecting RECI's robust portfolio, the Company's NAV remained stable during the half year to close at £1.45 per share at 30 September 2024.

Having commenced the half year period at a price of £1.15 per share, the Company's shares traded at an average discount to NAV of 16.5% during the financial half year to close at 30 September 2024 at £1.28 per share (a discount of 11.8%). Reflecting market sentiment, the Real Estate debt sector traded at an average discount of 20.4% (excluding RECI) over the six months to 30 September 2024 (source: Panmure Liberum, company data). The Board continues its practice of considering all options when assessing the levels of excess cash to be retained or deployed by the Company from time to time and how any such cash available for deployment should be allocated. Excess cash is regarded as the cash available following recognition of the obligation to ensure sufficient cash resources to pay, inter alia, the Company's expenses, borrowings, dividends and fund its ongoing contractual loan commitments ("Available Cash").

On 27 September 2024, the Board of Directors announced that, having reviewed the current circumstances and assessed the Company's level and allocation of cash available for deployment, it intends to undertake a further buyback programme (the "Programme") which will run to 31 March 2025. The aggregate purchase price of all shares acquired under the Programme will be no greater than £10.0 million. The Company appointed Panmure Liberum Capital Limited to make market purchases of shares in accordance with certain pre-set parameters, the Company's existing authorities and relevant regulatory requirements. In the period from the announcement of the preceding buyback programme to 25 September 2024 the Company's NAV increased from 144.9p (as at 31 March 2024) to 147.5p (31 August 2024) and the share price increased from 114.5p to 127.5p. This resulted in a significant reduction in the share price discount to 13.6% from 20.7% at the outset.

At the beginning of the financial year on 1 April 2024, RECI had gross balance sheet leverage of £23.8 million (7.3% of NAV) and leverage net of cash was £1.0 million (0.3% of NAV). The Board and Cheyne have continued to monitor RECI's cash resources and repayments and to consider the appropriate level and blend of gearing for the Company. To this end the Company introduced asset-level leverage (which may be structured on a non-recourse or partial recourse basis), alongside flexible balance sheet leverage. As at 30 September 2024, the Company's gross balance sheet leverage was £79.6 million (24.7% of NAV); its leverage net of cash was £63.2 million (19.6% of NAV); and its net effective leverage, including contingent liabilities of £3.0 million (being the partial recourse commitment, representing 25% of asset level borrowings provided to certain asset level structured finance counterparties), was £66.2 million (20.6% of NAV).

Reflecting your Board's and our Investment Manager's confidence in RECI and its future, the Directors and employees of Cheyne have purchased an aggregate of 3.3 million shares in the Company since the start of the current financial year.

Outlook

The continued uncertainty as to the future level of inflation and interest rates will likely persist for the rest of this financial year. The macroeconomic background will feed into valuation concerns for certain sectors and property types within the real estate market. The Board is confident that Cheyne's management expertise and focus on only lending in respect of high quality assets, in their preferred sectors and contracting with substantial quality sponsors, will position RECI well to withstand the broader challenges and steer a course through difficult market conditions.

The Company's buyback programme remains in place and will be reviewed at the end of the current financial year. Scheduled portfolio repayments will boost available cash resources during H1 2025, which may be deployed into a successor to the programme and potential investments into the attractive higher yielding opportunities identified by Cheyne.

During the next few months I am looking to meet with as many Shareholders as possible to continue the active engagement of my predecessor.

Your Board remains committed to providing investors with a long-term opportunity to receive an attractive dividend stream from an expertly managed exposure to selected real estate credit assets.

Andreas Tautscher Chairman

27 November 2024

The complete set of the Balance Sheet and Profit and Loss items are presented in the Company's condensed unaudited interim financial statements.

Further Information

Monthly fact sheets as well as quarterly update presentations are available on the Company's website: www.realestatecreditinvestments.com.

1 Alternative Performance Measures are described in Glossary on page 48.

BUSINESS AND STRATEGY REVIEW

Investment Manager's Report

Resilience and income through global uncertainty

Ravi Stickney Portfolio Manager

Managing Partner and CIO, Cheyne

Global Real Asset Valuations: Asset performance divergence against the backdrop of renewed capital market uncertainty

Asset Performance Remains Resilient for Select Productive Assets

This year has seen an accelerating divergence in asset-level performance between productive real estate assets and those considered obsolete. The previously prevailing low interest rate era had supported the valuations and financing capacity of obsolete assets and as interest rates have risen over the past two years, this support has effectively been withdrawn.

With terminal rates migrating upwards since late 2022 and remaining elevated, the focus on valuations has shifted to which assets are meaningfully capable of meeting a demand from society. Financial engineering (leverage and valuations) has given way to the reward of actual value creation and utility.

To take the London office sector as an example; it is now becoming accepted that tenants are no longer willing to reside in obsolete accommodation that does not present an attractive place of work for employees. The acceptance of sub-standard workspace has fallen away to be replaced by a demand for high-quality accommodation offering attractive amenities, a desirable location and strong sustainability credentials.

Occupiers, as well, are facing a growing need to leave their current sub-standard obsolete accommodation (having postponed occupational decisions since COVID). The need for new accommodation is met with a paucity of available appropriate space.

That same supply and demand imbalance can be extended to the "living" sector (multifamily, student housing, elderly housing and affordable housing), industrial (light industrial and logistics), healthcare and science-driven sectors (e.g. datacentres).

This retrenchment from obsolete assets presents an opportunity for well capitalised investors to address that imbalance.

The challenge for the creation, and retention, of much needed assets is then the valuation of assets and the availability of funding.

Valuation Yields and Funding Availability Face yet More Uncertainty

Recent downward trends in macro inflation in Western economies have reinforced hopes that central banks will be able to taper the higher level of terminal interest rates. Expectation of lower rates has caused a tightening of valuation yields and debt funding rates over the last few months.

The recent sweeping re-election of Donald Trump as US president does bring his stagflationary immigration, trade and fiscal policies promised on the campaign trail into sharper focus. Whether he is able to implement these policies to his desired extent remains to be seen but it is likely that his re-election will be negative for the US economy. Europe and the wider world will similarly face headwinds on growth and inflation.

To an extent, the UK and parts of Europe are relatively insulated from US policy. However, Germany, the largest Eurozone economy is, probably, the most exposed to an increase in tariffs and elevated inflation.

Coupled with reasonable growth and unemployment trends globally, we believe that the inflationary environment (and higher rates environment) will remain elevated for longer. This, we believe, will keep in check the yield compression assumptions for assets and also the sustainability of existing (pre 2022) debt finance.

RECI's Positioning

RECI's positioning and response to global macro fluctuations, since the Brexit vote of 2016, has been to move its focus to senior loans (with the benefit of first mortgage security, governance and covenants) and eschew legally subordinated (mezzanine) positions.

That repositioning has seen RECI demonstrate a strong degree of credit resilience in the pandemic period and also in this post 2022 higher rate cycle.

RECI's focus on new investments remains consistent with our investment thesis, and with Cheyne's wider origination focus on:

Challenges

Valuation declines and macro headwinds have thrown up challenges for RECI's management of its loan book. Indeed, the significant negative change in the German real estate market at the turn of the year, together with the political uncertainty arising from the recent elections in France have posed challenges. RECI's manager, Cheyne, with its large localised teams, have continued to work to maximise recovery of the positions requiring more intensive asset management as set out in the loan performance ranking table on the following page.

Earlier this year, we started presenting the RECI loan book in tranches of performance outlook, with a ranking that presents a view on our thoughts on each loan's performance and recovery potential. This ranking table can be found on the next page.

Opportunities

Given the ongoing significant gulf between the need for debt capital and its availability in Europe, along with the very high barriers to entry in the creation and operation of an alternative lender platform for real estate in Europe, Cheyne has recorded its highest origination volume in its 16 year history in 2024. Our increased senior loan origination has come with sustained spreads and risk profile.

RECI's ability to participate in that senior loan origination is constrained by the availability of its cash resources and the competing requirements of cash generated through loan income and repayments (share buybacks and dividends primarily).

Nonetheless, RECI did reinvest loan redemption proceeds from two investments repaid in June and July into one senior loan in this period, at a 65% LTV and secured by a portfolio of well performing core assets in London. The levered investment provides a net running income of 16% to RECI, assisting RECI in improving its net operating income and dividend cover.

RECI will seek to participate in further highly cash generative deals presented by its manager, while taking into consideration its competing capital requirements.

Portfolio Composition - Top 10 Assets

Risk Ranking

Risk Rating (Dirty FV % of NAV)

Looking Forward

The immediate priority for RECI remains the following:

Those priorities are aimed at the dual objectives of (a) reducing NAV volatility (as the loan book reduces, NAV volatility is likely to increase without further reinvestment) and (b) improving the dividend cover, without the need for cover from trading profits (i.e. looking solely to income for dividend cover through time). Expansion of the capital base would clearly help to support this dual objective.

Cheyne Capital Management (UK) LLP 27 November 2024

BUSINESS AND STRATEGY REVIEW

Sustainability Report

RECI's Approach to Sustainability

RECI aims to operate in a responsible and sustainable manner over the long term. The Company prioritises continuous enhancement of ESG credentials across the portfolio, and its success is aligned with the delivery of positive outcomes for all its stakeholders, not least the communities in which the buildings that it finances live, work and enjoy.

The Company's main activities are carried out by Cheyne, the Investment Manager, and as such the Company adopts the Investment Manager's policy and approach to sustainability and integrating ESG principles.

The Investment Manager was one of the initial signatories to the Standards Board for Alternative Investments (formerly known as the Hedge Fund Standards Board) and is a signatory to the United Nations-supported Principles for Responsible Investment ("PRI").

Several standards and codes have received prominence as metrics for investment managers. These include, for example, the UN Principles for Responsible Investment ("UN PRI"), the Task Force on Climate-related Financial Disclosures ("TCFD"), the Financial Reporting Council's Stewardship Code, and the FCA's Sustainability Disclosure Requirements ("SDR").

The Investment Manager's Stewardship Committee provides firm wide oversight over its processes, seeking to ensure compliance with existing Responsible Investment and ESG policies and procedures, and creates a direct communication channel for all ideas and concerns around ESG. In addition, the ESG Implementation Forum acts as a conduit for the streamlining of various initiatives across investment lines and ensures that it continuously improves its ESG standards.

Cheyne's Partnership with Evora Global

ESG considerations have formed a key part of Cheyne's approach to investments in real estate for many years. In February 2022, Cheyne partnered with Evora, widely recognised as one of the leading sustainability consultancy specialists to the real estate industry, to formalise its approach to the incorporation of sustainability considerations into the investment process.

Cheyne Core ESG Principles

Incorporating Sustainability into the Investment Process

Due Diligence

RECI is primarily invested in real estate loans and other real estate-based debt investments. Key factors taken into consideration, where appropriate and possible, are best-in- class environmental, design and construction standards, a focus on Building Research Establishment Environmental Assessment ("BREEAM") ratings, governance rights and engagement with sponsors. Sustainability risks are considered during the Investment Manager's initial due diligence in respect of an investment opportunity, including as part of the external valuations of the real estate being financed (such valuations typically consider any environmental and/or social risks) and early engagement with potential borrowers or issuers through a data gathering exercise.

The Investment Manager's analysts also compile reports using data gathered from their own due diligence and external reports, environmental performance indicators (including BREEAM ratings and Energy Performance Certificates) and investigations (including through the use of forensic accountants and other third-party consultants). This information is included in the investment committee memorandum, which is considered by the Investment Manager's investment committee prior to an investment being made.

Decision-Making Process

Sustainability risks are considered as part of the investment decision-making process for RECI. In particular, the following sustainability risks are typically considered, both in respect of the real estate being financed and/or the relevant borrower or issuer:

Exit

ESG considerations are already having an impact on underlying real estate values and whilst clear data-driven evidence is in its infancy, the Investment Manager is acutely aware that during the life of the loans that RECI is writing, this will become much clearer. As such this is an important consideration regarding risk analysis now; hence the approach above is an integral tool when calculating, managing and measuring risk.

Ongoing Management

Sustainability risks also form part of the ongoing monitoring of RECI's investments, with regular reports and ongoing engagement from borrowers and issuers incorporating information related to sustainability risks provided to the Investment Manager. Where appropriate, the investment team will assist borrowers and issuers in addressing ESG- related issues and support its borrowers' and issuers' efforts to report externally and internally on their ESG approach and performance in relation to material sustainability risks.

The ongoing (since 2022) partnership with Evora Global is expected to enable Cheyne to remain at the forefront of the rapidly evolving ESG agenda and provide an independent checkpoint to challenge their ESG investment process and ensure robustness.

Cheyne has taken a staged approach in developing its ESG strategy, with its philosophy drawing on the following four drivers:

Cheyne has worked with Evora to prepare customised ESG questionnaires for each of the real estate asset types the Cheyne lending funds finance: standing, refurbishment and development assets, together with a borrower questionnaire. An ESG data template has also been prepared (one template for all asset types).

The questionnaires seek to quantify each investment's ESG credentials, utilising a consistent approach to enable aggregation across the assets within the relevant Cheyne fund.

The questionnaires are utilised by the investment analysts as part of their investment evaluation. Investment memos for all proposed investments include a mandatory section on ESG considerations, which are reviewed and discussed at the relevant Investment Committee meeting.

Standards and Guidance

A range of external guidance and best practice standards have been used to inform the development of the ESG questionnaires, including:

Cheyne's Partnership with Carbon.Climate.Certified

Cheyne has also now appointed Carbon.Climate.Certified to prepare a CRREM alignment assessment for every proposed transaction, outlining how the deal could ultimately achieve CRREM alignment, dependent on cost and viability.

Carbon.Climate.Certified will work to establish the scope for a decarbonisation pathway, determine targets, deliverable requirements and create an action plan for net zero alignment and staged gateway reporting. The collation and analysis of this data will allow Cheyne to make strategic investment decisions that align with the UK and EU's commitment to achieve a net-zero carbon economy by 2050.

This commitment reflects Cheyne's dedication to environmental stewardship, sustainability, and the well- being of the communities it serves.

Outlook and Focus Areas 2024 and Beyond

The Company knows that its Shareholders, including the Directors of the Company, see attention to ESG factors as critical in its assessment of Cheyne as the Investment Manager. The Company expects ESG to remain a dominant theme within the financial services industry going forward; the course being taken by regulators suggests that its importance will only increase in years to come; the research process and the investment judgements the Company makes will continue to reflect that and to evolve as necessary.

The continuing evolution is demonstrated through the Investment Manager in completing and implementing its ESG framework which now forms the basis of an evaluation tool to influence investment decisions from an ESG perspective for new projects.

The most recent phase of its ESG evolution has involved the engagement of a leading ESG asset level consultant to capture more defined asset level metrics and develop a decarbonisation strategy. The initial focus of the strategy is to quantify and report carbon impacts associated with each portfolio's assets. The collation and analysis of this data will allow Cheyne to make strategic investment decisions that align with the UK and EU's commitment to achieve a net-zero carbon economy by 2050. This commitment reflects the Investment Manager's dedication to environmental stewardship, sustainability, and the wellbeing of the communities it serves. As part of its involvement with this project, the Investment Manager has assessed and implemented new frameworks (e.g. CRREM) to secure its assets and reduce the risk of stranding.

The Investment Manager firmly believes that adopting this approach has:

These efforts are being fully incorporated into the investment process and allow the Investment Manager to influence borrowers and to improve the ESG standards of projects which they fund.

Looking ahead, one of the main focuses will be on new regulatory requirements. This year the Investment Manager advanced its reporting under the TCFD framework and produced its inaugural FCA TCFD entity report. This report outlines how Cheyne considers climate-related matters when managing assets, and sets out Cheyne's approach to Governance, Strategy and Risk Management, as well as relevant climate-related Metrics and Targets. Due to its role as Investment Manager, Cheyne also produced a FCA TCFD product-level report for RECI.

Both reports are publicly available and can be found on Cheyne's website www.cheynecapital.com/esg- responsibleinvestment

In addition, the UK's regulatory framework SDR continues to come into force in stages. As a non-UK domiciled company, the existing scope of the SDR has very little impact on RECI, with no additional reporting or product labelling requirements imposed. Nonetheless, RECI will continue to monitor the regulatory landscape as well as consider best practices as pertains to SDR and other such frameworks. Effective 31 May 2024, the Investment Manager was brought into scope of the FCA's Anti-Greenwashing Rule and continues to work closely with relevant parties to ensure that it is meeting its regulatory obligations.

Further details, Cheyne's ESG policy can be found on its website: www.cheynecapital.com/esg-responsibleinvestment Residential development in the United Kingdom

GOVERNANCE

Directors' Responsibility Statement

Governance

We confirm that to the best of our knowledge:

Principal Risks and Uncertainties

The principal risks and uncertainties faced at the time of the last annual report remain valid for the purposes of the interim management report. The Board considers that the following are the principal risks and uncertainties faced by the Company. There are no emerging risks since the publication of the annual report.

Long-term Strategic Risk

The Company is subject to the risk that its long-term strategy and its level of performance fail to meet the expectations of its Shareholders. The shares may trade at a continuing discount to NAV and Shareholders may be unable to realise their investments through the secondary market at NAV per share.

Target Portfolio Returns and Dividend Risk

The Company's targeted returns are based on estimates and assumptions that are inherently subject to significant business and economic uncertainties and contingencies, and the actual rate of return may be materially lower than the targeted returns.

Valuation Risk

The valuation and performance of the Company's investments that comprise its portfolio of real estate debt instruments are the key value drivers for the Company's NAV and interest income. Judgements over fair value estimates could significantly affect these key performance indicators.

Credit Risk

Credit risk is the risk that a counterparty to a financial instrument will fail to discharge an obligation or commitment that it has entered into with the Company.

Market Risk

Market risk is the risk that the fair value and future cash flows of a financial instrument will fluctuate because of changes in market factors. Market risk comprises interest rate risk, currency risk and price risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value and future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

Currency Risk

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities on a timely basis.

Other Risk Factors

These currently include: geopolitical and macroeconomic risks including volatility, continuing higher rates, supply chain disruption, the continuing impact of the Ukraine conflict, and the effects of climate change and cyber security.

The detailed explanation of these principal risks and uncertainties can be found in the Strategic Report section under the Risk Management section of the 31 March 2024 annual report, which is available on the Company's website.

By order of the Board

Andreas Tautscher

Director

Susie Farnon

Director

27 November 2024

Condensed Unaudited Interim Financial Statements

For the six months ended 30 September 2024

Financial Statements

Independent Review Report

to Real Estate Credit Investments Limited

We have been engaged by the Company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2024 which comprises the condensed unaudited statement of comprehensive income, the condensed unaudited statement of financial position, the condensed unaudited statement of changes in equity, the condensed unaudited statement of cash flows and related notes 1 to 20.

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 September 2024 is not prepared, in all material respects, in accordance with International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

Basis for Conclusion

We conducted our review in accordance with International Standard on Review Engagements (UK) 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Financial Reporting Council for use in the United Kingdom (ISRE (UK) 2410).

A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

As disclosed in note 2, the annual financial statements of the company are prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting".

Conclusion Relating to Going Concern

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report, nothing has come to our attention to suggest that the Directors have inappropriately adopted the going concern basis of accounting or that the Directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

This Conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410; however future events or conditions may cause the entity to cease to continue as a going concern.

Responsibilities of the Directors

The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdom's Financial Conduct Authority.

In preparing the half-yearly financial report, the Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Review of the Financial Information

In reviewing the half-yearly financial report, we are responsible for expressing to the company a conclusion on the condensed set of financial statements in the half-yearly financial report. Our Conclusion, including our Conclusion Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of Our Report

This report is made solely to the company in accordance with ISRE (UK) 2410. Our work has been undertaken so that we might state to the Company those matters we are required to state to it in an independent review report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company, for our review work, for this report, or for the conclusions we have formed.

Deloitte LLP Recognised Auditor

Guernsey, Channel Islands 27 November 2024

Condensed Unaudited Statement of Comprehensive Income

For the Six Months Ended 30 September 2024

All items in the above statement are derived from continuing operations.

The accompanying notes form an integral part of the condensed unaudited interim financial statements.

Condensed Unaudited Statement of Financial Position

As at 30 September 2024

The accompanying notes form an integral part of the condensed unaudited interim financial statements. Signed on behalf of the Board of Directors by:

Andreas Tautscher, Director

Susie Farnon, Director

27 November 2024

Condensed Unaudited Statement of Changes in Equity

For the Six Months Ended 30 September 2024

The accompanying notes form an integral part of the condensed unaudited interim financial statements.

Condensed Unaudited Statement of Cash Flows

The accompanying notes form an integral part of the condensed unaudited interim financial statements.

Notes to the Condensed Unaudited Interim Financial Statements

For the Six Months Ended 30 September 2024

1. General Information

Real Estate Credit Investments Limited ("RECI" or the "Company") was incorporated in Guernsey, Channel Islands on 6 September 2005 with registered number CMP 43634. The Company commenced its operations on 8 December 2005.

The Company invests in real estate debt secured by commercial or residential properties in the United Kingdom and Western Europe, focusing primarily on those countries where it sees the changing dynamics in the real estate debt market offering a sustainable deal flow for the foreseeable future. The Company has adopted a long-term strategic approach to investing and focuses on identifying value in real estate debt. In making these investments, the Company uses the expertise and knowledge of its Alternative Investment Fund Manager ("AIFM"), Cheyne Capital Management (UK) LLP ("Cheyne" or the "Investment Manager").

The Company's shares are currently listed and trade on the Main Market of the London Stock Exchange. The shares offer investors a levered exposure to a portfolio of real estate credit investments and aim to pay a quarterly dividend.

The Company's investment management activities are managed by the Investment Manager, who is also the AIFM. The Company has entered into an Investment Management Agreement (the "Investment Management Agreement") under which the Investment Manager manages its day-to-day investment operations, subject to the supervision of the Company's Board of Directors. The Company is an Alternative Investment Fund ("AIF") within the meaning of the Alternative Investment Fund Managers Directive ("AIFMD") and accordingly the Investment Manager has been appointed as AIFM of the Company, which has no employees of its own. For its services, the Investment Manager receives a monthly Management Fee, expense reimbursements and accrues a Performance Fee (see Note 16). The Company has no ownership interest in the Investment Manager.

Citco Fund Services (Guernsey) Limited is the Administrator and provides all administration services to the Company in this capacity. The Bank of New York Mellon (International) Limited is the Depositary and undertakes the custody of assets. Aztec Financial Services (Guernsey) Limited is the Company Secretary.

2. Material Accounting Policies

Statement of Compliance

The condensed unaudited interim financial statements for the period ended 30 September 2024 have been prepared in accordance with International Accounting Standard ("IAS") 34 Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB"). The same accounting policies, presentation and methods of computation have been followed in these condensed unaudited interim financial statements as were applied in the preparation of the Company's audited financial statements for the year ended 31 March 2024.

The condensed unaudited interim financial statements do not contain all the information and disclosures required in a full set of annual financial statements and should be read in conjunction with the audited financial statements of the Company for the year ended 31 March 2024, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the IASB.

The comparative information for the year ended 31 March 2024 does not constitute Statutory Accounts as defined by Guernsey Law. A copy of the Statutory Accounts for that year has been delivered to the Shareholders and is available on the Company's website: www.realestatecreditinvestments.com.

The operations of the Company are not subject to seasonal fluctuations.

New Standards, Amendments and Interpretations Issued and Effective for the Financial Year Beginning 1 April 2024

The Company has applied the following standards and amendments for the first time for its interim reporting period commencing 1 April 2024:

The amendments listed above have no material impact on the financial statements of the Company.

New Standards, Amendments and Interpretations Issued but not Effective for the Financial Year Beginning 1 April 2024 and not Early Adopted.

Amendments to IAS 21 provide guidance to specify when a currency is exchangeable and how to determine the exchange rate when it is not. Earlier application is permitted. The Company did not early adopt these amendments and expects that the amendments will have no material impact on the financial statements.

Amendments to IFRS 9 and IFRS 7 respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments:

The Company did not expect these amendments to have a material impact on its operations or financial statements.

IFRS 19 allows for certain eligible subsidiaries of parent entities that report under IFRS Accounting Standards to apply reduced disclosure requirements. The Company did not expect this standard to have an impact on its operations or financial statements.

IFRS 18 will replace IAS 1, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined performance measures within the financial statements. The Company did not early adopt these amendments and the management is currently assessing the detailed implications of applying the new standard on the Company's financial statements.

Basis of Preparation

The condensed unaudited interim financial statements of the Company are prepared under IFRS on the historical cost or amortised cost basis except for financial assets and liabilities classified at fair value through profit or loss which have been measured at fair value.

For the period ended 30 September 2024 and year ended 31 March 2024, the financial assets at fair value through profit or loss include the related interest receivable to reflect the measurement of the Company's investments as a single unit of account, which includes all cash flows associated with the asset.

The functional and presentation currency of the Company is British Pounds ("GBP" or "£"), which the Board considers best represents the economic environment in which the Company operates.

Going Concern

The Directors believe it is appropriate to adopt the going concern basis in preparing the condensed unaudited interim financial statements as, after due consideration, they consider that the Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of signing the condensed unaudited interim financial statements.

The Investment Manager performed an evaluation of each of its positions in light of all geopolitical and macroeconomic factors on operating models and valuations, and performed a granular analysis of the future liquidity profile of the Company. A detailed cash flow profile of each investment was completed, incorporating the probability of likely delays to repayments, other stress tests (and additional cash needs).

Taking account of the updated forecasting, the Directors consider that the cash, cash equivalents and cash collateral at/to brokers as at 30 September 2024 of £16.4 million (31 March 2024: £22.8 million), the liquidity of the market bond portfolio and the financing available through activities such as repurchase agreements as described in Note 8, are sufficient to cover normal operational costs and current liabilities, including the proposed dividend, and the expected funding of loan commitments as they fall due for a period of at least twelve months from the date of signing the condensed unaudited interim financial statements. The Directors note that a key assumption adopted in the going concern analysis is that leverage through repurchase agreements is not withdrawn. Net debt (leverage minus cash) as at 30 September 2024 was 20.6% (31 March 2024: 1.5%).

As disclosed in Note 17, as at 30 September 2024, the Company had committed £494.8 million into the loan and bond portfolio of which £409.7 million had been funded (31 March 2024: £489.0 million commitment of which £352.1 million had been funded). The Investment Manager models these expected commitments and only funds if the borrowers meet specific business plan milestones.

Notwithstanding the Directors' belief that this assumption remains justifiable, the Directors have also determined a number of mitigations to address a scenario where all outstanding repurchase agreements are required to be settled as they fall due. Whilst there would be a number of competing strategic factors to consider before implementation of such options, the Directors believe that these are credible and can generate sufficient liquidity to enable the Company to meet its obligations as they fall due. Such strategies include cessation or delay of any future dividends, obtaining longer-term and non-recourse financing, and further sales of assets within the bond portfolio.

In carrying out the Company's strategy, the Investment Manager undertakes the following measures:

In consideration of this additional stressed scenario and mitigations identified, the Directors consider that the Company has adequate resources to continue in operational existence for a period of at least twelve months from the date of signing the condensed unaudited interim financial statements.

3. Net Gains on Financial Assets and Liabilities at Fair Value through Profit or Loss

4. Operating Expenses

1 The costs relate to the annual running costs of each securitization entity (ENIV) compartment along with any abortive costs on failed deals

The ongoing charges are calculated based on the most recent Association of Investment Companies ("AIC") guidance issued in October 2024. For 30 September 2024 they are 1.78% and the restated costs, based on the most recent AIC guidance, for 30 September 2023 are 1.67%.The costs exclude legal transaction fees and financing.

5. Interest Income and Finance Costs

The following table details interest income and finance costs from financial assets and liabilities for the period:

6. Other Liabilities

7. Structured Entities not Consolidated

A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor in deciding who controls the entity, such as when any voting rights relate to administrative tasks only and the relevant activities are directed by means of contractual arrangements. A structured entity often has some or all of the following features or attributes:

The Company has concluded that the unlisted entities in which it invests, but does not consolidate, meet the definition of structured entities. Cheyne utilises structured entities in order to obtain leverage, whilst limiting recourse to the underlying funds. Cheyne implements an off-balance sheet funding structure by establishing an orphan Special Purpose Vehicle or SPV ("LOL Vehicle") to own and manage a discrete, diversified pool of repackaged senior debt exposures financed pro rata by Cheyne funds and a bank. The Sponsors who will fund the Orphan SPV will be a combination of Cheyne-managed funds, of which RECI is one. The bank lender faces Real Estate Loan Funding ("RELF") (an orphan SPV established for the purpose of holding and financing a discrete pool of senior mortgage exposures, held in listed/cleared bond format). RECI, alongside other participating Cheyne funds, holds asset-linked notes issued by RELF. The recourse is either to the RELF only, or via certain limited recourse fund guarantees (i.e. maximum 25% of amounts borrowed). Financing is "off-balance sheet" and all other assets in RECI are unencumbered, except insofar as a limited recourse guarantee is provided. This arrangement limits RECI's exposure to the underlying credit(s) and financing. This conclusion will be reassessed on an annual basis, if any of these criteria or characteristics change.

As a result, the Company recognises its interests in structured entities as investments at fair value through profit or loss in accordance with IFRS 10 Consolidated Financial Statements and therefore there is no requirement to consolidate in full. However, in line with IFRS 12 Disclosure of Interest in Other Entities, the details of the interests in the unconsolidated structured entities are disclosed on the below. The maximum exposure to loss is the carrying amount of the financial assets held which is equal to the fair value of loans and units in funds as at 30 September 2024 and 31 March 2024.

30 September 2024

1 This amount excludes interest receivables.

2 RECI has interest in the structured entities through loan notes instruments and hence the equity percentage held is nil.

3 Other exposure indicates if the investment in the structured entity comes with any associated potential valuation uplift. These can include, but are not limited to: profit share, variable exit fees, and exposure to enterprise value uplift.

4 The total loan exposure on RELF will not equal the carrying value disclosed above due to financing within the RELF structure.

31 March 2024

1 This amount excludes interest receivables.

2 RECI has interest in the structured entities through loan notes instruments and hence the equity percentage held is nil.

3 Other exposure indicates if the investment in the structured entity comes with any associated potential valuation uplift. These can include, but are not limited to: profit share, variable exit fees, and exposure to enterprise value uplift.

4 The total loan exposure on RELF will not equal the carrying value disclosed above due to financing within the RELF structure.

8. Financing Agreements

The Company enters into repurchase agreements with several banks to provide leverage. This financing is collateralised against certain of the Company's bond portfolio assets with a fair value totalling £118.6 million (31 March 2024: £39.5 million) and a weighted average cost of 7.92% (31 March 2024: 7.73%) per annum. The contractual maturity period of the repurchase arrangements is minimum of 6 months or term matched to the underlying loan (31 March 2024: 3 to 6 months).

This short-term financing is shown as a current liability in the Condensed Unaudited Statement of Financial Position whereas the collateralised assets are shown as non-current. The movement in financing agreements amounting to £54.9 million (30 September 2023: £21.4 million) and finance costs paid amounting to £1.0 million (30 September 2023: £1.8 million) are shown as financing activities in the Condensed Unaudited Statement of Cash Flows.

The following table summarises movements under financing agreements as at 30 September 2024 and 31 March 2024.

During the financial period ended 30 September 2024, the Company continued to maintain some off-balance sheet financing agreements. These facilities entered into during the previous financial year do not have recourse to the Company, and the lending is structured using off-balance entities, and secured against the specific loans involved. The aggregate amount of these off-balance sheet loans as at 30 September 2024 was £33.8 million (31 March 2024: £33.9 million).

During the financial period ended 30 September 2024, the Company continued to maintain an off-balance sheet financing agreement which does have partial recourse to the Company. The amount of partial recourse commitment as at 30 September 2024 was £3.6 million (31 March 2024: £3.9 million). No expected loss from providing this guarantee has been recognised in these condensed unaudited interim financial statements and no additional collateralisation has been paid as of period end.

9. Quarterly Dividends

The total dividends announced during the financial period ended 30 September 2024 amounted to 6.0 pence per share (30 September 2023: 6.0 pence per share).

During the financial period ended 30 September 2024, the dividends paid totalled £6.7 million (30 September 2023: £6.9 million) while £6.7 million (31 March 2024: £Nil) was payable at the period end.

Under Guernsey Law, companies can pay dividends provided they satisfy the solvency test prescribed under the Companies (Guernsey) Law, 2008 (as amended), which considers whether a company is able to pay its debts when they become due and whether the value of a company's assets is greater than its liabilities.

The Directors considered that the Company satisfied the solvency test for all dividends approved.

10. Earnings per Share

The calculation of the basic and diluted earnings per share is based on the following data:

1 The weighted average number of shares takes into account the weighted average effect of changes in treasury shares during the period.

11. Share Capital

The issued share capital of the Company consists of shares and its capital as at the period end is represented by the net proceeds from the issuance of shares and profits retained up to that date. The Company does not have any externally-imposed capital requirements. As at 30 September 2024, the Company had equity of £321.8 million (31 March 2024: £326.4 million).

Pursuant to the share buyback authority approved by the Company's Shareholders at the Annual General Meeting on 18 September 2024, the Board has granted authority to the Company's broker, Panmure Liberum Limited, to purchase the Company's shares in the market, subject to preagreed parameters. All shares purchased during the period/year are held in treasury.

The Company purchased 3.3 million (31 March 2024: 4.1 million) shares in the market during the period. The total amount paid to purchase the shares was £4.2 million (31 March 2024: £5.0 million) and this was presented as a reduction from the total equity.

The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the return to Shareholders. The Company is a closed-ended listed investment company and, as such, Shareholders in the Company have no right to redeem their shares. Any redemption offered to Shareholders shall be at the discretion of the Directors of the Company.

The Company currently conducts its affairs so that the shares issued by the Company can be recommended by Independent Financial Advisers to ordinary retail investors in accordance with the Financial Conduct Authority ("FCA") rules in relation to non-mainstream pooled investment products and intends to continue to do so for the foreseeable future. The shares are excluded from the FCA's restrictions which apply to non-mainstream investment products because they are shares in an investment company, which if it were domiciled in the United Kingdom, would currently qualify as an investment trust.

There were no changes in the policies and procedures during the period ended 30 September 2024 with respect to the Company's approach to its share capital management.

12. Valuation of Financial Instruments

IFRS 13 Fair Value Measurement requires disclosures surrounding the level in the fair value hierarchy in which fair value measurement inputs are categorised for assets and liabilities measured in the Condensed Unaudited Statement of Financial Position. The determination of the fair value for financial assets and liabilities for which there is no observable market price requires the use of valuation techniques. For financial instruments that trade infrequently and have little price transparency, fair value is less objective.

The Company categorises investments using the following hierarchy as defined by IFRS 13:

The following tables analyse within the fair value hierarchy of the Company's financial assets and liabilities measured at fair value at the period/year end date:

1 Includes repurchase agreements related to Level 3 investments.

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

The fair value of forward foreign exchange contracts is the difference between the contracts price and reported market prices of the underlying contract variables. These are included in Level 2 of the fair value hierarchy.

The fair value of the repurchase agreements is valued at cost or principal and is included in Level 2 of the fair value hierarchy.

The fair values of investments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within Level 2. These include investment-grade corporate bonds ("Real Estate Credit Investments").

As Level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. In cases where material discounts are applied, the positions will be valued as Level 3.

The Company makes loans into structures to gain exposure to real estate secured debt in the United Kingdom and Western Europe. These loans are not traded in an active market and there are no independent quotes available for these loans. Such holdings are classified as Level 3 investments. The fair value of these loans is linked directly to the value of the real estate loans that the underlying structures invests in, which are determined based on modelled expected cash flows (drawdown principal and interest repayments, and maturity dates) with effective yields ranging from 6.2% to 13.2% (31 March 2024: 6.2% to 13.2%) (the unobservable input).

Fair value of the real estate loans is adjusted for changes in the credit quality of both the borrower and the underlying property collateral, and changes in the market rate on similar instruments where changes are material. No material movements on the fair value of the real estate loans have been identified and the par value of the loans was used. On origination of the loan, the Investment Manager performs due diligence on the borrower and related security/property. This includes obtaining a valuation of the underlying property (to assess LTV of the investment). In most instances, the terms of the loan require periodic revaluation of the underlying property to check against LTV covenants. All the fees associated with the investments (arrangement fees, exit fees, etc.) are paid directly to the Company and not paid to the Investment Manager.

RECI may invest in equity securities which are not quoted in an active market and which may be subject to restrictions on redemptions such as lock-up periods, redemption gates and side pockets. Transactions in the shares of the funds occur on a regular basis. Equity securities are valued using discounted cash flow.

In determining the level, RECI considers the length of time until the investment is redeemable, including notice and lock-up periods or any other restriction on the disposition of the investment. If RECI has the ability to redeem its investment at the reported net asset valuation as of the measurement date, the investment is generally categorised in Level 2 of the fair value hierarchy. If RECI does not know when it will have the ability to redeem the investment or it does not have the ability to redeem its investment in the near term, the investment is categorised in Level 3 of the fair value hierarchy. Equity securities are categorised in Level 3 of the fair value hierarchy.

The following tables set out information about significant unobservable inputs used as at 30 September 2024 and 31 March 2024 in measuring financial assets categorised as Level 3:

Although management believes that its estimates of fair value are appropriate, the use of different methodologies or assumptions could lead to different measurements of fair value. Changes in unobservable inputs, such as discount rates used in loans and bonds valuation and sector-based yields used in collateral valuation can have a negative or positive impact on fair value. Sensitivities around the discount rates are discussed in detail in the interest rate risk note found in the 31 March 2024 Annual Report while sensitivity around expected future cash flows including collateral valuation is explained below. Sensitivities range from 5% to 10% for external valuations dated prior to the end of 30 September 2024. The higher percentage of 10% is applicable to office assets, which have been historically demonstrated and are expected to continue to be more sensitive (+5%) compared to other asset classes. For valuations after 30 September 2024, the sensitivities are set from 5% to 10% with the higher percentage of 10% being assigned to the office sector. This represents management's assessment of a reasonable possible change and would have a negative or positive effect on the fair value measurements for the Level 3 assets of £6,583,013 (31 March 2024: £7,212,730).

Previously, many of the Company's investments in loans were made through a Luxembourg based entity, Stornoway Finance S.à r.l. via loan note instruments. The majority of the Company's investments are now made through another Luxembourg based entity, ENIV S.à r.l. and RELF via separate note instruments. As and when market information, such as market prices from recognised financial data providers becomes available, the Company will assess the impact on its portfolio of loans and whether there should be any transfers between levels in the fair value hierarchy.

As at 30 September 2024, the Investment Manager has taken into account movements in market rates, any indications of impairment, significant credit events or significant negative performance of the underlying property structures, which might affect the fair value of the loans and bonds.

Level 3 Reconciliation

The following table shows a reconciliation of all movements in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the financial period/year:

13. Derivative Contracts

The Company has credit exposure in relation to its financial assets. The Company invested in financial assets with The Bank of New York Mellon with the credit quality of AA- (31 March 2024: AA-) according to Standard and Poor's.

Transactions involving derivative instruments are usually with counterparties with whom the Company has signed master netting agreements. Master netting agreements provide for the net settlement of contracts with the same counterparty in the event of default. The impact of the master netting agreements is to reduce credit risk from the amounts shown as derivative financial assets in the Condensed Unaudited Statement of Financial Position. The credit risk associated with derivative financial assets subject to a master netting arrangement is eliminated only to the extent that financial liabilities due to the same counterparty will be settled after the assets are realised.

The exposure to credit risk reduced by master netting arrangements may change significantly within a short period of time as a result of transactions subject to the arrangement. The corresponding assets and liabilities have not been offset in the Condensed Unaudited Statement of Financial Position.

Below are the derivative financial assets and liabilities by counterparty as at 30 September 2024 and 31 March 2024.

Forward Foreign Exchange Contracts

The following forward foreign exchange contracts were open as at 30 September 2024:

14. Segmental Reporting

The Company has adopted IFRS 8 Operating Segments. The standard requires a "management approach", under which segment information is presented on the same basis as that used for internal reporting purposes.

Whilst the Investment Manager may make the investment decisions on a day-to-day basis regarding the allocation of funds to different investments, any changes to the investment strategy or major allocation decisions have to be approved by the Board, even though they may be proposed by the Investment Manager. The Board retains full responsibility as to the major allocation decisions made on an ongoing basis and is therefore considered the "Chief Operating Decision Maker" under IFRS 8.

The Company invests in Real Estate Credit Investments. The Real Estate Credit Investments may take different forms but are likely to be: (i) secured real estate loans; (ii) debentures or any other form of debt instrument, securitised tranches of secured real estate related debt securities, for example, RMBS and CMBS (together "MBS"); and (iii) equity securities. The real estate debt strategy focuses on secured residential and commercial debt in the United Kingdom and Western Europe, seeking to exploit opportunities in publicly traded securities and real estate loans.

The Company has three reportable segments, being the Market Bond Portfolio, Bilateral Loan and Bond Portfolio and Equity Securities.

For each of the segments, the Board of Directors reviews internal management reports prepared by the Investment Manager on a quarterly basis. The Investment Manager has managed each of the Market Bond Portfolio, Bilateral Loan and Bond Portfolio and Equity Securities separately; thus three reportable segments are displayed in the condensed unaudited interim financial statements.

Information regarding the results of each reportable segment is included below. Performance is measured based on segment profit/(loss), as included in the internal management reports that are reviewed by the Board of Directors. Segment profit/(loss) is used to measure performance as management believes that such information is the most relevant in evaluating the results.

Information regarding the basis of geographical segments is presented in the Investment Manager's Report and is based on the countries of the underlying collateral.

All segment revenues are from external sources. There are no inter-segment transactions between the reportable segments during the period. Certain income and expenditure is not considered part of the performance of either segment. This includes gains/(losses) on net foreign exchange and derivative instruments, expenses and interest on borrowings.

The following table provides a reconciliation between reportable segment profit and net profit.

Certain assets are not considered to be attributable to either segment; these include other receivables and prepayments, cash and cash equivalents, cash collateral at broker and derivative financial assets.

The following table provides a reconciliation between net total segment assets and total assets.

The following is a summary of the movements in the Company's investments analysed by the Loan and Bond Portfolios and Equity Securities for the period ended 30 September 2024:

1 Includes payment-in-kind amounting to £6,439,463 for the period ended 30 September 2024.

The following is a summary of the movements in the Company's investments analysed by the Loan and Bond Portfolios and Equity Securities for the year ended 31 March 2024:

1 Includes payment-in-kind amounting to £13,800,493 for the year ended 31 March 2024.

15. Cash Collateral

The Company manages some of its financial risks through the use of financial derivative instruments and repurchase agreements which are subject to collateral requirements. The following table provides the cash held by various financial institutions as at 30 September 2024 and 31 March 2024. The cash held by brokers is restricted and is shown as Cash collateral at/due to broker in the Condensed Unaudited Statement of Financial Position.

16. Material Agreements and Related Party Transactions

Loan Investments

Previously, many of the Company's investments in loans were made through a Luxembourg based entity, Stornoway Finance S.à r.l. via loan note instruments. The loan investments are now made through another Luxembourg based entity, ENIV S.à r.l., and RELF via separate note instruments. This entity has separate compartments for each loan deal which effectively ringfences each loan deal. Other funds managed by the Investment Manager may invest pari passu in these compartments.

Investment Manager

The Company is party to an Investment Management Agreement with the Investment Manager, dated 22 February 2017, pursuant to which the Company has appointed the Investment Manager to manage its assets on a day-to-day basis in accordance with its investment objectives and policies, subject to the overall supervision and direction of the Board of Directors.

The Company pays the Investment Manager a Management Fee and a Performance Fee.

Management Fee

Under the terms of the Investment Management Agreement, the Investment Manager is entitled to receive from the Company an annual Management Fee of 1.25% on an adjusted NAV, being the NAV of the shares.

During the period ended 30 September 2024, the Management Fee totalled £2.1 million (30 September 2023: £2.1 million), of which £0.3 million (31 March 2024: £0.3 million) was outstanding at the period end.

Performance Fee

Under the terms of the Investment Management Agreement, the Investment Manager is entitled to receive from the Company a performance fee calculated as ((A-B) x 20% x C) where:

On 1 October 2021, the Company entered a new Performance Period which is expected to run until the end date of the quarter in which the next continuation resolution is passed. As no Performance Fee was payable in the previous Performance Period, the NAV on which the Hurdle Assets will be determined in accordance with the above formula was the NAV per share of £1.63 as at 2 October 2017 (being the Starting Date of the Performance Period immediately following the last Performance Period in which a Performance Fee was paid).

During the period ended 30 September 2024 and 30 September 2023, there were no performance fees paid.

Administration Fee

Under the terms of the Administration Agreement, the Administrator is entitled to receive from the Company a monthly administration fee based on the prior month gross assets of the Company adjusted for current month subscriptions and redemptions of the Company at the relevant basis points per annum rate, subject always to a minimum monthly fee £10,000.

During the period ended 30 September 2024, the administration fee totalled £141,823 (30 September 2023: £142,064), of which £58,502 (31 March 2024: £37,548) was outstanding at the period end.

Depositary Fee

Under the terms of the Depositary Agreement, the Depositary is entitled to receive from the Company an annual Depositary fee of 0.02% (31 March 2024: 0.02%) of the NAV of the Company. During the period ended 30 September 2024, the Depositary fee totalled £35,690 (30 September 2023: £32,060). The Company owed £91,804 (31 March 2024: £66,708) to the Depositary at the period end date.

17. Contingencies and Commitments

As at 30 September 2024, the Company had committed £494.8 million into bilateral loans and bonds of which £409.7 million had been funded (31 March 2024: £489.0 million into bilateral loans and bonds of which £352.1 million had been funded).

During the financial period ended 30 September 2024, the Company entered into some off-balance sheet financing agreements which have partial recourse to the Company. The amount of partial recourse commitment as at 30 September 2024 was £3.6 million (31 March 2024: £3.9 million). This represents a financial guarantee and the Company recognises that there's no need for provision on assets at reporting date.

18. Subsequent Events

The Directors declared a second interim dividend of 3.0 pence per share on 27 November 2024.

Bob Cowdell retired on 31 October 2024, Andreas Tautscher became Chairman on 1 November 2024, and Mark Thompson was appointed Board Director on 4 November 2024.

There have been no other significant events affecting the Company since the period end date that require amendment to or disclosure in the condensed unaudited interim financial statements.

19. Foreign Exchange Rates Applied to Combined Totals Used in the Preparation of the Condensed Unaudited Interim Financial Statements

The following foreign exchange rates relative to the GBP were used as at the period/year end date:

20. Approval of the Condensed Unaudited Interim Financial Statements

The condensed unaudited interim financial statements of the Company were approved by the Directors on 27 November 2024.

Directors and Advisers

Directors

Andreas Tautscher (appointed 7 May 2024 and Chairman from 1 November 2024) Colleen McHugh

Mark Thompson (appointed 4 November 2024) Susie Farnon

Bob Cowdell (resigned 31 October 2024)

John Hallam (resigned 18 September 2024)

Secretary of the Company

Aztec Financial Services (Guernsey) Limited PO Box 656

East Wing Trafalgar Court

Les Banques, St. Peter Port Guernsey, GY1 3PP

Corporate Broker

Panmure Liberum Capital Limited Ropemaker Place, Level 12

25 Ropemaker Street London, EC2Y 9LY

Registrar

Link Market Services (Guernsey) Limited Mount Crevelt House

Bulwer Avenue St. Sampson

Guernsey, GY2 4LH

Depositary

The Bank of New York Mellon (International) Limited One Canada Square

London, E14 5AL

Registered Office

East Wing Trafalgar Court

Les Banques, St. Peter Port Guernsey, GY1 3PP

Alternative Investment Fund Manager Cheyne Capital Management (UK) LLP Stornoway House

13 Cleveland Row London, SW1A 1DH

Independent Auditor

Deloitte LLP Regency Court Glategny Esplanade St. Peter Port Guernsey, GY1 3HW

UK Transfer Agent Link Group Limited Central Square

29 Wellington Street Leeds, LS1 4DL

Administrator

Citco Fund Services (Guernsey) Limited PO Box 273

Frances House Sir William Place St. Peter Port

Guernsey, GY1 3RD

Sub-Administrator

Citco Fund Services (Ireland) Limited Custom House Plaza, Block 6 International Financial Services Centre Ireland, Dublin 1

Glossary

Real Estate Credit Investments Limited

East Wing Trafalgar Court Les Banques St. Peter Port Guernsey

GY1 3PP

www.realestatecreditinvestments.com