OCI

OAKLEY CAPITAL INVESTMENTS LIMITED
ANNUAL REPORT AND ACCOUNTS 2009

03

CONTENTS

CONTENTS

04

06

Financial Highlights

Chairman’s Statement

09 Manager’s Report

14

18

20

22

24

26

Directors’ Report

Review of Investments

Host Europe

Daisy Group Plc

Verivox

Headland Media Limited

28 Monument Securities Limited

30

32

33

34

36

37

38

39

48

49

Independent Auditor’s Report

Financial Statements

Statements of Assets and Liabilities

Schedule of Investments

Statements of Operations

Statements of Changes in Net Assets

Statements of Cash Flows

Notes to the Financial Statements

Directors and Advisers

Notice of Annual General Meeting

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Financial Highlights

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FINANCIAL HIGHLIGHTS

05

FINANCIAL
HIGHLIGHTS

• NET ASSET VALUE OF £1.41 PER SHARE AT 

31 DECEMBER 2009

– UP FROM £1.08 LAST YEAR, AN INCREASE OF 31%

– AHEAD OF ANALYST’S EXPECTATIONS

• IMPROVED EBITDA IN THE PORTFOLIO COMPANIES
ADDS £52 MILLION TO NAV IN THE YEAR, OUT OF A
TOTAL INCREASE OF £80 MILLION 

• ACQUISITION BY THE LIMITED PARTNERSHIP OF
51% OF VERIVOX HOLDINGS LIMITED, ONE OF
EUROPE’S LARGEST INDEPENDENT ONLINE
CONSUMER PRICE COMPARISON BUSINESSES

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The Company enjoyed 
a steep rise in its net asset
value in the year

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CHAIRMAN’S STATEMENT

I am pleased to report strong results for the Company
in 2009, led by a 31% increase in the Company’s net
asset value per share. This has been driven primarily
by operational performance improvements in the
portfolio companies of Oakley Capital Private Equity
L.P. (the “Limited Partnership”). 

The Limited Partnership throughout 2009 has been
driving operational improvements within its portfolio
companies, significantly increasing EBITDA, the
success of which is reflected in the steep increase 
in the value of its portfolio. As well as the strong
performance in the underlying portfolio companies,
the low level of leverage in those businesses has
meant that the Limited Partnership has been
positioned to weather difficult market conditions.

During 2009, the Limited Partnership completed a
successful partial exit: selling Vialtus Solutions to
Daisy Group plc (“Daisy”), a company listed on the
AIM market of the London Stock Exchange,
generating £13 million in cash and a further 
£29 million in Daisy shares. The Limited Partnership
holds 14% of the share capital of Daisy. Also in 2009,
the Limited Partnership acquired a 51% interest in
Verivox, one of Europe’s leading on-line energy price
comparison businesses. 

As a result of a strong trading performance in 2009,
both Host Europe and Headland Media, two of the
Limited Partnership’s portfolio companies,
successfully refinanced, increasing the amount of 
their senior debt. The refinancing, together with cash
generated from operations, enabled these 
companies to repay £9 million of their mezzanine
loans to the Company.

During the course of 2009 the Limited Partnership’s
Investment Adviser spent time building solid
relationships with a number of banking partners
thereby laying the foundations for future investment
opportunities. A large number of private companies
are now directly or indirectly owned by the banks and
the Investment Adviser works with its partner banks 
to provide financial and operational restructuring
solutions on behalf of the Limited Partnership.

The Company has provided loans directly to a number
of the Limited Partnership’s portfolio companies,
generally in the form of mezzanine finance. This has
allowed uncalled cash to continue to work for the
Company generating a positive return for investors.

PERFORMANCE
The Company enjoyed a steep rise in its net asset
value in the year, increasing by £80 million to 
£180 million as at 31 December 2009. Of this
increase, £52 million represents an unrealised gain
arising in the Company’s investment in the Limited

Partnership and £25 million arose as a result of the
issue of shares. 

Of the total net asset value of £180 million, £133 million
represents investments made by the Company into the
Limited Partnership and directly to portfolio companies.
The Limited Partnership had total commitments of
€283 million at 31 December 2009 of which the
Company’s commitment was €187 million or 66% of
the total amount raised; 34.5% of commitments have
been drawn down. The Limited Partnership closed with
total commitments of €288 million of which the
Company’s commitment was 65.0%.

Whilst the Company does not generally invest directly
in the Limited Partnership’s portfolio companies, it is
possible to “see through” the Limited Partnership to
understand the impact of the performance of those
portfolio companies on the investment value attributed
to the Limited Partnership in the Company.

All five of the portfolio company investments have
seen an increase in their fair value both from inception
and within the year, approximately 66% of which gets
reflected in the Company (through its investment in
the Limited Partnership). Fair values as at 
31 December 2009 have been established in
accordance with The International Private Equity 
and Venture Capital Valuation Guidelines by an
independent third party valuer appointed by the
Limited Partnership’s Investment Adviser. 

The Limited Partnership’s largest portfolio company,
Host Europe Corporation Limited (“Host Europe”) 
has contributed an unrealised gain of £28 million to
investment value in the year, driven by impressive
improvements in the operating performance of the
business and a higher rating. The valuation has been
established using a combination of EV/EBITDA
multiples for comparative public companies and
discounted cash flow. In this case, a prudent multiple
has been selected between the lower quartile and
mean of the guideline group of companies.

The Limited Partnership’s investment in Daisy, which is
held within Host Europe, was acquired at the time that
Vialtus Solutions, a division of Host Europe, was sold
to Daisy. At 31 December 2009 the Daisy share price
was 96.7p and this, less a discount to reflect a lock-in
prohibiting the transfer or disposal of the shares
before September 2010, provides an unrealised gain
of £21 million from this investment.

A 51% interest in Verivox Holdings Limited (“Verivox”)
was acquired by the Limited Partnership on 
4 December 2009. There has been an unrealised gain
in Verivox of which £8.2 million is attributable to the
Company. This arises from a combination of; acquiring
the business on an attractive multiple; and, a strong 

07

CHAIRMAN’S
STATEMENT

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08

CHAIRMAN’S
STATEMENT

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As at 31 December 2009, Daisy had a market
capitalisation of £255 million.

On 4 December 2009 the Limited Partnership
acquired 51% of Verivox, Germany’s largest
independent online consumer energy price
comparison service for £17 million. The consideration
was funded using a combination of equity and debt.
The recent deregulation in the German gas and
electricity markets should have a favourable impact 
on the business as German household switching 
rates are currently around 4% per annum compared
to 20% in the UK. 

OUTLOOK
The Limited Partnership’s Investment Adviser will
continue to source opportunities from its own network
of contacts including corporates looking to divest
non-core assets, accountants, corporate finance
practitioners, industry sources, lawyers and banks
seeking to restructure underperforming assets. 
The particular focus, to which significant effort was
dedicated in 2009, is to continue to build its
relationships in the banking sector as the source for 
a pipeline of good quality investment opportunities. 
The Limited Partnership’s focus continues to be on
the turnaround of underperforming assets in
consolidating or growth industries or within sectors
which are subject to structural change. 

The strong operational performance in 2009 and the
low levels of leverage in the portfolio companies has
positioned the Company well for the future. 
The market recovery in the last two quarters together
with the significant amounts of available capital held
by both corporate entities and private equity funds
should provide a positive backdrop for the Limited
Partnership in 2010. The Investment Adviser has
completed due diligence on a significant number of
potential transactions since the Limited Partnership
launched in 2007, beyond the nine transactions,
including follow on transactions, that have been
completed to date. The Investment Adviser is currently
working on a number of new transactions, which they
anticipate will result in further investment during the
second half of 2010. 

James Keyes
Chairman
20 April 2010

trading performance by Verivox in the fourth quarter of
2009, which has continued in the first quarter of 2010.
The Investment Adviser is satisfied that the re-rating is
justified given that the EV/EBITA multiple adopted was
that of the lowest amongst the group of comparative
public companies.

In addition to its investments in the Limited
Partnership, the Company has provided debt finance
directly to a number of the Limited Partnership’s
portfolio companies. These typically take the form of
secured mezzanine loans with fixed interest rates in
the range 12.5% to 15.25%. At the end of 2009, the
Company had loans outstanding with the portfolio
companies of £28.5 million (2008: £25.1 million).

The increase in net asset value is reflected in an
improvement in net asset value per share, of 33p 
over the 12 month period to £1.41. 

The Company held cash and cash equivalents of
£46.5 million at 31 December 2009.

INVESTMENTS
On 9 March 2009, the Company issued 28,125,000
shares at a price of 64p per share raising 
£18 million in a private placing. Of these proceeds, 
an additional €17 million was committed to the
Limited Partnership. 

On 11 September 2009, a further €20 million was
committed to the Limited Partnership.

On 21 October 2009, an additional placing took place
whereby the Company re-issued from treasury at a price
of 94p per share the 7,589,000 shares previously
repurchased at a price of 60p per share raising over 
£7 million and generating a capital gain of £2.5 million.

The Limited Partnership undertook two transactions 
in the year: selling Vialtus Solutions to Daisy in July;
and acquiring a 51% interest in Verivox in December.

Vialtus Solutions was a division of Host Europe at the
time this group was acquired by the Limited
Partnership in April 2008. In July 2009, Host Europe
sold Vialtus Solutions to Freedom4 Group plc
(“Freedom4”) for a total consideration of £42 million of
which £29 million was received by Host Europe in the
form of Freedom4 shares. Shortly thereafter Daisy
reversed into Freedom4 changing the name of the
AIM company to Daisy Group plc. Daisy’s shares were
subsequently readmitted to AIM on 3 August 2009.
Daisy is a leading provider of integrated voice and
data services to small and medium sized businesses
providing customers with access to a combined
product set from a single platform. The Limited
Partnership owns 36,250,000 shares, representing
approximately 14% of the share capital of Daisy. 

 
 
 
 
 
 
 
Manager’s Report

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10

MANAGER’S
REPORT

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MANAGER’S REPORT

THE COMPANY AND THE LIMITED PARTNERSHIP

MARKET BACKGROUND

The Company provides investors with exposure to
Oakley Capital Private Equity L.P. (“the Limited
Partnership”), an unlisted UK and European mid-
market private equity fund with the aim of providing
investors with significant long term capital appreciation.

Oakley Capital (Bermuda) Limited (the “Manager”), a
Bermudian company, has been appointed manager to
the Company and the Limited Partnership. The Manager
has appointed Oakley Capital Limited (the “Investment
Adviser”) as the investment adviser to the Manager. 
The Investment Adviser is primarily responsible for
advising the Manager on the investment of the assets
of the Limited Partnership and the Company.

The Limited Partnership’s investment strategy is to
focus on buy-out opportunities in industries with the
potential for growth, consolidation and performance
improvement. The Limited Partnership seeks to invest
in companies with scale in their industry subsectors,
thereby creating a sustainable earnings stream which
should command a premium on exit.

The Limited Partnership looks to acquire a controlling
interest in companies with an enterprise value of
between £20 million and £150 million, though
companies with a lower enterprise value are
considered where the Manager believes that
anticipated returns justify the investment. The Limited
Partnership aims to deliver in excess of 25% gross
internal rate of return (IRR) per annum on investments.
The life of the Limited Partnership is expected to be
approximately 10 years, which includes a five year
investment period.

The impact of the economic downturn continued to
be felt in 2009 with major parts of Europe suffering
from sustained periods of recession. The Investment
Adviser therefore remained cautious in its review and
analysis of new investment opportunities. In previous
recessions, where higher interest rates prevailed,
companies were forced to restructure earlier than in
the current recessionary environment. It is against this
backdrop that banks have been able to nurse
businesses along. However, as bank balance sheets
improve, it appears that the banking sector has
started to tackle the distressed businesses within their
portfolios. Further, it seems that private sellers have
been delaying the disposal of their companies, in
anticipation of obtaining higher prices when the
general economic situation improves.

In the difficult market conditions of the first two
quarters of 2009, the primary focus of the Investment
Adviser was directed towards driving operational
improvements in the portfolio companies and even in
these testing market conditions, the trading
performance of the underlying portfolio companies
has improved considerably. As market conditions
improved in the second half of the year the Limited
Partnership acquired a 51% interest in Verivox and the
portfolio companies made two further acquisitions.

Conditions in 2010 appear more conducive both for
the sourcing of new investments and for potential
disposals by the Limited Partnership.

FINANCIAL HIGHLIGHTS

Assets at:

31.12.07

31.12.08

31.12.09

Net assets (£m)
Net assets per share (£)
Share price (mid-market) (p)
FTSE All-Share Index
FTSE Small-Cap Index

99.4
0.99
101.6
3,287.0
3,418.0

99.9
1.08
63.5
2,209.0
1,854.0

180.1
1.41
95.0
2,751.0
2,777.0

Operational performance
Increase in net assets resulting from operations (£m)
Net gain per share (£)

(0.6)
(0.01)

5.1
0.06

55.0
0.47

% change
09/07

81%
42%
(6%)
(16%)
(19%)

 
 
 
 
 
 
 
ANALYSIS OF MOVEMENTS IN NET ASSET VALUE FOR THE YEAR ENDED 31 DECEMBER 2009

Opening net asset value as at 1 January 2009
Gross revenue
Other expenditure
Net unrealised appreciation of investments (excluding accrued interest)
Proceeds on issue of shares
Sale of treasury shares

Closing net asset value as at 31 December 2009

11

MANAGER’S
REPORT

£m

99.9
4.4
(1.7)
52.4
18.0
7.1

180.1

The primary contributor to the increase in net asset
value in the year was the unrealised appreciation in
the fair value of the Company’s investment in the
Limited Partnership. This amounted to £52.4 million
and, whilst the largest increase was attributable to the
Limited Partnership’s largest investment, Host Europe,
it is pleasing to note that all of the portfolio companies
enjoyed a lift in their fair values in the period. 

New ordinary shares were issued raising £18.0 million
and an additional £7.1 million arose on the sale of
shares held in treasury.

Income fell slightly in the year to £4.4 million from 
£5.4 million reflecting the repayment of mezzanine
debt by Host Europe and Headland Media in the
period. New debt finance was provided to Verivox in
December 2009, in the form of £7.3 million 15%
mezzanine finance and £4.6 million 8.5% senior debt
bridge loan, but, given the timing, this had little
influence on income in the year.

PERFORMANCE

The Company’s net asset value increased
substantially in the year from £99.9 million to 
£180.1 million, an increase of £80.2 million. The
largest contributor to the increase arose from the
revaluation of the Company’s investments to fair value
which gave rise to an unrealised gain of £52.4 million.
The Manager follows The International Private Equity
and Venture Capital Valuation Guidelines in
establishing fair value. The Limited Partnership’s
Investment Adviser appointed a third party valuer to
determine fair value taking account of financial
information provided by the Investment Adviser. 

In considering valuation, the Limited Partnership’s
Investment Adviser used a combination of the market
approach and the income approach, with a significant
bias in favour of the market method. This approach
ascribes a value to a business interest or shareholding
by comparing it to similar businesses, using the
principle of substitution: that is, that a prudent
purchaser would pay no more for an asset than it
would cost to acquire a substitute asset with the
same utility and income earning potential. In the
income approach, an economic benefit stream from
the business interest is selected, generally based on
historic or forecast cash flows and generally a
derivative of profits. The cash flow is then discounted
to present value using a risk-adjusted discount rate. 

The net asset value at 31 December 2009 is
equivalent to £1.41 per share up from £1.08 in 2008,
an improvement of £0.33, or 31%. In the same period
the Company’s share price has moved from £0.64 at
31 December 2008 to £0.95 at 31 December 2009.
The disparity between the market capitalisation and
net asset value suggests there is scope for upwards
movement in the Company’s share price.

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12

MANAGER’S
REPORT
continued

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UNREALISED MOVEMENTS IN INVESTMENT PORTFOLIO VALUATION 
FOR THE YEAR ENDING 31 DECEMBER 2009

27.5

20.5

Host
Host
Europe
Europe

Daisy
Daisy

Verivox
Verivox

8.2

Headland
Headland
Media
Media

2.3

Monument
Monument

0.4
0.4

–
–

5.0
5.0

10.0
10.0

15.0
15.0

20.0
20.0

25.0
25.0

30.0
30.0

Net unrealised appreciation of investments £m
Net unrealised appreciation of investments £m

As shown in the above chart, the total increase in the
year in the investment value of portfolio companies
attributable to the Company was £59 million, of which
Host Europe contributed 47%. This was driven largely
by the continued improvement in the operating
performance of the business which continued to enjoy
good growth in both its UK and German operations. 

Daisy’s fair value was £20.5 million including the
improvement in the Daisy share price from £0.80, 
at the time the shares were acquired (July 2009), 
to £0.97 (less a discount to reflect a lock-in prohibiting
the transfer or disposal of the shares before
September 2010) at 31 December 2009.

Verivox has also posted a significant gain, of 
£8.2 million, even though the business was only
acquired in December 2009. The Limited Partnership
acquired 49% (of its total holding of 51%) from a seller
who was disposing of non-core assets as part of a
financial restructuring. The additional 2% was 
acquired from the founding managers who retain 49%.
By partnering with management, the Limited
Partnership was able to acquire the business at a very
attractive multiple, well below average sector trading
multiples. In addition to this rating improvement, the
business had a fourth quarter trading performance
which considerably exceeded expectations.

The Company invested £12 million in cash in the
Limited Partnership of which £7 million was onward
invested in the portfolio companies. The net of the
increase in the value of the investment, of £59 million,

less new cash invested gives rise to an unrealised gain
on investments of £52.4 million.

The chart on page 13 shows the growth in 2009 of
the investment portfolio attributed to its source. 
The investment in the Limited Partnership grew from 
£39.3 million at 31 December 2008 to £104.4 million
at the end of 2009, an increase of £65.1 million.
Trading was the dominant influence on growth which
reflects the impact of the overall improvement in the
underlying performance of the portfolio businesses on
their assessed fair value. Improvements in trading
multiples ascribed to the portfolio companies
contributed an additional £27 million to growth. 
The Company invested £12 million in new
subscriptions to the Limited Partnership and the
portfolio companies reduced their overall debt. 
On the subtraction side of the growth chart, the
performance improvement achieved in the portfolio
businesses would, on exit, give rise to a percentage of
that improvement being earned by the management
teams in those businesses, reflected in a £10 million
deduction in the chart. The Manager believes that
direct participation by key managers in the portfolio
businesses is an essential component in driving
performance. In addition, any increase in fair value
adds to the founding partner’s performance fee
accrual, and there is the charge for management fees.
The founding partner’s performance fee is dependent
upon the Limited Partnership achieving a hurdle rate
of 8% per annum and is only paid in cash on the
successful realisation of an investment.

 
 
 
 
 
 
 
13

MANAGER’S
REPORT
continued

PORTFOLIO INVESTMENT GROWTH 
2009 BY SOURCE

i

O
Opening
Opening
valuation
valuation
£39.3m
£39.3m
£39.3m

t
C
Current
Current
valuation
valuation
£104.4m
£104.4m
£104.4m

m
m
£
£

100.0
100.0

90.0
90.0

80.0
80.0

70.0
70.0

60.0
60.0

50.0
50.0

40.0
40.0

30.0
30.0

20.0
20.0

10.0
10.0

–
–

Acquisitions
Acquisitions
at value
at value

Improvement
Improvement
in trading
in trading

Ratings
Ratings
extension
extension

Net
Net
Debt
Debt

Forex
Forex
movements
movements

Management
Management
fees
fees

Management
Management
share
share

Carried
Carried
interest to
interest to
Founder
Founder
Partner
Partner

Total
Total
increase
increase
in value
in value

At 31 December 2009 the Company’s assets were
divided between its investment in the Limited
Partnership (58%), cash and cash equivalents (26%)
and loans provided directly to portfolio companies
(16%). These loans generally take the form of
mezzanine finance, ensuring that uncalled cash
continues to work for the Company earning a positive
return. At 31 December 2009, the total value of loans
outstanding was £28.5 million (2008: £25.1 million).
The cash segment in the chart analysing assets by
portfolio investment includes cash held by the 
Limited Partnership. 

Geographically, the portfolio is divided between the
UK and Germany with 63% of value residing in 
the UK.

The distribution of the portfolio by sector remains
heavily skewed towards web hosting because of the
dominant influence of Host Europe on total values.
Host Europe occupies the fast growing web hosting
and domain name registration space within the
technology sector. This area has defensive qualities as
websites tend to be near the bottom of any list of cuts
should a business find itself in trouble. On top of this,
there are high barriers to entry in the form of very
costly infrastructure and challenging power
requirements. Daisy provided interest in the telecom’s
sector and the acquisition of Verivox has diversified
the portfolio into consumer services. Headland Media
and Monument add further limited diversification but
with future potential.

Asset types

26% Cash

58% Limited 

Partnership

16% Loan

finance

Split of investment in 
Limited Partnership above

6% Cash & other
net assets

2% Monument

4% Headland

11 % Verivox

20% Daisy

57% Host Europe

Portfolio by sector

61% Technology

21% Telecoms

2% Financial 

services

5% Digital media

11 % Consumer 

services

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Directors’ Report

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DIRECTORS’ REPORT

DIRECTORS’ FUNCTIONS

The Directors are responsible for the overall
management and control of the Company. 
The Directors review the operations of the Company
at regular meetings and meet at least quarterly. 
For this purpose, the Directors receive periodic
reports from the Manager detailing the Company’s
performance, and receive from the Manager such
other information as may from time to time be
reasonably required by the Directors for the purpose
of such meetings.

The Limited Partnership is managed by the Manager
and the Directors do not make investment decisions
on behalf of the Limited Partnership, nor do they have
any role or involvement in selecting or implementing
transactions by the Limited Partnership.

DIRECTORS
The Directors of the Company are:

JAMES KEYES
James Keyes has been a Managing Director of
Renaissance Capital since 1 October 2008. 
He established the Bermuda office, for which he has
responsibility, of Renaissance in 2008. He was
previously a partner of Appleby, the offshore law firm,
for eleven years. James joined Appleby in 1993 and
was team leader of the Funds & Investment Services
Team. Prior to Appleby, he was employed in the
Corporate Department of Freshfields law firm, and
worked in the London, New York and Hong Kong
offices. James attended Oxford University in England
as a Rhodes Scholar and graduated with a degree 
in Politics, Philosophy and Economics (MA with
Honours) in 1985. He was called to the bar of England
and Wales in 1991 and to the Bermuda Bar in 1993.
He became a Notary Public in 1998. James is a
resident of Bermuda.

TINA BURNS
Tina Burns is a Certified Public Accountant providing
consulting services to Schroders Private Equity
Services (“Schroders”) in Bermuda. Prior to consulting
with Schroders, she was a Director with KPMG in
Bermuda from 2002 through 2006, specialising in US
taxation. Tina joined KPMG in Bermuda in 1995. 
Prior to joining KPMG in Bermuda, she was a tax
senior with KPMG in Atlanta, Georgia. She graduated
from the University of North Carolina with a Masters of
Accounting in 1994 and is a member of the American
Institute of Certified Public Accountants and the
Georgia Society of Certified Public Accountants. 
Tina is a resident of Bermuda.

PETER DUBENS
Peter Dubens is the founder of the Oakley Capital
group of companies, a privately owned asset

management and advisory business comprising private
equity, fund of funds, corporate finance, capital
introduction and venture capital operations. Peter is
the Managing Director of Oakley Capital Limited, the
Investment Adviser to Oakley Capital Private Equity
L.P., a European middle-market private equity fund
specialising in turnarounds, restructurings and
consolidation opportunities. During the last 20 years 
he has acquired, restructured and consolidated public
and private companies. Most recently as Executive
Chairman, Peter led the formation of two public
companies 365 Media Group plc and Pipex
Communications plc. The 365 Media platform
consolidated 12 businesses within the online sports
information and gambling industry and the Pipex
platform consolidated 15 within the telecoms industry.
365 Media was sold for over £106 million to BSkyB
and the main operating divisions of Pipex were sold for
over £330 million. Peter is a United Kingdom resident.

LAURENCE BLACKALL
Laurence Blackall has had a 30 year career in the
information, media and communication industries.
After an early career that included Virgin and the
SEMA Group, Laurence was appointed a director of
Frost & Sullivan and a vice-president of McGraw Hill.
He was also CEO of AIM listed Internet Technology
Group, which was founded in 1995, and Chairman of
Boat International Publications. Laurence was also
instrumental in the creation of Pipex Communications
plc. He has an MA in marketing and currently holds a
number of directorships in public and private UK
companies. Laurence is a United Kingdom resident.

IAN PILGRIM
Ian Pilgrim is Chief Executive Officer of the
Administrator, Mayflower Management Services
(Bermuda) Limited, a corporation which provides
consultancy and other services to hedge funds and is
the administrator to the Company and the Limited
Partnership. Prior to founding the Administrator in
January 2006, he was the Managing Director of Citco
Fund Services (Bermuda) Limited and also served as
General Counsel to Citco Fund Services from January
2001 until December 2005. Before joining Citco, Ian
practiced from January 1997 until December 2000 as 
a Barrister and Attorney with M.L.H. Quin & Co. (now
Wakefield Quin) in Bermuda. From 1994 to 1996, he
practiced as a solicitor with Allen & Overy in Hong Kong
where he was involved primarily in banking and project
finance, and prior to that from 1991 to 1994 with
Deacons in Hong Kong. Ian was admitted to practice
as a solicitor in England and Wales in 1989 and in Hong
Kong in 1992. He was admitted to the Bar in Bermuda
in 1998. He is a director of Palmer Capital Associates
(International) Limited, Oakley Absolute Return Limited
(formerly Oakley Multi Manager Funds Limited) and 

15

DIRECTORS’
REPORT

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16

DIRECTORS’
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continued

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Oakley Capital Management (Bermuda) Limited, the
manager of the Oakley Absolute Return Limited. 
Ian is a resident of Bermuda.

CHRISTOPHER WETHERHILL
Christopher Wetherhill founded and was Chief
Executive Officer of Hemisphere Management Limited
(now known as Citi Hedge Fund Services Limited), 
a financial services company in Bermuda, from 1981
until 2000. Since 2000, he has served as a board
member of, and a consultant to, a number of
investment companies. He is a Fellow of the Institute
of Chartered Accountants in England and Wales, a
member of the Canadian and Bermudian Institutes 
of Chartered Accountants, a Fellow of the Institute 
of Directors and a Freeman of the City of London.
Christopher is a resident of Bermuda.

MANAGER

Oakley Capital (Bermuda) Limited was incorporated 
in Bermuda on 18 June 2007 under the Bermuda
Companies Act. The Manager is responsible for the
day to day management of the assets of the
Company pursuant to the Management Agreement.
Under the Management Agreement, the Manager has
full discretion, subject to the review by the Directors,
to invest the assets of the Company in a manner
consistent with the investment objective, approach
and restrictions described in the admission document.
Oakley Capital (Bermuda) Limited is also manager of
the Limited Partnership.

Peter Dubens and Ian Pilgrim are directors of both the
Manager and the Company, and cannot vote on any
Board decision relating to the Management
Agreement whilst they have an interest.

INVESTMENT ADVISER

Oakley Capital Limited was incorporated in England
and Wales on 12 October 2000 under the Companies
Act 1985. The Company and the Manager have
appointed the Investment Adviser as investment
adviser to the Company and the Manager has
appointed the Investment Adviser as investment
adviser to the Limited Partnership.

The Investment Adviser is authorised and regulated 
by the FSA. The Investment Adviser is not registered
as an “investment adviser” under the US Investment
Advisors Act, but may in the future seek to register.

Peter Dubens and David Till (who are both Directors 
of the Investment Adviser) will together be primarily
responsible for performing the investment advisory
obligations of the Investment Adviser.

CORPORATE GOVERNANCE

The Directors recognise the importance of sound
corporate governance and have adopted policies and
procedures which reflect those principles of Good
Governance and Code of Best Practice as published
by the Committee on Corporate Governance
(commonly known as the “Combined Code”) as are
appropriate to the Company’s size on admission to
AIM. The Directors note that Bermuda, the country 
of incorporation of the Company, has no specific
corporate governance regime.

The Company has established an audit committee
and a remuneration committee, each with formally
delegated duties and responsibilities. The audit
committee and the remuneration committee are each
comprised of all the Independent Directors. The audit
committee is chaired by Tina Burns and the
remuneration committee is chaired by James Keyes.

The audit committee determines the terms of
engagement of the Company’s auditors and, in
consultation with the auditors, the scope of the audit.
The audit committee receives and reviews reports from
management and the Company’s auditors relating to
the annual accounts and the accounting and internal
control systems in the Company. The audit committee
has unrestricted access to and oversees the
relationship with the Company’s auditors.

The remuneration committee reviews the scale and
structure of the Directors’ remuneration and the terms
of their service or employment contracts, including
share option schemes and other bonus arrangements
if any. The remuneration and terms and conditions of
the non executive Directors are set by the Board. No
Director or manager of the Company may participate
in any meeting at which discussion or any decision
regarding his own remuneration takes place.

In addition to establishing an audit committee and a
remuneration committee, the Company has
established a fund committee, comprising all of the
Independent Directors. The fund committee receives
and reviews all matters and contracts where there are
potential conflicts of interest between the Company
and the Limited Partnership. No Director, other than
the Independent Directors, may participate in any
meeting of the fund committee. The fund committee is
chaired by the Chairman.

The Board complies with Rule 21 of the AIM Rules
relating to Directors’ dealings as applicable to AIM
companies and also takes all reasonable steps to
ensure compliance by the Company’s applicable
employees (if any) and has adopted a share dealing
code for this purpose.

 
 
 
 
 
 
 
17

DIRECTORS’
REPORT
continued

DIRECTORS’ INTERESTS

DIRECTORS’ REMUNERATION

Christopher Wetherhill is the beneficial owner of
70,000 shares of the Company, otherwise none of the
Directors nor any member of their respective
immediate families, nor any person connected with a
Director, has any interest whether beneficial or non
beneficial in the share capital of the Company.

The emoluments of the individual Directors for the
year were as follows:

James Keyes

Tina Burns

Peter Dubens

Laurence Blackall

Ian Pilgrim

Christopher Wetherhill

£14,251

£14,251

£nil

£14,251

£14,251

£14,251

The above fees do not include reimbursed expenses.

SUBSTANTIAL SHAREHOLDINGS

As at 12 April 2010, the Company has been notified by the following that they have a disclosable beneficial
interest in 3% or more of the issued ordinary share capital of the Company:

AS A PERCENTAGE OF VOTING RIGHTS

Invesco

Schroders plc

Gartmore Investment Limited

Blackrock Inc

GAM International Management Limited

Lloyds Banking Group Plc

Cazenove Capital Management Limited

Fidelity International Limited

GAM UK Hedge Investments Limited

29.90%

13.75%

13.00%

8.30%

6.97%

6.41%

4.93%

4.88%

3.07%

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A portfolio of carefully

selected investments

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REVIEW OF INVESTMENTS

SUMMARY

Assets at fair value

Investment in Limited Partnership

Mezzanine loans:

Host Europe
Verivox
Headland Media1

Bridging loan:

Verivox

Total investments

1Repaid to the Company in 2009

19

REVIEW OF
INVESTMENTS

2009
£m

104.4

16.9
7.1
–

4.4

132.9

2008
£m

39.3

22.0
–
3.1

–

64.4

The Company invests principally in the Limited
Partnership. The primary objective of the Limited
Partnership is to invest in a diverse portfolio of private
mid-market UK and European businesses, aiming 
to provide investors with significant long term 
capital appreciation.

By 31 December 2009, the Company had invested a
total of £52.6 million in the Limited Partnership since
inception. This investment together with the Limited
Partnership’s own cash resources were invested in
portfolio companies such that the investment by the
Company represents approximately 66% of the total
amount invested. The above chart shows the values
attributed to the Company by virtue of its indirect
holding through the Limited Partnership of its interest
in the portfolio businesses. At 31 December 2009, the
Limited Partnership’s Investment Adviser appointed a
third party valuer to determine fair value taking
account of financial information provided by the
Investment Adviser. As a result of this assessment, 

the fair value of investments made in the Limited
Partnership at 31 December 2009 stands at 
£104.4 million, a factor of 1.98 x cost. This also
represents an increase over 2008 of £65.1 million.

In addition to its investments in the Limited Partnership,
the Company has provided loans directly to two
portfolio companies. At 31 December 2009, the
Company had outstanding mezzanine finance provided
to Host Europe of £16.9 million carrying an interest rate
of 15.25% and with a maturity date of December 2015,
but repayable at any time before this date. Verivox also
had a mezzanine loan from the Company of £7.3 million
with a fixed interest rate of 15% and maturing no later
than December 2019. Verivox also had a senior debt
finance bridge loan of £6.0 million of which £4.6 million
was drawn at the year end. This carries an interest rate
of 8.5% maturing no later than December 2012. 
The mezzanine finance outstanding with Headland
Media at the end of 2008 was repaid in the year from
the proceeds of a refinancing with senior debt.

GROWTH IN FAIR VALUE OF INVESTMENTS THROUGH THE LIMITED PARTNERSHIP

Host
Host
Europe
Europe

Daisy
Daisy

Verivox
Verivox

Headland
Headland
Media
Media

Monument
Monument

Cash & other
Cash & other
net assets
net assets

Fair value at 31 December 2009
Fair value at 31 December 2009

b

l

Fair value at 31 December 2008
Fair value at 31 December 2008

b

l

–
–

10.0
10.0

20.0
20.0

30.0
30.0

40.0
40.0

50.0
50.0

60.0
60.0

70.0
70.0

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Sector:
Technology

Location:
United Kingdom

Investment date:
2 April 2008

Website:
www.hosteurope.com

BUSINESS OVERVIEW

On 21 July 2009, Host Europe sold Vialtus Solutions to Daisy. 
This transaction is more fully described under Review of Investments –
Daisy. Following the disposal of Vialtus Solutions, Host Europe is now
focussed solely on web hosting and comprises two businesses operating
in the UK and Germany. The UK business is conducted through two
brands; 123reg, the UK market leader for domain name registration; and
Webfusion, the UK’s second largest shared hosting provider. In Germany,
Hosteurope.de is the market leader in standardised managed hosting.

The web hosting market has grown strongly driven by the increase in
broadband usage, faster internet connections and the rising proliferation
of multimedia content. The hosting industry has high barriers to entry
requiring costly infrastructure and demanding power supplies.

BUSINESS UPDATE

Host Europe continues to perform strongly driven by market growth,
market share gains and productivity improvements. 

On 11 September 2009, Host Europe completed a refinancing of its
senior debt facility, raising an additional £12.5 million. This, together with
£13 million received from Daisy as part of the consideration for Vialtus
Solutions and cash generated by operations, allowed Host Europe to
repay the £17.5 million vendor loan note issued to part finance the
acquisition of the group and to repay a portion of the mezzanine debt.
The refinancing has reduced Host Europe’s cost of capital.

On 11 December 2009, Webfusion acquired the assets of XCalibre, a
web hosting and virtualisation business for consideration of £2.5 million,
£1.0 million of which was deferred and is subject to an earn-out. 
This was funded from Host Europe’s internal resources.

PERFORMANCE

Host Europe performed very strongly in 2009, exceeding both its revenue
and EBITDA targets. The fair value of the Company’s interest in Host
Europe through its investment in the Limited Partnership has risen by 
£28 million in the year driven primarily by this underlying performance. 

HOST EUROPE

Company value at
acquisition

Total equity
held

Fair value of the
Company’s interest

£128m

83%

£77m

21

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22

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23

REVIEW OF
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Sector:
Telecoms

Location:
United Kingdom

Investment date:
21 July 2009

Website:
www.daisyplc.com

TRANSACTION DETAILS

On 21 July 2009, Host Europe sold Vialtus Solutions, one of Host
Europe’s three operating divisions, for £42 million to Freedom4 Group plc
(“Freedom4”). The same day, following a reverse takeover, Freedom4 was
renamed Daisy Group plc (“Daisy”). In consideration for the disposal of
Vialtus Solutions, Host Europe received £13 million of cash and 
£29 million of ordinary shares in Daisy. As at 21 July, 2009 Host Europe
held 36,250,000 Daisy ordinary shares with a share price of £0.80 per
share at the previous day’s close. Daisy is listed on AIM. 

BUSINESS OVERVIEW

Daisy is a leading provider of integrated voice and data services to small
and medium sized businesses providing customers with access to a
combined product set from a single platform.

Daisy’s strategic objective is to consolidate the fragmented mid-market
telecommunications sector with the aim of building a business of
considerable scale. Following the acquisition of Vialtus Solutions, 
Daisy had completed three further acquisitions by 31 December 2009;
the trading assets of AT Communications plc; the trading assets of
Eurotel Limited; and the telecommunications division of Redstone plc. 

In 2010, Daisy has completed two more acquisitions; Managed
Communications Limited; and BNS Telecom plc. The aggregate historic
annual revenues and EBITDA for these two businesses were £41 million
and £4.8 million respectively.

The Daisy share price on 31 December 2009 was 96.7p and this has
been used to establish the fair value of the investment, less a discount to
reflect a lock-in prohibiting the disposal or transfer of the shares before
September 2010.

In its pre-close trading update made on 19 April, 2010 Daisy announced
that “The 15 months ended 31 March 2010 has been a transformational
period for Daisy. The Group has completed seven separate acquisitions
during the period and has been actively engaged in the integration of
these businesses over that time. The results for this financial period are
anticipated to be in line with market expectations.”

DAISY GROUP PLC

Company value at
acquisition

Total equity
held

Fair value of the
Company’s interest

N/A

14%

£20.5m

 
 
 
 
 
 
 
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Sector:
Online consumer

Location:
Germany

Investment date:
4 December 2009

Website:
www.verivox.de

TRANSACTION DETAILS

On 4 December 2009, the Limited Partnership acquired Verivox,
Germany’s largest independent online consumer energy price comparison
site, for £17 million, funded using a combination of debt and preferred
equity. 49% of Verivox was acquired from the seller, which was disposing
of non-core assets as part of a financial restructuring, and a further 2%
was acquired from management, who have retained the remaining 49%.

The Company’s investment in Verivox via the Limited Partnership is held in
preferred shares. In addition, the Company provided €13.0 million in the
form of mezzanine finance and a bridging loan. 

In accordance with management performance, at exit, following
repayment of the loans and preferred equity, including accrued interest,
the economic gain is to be divided between the Limited Partnership and
management in the ratio 40.5 : 59.5.

BUSINESS OVERVIEW

Verivox, which has been established 10 years, is Germany’s leading
energy price comparison website. The company receives commissions
from energy suppliers when consumers elect to switch their provider,
using the company’s website www.verivox.de. Verivox’s commission is
based on a typical household bill of €700 to €1,300 per annum.

In contrast to the UK energy market, Germany has historically
experienced relatively low levels of consumer switching due primarily to
the dominance of regional energy providers. However, with recent
deregulation of the energy market the level of consumer switching is
growing driven by increasing consumer awareness and by increased
competition and higher internet penetration. The company currently
handles around 2.5 million contract enquiries annually, leading to
approximately 600,000 customer switches. 

VERIVOX

Company value at
acquisition

Total equity
held

Fair value of the
Company’s interest

£17.0m

51%

£22.7m

25

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27

REVIEW OF
INVESTMENTS
continued

Sector:
Digital media

Location:
United Kingdom

Investment date:
25 January 2008

BUSINESS OVERVIEW

Headland Media Limited (“Headland Media”) is a business-to-business
media content provider with offices in the UK, Europe and the US. 
It is the leading provider of news digest services to the hotel and 
shipping sectors and is a provider of entertainment and training services
to offshore industries and other remote locations.

Website:
www.headlandmedia.com

Headland Media distributes media content to around 6,500 destinations
using proprietary channels and has an audience of approximately 
20 million listeners and 250,000 readers.

BUSINESS UPDATE

In September 2009, the business acquired Shipboard Video Express Inc,
a US based maritime entertainment provider. The acquired business was
integrated into the existing Walport entertainment business in quarter 4
2009 and therefore has been rebranded “Walport USA”.

In December 2009, the Headland Media refinanced its mezzanine debt
facility of £3.1 million provided by the Company with a senior bank facility,
thereby significantly lowering its cost of borrowing.

PERFORMANCE 

The trading performance in 2009 was strong with both revenues and
EBITDA in line with expectations and ahead of the previous year.

HEADLAND MEDIA

Company value at
acquisition

Total equity
held

Fair value of the
Company’s interest

£6.3m

80%

£4.4m

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28

REVIEW OF
INVESTMENTS
continued

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29

REVIEW OF
INVESTMENTS
continued

Sector:
Financial services

Location:
United Kingdom

Investment date:
31 March 2008

Website:
www.monumentsecurities.com

BUSINESS OVERVIEW

Monument Securities Limited (“Monument”) is an independent equity,
derivatives and fixed income broker with an 18 year history. The company
provides services to institutions, fund managers, market professionals,
corporates and hedge funds. Monument Securities is a member of the
NYSE, Euronext, LIFFE, Eurex, the London Stock Exchange and the
International Capital Markets Association and is regulated by the Financial
Services Authority.

BUSINESS UPDATE

The Limited Partnership’s ownership of Monument has coincided with
difficult economic and market conditions. Equity trading volumes
remained low throughout 2009 and this has been reflected in brokering
commissions which ended the year lower than in previous years.
Monument’s performance given such adverse market conditions was
considered good and with a strong balance sheet supports a slight
increase in the Company’s interest in Monument measured at fair value.

PERFORMANCE 

Even with the low volumes in Monument’s markets, the company
remained profitable, albeit at lower levels than in 2008. The business has
no leverage and has a significant amount of cash on its balance sheet
and their management is confident of an improved performance in 2010.

MONUMENT SECURITIES

Company value at
acquisition

Total equity
held

Fair value of the
Company’s interest

£5.5m

51%

£2.2m

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30

INDEPENDENT
AUDITOR’S
REPORT

Independent Auditor’s Report

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INDEPENDENT AUDITOR’S REPORT
to the Board of Directors and Shareholders of 
Oakley Capital Investments Limited

We have audited the accompanying statements of assets and liabilities,
including the schedule of investments, of Oakley Capital Investments
Limited (the “Company”) as of 31 December 2009 and 2008 and the
related statements of operations, changes in net assets and cash flows
for the years then ended. These financial statements are the responsibility
of management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that
we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. 
An audit includes consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, 
on a test basis, evidence supporting the amounts and disclosures in the
financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion. 

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Oakley Capital Investments
Limited as of 31 December 2009 and 2008, and the results of its
operations, changes in net assets and its cash flows for the years then
ended in conformity with accounting principles generally accepted in the
United States of America.

KPMG
Chartered Accountants
Hamilton, Bermuda
20 April 2010

31

INDEPENDENT
AUDITOR’S
REPORT

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Financial Statements

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FINANCIAL STATEMENTS

STATEMENTS OF ASSETS AND LIABILITIES 
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 
(Expressed in British Pounds)

Assets 

Investments (Cost 2009: £81,356,297; 2008: £65,387,060)

Cash and cash equivalents

Accrued interest receivable

Other receivables 

Total assets 

Liabilities 

notes

5, 7

3

2009
£

2008
£

132,883,058

64,447,295

46,511,535

32,893,846

781,118

2,630,494

41,394

20,280

180,217,105

99,991,915

Accounts payable and accrued expenses

6

106,747

52,598

Total liabilities 

106,747

52,598

Net assets attributable to shares

180,110,358

99,939,317

Represented by:

Share capital

Share premium 

Retained earnings 

1,281,250

924,110

119,276,094

94,499,575

59,553,014

4,515,632

180,110,358

99,939,317

Number of shares outstanding

9

128,125,000

92,411,000

Net asset value per share

1.41

1.08

These financial statements were approved and authorised for issue by the Board on 20 April 2010 and signed on its

behalf by Ian Pilgrim and Tina Burns. 

The notes following form an integral part of these financial statements

33

FINANCIAL 
STATEMENTS

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34

FINANCIAL 
STATEMENTS
continued

SCHEDULE OF INVESTMENTS
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 
(Expressed in British Pounds)

31 December 2009

Fair value as
a percentage
of net assets

Percentage
interest

Principal
amount/
Quantity

Cost
£

Fair value
£

Investments in Limited Partnership

Bermuda
Oakley Capital Private Equity LP 

Unquoted debt securities
Investment in mezzanine loans
United Kingdom
Host Europe Corporation Limited
Interest at 15.25% p.a. 
Maturity date Dec 2015

Bermuda
VVX (Bermuda) Limited
Interest rate at 15% p.a. 
Maturity date December 2019

Total mezzanine loans

Investment in bridge loans

Bermuda
VVX (Bermuda) Limited. 
Interest rate at 8.5% p.a. 
Maturity date December 2012

57.98%

66.05%

–

52,607,753

104,432,214

9.39%

3.94%

13.33%

–

–

–

£16,905,544

16,905,544

16,905,544

€8,000,000

7,288,000

7,104,800

–

24,193,544

24,010,344

2.47%

–

€5,000,000

4,555,000

4,440,500

Total investments 

73.78%

81,356,297

132,883,058

For details of the underlying investment of the Limited Partnership, please refer to Note 7.

The notes following form an integral part of these financial statements

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35

FINANCIAL 
STATEMENTS
continued

SCHEDULE OF INVESTMENTS (continued)
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 
(Expressed in British Pounds)

31 December 2008

Fair value as
a percentage
of net assets

Percentage
interest

Principal
amount/
Quantity

Cost
£

Fair value
£

Investments in Limited Partnership

Bermuda
Oakley Capital Private Equity LP 

Unquoted debt securities
Investment in mezzanine loans
United Kingdom
Host Europe Corporation Limited
Interest at 15.25% p.a. 
Maturity date Dec 2015

Headland Media Limited
Interest rate at 12% p.a. 
Maturity date Jun 2010

Bermuda
Cologne Data Centre (Bermuda) Ltd
Interest rate at 15.25% p.a. 
Maturity April 2015

Total mezzanine loans

Total investments

39.35%

65.20%

–

40,265,724

39,325,959

–

–

–

–

19.41%

3.10%

2.62%

25.13%

64.48%

£19,400,000

19,400,000

19,400,000

£3,100,000

3,100,000

3,100,000

£2,621,336

2,621,336

2,621,336

–

25,121,336

25,121,336

65,387,060

64,447,295

For details of the underlying investment of the Limited Partnership, please refer to Note 7.

The notes following form an integral part of these financial statements

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36

FINANCIAL 
STATEMENTS
continued

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 
(Expressed in British Pounds)

Investment income

Interest

Total income

Expenses

Professional fees

Performance fees

Other

Interest

Total expenses

notes

2009
£

2008
£

4,389,662

5,429,842

4,389,662

5,429,842

6

4

970,094

529,441

223,733

1,677

198,852

–

216,189

19,875

1,724,945

434,916

Net investment income

2,664,717

4,994,926

Realised & unrealised gains (losses) on foreign exchange and investments 

Net realised (losses) gains on foreign exchange

Net change in unrealised gains/(losses) on foreign exchange

(95,088)

1,226

491,648

(6,459)

Net change in unrealised appreciation (depreciation) on investments

52,466,526

(392,349)

Net realised and unrealised gains on foreign exchange and investments

52,372,664

92,840

Net earnings

Net earnings per share

55,037,381

5,087,766

0.47

0.06

The notes following form an integral part of these financial statements

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37

FINANCIAL 
STATEMENTS
continued

STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 
(Expressed in British Pounds)

notes

2009
£

2008
£

Net increase in net assets resulting from operations

Net investment income

Net realised (losses) gains on foreign exchange

Net change in unrealised gains (losses) on foreign exchange

2,664,717

4,994,926

(95,088)

1,226

491,648

(6,459)

Net change in unrealised appreciation (depreciation) on investments

52,466,526

(392,349) 

Net increase in net assets resulting from operations

55,037,381

5,087,766

Capital share transactions

Proceeds on issue of shares

Repurchase of shares

9

25,133,660

–

–

(4,576,316)

Net increase (decrease) in net assets from capital share transaction

25,133,660

(4,576,316)

Net increase in net assets

Net assets at beginning of year

80,171,041

511,450

99,939,317

99,427,867

Net assets at end of year

180,110,358

99,939,317

The notes following form an integral part of these financial statements

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STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 
(Expressed in British Pounds)

2009
£

2008
£

Cash flows from operating activities

Net increase in net assets resulting from operations

55,037,381

5,087,766

Adjustments to reconcile net increase in net assets resulting 
from operations to net cash used in operating activities:

Net realised and unrealised losses on foreign exchange and investments

(52,372,664)

(92,840)

Payments for purchases of investments

Proceeds on disposal of investments

Change in accrued interest receivable

Change in other receivables 

Change in accounts payable and accrued expenses 

(27,283,560)

(62,461,334)

11,314,316

–

1,849,376

(2,630,494)

(21,114)

54,149

283,195

(342,950)

Net cash used in operating activities

(11,422,116)

(60,156,657)

Cash flows from capital transactions

Proceeds on issuance of shares

Repayment of cash provided by short term borrowing

Paid on repurchase of shares

25,133,660

–

–

–

(12,632)

(4,576,316)

Net cash provided by (used in) capital transactions

25,133,660

(4,588,948)

Net effect of foreign exchange gain

(93,855)

485,189

Net increase (decrease) in cash and cash equivalents

13,617,689

(64,260,416)

Cash and cash equivalents at beginning of year

32,893,846

97,154,262

Cash and cash equivalents at end of year

46,511,535

32,893,846

Interest paid during the year

1,677

19,875

The notes following form an integral part of these financial statements

38

FINANCIAL 
STATEMENTS
continued

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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2009 AND 2008 

1. THE COMPANY

Oakley Capital Investments Limited (the “Company”) is a closed-ended investment company which was
incorporated under the laws of Bermuda on 28 June 2007. The principal objective of the Company is to
achieve capital appreciation through investments in a diversified portfolio of private mid-market UK and
European businesses. The Company achieves its investment objective primarily through an investment in
Oakley Capital Private Equity LP (the “Limited Partnership”), an exempted limited partnership established 
in Bermuda on 10 July 2007. The manager is Oakley Capital (Bermuda) Limited (the “Manager”) and the
investment adviser is Oakley Capital Limited (the “Investment Adviser”). The Company and the general
partner of the Limited Partnership have at least one director in common.

The Company listed on the AIM market of the London Stock Exchange on 3 August 2007. 

2. SIGNIFICANT ACCOUNTING POLICIES

a) Basis of presentation

The accompanying financial statements are prepared in accordance with accounting principles generally
accepted in the United States of America.

Pursuant to Statement of Financial Accounting Standards (“SFAS”) No. 168, The Financial Accounting
Standards Board (“FASB”) Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles – a replacement of FASB Statement No. 162, the FASB Accounting Standards
Codification (“ASC”) became the sole source of authoritative accounting principles generally accepted in 
the United States of America for interim and annual periods ending after 15 September 2009, except for
rules and interpretive releases of the Securities and Exchange Commission (“SEC”), which are sources of
authoritative GAAP for SEC registrants. The Company adopted this standard for the year ended 
31 December 2009. References to specific accounting standards in the footnotes to the financial
statements have been changed to refer to the appropriate section of the ASC.

b) Use of estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of increases and decreases in net assets during the reporting period.
Actual results could differ from those estimates. 

c) Investment valuation
Limited Partnership
Security transactions are accounted for on a trade date basis based on the capital drawdown and proceeds
distribution dates from the Limited Partnership. The Company’s investment in the Limited Partnership is
valued at the balance on the Company’s capital account in the Limited Partnership as at the reporting date.
Any difference between the capital introduced and the balance on the Company’s capital account in the
Limited Partnership is recognised in net change in unrealised appreciation and depreciation on investments
in the Statements of Operations. 

The Limited Partnership values investments at fair value and recognises gains and losses on security
transactions using the specific cost method. 

Mezzanine loans
Mezzanine loans are initially valued at the price the loan was granted. Subsequent to initial recognition the
loans are valued on a fair value basis taking into account market conditions and any appreciation or
deterioration in value.

Realised gains and losses are recorded when the security acquired is sold. The net realised gains and
losses on sale of securities are determined using the specific cost method. 

39

NOTES TO THE
FINANCIAL 
STATEMENTS

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40

NOTES TO THE
FINANCIAL 
STATEMENTS
continued

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Bridge loans
Bridge loans are initially valued at the price the loan was granted. Subsequent to initial recognition the
loans are valued on a fair value basis taking into account market conditions and any appreciation or
deterioration in value.

Realised gains and losses are recorded when the security acquired is sold. The net realised gains and
losses on sale of securities are determined using the specific cost method. 

The Company is subject to the provisions of the FASB guidance on Fair Value Measurements and
Disclosure (originally issued as FAS No. 157 and now referred to as ASC 820). ASC 820 defines fair value,
establishes a framework for measuring fair value in accordance with accounting principles generally
accepted in the United States of America and expands disclosures about fair value measurements. 
ASC 820 establishes a hierarchal disclosure framework which prioritizes and ranks the level of market price
observability used in measuring investments at fair value. Market price observability is affected by a number
of factors, including the type of investment and the characteristics specific to the investment. 
Investments with readily available active market quoted prices or for which fair value can be measured from
actively quoted prices generally will have a higher degree of market price observability and a lesser degree
of judgment used in measuring fair value.

The hierarchy of inputs is summarised below. 

Level 1 – quoted prices in active markets for identical investments

Level 2 – other significant observable inputs (including quoted prices for similar investments, interest rates, 

prepayment speeds, credit risk, etc.)

Level 3 – significant unobservable inputs (including the Investment Advisers’ own assumptions in 

determining the fair value of investments)

The inputs and methodologies used in valuing the securities are not necessarily an indication of the risks
associated with investing in those securities.

Securities traded on a national stock exchange are valued at the last reported sales price on the valuation
date. When prices are not readily available, or are determined not to reflect fair value, the Company may
value these securities at fair value as determined in accordance with the procedures approved by the
Investment Adviser in consultation with the Manager.

Level 2 securities are valued using representative brokers’ prices, quoted prices for similar investments,
published reports or, third-party valuations.

Level 3 securities are valued at the direction of the Investment Adviser in consultation with the Manager. 
In these circumstances, the Manager will attempt to use consistent and fair valuation criteria and may 
(but is not required to) obtain independent appraisals at the expense of the Company.

d) Income recognition

Interest income and expenses are recognised on the accruals basis. 

e) Foreign currency translation 

Investments and other monetary assets and liabilities denominated in foreign currencies are translated into
British Pound amounts at exchange rates prevailing at the reporting date. Capital drawdowns and proceeds
of distributions from the Limited Partnership and foreign currencies and income and expense items
denominated in foreign currencies are translated into British Pound amounts at the exchange rate on the
respective dates of such transactions. 

Foreign exchange gains and losses on other monetary assets and liabilities are recognised in net realised
and unrealised gain or loss from foreign exchange in the Statements of Operations. 

The Company does not isolate unrealised or realised foreign exchange gains and losses arising from
changes in the fair value of investments. All such foreign exchange gains and losses are included with the
net realised and unrealised gain or loss on investments in the Statements of Operations.

f) Cash and cash equivalents

The Company considers all short-term deposits with a maturity of 90 days or less as equivalent to cash.

 
 
 
 
 
 
 
3. CASH AND CASH EQUIVALENTS

Cash and cash equivalents at 31 December 2009 and 2008 consist of the following:

Cash

Short-term deposits 

2009
£

2008
£

10,581,913

168,291

35,929,622

32,725,555

46,511,535

32,893,846

4. MANAGEMENT AND PERFORMANCE FEES

(a) The Company has entered into a Management Agreement with Oakley Capital (Bermuda) Limited (the

“Manager”) to manage the Company’s investment portfolio. The Manager will not receive a management fee
from the Company in respect of funds either committed or invested by the Company in the Limited
Partnership or any successor fund managed by the Manager. The Manager will receive a management fee
at the rate of 1% per annum in respect of those funds that are not committed to the Limited Partnership or
any successor fund (but including the proceeds of any realisations), which are invested in cash, cash
deposits or near cash deposits and a management fee at the rate of 2% per annum in respect of those
funds which are invested directly in co-investments. The management fee is payable monthly in arrears. 
As at 31 December 2009, there were no management fees payable to the Manager (2008: Nil).

The Manager may also receive a performance fee of 20% of the excess of the amount earned by the
Company over and above an 8% hurdle rate per annum on any monies invested as a co-investment with
the Limited Partnership or any successor limited partnership. Any co-investment will be treated as a
segregated pool of investments by the Company. If the calculation period is greater than one year, the
hurdle rate shall be compounded on each anniversary of the start of the calculation period for each
segregated co-investment. If the Manager does not exceed the hurdle rate on any given co-investment that
co-investment shall be included in the next calculation on a co-investment so that the hurdle rate is
measured across both co-investments. No previous payments of performance fee will be affected if any 
co-investment does not reach the hurdle rate of the return. As at 31 December 2009, there were no
performance fees payable to the Manager (2008: Nil). 

(b) The Manager has entered into an Investment Adviser Agreement with Oakley Capital Limited (the
“Investment Adviser”) to advise the Manager on the investment of the assets of the Company. 
The Investment Adviser will not receive a management or performance fee from the Company. Any fees 
due to the Investment Adviser will be paid by the Manager out of the management fees it receives from 
the Company.

41

NOTES TO THE
FINANCIAL 
STATEMENTS
continued

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42

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FINANCIAL 
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continued

5. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following is a summary of the inputs used in valuing the Company’s assets carried at fair value: 

Investments in Securities

Quotes prices (Level 1)

Other significant observable inputs (Level 2)

31 December
2009
£

31 December
2008
£

–

–

–

–

Significant unobservable inputs (Level 3)

132,883,058

64,447,295

The instruments comprising investments in securities are disclosed in the schedules of investments.

The Company has an investment into a private equity limited partnership. The investment is included at fair
value based on the Company’s balance on its capital account in the Limited Partnership. The valuation of
non-public investments requires significant judgment by the Limited Partnership’s investment adviser in
consultation with the manager of the Limited Partnership due to the absence of quoted market values,
inherent lack of liquidity and the long-term nature of such assets. Private equity investments are valued
initially based upon transaction price. Valuations are reviewed periodically utilising available market data to
determine if the carrying value of these investments should be adjusted. Such market data primarily includes
observations of the trading multiples of public companies considered comparable to the private companies
being valued. In addition, a variety of additional factors are reviewed by the Limited Partnership’s investment
adviser, including, but not limited to, financing and sales transactions with third parties, current operating
performance and future expectations of the particular investment, changes in market outlook and the third
party financing environment. Mezzanine loans are initially valued at the price the loan was granted.
Subsequent to initial recognition, the loans are valued on a fair value basis taking into account market
conditions and any appreciation or deterioration in value. Bridge loans are initially valued at the price the
loan was granted. Subsequent to initial recognition, the loans are valued on a fair value basis taking into
account market conditions and any appreciation or deterioration in value.

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The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used
to determine fair value: 

Investment in Limited Partnership

Fair value at beginning of year

Net purchases 

Investment
in Securities
2009 
£

Investment
in Securities
2008
£

39,325,959

2,378,310

12,342,029

37,339,998

Net change in unrealised appreciation (depreciation) on investments

52,764,226

(392,349)

Unquoted equity securities, fair value at end of year

104,432,214

39,325,959

Unquoted debt securities

Fair value at beginning of year

Net purchases 

25,121,336

–

3,627,208

25,121,336

Net change in unrealised depreciation on investments

(297,000)

–

Unquoted debt securities, fair value at end of year

28,450,844

25,121,336

Fair value at end of year

132,883,058

64,447,295

The net change in unrealised appreciation on investments relates to investments held at the respective year
end. The investments held by the Limited Partnership are classified as Level 3 investments by the 
Limited Partnership. 

6. ADMINISTRATION FEE

Under the terms of the Company Administration Agreement dated 30 July 2007 between Mayflower
Management Services (Bermuda) Limited (the “Administrator”) and the Company, the Administrator receives
an annual administration fee at prevailing commercial rates, subject to the minimum monthly fee of US$5,000
per month. During the year ended 31 December 2009, the Company incurred administration fees of £43,675
(2008: £47,466), which is included in professional fees in the Statements of Operations. As at 31 December
2009, there was a balance payable of £14,408 (2008: £12,735), which is included in accounts payable and
accrued expenses. 

43

NOTES TO THE
FINANCIAL 
STATEMENTS
continued

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44

NOTES TO THE
FINANCIAL 
STATEMENTS
continued

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7. INVESTMENTS

Limited Partnership
The Company has committed substantially all of its capital to the Limited Partnership. The Limited
Partnership’s primary objective is to invest in a diversified portfolio of private mid-market UK and European
businesses, aiming to provide investors with significant long term capital appreciation. The investment in the
Limited Partnership is denominated in Euros. The Limited Partnership has an initial period of ten years from
its final closing date of 30 November 2009; however the life of the Partnership may be extended, at the
discretion of the General Partner, by up to three additional one year periods to provide for the orderly
realisation of investments. The Limited Partnership will make distributions as its investments are realised.

The Company’s share of the total capital called by the Limited Partnership to 31 December 2009 was
£52,607,753 (€64,515,000) (2008: £40,265,717 (€51,750,000)), representing 34.5% of the Company’s total
capital commitment. As at 31 December 2009, the Company accounted for 66.05% of the total capital and
commitments in the Limited Partnership (2008: 65.20%).

The Company may also make co-investments with the Limited Partnership based on the recommendations
of the Manager. 

At 31 December 2009, the Limited Partnership appointed a third party valuer to determine the fair value of
the underlying businesses taking into account financial information provided by the Limited Partnership’s
investment adviser. The Limited Partnerships accounts have been audited for the year ending 31 December
2009. As a result of the valuation, the Company’s participation in the Limited Partnership has been valued 
at £104,432,214 (2008: £39,325,959) at year end, representing an increase in value of £52,764,226 
(2008: (£392,349)).

Limited Partnership’s investments
The Limited Partnership made one new acquisition in 2009, Verivox, and was involved in the refinancing 
of Host Europe.

Host Europe Corporation Limited and Cologne data centre
Host Europe Corporation Limited (“Host Europe”) is a UK market leader in domain registration, the UK’s
second largest shared hosting provider and a leading provider of standardised hosting in Germany. 
Host Europe was acquired in April 2008 for £128 million with the Limited Partnership’s contribution being
£48.6 million. The acquisition included an acquisition of a data centre based in Cologne which was held
within a wholly-owned subsidiary of the Limited Partnership, Cologne Data Centre (Bermuda) Limited
(“Cologne data centre”). 

On 21 July 2009 Host Europe sold Vialtus Solutions Limited (“Vialtus”), one of Host Europe’s three operating
divisions, for £42 million to AIM listed Daisy Group plc (“Daisy”). Host Europe received £13 million at the
date of the transaction and 36,250,000 ordinary Daisy shares (currently held by Host Europe), valued at 
£29 million and equal to 14% of Daisy’s issued share capital. Daisy is a leading provider of integrated voice and
data services to small and medium sized businesses providing customers with access to a combined product
set from a single billing platform. Peter Dubens, a director of the Company, is Daisy’s Executive Chairman.

On 11 September 2009 Host Europe completed a refinancing of its senior debt facility increasing it from
£32.5 million to £45 million. Together with the £13 million received from Daisy as part of the consideration
for Vialtus, this refinancing allowed Host Europe to repay the £17.5 million vendor loan note issued to
finance the acquisition of the Group and to prepay a large portion of the mezzanine debt. Following the
disposal of Vialtus, Host Europe consists of two web hosting divisions operating in distinct geographies. 
In the UK, Host Europe operates through the brands 123reg and Webfusion. 123reg is the UK market
leader for domain name registration and Webfusion is the UK’s second largest shared hosting provider. 
The Group also has a German division, Host Europe GmbH, which is the German market leader in the
standardised managed hosting market. 

As at 31 December 2009, the net fair value of the investment, excluding Daisy, attributable to the Company
was £60.2 million (2008: £32.5 million). At 31 December 2009, the net fair value of the investment in Daisy
held within Host Europe attributable to the Company was £20.5 million.

 
 
 
 
 
 
 
Headland Media
Headland Media Limited (“Headland Media”) is a leading business to business media content provider of
news digest services to the hotel and shipping sectors; as well as a leading provider of entertainment and
training services to offshore industries. Total transaction value in January 2008 was £6.3 million and the
Limited Partnership contribution was £2.5 million.

As at 31 December 2009, the net fair value of the investment attributable to the Company was £4.4 million
(2008: £1.7 million).

Monument Securities
Monument Securities Limited (“Monument Securities”) is a global equity, derivatives and fixed income broker
with an 18 year history. The company provides services to institutions, fund managers, market
professionals, corporates and hedge funds. The total transaction value in March 2008 was £5.5 million. 
The Limited Partnership has a 51% interest in Monument Securities and its contribution was £2.8 million. 

As at 31 December 2009, the net fair value of the investment attributable to the Company was £2.2 million
(2008: £1.8 million).

VVX (Bermuda) Limited 
On 4 December 2009, the Limited Partnership acquired 51% of Verivox Holdings Limited (“Verivox”),
Germany’s largest independent online consumer energy price comparison service, for £17 million. 
The consideration was funded using a combination of debt and equity. The Limited Partnership’s
contribution was £4.6 million for equity. The company receives commission from energy suppliers when
consumers elect to switch providers through its website.

As at 31 December 2009, the net fair value of the investment attributable to the Company was £11.1 million
(2008: £Nil).

Mezzanine financing investments
Headland Media
As part of the Limited Partnership’s acquisition of Headland Media, the Company provided £3.1 million of
debt finance, in the form of a secured mezzanine instrument from the Company. The instrument carries a
fixed interest rate of 12% and was due June 2010. On 20 December 2009, Clydesdale bank provided 
£3.35 million of senior debt which was used to repay the mezzanine loan in full.

Host Europe 
As part of the Limited Partnership’s acquisition of Host Europe, the Company provided debt finance of
£19.4 million, in the form of a secured mezzanine instrument. The instrument carries a fixed interest rate of
15.25% maturing on the earlier of 31 December 2015 or the date of sale or IPO of Host Europe Corporation
Limited. Host Europe, through refinancing its senior debt, repaid £5.6 of the mezzanine loan to the Company.
The Company also provided debt finance of £2.6 million to Cologne data centre whose Cologne subsidiary
houses a data centre. This instrument carries a fixed interest rate of 15.25%, maturing 3 April 2015. During
2009, the principal plus accrued interest amounting in total to £3 million was assigned to Host Europe,
bringing the total mezzanine loan with Host Europe to £16.9 million (2008: £19.4 million).

VVX (Bermuda) Limited
As part of the Limited Partnership’s acquisition the Company provided debt finance of £7.3 million (€8 million),
in the form of an unsecured mezzanine instrument. The instrument carries a fixed interest rate of 15%,
maturing no later than 4 December 2019. 

Bridge financing investments
VVX Investments Limited
As part of the Limited Partnership’s acquisition of Verivox, the Company provided debt finance of £6 million
(€6.6 million), in the form of a secured facility instrument. As at 31 December 2009, Verivox has drawn 
£4.6 million (€5 million) of the facility. The instrument carries a fixed interest rate of 8.5%, maturing no later
than 4 December 2012.

Certain directors of the Company and the General Partner of the Limited Partnership may also be directors
of the investee companies.

45

NOTES TO THE
FINANCIAL 
STATEMENTS
continued

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46

NOTES TO THE
FINANCIAL 
STATEMENTS
continued

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8. CAPITAL COMMITMENT

During 2009, the Company made an additional commitment of £33,449,500 (€37,000,000) to the Limited
Partnership taking the total capital commitment up to £166,074,700 (€187,000,000) (2008: £142,815,000;
€150,000,000). The Limited Partnership may draw upon the capital commitment at any time subject to two
weeks’ notice on an as needed basis. Since inception, capital in the amount of £52,607,753 (€64,515,000)
was called from the Company by the Limited Partnership. As at 31 December 2009, the amount of capital
commitment available to be called from the Company by the Limited Partnership was £108,788,929
(€122,485,000) (2008: £93,543,825; €98,250,000).

9. SHARE CAPITAL AND WARRANTS

(a) Share capital

The authorised share capital of the Company on incorporation was $1,000 divided into 1,000 shares par
value $1.00 each. On incorporation, one ordinary share of par value $1.00 was issued to Codan Trust
Company Limited (the “Initial Subscriber”). The currency denomination of the Company’s authorised share
capital was subsequently changed from US Dollars to Euros, the shares were subdivided and the
authorised share capital increased to €2,500,000 divided into 250,000,000 shares of par value €0.01 each. 
The currency denomination of the Company’s authorised share capital was further changed from Euros to
British Pounds, the shares were consolidated, divided and redenominated and the authorised share capital
increased to £2,000,000 divided into 200,000,000 shares of par value 1 pence each. After the
consolidation, division and redenomination the Initial subscriber was the registered shareholder of one
Ordinary Share of par value 1 pence. This Ordinary Share was made available, under the terms of the
Placing. The Placing Price of £1.00 per Ordinary Share represented a premium of 99 pence to the nominal
value of an Ordinary Share issued under the Placing.

The Placing of the Company’s Shares was fully subscribed, so that immediately after the Placing, the
authorised share capital of the Company consisted of 200,000,000 Ordinary Shares and the issued share
capital of the Company of 100,000,000 Ordinary Shares.

(b) Warrants

50,000,000 warrants were issued in conjunction with the subscription of Ordinary Shares at a ratio of one
warrant for every two shares. Each warrant confers on the holder the right to purchase one fully paid
Ordinary Share at an exercise price of £1.30 as adjusted in accordance with Condition 2.3 of the AIM
Admission Document. Warrants may be exercised at the option of the holder at any time prior to the close
of business on AIM of the third anniversary of the date of admission of the Company warrants to AIM.

As the exchange traded price of the Ordinary Shares as at 31 December 2009 and 2008 was below the
exercise price of the warrants, there was no dilution caused by the warrants in the net asset value and gain
per share.

(c) Secondary placing

On 9 March 2009, a secondary placing took place whereby the Company issued 28,125,000 shares, 
which were sold at a price of 64 pence per share raising £18,000,000.

(d) Share repurchase

On 2 October 2008, the Board of Directors authorised a repurchase programme of 7,589,000 shares.
Under the tender offer, the Company repurchased 7,589,000 shares for £4,576,316 at a price per share 
of 60 pence per share and held them in treasury. All of the rights of the treasury shares were suspended
(including economic participation, voting and dividend distribution rights). The Company also holds
1,250,000 warrants in treasury.

On 21 October 2009, an additional placing took place whereby the Company re-issued the 7,589,000
shares previously repurchased at a price of 94 pence per share raising £7,133,660.

 
 
 
 
 
 
 
Shares of common stock and warrants outstanding are:

Common stock

Balance at beginning of year

Issued

Repurchased

2009

2008

92,411,000

100,000,000

35,714,000

–

–

(7,589,000)

Balance at end of year

128,125,000

92,411,000

Weighted average shares in issue at end of year

116,825,010

98,128,739

Warrants 

2009

2008

Balance at beginning of year

48,750,000

50,000,000

Issued

Repurchased

–

–

–

(1,250,000)

Balance at end of year

48,750,000

48,750,000

10. RELATED PARTIES

Certain Directors of the Company are also Directors, Members and/or shareholders of the Manager, 
Oakley Capital Corporate Finance LLP (“Oakley Finance”), Palmer Capital Associates (International) Limited
and the Administrator; entities which provide services to and receive compensation from the Company.

During the year ended 31 December 2009, the Company entered into a financial advisory agreement with
Oakley Finance. During 2009, the Company incurred financial advisory fees of £20,125 (2008: £Nil), which 
is included in professional fees in the statements of operations. As at 31 December 2009, there was no
balance payable (2008: £Nil) to Oakley Finance.

11. TAXATION

Under current Bermuda law the Company is not required to pay any taxes in Bermuda or either income or
capital gains. The Company has received an undertaking from the Minister of Finance in Bermuda that in 
the event of such taxes being imposed, the Company will be exempt from such taxation at least until the
year 2016. 

The Company is subject to the provisions of FASB ASC 740-10, Income Taxes – Overall, where FASB
Interpretation No. (FIN) 48, Accounting for Uncertainty in Income Taxes is primarily codified, and which is
effective for the financial statements for fiscal year beginning after 15 December 2008. This standard
establishes consistent thresholds as it relates to accounting for income taxes. It defines the threshold for
recognizing the benefits of tax-return positions in the financial statements as “more-likely-than-not” to be
sustained by the taxing authority and requires measurement of a tax position meeting the more-likely-than-
not criterion, based on the largest benefit that is more than 50 percent likely to be realised. The Company
early adopted ASC 740-10 for the fiscal year beginning 1 January 2008. There has been no significant
impact on the Company’s financial statements as a result of adopting this interpretation.

12. SUBSEQUENT EVENTS 

The Directors have evaluated subsequent events from the year end through 20 April 2010 which is the date
the financial statements were available to be issued. They have determined that there were no matters
requiring disclosure.

47

NOTES TO THE
FINANCIAL 
STATEMENTS
continued

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48

DIRECTORS 
AND
ADVISERS

DIRECTORS AND ADVISERS

DIRECTORS

James Michael Keyes
Independent Director and Chairman

Laurence Charles Neil Blackall 
Independent Director 

Christine (Tina) Michelle Burns
Independent Director

Peter Adam Daiches Dubens
Director

Ian Patrick Pilgrim
Director

Christopher Wetherhill
Independent Director

ADVISERS

Registered Office
11 Harbour Road
Paget PG01
Bermuda

Investment Adviser to the Manager
Oakley Capital Limited
The Economist Building
25 St James’s Street
London SW1A 1HA
United Kingdom

Legal Advisers to the Company 
as to English Law
Clifford Chance
10 Upper Bank Street
London E14 5JJ
United Kingdom

CREST Depositary
Computershare Investor Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
United Kingdom

Manager to the Company 
and the Limited Partnership
Oakley Capital (Bermuda) Limited
11 Harbour Road
Paget PG01
Bermuda

Administrator to the Company 
and the Limited Partnership
Mayflower Management Services 
(Bermuda) Limited
11 Harbour Road
Paget PG01
Bermuda

Legal Advisers to the Company 
as to Bermuda Law
Conyers Dill & Pearman Limited
Clarendon House
2 Church Street
PO Box HM 666
Hamilton HM CX
Bermuda

Nominated Adviser and Broker 
to the Company 
Liberum Capital Limited
Level 12, Ropemaker Place
25 Ropemaker Street
London EC2Y 9AR
United Kingdom 

Auditors to the Company and 
the Limited Partnership
KPMG
Crown House
4 Par la Ville Road
Hamilton HM 08
Bermuda

Branch Registrar
Computershare Investor Services
(Jersey) Limited
Queensway House
Hilgrove Street
St Helier
Jersey JE1 1ES
Channel Islands

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NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the 2010 Annual General Meeting (the “Meeting”) of Oakley Capital Investments
Limited (the “Company”) will be held at 11.00 a.m. Bermuda time on 23 June 2010, at the offices of 
Mayflower Management Services (Bermuda) Limited at 11 Harbour Road, Paget PG01, Bermuda for the
following purposes:

As ordinary business to consider and, if thought fit, pass Resolutions 4 and 6(a) to (i) inclusive below which
will be proposed as Ordinary Resolutions:

1. To elect a Chairman, if necessary.

2. To read the Notice convening the meeting.

3. To lay before the Members of the Company’s audited report and accounts for the financial year ended

31 December 2009.

4. To re-appoint KPMG of Crown House, 4 Par la Ville Road, Hamilton HM 08, Bermuda as auditors for

the ensuing year, and to authorise the Directors to fix their remuneration.

5. To note the retirement by rotation as Directors of the Company of Peter Dubens and Laurence Blackall

at the Meeting in accordance with Bye-law 105 of the Company’s Bye-laws.

6. To:

a) determine the minimum and maximum number of Directors as not less than two (2) and not more

than twelve (12);

b) re-elect Peter Dubens as a Director of the Company so to serve until the next Annual General

Meeting or until his successor is elected or appointed;

c) re-elect James Keyes as a Director of the Company so to serve until the next Annual General

Meeting or until his successor is elected or appointed;

d) re-elect Laurence Blackall as a Director of the Company so to serve until the next Annual General

Meeting or until his successor is elected or appointed;

e) re-elect Christopher Wetherhill as a Director of the Company so to serve until the next Annual

General Meeting or until his successor is elected or appointed;

f)

re-elect Tina Burns as a Director of the Company so to serve until the next Annual General Meeting 
or until her successor is elected or appointed;

g) re-elect Ian Pilgrim as a Director of the Company so to serve until the next Annual General Meeting 

or until his successor is elected or appointed;

h) authorise the Directors from time to time to fill any vacancies on the Board; and

i) confer general authority on the Directors to appoint Alternate Directors.

Copies of the letters of appointment of the Directors of the Company will be available for inspection for at
least 15 minutes prior to the meeting and during the meeting itself.  

20 May 2010 
BY ORDER of the Directors
Mayflower Management Services (Bermuda) Limited
Secretary

49

NOTICE OF
ANNUAL
GENERAL
MEETING

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50

NOTICE OF
ANNUAL
GENERAL
MEETING
continued

NOTES

1. The Company has established the date of this Notice as the record date (the “Record Date”) for the purposes

of the Meeting, and accordingly only the registered holders of the Company’s Ordinary Shares who are
entered in the Company’s Register of Members as at the Record Date are entitled to receive notice of, and
attend and vote at, the Meeting.

2. A member is entitled to appoint one or more proxies to attend the Meeting, and, on a poll, vote instead of that

member. A proxy need not be a Member.

3. Enclosed is a Form of Proxy appointing the Chairman, failing which the Secretary, of the Meeting or some

other person to vote your shares with respect to any and all matters coming before the Meeting. 

To be valid the Form of Proxy must be received no later than 11.00 a.m. Bermuda time on 21 June 2010 at:

Mayflower Management Services (Bermuda) Limited
Secretary
Oakley Capital Investments Limited
11 Harbour Road
Paget PG01
Bermuda

Email: ipilgrim@mayflower.bm
Fax: (441) 236 6724

Please return the completed Form of Proxy by scanned e-mail or by facsimile.

4. The Company advises that it knows of no other items to be brought before the Meeting other than the

agenda items specified in the Notice. However, should any other items be presented at the Meeting of which
the Company is not aware, it is the intention that the Proxy-holder vote at his/her discretion.

5. The giving of a proxy does not preclude the right to vote in person, should the Member giving the proxy so

desire, as the proxy may be revoked at any time, provided Notice of Revocation is received by the Company
at the address given in paragraph 3 above before commencement of the Meeting. Notice of Revocation may
be served by scanned e-mail or by facsimile.

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Designed by add to taste and printed by Portman Lodge Limited

Oakley Capital Investments Limited is registered in Bermuda with company number 40324. 
Registered office: 11 Harbour Road, Paget PG01, Bermuda