OCI

OAKLEY CAPITAL INVESTMENTS LIMITED
ANNUAL REPORT AND ACCOUNTS 2011

	CONTENTS

	 04	 Chairman’s	Statement

	 08	 Manager’s	Report

	 14	 Directors’	Report

	 18	 Review	of	Investments

	 20	 Daisy	Group	Plc

	 22	

Verivox

	 24	

Time	Out	Group

	 26	

Emesa

	 28	 Broadstone

	 30	 Headland	Media

	 32	 Monument	Securities

	 34	

Intergenia

	 36	 Host	Europe	

	 38	

Independent	Auditor’s	Report

	 40	

Financial	Statements

	 41	 Statements	of	Assets	and	Liabilities

	 42	 Schedules	of	Investments

	 44	 Statements	of	Operations

	 45	 Statements	of	Changes	in	Net	Assets

	 46	 Statements	of	Cash	Flows

	 47	 Notes	to	the	Financial	Statements

	 57	 Directors	and	Advisers

	 58	 Notice	of	Annual	General	Meeting	

03

CONTENTS

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04

CHAIRMAN’S 
STATEMENT

Chairman’s	Statement

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CHAIRMAN’S	STATEMENT

05

CHAIRMAN’S 
STATEMENT

for	 Oakley	 Capital	

“Limited	 Partnership”)	 made	

I	 am	 pleased	 to	 report	 that	 2011	 was	 a	 year	 of	 solid	
progress	
Investments	 Limited		
(the	 “Company”).	 Oakley	 Capital	 Private	 Equity	 L.P.		
(the	
three	 direct	
investments	 in	 the	 year,	 bringing	 the	 total	 number	 of	
investments	 it	 has	 made	 since	 inception	 to	 ten	 and	
funded	 a	 number	 of	 follow-on	 investments	 in	 its	
portfolio	companies.	The	overall	trading	performances	
of	the	portfolio	companies	has	been	good,	contributing	
to	a	modest	lifting	of	the	Company’s	net	asset	value	per	
share	 from	 £1.68	 at	 31	 December	 2010	 to	 £1.71	 at		
31	December	2011.

The	 first	 of	 the	 direct	 investments	 in	 2011	 was	 the	
acquisition	 of	 68%	 of	 Emesa,	 a	 high	 growth	 online	
consumer	facing	business	operating	in	the	e-commerce	
leisure	 and	 entertainment	 sectors.	 The	 transaction	
the	 Limited	
valued	 Emesa	 at	 £31	 million	 with	
Partnership	 providing	 equity	 of	 £10.4	 million	 and	 the	
Company	 providing	 senior	 debt	 of	 £8.7	 million	 and	 a	
mezzanine	loan	of	£4.7	million.	The	second	investment	
was	the	acquisition	of	65.7%	of	Time	Out	New	York,	
which,	following	the	acquisition	of	Time	Out	Group	in	
November	2010,	allows	worldwide	intellectual	property	
rights	 to	 be	 consolidated	 under	 common	 ownership	
and	the	business	to	follow	a	unified	strategic	direction.	
The	 transaction	 valued	 Time	 Out	 New	 York	 at		
£18.5	 million	 with	 the	 Limited	 Partnership	 providing	
equity	 of	 £9.3	 million	 and	 the	 Company	 providing	
mezzanine	loan	finance	of	£3.1	million	and	senior	loan	
notes	of	£2.1	million.	The	third	direct	investment	was	
the	 acquisition	 of	 51%	 of	 Intergenia	 Holdings	 GmbH,		
a	web	hosting	company	providing	managed,	dedicated	
and	cloud	hosting.	This	is	a	market	sector	which	is	well	
the	 Limited	
known	
Partnership	 having	 invested	 in	 and	 subsequently	
successfully	sold	Host	Europe	in	2010.	The	transaction	
valued	 Intergenia	 at	 £72	 million	 with	 the	 Limited	
Partnership	providing	£25.2	million	of	equity	financing	
and	the	Company	providing	£8.4	million	of	senior	debt.

Investment	 Adviser,	

the	

to	

The	portfolio	companies	had	a	good	year	in	terms	of	
cash	generation	enabling	Emesa,	Headland	Media	and	
Intergenia	 to	 repay	 in	 total	 £17	 million	 of	 mezzanine	
and	 senior	 loans,	 with	 accrued	 interest,	 to	 the	
Company,	of	which	£4.1	million	was	repaid	in	the	post	
balance	sheet	period.	

The	Limited	Partnership	issued	two	capital	calls	in	the	
year,	 principally	 to	 fund	 the	 acquisitions.	 The	 first	 call	
was	 in	 April	 2011	 for	 10%	 of	 the	 Company’s	 total	
commitments	 of	 £156	 million	 (€187	 million)	 and	 a	
further	 call	 made	 in	 November	 for	 14%	 of	 total	
commitments.	This	resulted	in	the	Company	making	a	
payment	 to	 the	 Limited	 Partnership	 in	 respect	 of	 the	
April	call	of	£16.5	million	and	in	respect	of	the	November	
call	 of	 £22.5	 million.	 The	 Limited	 Partnership	 has	 in	
total	called	65.5%	of	total	commitments.

PERFORMANCE	

Net	asset	value	in	the	year	increased	by	£4.0	million	to	
£218.9	million	as	at	31	December	2011.	Of	this	total	
net	 asset	 value,	 £112.6	 million	 represented	 the	 fair	
value	 of	 investments	 made	 by	 the	 Company	 into	 the	
Limited	Partnership	and	£32.6	million	was	investments	
made	 directly	 to	 the	 Limited	 Partnership’s	 portfolio	
companies	in	the	form	of	mezzanine	finance	and	senior	
loan	notes.	The	balance	of	£73.7	million	was	held	by	
the	 Company	 as	 cash	 and	 cash	 equivalents	 and		
other	assets.	

Whilst	the	Company	does	not	generally	invest	directly	
in	the	portfolio	companies,	other	than	by	the	provision	
of	 debt	 finance,	 it	 is	 possible	 to	 “look	 through”	 the	
Limited	 Partnership	 to	 understand	 the	 impact	 of	 the	
performance	 of	 those	 portfolio	 companies	 on	 the	
investment	values	attributed	to	the	Limited	Partnership	
in	the	Company.	

The	total	fair	value	of	the	portfolio	company	investments	
have	increased	both	from	inception	and	within	the	year,	
approximately	 65%	 of	 which	 gets	 reflected	 in	 the	
Company	 (through	 its	 investment	 in	 the	 Limited	
Partnership).	Fair	values	as	at	31	December	2011	have	
been	established	in	accordance	with	The	International	
Private	Equity	and	Venture	Capital	Valuation	Guidelines.	

investment	 by	

The	 fair	 value	 of	 the	 underlying	 portfolio	 investments		
in	the	Limited	Partnership	attributable	to	the	Company	
has	 increased	 by	 £38.1	 million	 to	 £107.2	 million	 at		
31	 December	 2011.	 Of	 this,	 £35.9	 million	 arose	 as	 a	
result	 of	 additional	
the	 Limited	
Partnership	in	new	acquisitions	or	follow-on	investments	
in	 existing	 portfolio	 companies.	 The	 balance	 of		
£2.2	million	represents	the	net	increase	in	the	assessed	
fair	values	of	the	portfolio	companies	attributable	to	the	
Company	 arising	 from	 performance	 considerations.		
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	mezzanine	
loans	 with	 fixed	 interest	 rates	 of	 15%.	 The	 Company	
may	also	provide	secured	senior	debt	to	the	portfolio	
companies	 at	
typically	 of	 8.5%.		
These	 investments	 in	 loan	 instruments	 increased	 by	
£12.8	 million	 from	 £19.8	 million	 as	 at	 31	 December	
2010	 to	 £32.6	 million	 at	 31	 December	 2011,	 due	
principally	to	new	loans	being	issued	in	connection	with	
the	Intergenia	and	Time	Out	New	York	acquisitions.

interest	

rates	

The	 Company	 held	 cash	 and	 cash	 equivalents	 of		
£70.1	 million	 at	 31	 December	 2011.	 On	 28	 October	
2010,	the	Company	made	a	capital	commitment	in	the	
amount	 of	 £83.5	 million	 (€100.0	 million)	 in	 Oakley	
Capital	 Private	 Equity	 II	 L.P.,	 a	 successor	 fund	 to	 the	
Limited	Partnership.	To	date	there	have	been	no	capital	
calls	in	respect	of	this	commitment.

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06

CHAIRMAN’S 
STATEMENT
continued

INVESTMENTS 

FOLLOW-ON INVESTMENTS

The	 Limited	 Partnership	 undertook	
three	 direct	
acquisitions	in	the	period;	acquiring	68%	of	Emesa	B.V.	
(“Emesa”)	in	March	2011;	65.7%	of	Time	Out	America	
LLC	(“Time	Out	New	York”)	in	May	2011	and	51%	of	
Intergenia	 Holding	 GmbH	 (“Intergenia”)	 in	 December	
2011.	Daisy	Group	plc	(“Daisy”)	made	three	purchases	
in	the	twelve	months	to	31	December	2011.	In	addition,	
the	Limited	Partnership	provided	additional	funding	to	
Broadstone	 Pensions	 and	
Investments	 Limited	
(“Broadstone”)	and	Time	Out	Group	Limited	(“Time	Out	
London”)	to	enable	them	to	pursue	their	strategies	and	
to	make	four	small	acquisitions.

Emesa B.V. (“Emesa”)

On	25	March	2011,	the	Limited	Partnership	acquired	
68%	of	Emesa,	a	leading	e-commerce	company	active	
in	the	Dutch	online	leisure	market.	Emesa	was	founded	
in	 2004	 and	 has	 grown	 significantly	 to	 become	 a	
leading	 online	 consumer	 auction	 platform	 in	 the	
European	e-commerce	leisure	industry.	Emesa	enables	
online	customers	to	find	and	book	leisure	deals	such	
as	 short	 holidays	 and	 weekend	 breaks	 through	 its	
websites.	 The	 Limited	 Partnership	 provided	 equity	 of	
£10.4	million	and	the	Company	provided	senior	debt	of	
£8.7	 million	 and	 a	 mezzanine	 loan	 of	 £4.7	 million.		
Both	the	mezzanine	and	senior	debt	was	fully	repaid	on	
22	December	2011	by	a	refinancing	from	bank	debt.

Time Out New York Limited (“Time Out New York”)

On	 22	 May	 2011,	 the	 Limited	 Partnership	 acquired	
65.7%	 of	 Time	 Out	 New	 York.	 The	 investment	 is	
synergistic	 and	 will	 enhance	 the	 investment	 made	 by	
the	Limited	Partnership	in	November	2010	in	Time	Out	
London	 to	 create	 a	 global	 digital	 media	 group	 (the	
“Time	Out	Group”).	In	combination,	Time	Out	New	York	
and	Time	Out	London	control	the	worldwide	rights	to	
the	Time	Out	brand	(excluding	Chicago).	The	Limited	
Partnership	 subscribed	 for	 equity	 of	 £9.3	 million	 and	
the	Company	provided	mezzanine	loan	finance	of	£3.1	
million	and	senior	loan	notes	of	£2.2	million.	

Intergenia Holding GmbH (“Intergenia”)

On	 31	 December	 2011,	 the	 Limited	 Partnership	
acquired	 51%	 of	 Intergenia	 Holding	 GmbH	 and	 its	
subsidiaries	(together	known	as	“Intergenia”).	Intergenia	
is	a	leading	web	hosting	company	providing	managed,	
dedicated	 and	 cloud	 hosting.	 The	 transaction	 valued	
Intergenia	 at	 a	 total	 enterprise	 value	 of	 £72.0	 million.	
The	 Limited	 Partnership	 provided	 £25.2	 million	 of	
Investments	
equity	 financing	 and	 Oakley	 Capital	
Limited	 provided	 senior	 debt	 of	 £8.4	 million.		
£2.1	million	of	this	debt	was	repaid	post	balance	sheet.

Broadstone  Pensions  and  Investments  Limited 
(“Broadstone”)

the	 Limited	 Partnership	 provided	
During	 2011,	
additional	funding	to	Broadstone	in	the	form	of	equity	
financing	 of	 £6.2	 million.	 The	
funding	 provided	
additional	 working	 capital	 to	 pursue	 its	 turnaround	
strategy	and	to	fund	regulatory	capital.

Time Out Group Limited (“Time Out London”)

In	 2011,	 the	 Limited	 Partnership	 provided	 additional	
funding	 to	 Time	 Out	 London	 in	 the	 form	 of	 equity	
financing	 of	 £4.6	 million	 to	 fund	 four	 acquisitions;	
LikeCube;	Kelkoo;	Keynoir	and	What’s	on	Stage.	The	
funds	were	also	used	to	fund	additional	working	capital.

Daisy Group plc (“Daisy”)

On	 31	 March	 2011,	 Daisy	 announced	 that	 it	 had	
acquired	 the	 Vodafone	 mobile	 service	 business	 of	
(“Outsourcery”),	 a	 managed	
Outsourcery	 Limited	
for	 a	 cash	 consideration	 of		
service	 provider,	
£12	 million.	 Outsourcery	 provides	 a	 suite	 of	 unified	
communications,	 focused	 on	 mobile	 voice,	 mobile	
data	
and		
medium-sized	enterprises.

solutions	

hosted	

small	

and	

to	

On	 18	 April	 2011,	 Daisy	 announced	 that	 it	 had	
completed	 the	 acquisition	 of	 the	 trading	 assets	 of	
Telinet	and	certain	trading	assets	of	Ipitomi	for	a	cash	
consideration	 of	 up	 to	 £15.4	 million.	 As	 leading	 data	
and	managed	service	providers,	the	Telinet	and	Ipitomi	
acquisitions	further	bolster	Daisy’s	existing	presence	in	
the	 mid-market	
telecommunications	 space	 and	
enhance	its	data	and	engineering	capabilities.	

Subsequent events

In	February	2012,	Headland	Media	Limited	repaid	the	
outstanding	 balance	 of	 £1.6	 million	 on	 its	 mezzanine	
loan	 and	 in	 March	 2012,	 Intergenia	 AG	 repaid		
£2.1	 million	 of	 its	 senior	 loan	 back	 to	 the	 Company	
leaving	an	outstanding	balance	of	£6.3	million.

On	13	April	2012,	Daisy	announced	that	its	profits	and	
earnings	 for	 year	 ending	 31	 March	 2012	 were	 within	
the	 range	 of	 market	 expectations.	 On	 16	 April,	 Daisy	
announced	 the	 completion	 of	 the	 acquisition	 of,	 the	
audio-conferencing	 specialist,	 Worldwide	 Group	
Holdings	 Limited	 for	 an	 initial	 cash	 consideration		
of	£28	million.	

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07

CHAIRMAN’S 
STATEMENT
continued

OUTLOOK 

Whilst	the	Limited	Partnership	has	invested	in	a	diverse	
range	 of	 industry	 sectors,	 a	 significant	 core	 of	 those	
investments	 share	 the	 common	 characteristic	 of	
providing	 online	 services	 helping	 consumers	 save	
money.	These	investments	are	typically	in	high	growth	
markets	where	the	combination	of	the	underlying	rate	
of	growth,	together	with	the	ever-increasing	acceptance	
of	the	internet	as	a	place	to	transact	business,	provides	
opportunity	 for	 expansion	 and	 a	 degree	 of	 shelter		
from	 the	 difficult	 economic	 situation	
in	 Europe.		
The	Investment	Adviser	is	likely	to	be	influenced	by	the	
its	 evaluation	 of	 new	
same	 considerations	
opportunities	in	the	current	year.	

in	

The	Limited	Partnership	expects	to	consider	realisation	
opportunities	 in	 2012	 where	 conditions	 prove	 to	 be	
conducive	to	an	exit.

James	Keyes	

Chairman

19	April	2012

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08

MANAGER’S 
REPORT

Manager’s	Report

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MANAGER’S	REPORT

THE COMPANY AND THE LIMITED PARTNERSHIP 

MARKET BACKGROUND 

09

MANAGER’S 
REPORT

Economic	recovery	in	Europe	remains	weak.	However,	
a	spate	of	surprisingly	strong	US	data,	and	some	signs	
that	 China	 was	 achieving	 a	 ‘soft	 landing’	 and	 would	
avoid	a	sharp	slowdown,	encouraged	the	view	that	a	
world	recession	would	be	avoided.	The	key	drivers	of	
growth	 in	 Europe	 in	 the	 boom	 years,	 spending	 by	
households	 and	 governments,	 will	 provide	 a	 much	
smaller	 contribution	 going	 forward	 as	 governments	
work	to	reduce	debt	and	to	re-balance	their	economies	
in	favour	of	investment	and	export-led	recovery.	One	of	
the	 perhaps	 surprising	 features	 in	 recent	 months	 has	
been	 the	 relative	 stability	 of	 sterling	 in	 the	 foreign	
exchange	markets.	This	appears	to	be	because	sterling	
is	caught	between	the	US	Dollar	and	the	Euro	as	risk	
appetite	fluctuates	within	those	currencies.	

With	 continuing	 market	 uncertainty,	 the	 Investment	
Adviser	 has	 maintained	 its	 cautious	 approach	 to	 the	
evaluation	 of	 new	 opportunities,	
favouring,	 as	
previously,	 those	 businesses	 which	 provide	 a	 level	 of	
shelter	by	being	in	high-growth	internet	based	services.	

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.	

the	 Company	 and	

Oakley	 Capital	 (Bermuda)	 Limited	 (the	 “Manager”),		
a	 Bermudian	 company,	 has	 been	 appointed	 manager	
to	
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	
invest	in	sectors	that	are	growing	or	where	consolidation	
is	 taking	 place.	 Within	 the	 core	 sector	 interests,	 the	
Limited	 Partnership	 invests	 in	 both	 performing	 and	
under-performing	 companies,	 supporting	 buy	 and	
build	strategies,	businesses	encountering	rapid	growth,	
or	 businesses	 undergoing	 significant	 operational	 or	
strategic	 change.	 Investing	 in	 a	 diverse	 range	 of	
portfolio	companies,	the	Limited	Partnership’s	objective	
is	 to	 work	 proactively	 with	 the	 portfolio	 companies’	
management	teams,	together	with	other	stakeholders,	
in	order	to	create	substantial	shareholder	value.

The	Limited	Partnership	looks	to	acquire	a	controlling	
interest	 in	 companies	 with	 an	 enterprise	 value	 of	
between	 £20.0	 million	 and	 £150.0	 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.

FINANCIAL	HIGHLIGHTS

Assets at: 

31.12.07 

31.12.08 

31.12.09 

31.12.10 

31.12.11  % change 
2011/2007

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	

3,418	

99.9	

1.08	

63.5	

2,209	

1,854	

180.1	

1.41	

95.0	

2,751	

2,777	

214.9	

1.68	

145.5	

3,063	

3,229	

218.9	

1.71	

132.5	

2,858	

2,749	

120%

73%

30%

(13%)

(20%)

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	

34.8	

0.27	

4.0

0.03

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10

MANAGER’S 
REPORT
continued

ANALYSIS	OF	MOVEMENTS	IN	NET	ASSET	VALUE	FOR	THE	YEAR	ENDED	31	DECEMBER	2011

Opening	net	asset	value	as	at	1	January	2011	

Gross	revenue	

Other	expenditure	

Realised	gain	on	investments	

Net	unrealised	appreciation	of	investments	(excluding	accrued	interest)	

Closing net asset value as at 31 December 2011 

£m

214.9

5.5

(1.3)

(0.5)

0.3

218.9

PERFORMANCE 

The	Company’s	net	asset	value	increased	in	the	year	
to		
from	 £214.9	 million	 at	 31	 December	 2010	
£218.9	million,	a	rise	of	£4	million.	The	net	asset	value	
at	31	December	2011	is	equivalent	to	£1.71	per	share,	
up	from	£1.68	at	31	December	2010,	an	improvement	
of	3	pence,	or	2%.	

During	2011,	the	Limited	Partnership	made	two	capital	
calls;	the	first	in	April	for	10%	of	the	Company’s	total	
commitments	of	€187	million	and	a	further	call	made	in	
November	for	14%	of	total	commitments.	

This	 resulted	 in	 the	 Company	 making	 a	 payment	 to		
the	 Limited	 Partnership	 in	 respect	 of	 the	 April	 call		
of	 £16.5	 million	 (€18.7	 million)	 and	 in	 respect	 of	 the	
November	 call	 of	 £22.5	 million	
(€26.2	 million).		
The	 calls	 were	 used	 to	 fund	 three	 key	 acquisitions	
made	directly	by	the	Limited	Partnership;	Emesa	B.V.;	
Time	 Out	 New	 York	 Limited	 and	 Intergenia	 Holding	
GmbH	and	to	enable	the	Limited	Partnership	to	make	
additional	 capital	 contributions	 to	 Time	 Out	 London	
and	Broadstone.

MOVEMENTS	IN	INVESTMENT	PORTFOLIO	VALUES	FOR	THE	YEAR	ENDED	31	DECEMBER	2011

Host Europe
Host Europe

Verivox
Verivox

Daisy
Daisy

Emesa
Emesa

Intergenia
Intergenia

Time Out
Time Out
Group
Group

Broadstone
Broadstone

Headland
Headland
Media
Media

Monument
Monument

SOLD	
OCTOBER	
2010

Cost at 31 December 2011
Cost at 31 December 2011

r

Value at 31 December 2010
Value at 31 December 2010

e

t

Value at 31 December 2011
Value at 31 December 2011

e

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£m
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–
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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
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There	 were	 smaller	 increases	 to	 the	 fair	 value	 of	
Headland	Media	and	Monument	resulting	in	an	increase	
in	the	Company	value	for	these	two	portfolio	companies	
of	£1.0	million.	

By	 contrast,	 the	 Company’s	 fair	 value	 in	 Verivox	
decreased	 by	 £7.9	 million	 from	 £35.5	 million	 as	 at		
31	December	2010	to	£25.6	million	as	at	31	December	
2011.	Results	for	2011	were	adversely	affected	by	the	
insolvency	of	one	of	the	more	active	energy	suppliers	in	
the	 German	 market,	 by	 the	 unseasonably	 warm	
weather	 in	 quarter	 four	 and	 by	 the	 postponement	 of	
annual	price	increase	by	a	number	of	the	major	energy	
providers,	 all	 of	 which	 dampened	 switching	 demand.	
Despite	the	decrease	in	fair	value	of	Verivox,	it	remains	
significantly	 above	 cost	 and	 represents	 a	 9x	 money	
multiple,	 as	 can	 be	 seen	 from	 the	 chart	 on	 the		
previous	page.

Daisy’s	share	price	fell	from	100	pence	on	31	December	
2010	
to	 95.5	 pence	 on	 31	 December	 2011.		
This	reduced	the	Company’s	investment	value	in	Daisy	
from	 £19.2	 million	 to	 £18.3	 million,	 a	 decrease	 of		
£0.9	million.	

Time	 Out,	 Broadstone	 and	 Intergenia	 are	 carried	 at	
their	cost	of	investment.

The	combined	effect	of	the	changes	to	the	fair	values		
of	the	portfolio	companies	resulted	in	a	net	increase	to	
the	Company	of	£2.2	million.	

As	the	chart	on	the	previous	page	indicates,	the	total	
increase	 in	 the	 year	 in	 the	 investment	 value	 of	 the	
portfolio	companies	attributable	to	the	Company	was	
£38.1	 million.	 The	 change	 in	 values	 of	 the	 portfolio	
companies	is	attributable	to	three	key	factors:


  £28.9 million as a result of acquisitions made by 

the Limited Partnership during 2011

The	 total	 increase	 in	 the	 look-through	 values	 of	 the	
portfolio	companies	attributable	to	the	Company	as	a	
result	 of	 new	 acquisitions	 was	 £28.9	 million.	 Emesa	
was	acquired	by	the	Limited	Partnership	in	March	2011;	
Time	 Out	 New	 York	 in	 May	 2011;	 and	 Intergenia	 in	
December	2011.	The	Company’s	investment	values	at	
the	time	of	acquisition	were;	Emesa:	£6.5	million;	Time	
Out	New	York:	£6.0	million	and	Intergenia:	£16.4	million.	


  £7.0  million  as  a  result  of  additional  funding 
made  by  the  Limited  Partnership  into  existing 
portfolio companies

The	 Limited	 Partnership	 also	 injected	 further	 equity	
funding	 into	 Broadstone	 and	 Time	 Out	 London.		
The	 investment	 value	 of	 Broadstone	 was	 increased	
from	£4.5	million	at	31	December	2010	to	£8.5	million	
at	 31	 December	 2011,	 an	 increase	 of	 £4.0	 million.	
Time	 Out	 London	 increased	 from	 £3.1	 million	 as	 at		
31	December	2010	to	£6.1	million	as	at	31	December	
2011	an	increase	of	£3.0	million.	


  £2.2 million as a result of fair value increases in 
the value of the underlying portfolio companies

ratings	 expansion.	 Emesa,	

This	 was	 driven	 by	 a	 revaluation	 of	 the	 portfolio	
companies	at	the	year	end,	having	regard	to	changes	
in	 the	 underlying	 profitability	 of	 the	 businesses	 and,	
where	 applicable,	
in	
particular,	has	seen	an	increase	in	fair	value	attributable	
to	 the	 Company	 of	 £10	 million	 from	 its	 cost	 of		
£6.5	 million	 at	 the	 time	 of	 acquisition	 in	 March.	 This	
uplift	in	value	reflects	the	significant	growth	in	profitability	
which	 the	 business	 has	 enjoyed	 in	 its	 home	 market	
since	acquisition.	

This	increase	in	fair	value	of	Emesa	generates	a	money	
multiple	of	2.4x.

11

MANAGER’S 
REPORT
continued

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12

MANAGER’S 
REPORT
continued

PORTFOLIO	INVESTMENT	GROWTH	2011	BY	SOURCE	

60.0
60.0

50.0
50.0

40.0
40.0

30.0
30.0

20.0
20.0

10.0
10.0

–
–

£m
£m

Opening
Opening
valuation
valuation
£69.1m
£69.1m

Current
Current
valuation
valuation
£107.2m
£107.2m

Acquisitions
Acquisitions
during 2011
during 2011

Net trading
Net trading
performance
performance

Ratings
Ratings
expansion
expansion

Net
Net
debt
debt

Forex
Forex
movements
movements

Performance
Performance
fees
fees

Total
Total
increase
increase
in value
in value

The	 above	 chart	 shows	 the	 growth	 in	 2011	 of	 the	
investment	portfolio	attributed	to	its	source.	

The	 fair	 value	 of	 the	 Limited	 Partnership’s	 portfolio	
investments	(i.e.	excluding	cash	and	cash	equivalents	
held	 by	 the	 Limited	 Partnership)	 attributable	 to	 the	
Company	grew	from	£69.1	million	to	£107.2	million,	an	
increase	 of	 £38.1	 million.	 The	 dominant	 influence	 on	
this	growth,	which	can	be	seen	from	the	above	chart,	
is	due	to	the	acquisitions	and	follow-on	funding	made	
by	the	Limited	Partnership	of	£35.9	million.	

Trading	 has	 contributed	 a	 reduction	 to	 investment	
value	as	the	decline	in	EBITDA	in	Verivox	(magnified	by	
the	 valuation	 multiple),	 brought	 about	 by	 the	 reasons	
outlined	 above,	 was	 only	 partly	 offset	 by	 improved	
trading	 from	 the	 other	 revalued	 portfolio	 companies.	
The	 other	 elements	 in	 the	 chart,	 net	 debt,	 foreign	
exchange	 and	
than	
compensate	 for	 the	 effect	 of	 the	 decline	 in	 trading	
performance	 with	 the	 result	 that	 fair	 value	 of	 the	
portfolio	companies	increased	by	£2.2	million.

ratings	 expansion,	 more	

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COMPANY	ASSET	TYPES	2011

COMPANY	ASSET	TYPES	2010

51%	Limited	Partnership

34%	Cash

15%	Mezzanine	and		
	Senior	Loan		
	Finance

56%	Cash

35%	Limited	Partnership

9%	Mezzanine	and		
	Senior	Loan		
	Finance

At	 31	 December	 2011	 the	 Company’s	 assets	 were	
divided	between	its	investment	in	the	Limited	Partnership	
(51%),	 cash	 and	 cash	 equivalents	 (34%)	 and	 loans	
provided	 directly	 to	 portfolio	 companies	 (15%).	 These	
loans	generally	take	the	form	of	mezzanine	and	senior	
finance,	ensuring	that	uncalled	cash	continues	to	work	
for	the	Company	earning	a	positive	return.	

At	 31	 December	 2011	 the	 total	 value	 of	 loans	
outstanding	was	£32.6	million	(2010:	£19.8	million).	The	
decrease	in	cash	of	£50.8	million	reflects	the	payments	
of	 £39.0	 million	 called	 by	 the	 Limited	 Partnership	 to		
fund	acquisitions	and	follow-on	investments	and	a	cash	
outflow	 of	 £12.9	 million	 to	 provide	 senior	 debt	 and	
mezzanine	financing	directly	to	portfolio	companies.

SPLIT	OF	INVESTMENTS	IN	
LIMITED	PARTNERSHIP	2011

SPLIT	OF	INVESTMENTS	IN	
LIMITED	PARTNERSHIP	2010

24%	Verivox

16%	Daisy

15%	Emesa

14%	Intergenia

11%	Time	Out	Group

8%	Broadstone

5%	Headland	Media

2%	Monument

5%	Cash	and	other	

	net	assets

48%	Verivox

26%	Daisy

7%	Headland	Media

6%	Broadstone

4%	Time	Out

2%	Monument

7%	Cash	and	other	

	net	assets

The	distribution	of	the	split	of	investments	in	the	Limited	
is	 now	 showing	 a	 more	 balanced	
Partnership	
distribution.	 The	 largest	 investment	 in	 2011	 (Verivox)	
accounts	 for	 just	 24%	 of	 total	 value	 compared	 with	
2010	(also	Verivox)	which	then	accounted	for	48%	of	
total	value.

This	 improvement	 in	 diversification	 is	 also	 true	 of		
the	 portfolio	 distribution	 by	 sector	 which	 is	 more		
evenly	 distributed	 in	 2011	 compared	 with	 2010.		
The	 technology	 sector	 has	 re-emerged	 due	 to	 the	
acquisition	of	Intergenia,	and	the	acquisition	of	Emesa	
has	introduced	a	new	sector	in	the	form	of	e-commerce.	

This	 has	 halved	 the	 former	 dominant	 sector	 of	
consumer	services	from	51%	in	2010	to	26%	in	2011.	
Digital	 Media	 and	 Publishing	 has	 increased	 its	 share	
due	to	the	acquisition	of	Time	Out	New	York.	

Diversification	of	the	geographical	split	of	the	portfolio	
companies	has	also	improved.	In	2011	the	division	is;	
41%	 in	 Germany;	 19%	 in	 the	 Netherlands,	 a	 new	
geographical	 entrant	 due	 to	 Emesa;	 5%	 in	 the		
USA	 due	 to	 another	 new	 entrant,	 Time	 Out	 New	
York;	 and	 the	 remaining	 35%	 in	 the	 UK.	 In	 2010		
the	 geographical	 split	 was	 Germany,	 53%,	 and	 the	
UK,	47%.

PORTFOLIO	DISTRIBUTION	BY	SECTOR	2011

PORTFOLIO	DISTRIBUTION	BY	SECTOR	2010

26%	Consumer	services

51%	Consumer	services

17%	Digital	media/	
	Publishing

17%	Telecoms

15%	Technology

15%	e-Commerce

10%	Financial		

	services

28%	Telecoms

12%	Digital	media/	
	Publishing

9%	Financial		
	services

13

MANAGER’S 
REPORT
continued

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chart 101mm x 101mm

hole 60mm x 60mm

with 4pt stroke

chart 101mm x 101mm

hole 60mm x 60mm

with 4pt stroke

chart 101mm x 101mm

hole 60mm x 60mm

with 4pt stroke

	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
	
 
 
 
 
 
 
 
 
14

DIRECTORS’
REPORT

Directors’	Report

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DIRECTORS’	REPORT

DIRECTORS’ FUNCTIONS 

PETER DUBENS 

15

DIRECTORS’
REPORT

for	

responsible	

The	 Directors	 are	
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.		
In	 that	 year	 he	 established	 the	 Bermuda	 office	 of	
Renaissance,	 for	 which	 he	 has	 responsibility.	 He	 was	
previously	a	Partner	of	Appleby,	the	offshore	law	firm,	
for	11	years.	James	joined	Appleby	in	1993	and	was	
team	 leader	 of	 the	 Funds	 and	 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	admitted	as	a	solicitor	in	England	and	
Wales	in	1991	and	called	to	the	Bermuda	Bar	in	1993.	
He	became	a	notary	public	in	1998.	James	is	a	resident	
of	Bermuda.	

TINA BURNS 

Tina	 Burns	 is	 the	 Tax	 Director	 for	 Alterra	 Capital	
Holdings	Limited.	Prior	to	joining	Alterra,	Tina	was	tax	
consultant	 with	 Schroders	 Private	 Equity	 Services	
(“Schroders”)	 in	 Bermuda.	 From	 1996	 to	 2006,	 Tina	
was	a	Director	in	the	tax	services	practice	of	KPMG	in	
Bermuda.	Tina	joined	KPMG	in	Bermuda	in	1995.	Prior	
to	joining	KPMG	in	Bermuda,	she	was	a	tax	senior	with	
KPMG	 in	 Atlanta,	 Georgia.	 Tina	 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.

fund	 of	

Peter	 Dubens	 is	 the	 founder	 of	 Oakley	 Capital,	 a	
privately	 owned	 asset	 management	 and	 advisory	
group	 comprising	 private	 equity,	
funds,	
corporate	 finance,	 capital	 introduction	 and	 venture	
capital	operations	managing	over	US$950	million	that	
was	founded	in	2002.	Peter	is	the	Managing	Partner	of	
Oakley	 Capital	 Limited,	 the	 investment	 adviser	 to	
Oakley	 Capital	 Private	 Equity	 L.P.,	 a	 European	 mid-
market	 private	 equity	 fund	 that	 invests	 in	 performing	
and	 under-performing	 companies,	 supports	 buy	 and	
build	 strategies,	
rapid	 growth,	 or	 businesses	
undergoing	significant	operational	or	strategic	change.	
During	the	last	22	years	Peter	has	acquired,	restructured	
and	 consolidated	 public	 and	 private	 companies.		
As	 Executive	 Chairman,	 he	 led	 the	 formation	 of	 two	
public	 companies,	 being	 365	 Media	 Group	 plc	 and	
Pipex	 Communications	 plc	 (now	 Daisy	 Group	 plc).		
The	 365	 Media	 platform	 consolidated	 12	 businesses	
within	 the	 online	 sports	 information	 and	 gambling	
the	 Pipex	 platform	 consolidated		
industry	 and	
14	 businesses	 within	 the	 telecoms	 and	 internet	
industries.	365	Media	was	sold	for	over	£102	million	to	
BSkyB	and	the	main	operating	divisions	of	Pipex	were	
sold	for	approximately	£370	million.

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.	

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16

DIRECTORS’ 
REPORT
continued

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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	 Oakley	
Capital	Management	(Bermuda)	Limited,	the	manager	
of	 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,	
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.	

the	 Manager	 has	

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 

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)	with	a	team	of	eight	investment	
professionals	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	and	AIM	listing.	The	
that	 Bermuda,	
Directors	 note	
the	 country	 of	
incorporation	 of	
the	 Company,	 has	 no	 specific	
corporate	governance	regime.	

remuneration	 committee,	 each	 with	

The	Company	has	established	an	audit	committee	and	
a	
formally	
delegated	 duties	 and	
responsibilities.	 The	 audit	
committee	 and	 the	 remuneration	 committee	 each	
comprise	 all	 of	 the	 Independent	 Directors.	 The	 audit	
committee	
the	
remuneration	committee	is	chaired	by	James	Keyes.	

is	 chaired	 by	 Tina	 Burns	 and	

the	

The	 audit	 committee	 determines	
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	of	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.	

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.	

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.	

 
 
 
 
 
 
 
 
17

DIRECTORS’ 
REPORT
continued

No	Director,	other	than	the	Independent	Directors,	may	
participate	in	any	meeting	of	the	fund	committee.	The	
fund	committee	is	chaired	by	James	Keyes.	

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.

DIRECTORS’ INTERESTS

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.

DIRECTORS’ REMUNERATION 

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

James	Keyes	

Tina	Burns		

Peter	Dubens		

Laurence	Blackall	

Ian	Pilgrim	

Christopher	Wetherhill	

£30,000

£30,000

£nil	

£30,000

£30,000	

£30,000	

The	above	fees	do	not	include	reimbursed	expenses.	

SUBSTANTIAL SHAREHOLDINGS 

As	 at	 31	 March	 2012,	 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	Perpetual	

Ruffer	LLP	

Blackrock	Investment	Management	

Henderson	Global	Investors		

Rothschild	Bank,	Zurich	

Schroder	Investment	Management		

Fidelity	Investments	

30.94%

15.20%

8.67%

8.15%

5.91%

5.89%

5.22%

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18

REVIEW OF 
INVESTMENTS

REVIEW	OF	INVESTMENTS

SUMMARY

Assets at fair value 

Investment	in	Limited	Partnership	

Mezzanine	loans:

Verivox	

Headland	Media	

Broadstone	

Time	Out	Group	

Senior	loans:

Time	Out	

Intergenia	

Total investments 

1Repaid	to	the	Company	in	full	in	2012

2Part	repayment	to	the	Company	in	2012

Fair value 
2011 (£m) 

Fair value 
2010 (£m)

112.6	

74.0

–	

1.61	

6.0	

9.4	

7.2	

8.42	

1.4

1.6

6.0

5.7

5.0

–

145.1 

93.7

The	 Company	
in	 the	 Limited	
invests	 principally	
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	2011,	the	Company	had	invested	a	
total	of	£101.9	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	 65%	 of	 the	 total	
amount	invested.	The	above	summary	shows	the	value	
attributed	to	the	Company	by	virtue	of	its	direct	holding	
in	 the	 Limited	 Partnership.	 In	 October	 2010,	 a	 cash	
distribution	of	£72.7	million	was	made	by	the	Limited	
Partnership	to	the	Company	following	the	disposal	of	
Host	Europe.	

At	 31	 December	 2011,	 the	 Limited	 Partnership’s	
Investment	 Adviser	 appointed	 a	 third	 party	 valuer	 to	
determine	fair	value	of	the	portfolio	companies	taking	
account	 of	 the	 financial	 information	 provided	 by	 the	
Investment	Adviser.	As	a	result	of	this	assessment,	the	
fair	 value	 of	 the	 Limited	 Partnership	 increased	 by		
£38.6	million	from	£74	million	as	at	31	December	2010	
to	 £112.6	 million	 as	 at	 31	 December	 2011.		
Of	 this	 increase,	 £28.9	 million	 is	 attributable	 to	 the	
direct	investments	in	Emesa,	Time	Out	New	York,	and	
Intergenia	made	by	the	Limited	Partnership.	Follow-on	
investments	made	by	the	Limited	Partnership	into	Time	
Out	 London	 and	 Broadstone	 accounted	 for	 a	 further	
£7.0	million	and	£2.2	million	results	from	the	increase	in	
fair	values	of	the	underlying	portfolio	companies.

In	addition	to	its	investments	in	the	Limited	Partnership,	
the	 Company	 has	 also	 provided	 loans	 directly	 to	 a	
number	 of	 the	 portfolio	 companies.	 At	 31	 December	
2010,	 Verivox	 had	 a	 mezzanine	 loan	 of	 £1.4	 million	
outstanding.	This	was	repaid	in	full	in	March	2011.

At	 31	 December	 2011	 and	 31	 December	 2010,	 the	
Company	 had	 outstanding	 mezzanine	
finance		
provided	to	Headland	Media	of	£1.6	million.	This	was	
repaid	 in	 full	 after	 the	 year-end,	 in	 February	 2012.		
At	 31	 December	 2011,	
the	 Company	 had	 an	
outstanding	 mezzanine	 loan	 with	 Broadstone	 via	
Fitzwilliam	 Holdco	 Limited	 of	 £6.0	 million	 with	 an	
interest	rate	of	15%	per	annum	maturing	no	later	than	
November	2015.	

The	 Company	 provided	 both	 mezzanine	 finance	 and	
senior	debt	finance	to	Time	Out	London.	The	mezzanine	
finance	 amounted	 to	 £5.7	 million	 in	 2010	 with	 an	
additional	 £0.5	 million	 provided	 in	 January	 2011.		
The	interest	rate	is	15%	per	annum	maturing	no	later	
than	November	2015.	The	senior	loan	notes	amounted	
to	 £5.0	 million	 and	 have	 an	 annual	 interest	 rate	 of		
8.5%	 and	 are	 due	 to	 be	 repaid	 by	 no	 later	 than		
March	2013.	

loans		
The	 Company	 also	 provided	 mezzanine	
and	 senior	 debt	 finance	 to	 Time	 Out	 New	 York.		
The	mezzanine	finance	was	£3.1	million	at	an	interest	
rate	 of	 15%	 per	 annum	 maturing	 no	 later	 than	 May	
2016.	The	senior	loan	notes	amounted	to	£2.1	million	
at	 an	 interest	 rate	 of	 8.5%	 per	 annum	 maturing	 no		
later	 than	 May	 2014.	 Both	 the	 mezzanine	 loan	 and	
senior	 loan	 note	 are	 subject	 to	 withholding	 tax,		
reducing	 the	 effective	 rates	 of	 interest	 to	 10.5%	 and	
5.95%	respectively.

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18REVIEW OF INVESTMENTS 
 
	
	
	
	
	
	
 
 
 
 
 
 
 
 
19

REVIEW OF 
INVESTMENTS

With	 the	 acquisition	 of	 Emesa,	 in	 March	 2011,	 the	
Company	 provided	 both	 mezzanine	 and	 senior	 debt	
finance	 to	 the	 Company.	 The	 mezzanine	 finance	 was	
£4.7	 million	 at	 an	 interest	 rate	 of	 15%	 per	 annum	
maturing	 no	 later	 than	 March	 2016.	 The	 senior	 loan	
notes	 amounted	 to	 £8.7	 million	 and	 have	 an	 annual	
interest	 rate	 of	 8.5%	 and	 are	 due	 to	 be	 repaid	 no		
later	 than	 March	 2014.	 The	 loans	 were	 repaid	 in	 full		
on	 22	 December	 2011	 from	 the	 proceeds	 from		
bank	refinancing.

In	December	2011,	the	Company	provided	senior	debt	
finance	 to	 Intergenia	 of	 £8.4	 million	 (€10	 million).		
The	 loan	 notes	 have	 an	 annual	 interest	 rate	 of	 8.5%	
and	are	due	to	be	repaid	in	December	2013.	In	March	
2012,	 Intergenia	 repaid	 £2.1	 million	 (€2.5	 million)	 of		
the	debt.

From	 time	 to	 time,	 the	 Company	 provides	 bridging	
loans	to	the	Limited	Partnership.	The	loans	are	used	by	
the	 Limited	 Partnership	 to	 fund	 short-term	 cash	
demand.	The	bridging	loans	generally	have	a	term	of	
six	months	and	an	interest	rate	of	6.5%.	Bridging	loans	
are	underwritten	by	capital	calls.	The	interest	generated	
from	a	bridging	loan	exceeds	the	interest	earned	on	the	
Company’s	 bank	 deposits,	 allowing	 the	 Company	 to	
earn	 higher	 returns	 on	 part	 of	 its	 cash	 reserves.		
On	24	March	2011,	the	Company	provided	a	bridging	
loan	to	the	Limited	Partnership	for	£12.0	million	at	an	
interest	 rate	 of	 6.5%	 and	 a	 maturity	 date	 of	 29	 July	
2011.	 The	 loan	 was	 repaid	 in	 full	 on	 15	 April	 2011.		
On	 24	 November	 2011,	 the	 Company	 provided	 a	
bridging	loan	of	£3.0	million	at	an	interest	rate	of	6.5%	
and	 a	 maturity	 date	 of	 29	 February	 2012.	 This	 debt	
was	repaid	in	full	on	8	December	2011.

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20REVIEW OF INVESTMENTScontinued 
 
 
 
 
 
 
 
21

REVIEW OF 
INVESTMENTS
continued

Sector:	
Telecoms	

Location:	
United	Kingdom

Investment	date:	
21	July	2009	

Website:	
www.daisyplc.com	

TRANSACTION DETAILS

On	21	July	2009,	Host	Europe	sold	Vialtus,	one	of	its	three	operating	divisions,	for	
£42.0	 million	 to	 Daisy	 Group	 plc	 (“Daisy”).	 In	 consideration	 for	 the	 disposal	 of	
Vialtus,	 Host	 Europe	 received	 £13.0	 million	 of	 cash	 and	 £29.0	 million	 worth	 of	
ordinary	shares	in	Daisy	representing	36.25	million	Daisy	ordinary	shares.	Daisy	is	
listed	on	the	London	Stock	Exchange	under	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	 tele-
communications	sector	with	the	aim	of	building	a	business	of	considerable	scale.	
Following	 the	 acquisition	 of	 Vialtus	 Solutions,	 Daisy	 completed	 14	 acquisitions	
and	 has	 developed	 to	 become	 an	 industry	 leading	 provider	 of	 unified	
communications	to	the	SME	and	mid-market	business	sector	in	the	UK.

BUSINESS UPDATE

On	 30	 November	 2011	 Daisy	 announced	 its	 interim	 results	 for	 the	 six	 months		
ended	30	September	2011.	Revenues	in	the	six	months	to	30	September	2011	
were	 £176	 million	 which	 were	 £56	 million	 higher	 than	 those	 in	 the	 previous	 six		
month	period.	Adjusted	EBITDA	increased	from	£16	million	in	the	six	months	to		
30	September	2010	to	£26.6	million	for	the	six	months	to	30	September	2011.		
Cash	conversion	was	good	with	free	cash	flow	of	£16.9	million	being	generated	in	
the	six	months	to	30	September	2011	against	£11.2	million	in	the	previous	six	
month	period.	On	13	April	2012,	Daisy	announced	that	its	profit	and	earnings	for	
the	 year	 ending	 31	 March	 2012	 were	 within	 the	 range	 of	 market	 expectations.	
Daisy	further	announced	on	16	April,	2012	that	it	had	completed	the	acquisition	
of	 the	 audio	 conferencing	 specialist,	 Worldwide	 Group	 Holdings	 Limited	 for	 an	
initial	cash	consideration	of	£28	million.

The	 Daisy	 share	 price	 on	 31	 December	 2011	 was	 95.5	 pence,	 down	 from		
100	 pence	 at	 31	 December	 2010.	 The	 share	 price	 at	 31	 December	 2011	 was	
used	to	establish	the	fair	value	of	the	investment.

DAISY	GROUP	

Enterprise 
value at 
acquisition 

N/A	

Total 
equity 
held 

14%	

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

N/A	

£18.3m

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22REVIEW OF INVESTMENTScontinued 
 
 
 
 
 
 
 
23

REVIEW OF 
INVESTMENTS
continued

Sector:	
Online	consumer

Location:	
Germany

Investment	date:	
4	December	2009	

Website:	
www.verivox.de	

TRANSACTION DETAILS 

On	4	December	2009,	the	Limited	Partnership	acquired	51%	of	Verivox,	Germany’s	
largest	independent	online	consumer	energy	price	comparison	site,	funded	using	
a	combination	of	debt	and	preferred	equity.	The	Limited	Partnership’s	contribution	
was	€5.3	million	in	preferred	shares.	By	the	end	of	Q1	2011,	the	preferred	equity	
had	been	repaid.	

In	addition,	the	Company	provided	€13.0	million	in	the	form	of	mezzanine	finance	
and	 a	 bridging	 loan.	 Of	 these	 loans,	 at	 31	 December	 2010,	 €1.65	 million	 was	
outstanding	but	this	was	fully	repaid	on	11	March	2011.	

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	 GmbH	 (“Verivox”)	 is	 Germany’s	 leading	 consumer	 energy	 and	 telecoms	
price	 comparison	 website	 with	 a	 12	 year	 history.	 Verivox	 receives	 commission	
from	 energy	 suppliers	 when	 consumers	 elect	 to	 switch	 providers	 through	 its	
website.	It	is	a	well	recognised	brand	in	Germany	and	is	regularly	quoted	by	media	
as	an	independent	source	of	energy	price	data.	Verivox	has	also	been	certified	by	
Germany’s	three	leading	consumer	protection	and	standards	bodies.

Verivox	 differentiates	 itself	 from	 competitors	 by	 having	 contractual	 relationships	
with	 over	 150	 suppliers	 and	 by	 providing	 users	 with	 details	 of	 the	 lowest	 cost	
energy	 supplier	 even	 when	 the	 company	 does	 not	 represent	 that	 supplier.		
The	company	handled	approximately	0.9	million	customer	switches	in	2011.

BUSINESS UPDATE

Verivox	started	2011	strongly	but	trading	in	the	second	half	of	the	year	was	below	
expectations.	 Revenues	 and	 EBITDA	 for	 the	 year	 ended	 lower	 than	 for	 the	
previous	 year.	 The	 highly	 publicised	 insolvency	 of	 Teldafax	 Energy	 (the	 largest	
“new	entrant”	into	the	Germany	consumer	energy	supply	market)	in	June	2011	
adversely	affected	confidence	in	the	switching	market.	A	number	of	major	energy	
suppliers	 held	 back	 from	 raising	 their	 tariffs	 in	 2011	 seemingly	 linked	 to	 the	
German	 government’s	 decision	 to	 phase	 out	 nuclear	 energy	 generation	 in	
Germany	following	the	Fukashima	disaster	in	Japan,	again	depressing	switching	
volumes.	

At	 31	 December	 2011,	 the	 fair	 value	 of	 the	 Limited	 Partnership’s	 investment	 in	
Verivox	was	re-valued	downwards,	to	reflect	the	decline	in	performance	in	2011.	
The	restated	fair	value	represents	a	money	multiple	of	9x	cost	invested	for	Oakley	
Capital	Investments	Limited.	

PERFORMANCE

Revenue	for	the	year	to	31	December	2011	was	€42.2	million	with	an	EBITDA	of	
€14.1	million.

VERIVOX	

Enterprise 
value at 
acquisition 

Total 
equity 
held 

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

£23.0m	

51%	

£14.8m1		

£27.6m

1Includes	£11.8	million	debt	provided	by	the	Company	at	acquisition,	since	repaid.

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REVIEW OF 
INVESTMENTS
continued

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25

REVIEW OF 
INVESTMENTS
continued

Sector:	
Digital	media/publishing

Location:	
United	Kingdom	and	USA	

Investment	date:	
25	November	2010		
and	26	May	2011	

Website:	
www.timeout.com	

TRANSACTION DETAILS

In	 November	 2010,	 the	 Limited	 Partnership	 acquired	 50%	 of	 Time	 Out	 Group	
Limited	(“Time	Out	London”),	the	international	multi-channel	publisher.	The	Limited	
Partnership	subscribed	for	equity	of	£5.1	million	and	the	Company	has	provided	
loans	 in	 the	 form	 of	 mezzanine	 finance	 of	 £6.2	 million	 and	 senior	 debt	 of		
£5.0	 million.	 In	 2011,	 the	 Limited	 Partnership	 provided	 additional	 equity	 of		
£4.6	million	to	fund	four	follow-on	acquisitions	and	to	provide	additional	working	
capital.	In	May	2011,	the	Limited	Partnership	acquired	65.7%	of	Time	Out	America	
LLC	(“Time	Out	New	York”).	The	investment	is	synergistic	and	will	enhance	the	
investment	in	Time	Out	London	creating	a	global	digital	media	group	(the	“Time	
Out	 Group”).	 The	 Limited	 Partnership	 subscribed	 for	 equity	 of	 £9.3	 million	 and	
Oakley	Capital	Investments	Limited	provided	a	mezzanine	loan	of	£3.1	million	and	
senior	loan	of	£2.2	million.

BUSINESS OVERVIEW

Time	Out	was	established	in	1968	by	Tony	Elliott	and	today	is	a	globally	recognised	
brand.	The	development	of	the	internet	has	presented	the	Time	Out	Group	with	
an	opportunity	to	transition	the	business	from	a	magazine	listings	business	to	a	
real-time	 digital	 provider	 of	 entertainment	 information	 and	 qualified	 editorial	
opinions,	with	an	added	transactional	capability.	Globally,	the	Time	Out	Group	is	
present	 in	 35	 cities	 across	 the	 world,	 with	 a	 worldwide	 audience	 of	 16	 million	
across	both	print	and	digital	channels.	

BUSINESS UPDATE

The	first	half	of	2011	had	been	a	period	of	planning,	re-organisation	and	customer	
research	 in	 order	 to	 transition	 from,	 what	 was	 historically,	 a	 print	 publishing	
business	 to	 a	 digital	 media	 business.	 Key	 staff	 were	 recruited	 with	 significant	
digital	 and	 e-commerce	 experience	 to	 help	 facilitate	 transition	 and	 growth.		
The	second	half	had	focussed	on	integrating	the	management	of	the	London	and	
New	 York	 businesses	 with	 the	 aim	 to	 better	 align	 strategic	 direction;	 to	 ensure	
Time	 Out	 Group’s	 investment	 in	 content	 and	 platforms	 is	 exploited	 across	 all	
operations;	and	to	reduce	costs	by	eliminating	duplication.	During	the	second	half	
of	2011,	the	Limited	Partnership	provided	funding	to	Time	Out	for	four	acquisitions:	
one	of	which	was	LikeCube,	the	cutting	edge	personalisation	software	company	
that	 uses	 semantic	 analysis	 to	 give	 web	 and	 mobile	 users	 personalised	
recommendations.	The	other	three,	Keynoir,	Kelkoo	and	What’s	on	Stage	were	
acquisitions	made	to	enhance	the	content	provided	by	Time	Out	and	to	increase	
transactional	revenue	through	the	site.	

PERFORMANCE

Revenue	for	the	total	group	to	31	December	2011	was	£28	million	with	an	EBITDA	
loss	of	£1.9	million.	The	restructuring	programme	to	digital	and	transactional	and	
the	integration	of	the	London	and	New	York	businesses	onto	a	single	platform	has	
increased	costs	in	2011	with	a	consequent	impact	on	profitability.	

TIME	OUT	GROUP

Enterprise 
value at 
acquisition 

Total 
equity 
held 

£32.4m	

London	50.0%	
New	York	65.7%	

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

£25.8m	

£29.0m

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Sector:	
e-Commerce

Location:	
Netherlands	

Investment	date:	
24	March	2011	

Website:	
www.emesa.nl

TRANSACTION DETAILS

On	 24	 March	 2011,	 the	 Limited	 Partnership	 acquired	 68%	 of	 Emesa	 B.V.	
(“Emesa”),	 a	 leading	 e-commerce	 company	 active	 in	 the	 Dutch	 online	 leisure	
market.	The	Limited	Partnership	provided	£10.4	million	and	the	Company	provided	
senior	 debt	 of	 £8.7	 million	 and	 a	 mezzanine	 loan	 of	 £4.7	 million.	 Emesa’s	
management	 and	 its	 main	 founder	 retained	 a	 significant	 stake	 in	 Emesa.		
An	 earnout	 of	 €5	 million	 is	 payable,	 Emesa	 having	 significantly	 exceeded	 its	
EBITDA	targets	in	2011.	On	22	December	2011,	Emesa	repaid	its	senior	debt	and	
mezzanine	 loan,	 including	 interest,	 in	 full.	 The	 repayment	 was	 funded	 from	 a	
refinancing	using	external	bank	debt.	

BUSINESS OVERVIEW

Emesa	 was	 founded	 in	 2004	 and	 has	 grown	 significantly	 to	 become	 a	 leading	
online	consumer	auction	platform	in	the	European	leisure	industry.	Emesa	enables	
online	customers	to	find	and	book	leisure	deals	such	as	short	holidays,	weekend	
breaks,	spa/beauty	visits,	event	tickets	and	restaurant	visits	through	its	websites.	
Emesa	operates	three	websites	in	the	Netherlands	and	in	2011	completed	over	
1.8	million	transactions	with	a	current	run	rate	of	over	2	million	transactions	per	
annum.

INVESTMENT RATIONALE

The	investment	provides	the	Limited	Partnership	with	a	high-growth	platform	in	an	
attractive	vertical	and	the	opportunity	both	to	white-label	the	auction	technology	
and	to	expand	internationally.	The	business	has	a	strong	track	record	of	introducing	
successful	new	concepts	such	as	“deal	of	the	day”.

BUSINESS UPDATE

Emesa	has	continued	to	trade	strongly	in	the	Netherlands	and	has	finished	2011	
ahead	of	expectations.	Management	launched	the	auction	concept	in	the	German	
market	in	Q3	with	the	site	Aladoo.de.	The	launch	of	Aladoo	will	be	a	net	cost	to	
the	group	whilst	users	are	attracted	to	the	new	site	and	the	brand	develops.	

PERFORMANCE

Net	revenue	for	the	year	to	31	December	2011	was	€23.7	million	with	an	EBITDA	
of	€7.5	million	(excluding	the	impact	of	the	launch	of	Aladoo.de).

EMESA

Enterprise 
value at 
acquisition 

Total 
equity 
held 

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

£30.0m	

68%	

£20.1m1	

£16.5m

1Includes	£13.4	million	debt	provided	by	the	Company	at	acquisition,	repaid	in	December	2011.

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Sector:	
Financial	services

Location:	
United	Kingdom	

Investment	date:	
4	November	2010	

Website:	
www.broadstoneltd.co.uk	

TRANSACTION DETAILS

On	4	November	2010,	the	Limited	Partnership	announced	that	it	had	acquired	
84.4%	of	Broadstone	Pensions	and	Investments	Limited	(“Broadstone”),	formerly	
known	as	BDO	Wealth	Management	Limited,	the	UK-wide	independent	provider	
of	 investment	 advice	 and	 solutions	 to	 private	 individuals	 and	 corporates,	 from	
BDO	LLP.	The	Limited	Partnership	has	provided	initial	equity	of	£7.0	million	and	
the	Company	provided	a	mezzanine	loan	of	£6.0	million.	During	2011,	the	Limited	
Partnership	 provided	 additional	 funding	 in	 the	 form	 of	 equity	 of	 £6.2	 million.		
The	 funding	 was	 used	 to	 provide	 additional	 working	 capital	 and	 to	 fund		
regulatory	capital.

BUSINESS OVERVIEW

The	 Company,	 a	 top	 40	 UK	 wealth	 manager	 with	 high	 quality	 clients,	 operates	
across	two	divisions;	Private	Client	Services	and	Corporate	Pensions	and	Benefits	
Services.

On	 3	 May	 2011,	 Broadstone	 was	 unveiled	 as	 the	 new	 brand	 name	 for	 BDO	
Wealth	Management,	using	the	opportunity	to	reassess	its	market	position	and	
refocus	its	business	to	provide	an	enhanced	service	to	its	loyal	customer	base.

Broadstone’s	 wide	 breadth	 of	 offering	 means	 that	 it	 is	 operating	 in	 the	 mass	
affluent	and	high	net	wealth	segments.	

BUSINESS UPDATE

Since	 acquisition,	 the	 business	 has	 gone	 through	 a	 change	 management	
programme	 with	 a	 significant	 investment	 made	 in	 people	 and	 internal	 systems.	
During	 this	 period,	 the	 business	 has	 reduced	 costs	 by	 £3.0	 million	 annualised	
whilst	funds	under	management,	advice	and	influence	for	private	clients	remained	
above	 £2	 billion.	 Revenues	 from	 the	 corporate	 pensions	 and	 benefits	 business	
were	maintained	at	approximately	£6	million	despite	volatile	market	conditions.	

PERFORMANCE

Broadstone’s	 year	 end	 is	 30	 June	 2011.	 Total	 revenues	 for	 the	 12	 months	 to		
30	June	2011	were	£15.8	million	with	an	EBITDA	loss	of	£4.7	million.	The	business	
has	invested	in	a	scalable	client	asset	platform	whilst	seeking	to	grow	the	business	
both	organically	and	by	acquisition.

BROADSTONE	

Enterprise 
value at 
acquisition 

Total 
equity 
held 

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

£20.6m	

84%	

£12.8m	

£14.5m

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Sector:	
Digital	media

Location:	
United	Kingdom	

Investment	date:	
25	January	2008	

Website:	
www.headlandmedia.com	

TRANSACTION DETAILS

During	2008,	the	Limited	Partnership	via	a	newly	incorporated	company,	Headland	
Media	 Limited	 acquired	 Teamtalk	 Satellite	 Limited	 and	 Teamtalk	 Broadcast	
Limited,	 Good	 Morning	 News	 and	 Walport	 International.	 In	 2009,	 the	 business	
acquired	 Shipboard	 Video	 Express	 Inc	 and	 in	 2010,	 Headland	 Media	 acquired	
Newslink	Service	Limited.	The	Limited	Partnership	provided	total	equity	funding	of	
£4.4	 million.	 The	 Company	 also	 provided	 mezzanine	 funding	 and	 as	 at		
31	December	2011	has	£1.6	million	of	mezzanine	loan	outstanding,	which	was	
fully	repaid	in	February	2012.

BUSINESS OVERVIEW 

Headland	 Media	 Limited	 (“Headland	 Media”)	 is	 a	 business-to-business	 media	
content	provider	with	offices	in	the	UK,	Europe	and	the	US.	Headland	Media	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	with	specialist	communication	needs.	Headland	Media	distributes	
media	 content	 to	 around	 13,000	 destinations	 using	 proprietary	 distribution	
channels	and	has	an	audience	of	approximately	20	million	listeners	and	250,000	
readers.	 Revenue	 is	 derived	 from	 recurring	 (subscription)	 revenue	 and	 non-
recurring	(one-off	installation)	charges.	Headland	Media	has	a	loyal	customer	base	
and	provides	services	to	1,400	hotels	and	9,000	cruise	and	merchant	ships.	

BUSINESS UPDATE 

Headland	 Media	 had	 a	 good	 year	 in	 2011,	 increasing	 destination	 sites	 from	
12,500	to	13,160.	It	has	used	technology	to	roll	out	a	single	platform	significantly	
improving	their	customer’s	experience.	Headland	Media	has	also	signed	up	to	340	
new	sites	in	their	hotel	division	and	new	deals	in	their	retail	business.

PERFORMANCE

Headland	Media’s	financial	performance	for	the	year	to	31	December	2011	was	in	
line	with	expectations.	On	16	February	2012,	Headland	Media	repaid	the	Company	
its	 $2.5	 million	 mezzanine	 debt	 and	 interest	 in	 full	 which	 was	 funded	 by	 £1.0	
million	 of	 bank	 debt	 and	 internally	 generated	 cash.	 Revenue	 for	 the	 year	 to	 31	
December	2011	was	£8.4	million	and	EBITDA	was	£2.2	million.

HEADLAND	MEDIA	

Enterprise 
value at 
acquisition 

Total 
equity 
held 

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

£7.9m	

80%	

£5.9m	

£7.4m

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Sector:	
Financial	services

Location:	
United	Kingdom	

Investment	date:	
31	March	2008	

Website:	
www.monumentsecurities.com	

TRANSACTION DETAILS

The	Limited	Partnership	acquired	51%	of	Monument	Securities	Limited	which	was	
funded	by	equity	of	£2.8	million,	in	March	2008.

BUSINESS OVERVIEW 

Monument	Securities	Limited	(“Monument	Securities”)	is	an	independent	equity,	
derivatives	and	fixed	income	broker	with	a	20	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 

During	 2011,	 Monument	 Securities	 has	 strengthened	 its	 development	 team		
and	 has	 been	 involved	 in	 developing	 new	 products.	 Revenues	 have	 been	
generated	 at	 broadly	 similar	 levels	 to	 2010	 from	 derivatives,	 equity	 and	 fixed	
income.	 The	 diversity	 in	 the	 business	 has	 enabled	 Monument	 Securities	 to	
maintain	 results	 in	 line	 with	 2010	 in	 challenging	 markets.	 Monument’s	 balance	
sheet	remains	strong.

PERFORMANCE

Revenue	for	the	twelve	months	to	31	December	2011	was	£6.4	million	with	an	
EBITDA	loss	of	£0.2	million.

HEADLAND	MEDIA	

Enterprise 
value at 
acquisition 

Total 
equity 
held 

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

£5.6m	

51%	

£1.8m	

£1.8m

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Sector:	
Technology

Location:	
Germany	

Investment	date:	
31	December	2011

Website:	
www.intergenia.de

TRANSACTION HISTORY

On	 31	 December	 2011,	 the	 Limited	 Partnership	 acquired	 a	 51%	 stake	 in	 the	
business	 conducted	 by	 Intergenia	 AG	 (“Intergenia”),	 a	 leading	 web	 hosting	
company	 providing	 managed,	 dedicated	 and	 cloud	 hosting.	 The	 transaction	
valued	Intergenia	at	a	total	enterprise	value	of	£72	million	(including	transaction	
costs).	The	Limited	Partnership	provided	£25.2	million	of	equity	financing	and	the	
Company	provided	senior	debt	of	£8.4	million.	Intergenia’s	management	and	its	
founders	retain	a	significant	stake	in	the	company.

BUSINESS OVERVIEW

Intergenia	was	founded	in	1998	with	a	head	office	based	in	Cologne.	Intergenia	
three	 different	 hosting	 brands,	 PlusServer,	 serverloft	 and	
trades	 under	
SERVER4YOU.	The	Company	has	an	industry-leading	low	cost	infrastructure	due	
to	 its	 data	 centre	 in	 Strasbourg	 which	 is	 one	 of	 Europe’s	 most	 efficient	 data	
centres.	 The	 Company	 has	 7,000	 sq.m	 of	 leasehold-owned	 data	 centre	 space	
split	 between	 Strasbourg,	 France	 and	 St.	 Louis,	 USA.	 Intergenia	 has	 a	
geographically	 diversified	 customer	 base	 composed	 predominantly	 of	 SME	
customers	 and	 is	 one	 of	 the	 German	 market	 leaders	 in	 dedicated	 hosting	 to		
SME	 customers.	 Intergenia	 also	 runs	 WorldHostingDays	 (“WHD”),	 the	 largest	
series	of	hosting	conferences	worldwide.

INVESTMENT RATIONALE

its	

following	

investment	

former	 successful	

Intergenia	operates	in	the	web	hosting	sector,	an	area	well	known	to	the	Limited	
Partnership	
in	 Host	 Europe.		
The	company	was	at	an	attractive	point	in	its	infrastructure	investment	cycle	after	
it	had	completed	the	build	of	two	significant	and	capital	intensive	data	centres.	
Intergenia’s	key	competitive	advantage	is	its	low	cost	base	due	to	its	Strasbourg	
data	 centre.	 Intergenia’s	 management	 have	 also	 automated	 many	 processes	
within	the	company	including	customer	sign	up,	billing	and	server	configuration.	
Intergenia’s	WHD	has	allowed	management	to	build	an	extensive	network	in	the	
industry	with	suppliers,	competitors	and	customers.	

Intergenia’s	strategy	is	to	focus	on	growing	all	three	hosting	brands	and	to	boost	
customer	lifetime	value,	which	should	improve	return	on	capital	and,	in	combination	
with	improved	financial	management,	should	increase	free	cashflow.

PERFORMANCE

Intergenia	has	traded	strongly	in	2011	and	(subject	to	audit)	made	revenues	of		
€26.7	million	and	EBITDA	of	€12.4	million.

INTERGENIA	

Enterprise 
value at 
acquisition 

Total 
equity 
held 

Value of 
Company’s  
interest at  
acquisition 

Fair value 
of the 
Company’s 
interest

£72.0m	

51%	

£24.8m	

£24.8m

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36REVIEW OF INVESTMENTScontinued 
 
 
 
 
 
 
 
DISPOSALS

37

REVIEW OF 
INVESTMENTS
continued

Sector:	
Technology

Location:	
United	Kingdom

Investment	date:	
2	April	2008	

Website:	
www.hosteurope.com

DISPOSAL DETAILS

On	15	September	2010	the	Limited	Partnership	announced	the	disposal	of	Host	
Europe	 to	 Montagu	 Private	 Equity,	 subject	 to	 approval	 by	 Germany’s	 Federal	
Cartel	 Office	 (Bundeskartellamt).	 Having	 received	 this	 approval,	 the	 sale	 was	
completed	on	28	October	2010.

Total	consideration	for	the	sale	was	£222	million.	The	consideration	was	used	to	
repay	 third	 party	 debt;	 to	 pay	 Host	 Europe	 management	 in	 respect	 of	 their	
interests;	to	meet	transaction	costs;	and	to	repay	debt	due	to	the	Company	of	
£16.9	million	plus	accrued	interest.	As	a	result	of	the	disposal,	on	10	November	
2010,	the	Limited	Partnership	distributed	£111.9	million	of	proceeds	to	the	Limited	
Partners,	including	£72.7	million	to	the	Company.

Prior	 to	 the	 sale	 of	 Host	 Europe,	 the	 shares	 it	 held	 in	 Daisy	 Group	 plc		
(“Daisy”)	 were	 extracted	 and	 continue	 to	 be	 held	 by	 the	 Limited	 Partnership.	
These	36.25	million	shares,	representing	14%	of	Daisy	were	acquired	as	part	of	
the	consideration	for	the	disposal	of	Host	Europe’s	Vialtus	division	in	July	2009.

Host	Europe	was	acquired	by	the	Limited	Partnership	at	a	total	transaction	value	
of	£128	million.	The	consideration	was	satisfied	by	a	mixture	of	cash,	vendor	loan	
note	 and	 bank	 loans	 and	 mezzanine	 financing	 from	 the	 Company.	 The	 Limited	
Partnership	 contributed	 £48.0	 million.	 Outstanding	 mezzanine	 loans	 due	 to	 the	
Company	 at	 the	 time	 of	 the	 disposal,	 amounting	 to	 £19.9	 million	 (including	
accrued	interest),	were	repaid	on	28	October	2010.

RETURN	

The	 exit	 value	 of	 the	 investment	 in	 Host	 Europe	 was	 £111.9	 million	 against	 an	
invested	cost	of	£48.0	million,	generating	a	money	multiple	of	2.3x	and	an	IRR	of	
48%	 to	 the	 Limited	 Partners.	 The	 Company	 received	 a	 total	 distribution	 of		
£92.6	million	from	the	disposal	comprising	a	return	on	its	investment	through	the	
Limited	Partnership	of	£72.7	million	and	the	repayment	of	outstanding	mezzanine	
finance	owed	by	Host	Europe	of	£19.9	million.

HOST	EUROPE

Enterprise 
value at 
acquisition 

£128m	

Total 
equity 
held 

83%	

Value of 
Company’s  
interest at  
acquisition 

Exit value 
of the 
Company’s 
interest

£51m	

£92.6m

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Independent Auditor’s Report

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38INDEPENDENT AUDITOR’S REPORT 
 
 
 
 
 
 
 
39

INDEPENDENT 
AUDITOR’S 
REPORT

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 of 
Oakley  Capital  Investments  Limited  (the  “Company”),  including  the 
schedules  of  investments,  as  of  31  December  2011  and  2010,  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 
the Company’s 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 also 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 2011 and 2010, and the results of its operations, 
changes  in  its  net  assets  and  cash  flows  for  the  years  then  ended  in 
conformity with US generally accepted accounting principles.

This report, including our opinion, has been prepared for, and only for, the 
Company’s shareholders as a body in accordance with Section 90 of the 
Bermuda Companies Act 1981 and for no other purpose. We do not, in 
giving this opinion, accept or assume responsibility for any other purpose 
or to any other person to whom this report is shown or into whose hands 
it may come, save where expressly agreed by our prior consent in writing.

KPMG 
Chartered Accountants 
Hamilton, Bermuda 
19 April 2012

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40

FINANCIAL  
STATEMENTS

Financial Statements

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FINANCIAL STATEMENTS

STATEMENTS OF ASSETS AND LIABILITIES 
FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in British Pounds)

Assets 

Investments (cost 2011: £93,752,827; 2010: £42,127,743) 

Cash and cash equivalents 

Accrued interest receivable 

Other receivables  

Total assets  

Liabilities  

notes 

5, 7 

3 

2011 
£ 

2010 
£

145,143,787 

93,708,239

70,108,870 

120,915,727

3,961,377 

15,638 

814,139

29,553

219,229,672 

215,467,658

Accounts payable and accrued expenses 

4, 6 

300,960 

520,316

Total liabilities  

300,960 

520,316

Net assets attributable to shareholders 

218,928,712 

214,947,342

Represented by: 

Share capital 

Share premium  

Retained earnings  

1,281,250 

1,281,250

119,276,094 

119,276,094

98,371,368 

94,389,998

218,928,712 

214,947,342

Number of shares outstanding 

9 

128,125,000 

128,125,000

Net asset value per share 

1.71 

1.68

Signed on behalf of the Board on 19 April 2012 by

Ian Pilgrim 
Director 

 Tina Burns 
 Director

The notes following form an integral part of these financial statements.

41

FINANCIAL  
STATEMENTS

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42

FINANCIAL  
STATEMENTS
continued

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SCHEDULES OF INVESTMENTS
FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in British Pounds)

31 December 2011 

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 L.P.  

Unquoted debt securities 

Investments in senior loan notes 

United Kingdom 

Time Out Group BC Limited 
Interest at 8.5% p.a.  
Maturity date March 2013 

Bermuda 

TONY OCIL (Bermuda) Limited 
Interest at 8.5% p.a.  
Maturity date May 2014 

WHDI (Bermuda) Limited 
Interest at 8.5% p.a.  
Maturity date November 2013 

Total senior loan notes 

Investments in mezzanine loans 

United Kingdom 

Headland Media Limited  
Interest at 15% p.a.  
Maturity date December 2014 

Fitzwilliam Holdco Limited 
Interest at 15% p.a. 
Maturity date November 2015 

Time Out (Bermuda) Limited 
Interest rate at 15% p.a.  
Maturity date November 2015 

TONY OCIL (Bermuda) Limited 
Interest rate at 15% p.a.  
Maturity date May 2016 

Total mezzanine loans 

51.41% 

65.01% 

61,328,362 

112,553,747

2.28% 

£5,000,000 

5,000,000 

5,000,000

1.00% 

$3,400,000 

2,109,020 

2,195,040

3.82% 

7.10% 

€10,000,000 

8,368,000 

8,353,000

15,477,020 

15,548,040

0.74% 

$2,500,000 

1,645,945 

1,614,000

2.74% 

£6,000,000 

6,000,000 

6,000,000

2.83% 

£6,200,000 

6,200,000 

6,200,000

1.47% 

7.78% 

$5,000,000 

3,101,500 

3,228,000

16,947,445 

17,042,000

Total Investments  

66.29% 

93,752,827 

145,143,787

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

The notes following form an integral part of these financial statements.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SCHEDULES OF INVESTMENTS (continued)
FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in British Pounds)

31 December 2010 

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 L.P.  

Unquoted debt securities 

Investments in senior loan notes 

United Kingdom 

Time Out Group BC Limited 
Interest at 8.5% p.a.  
Maturity date March 2013 

Investments in mezzanine loans 

United Kingdom 

Headland Media Limited 
Interest at 15% p.a.  
Maturity date December 2014 

Bermuda 

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

Fitzwilliam Holdco Limited 
Interest rate at 15% p.a. 
Maturity date November 2015 

Time Out (Bermuda) Limited 
Interest rate at 15% p.a.  
Maturity date November 2015 

Total mezzanine loans 

34.42% 

65.01% 

22,278,648 

73,977,584

2.33% 

£5,000,000 

5,000,000 

5,000,000

0.75% 

$2,500,000 

1,645,945 

1,610,500

0.66% 

€1,650,000 

1,503,150 

1,420,155

2.79% 

£6,000,000 

6,000,000 

6,000,000

2.65% 

6.85% 

£5,700,000 

5,700,000 

5,700,000

14,849,095 

14,730,655

Total Investments  

43.60% 

42,127,743 

93,708,239

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

The notes following form an integral part of these financial statements.

43

FINANCIAL  
STATEMENTS
continued

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44

FINANCIAL  
STATEMENTS
continued

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in British Pounds)

Investment income 

Interest 

Withholding tax on interest 

Total income 

Expenses 

Management fees 

Performance fees 

Professional fees 

Other 

Interest 

Total expenses 

notes 

2011 
£ 

2010 
£

5,570,248 

4,835,741

(117,436) 

–

5,452,812 

4,835,741

591,481 

– 

339,923 

339,023 

1,721 

306,677

408,948

279,086

372,133

379

1,272,148 

1,367,223

4 

4 

6,10 

Net investment income 

4,180,664 

3,468,518

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

Net realised gains on foreign exchange 

Net change in unrealised gains (losses) on foreign exchange 

Net realised (losses) gains on investments 

502,413 

12,362 

51,288

(545)

(524,533) 

31,263,988

Net change in unrealised (depreciation) appreciation on investments 

(189,536) 

53,735

Net realised and unrealised gains on foreign exchange and investments 

(199,294) 

31,368,466

Net earnings 

Net earnings per share 

3,981,370 

34,836,984

0.03 

0.27

The notes following form an integral part of these financial statements.

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45

FINANCIAL  
STATEMENTS
continued

STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in British Pounds)

Net increase in net assets resulting from operations 

Net investment income 

Net realised gains on foreign exchange 

Net change in unrealised gains (losses) on foreign exchange 

Net realised (losses) gains on investments 

2011 
£ 

2010 
£

4,180,664 

3,468,518

502,413 

12,362 

51,288

(545)

(524,533) 

31,263,988

Net change in unrealised (depreciation) appreciation on investments 

(189,536) 

53,735

Net increase in net assets resulting from operations 

3,981,370 

34,836,984

Net increase in net assets 

3,981,370 

34,836,984

Net assets at beginning of year 

214,947,342 

180,110,358

Net assets at end of year 

218,928,712 

214,947,342

The notes following form an integral part of these financial statements.

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46

FINANCIAL  
STATEMENTS
continued

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010
(Expressed in British Pounds)

2011 
£ 

2010 
£

Cash flows from operating activities 

Net increase in net assets resulting from operations 

3,981,370 

34,836,984

Adjustments to reconcile net increase in net assets resulting from  
operations to net cash (used in) provided by operating activities: 

Net realised and unrealised gains on foreign exchange and investments 

199,294 

(31,368,466)

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  

(80,448,664) 

(36,490,528)

28,299,047 

106,983,070

(3,147,238) 

13,915 

(219,356) 

(33,021)

11,841

413,569

Net cash (used in) provided by operating activities 

(51,321,632) 

74,353,449

Net effect of foreign exchange 

514,775 

50,743

Net (decrease) increase in cash and cash equivalents 

(50,806,857) 

74,404,192

Cash and cash equivalents at beginning of year 

120,915,727 

46,511,535

Cash and cash equivalents at end of year 

70,108,870 

120,915,727

Interest paid during the year 

1,721 

379

The notes following form an integral part of these financial statements.

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47

NOTES TO THE 
FINANCIAL  
STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2011 AND 2010 

  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 L.P. (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  US  generally  accepted  
accounting principles. 

  b) Use of estimates

 The preparation of financial statements in conformity with US generally accepted accounting principles 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, bridge loans and senior loans
 Mezzanine loans, bridge loans and senior 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 depreciation in value.

 Realised  gains  and  losses  are  recorded  when  the  security  acquired  is  realised.  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 
(ASC 820). ASC 820 defines fair value, establishes a framework for measuring fair value in accordance with US 
generally  accepted  accounting  principles  and  expands  disclosures  about  fair  value  measurements.  
ASC 820 establishes a hierarchical disclosure framework which prioritises 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.

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48

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

 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 Adviser’s 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 
and are categorised as Level 1 within the fair value hierarchy.

 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 obtain 
independent appraisals.

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

  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 in 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.

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49

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

  3. CASH AND CASH EQUIVALENTS

 Cash and cash equivalents at 31 December 2011 and 2010 consist of the following:

Cash 

Short-term deposits  

2011 
£ 

1,010,856 

2010 
£

–

69,098,014 

120,915,727

70,108,870 

120,915,727

  4. MANAGEMENT AND PERFORMANCE FEES

  (a) The  Company  has  entered  into  a  Management  Agreement  with  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. During the year ended 31 December 2011, the Company 
incurred management fees of £591,481 (2010: £306,677). As at 31 December 2011, management fees in the 
amount of £105,892 were payable to the Manager and are recorded within accounts payable and accrued 
expenses in the Statement of Assets and Liabilities (2010: £306,677).

 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.  During  the  year  ended  31  December  2011,  the  Company  incurred 
performance  fees  of  £nil  (2010:  £408,948).  As  at  31  December  2011,  performance  fees  in  the  amount  of  
£nil were payable to the Manager and are recorded within accounts payable and accrued expenses in the 
Statements of Assets and Liabilities (2010: £107,044). 

  (b) The Manager has entered into an Investment Adviser Agreement with 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.

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50

NOTES TO THE 
FINANCIAL  
STATEMENTS
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 
2011 
£ 

31 December 
2010 
£

– 

– 

–

–

Significant unobservable inputs (Level 3) 

145,143,787 

93,708,239

 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,  bridge  loans  and  senior  loan  notes  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 depreciation in value. The fair values have been determined based on a discounted 
cash flow valuation approach consistent with prior years. The discount rate used to value the mezzanine loans 
is 15% (2010: 15%) and the secured loans 8.5% (2010: 8.5%).

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51

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

 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 

Purchases  

Proceeds on disposal 

Realised gains on disposal 

Investment 
in Securities 
2011  
£ 

Investment 
in Securities 
2010 
£

73,977,584 

104,432,214

39,049,714 

11,194,582

– 

– 

(73,476,433)

31,952,746

Net change in unrealised depreciation on investments 

(473,551) 

(125,525)

Limited Partnership, fair value at end of year 

112,553,747 

73,977,584

Unquoted debt securities 

Fair value at beginning of year 

Purchases  

Proceeds on disposal  

Net realised gain (loss) on disposal  

Net change in unrealised depreciation on investments 

19,730,655 

28,450,844

41,398,950 

25,295,946

(28,299,045) 

(33,506,637)

(524,533) 

–

284,013 

(509,498)

Unquoted debt securities, fair value at end of year 

32,590,040 

19,730,655

Fair value at end of year 

145,143,787 

93,708,239

 The  net  change  in  unrealised  appreciation  on  investments  relates  to  investments  held  at  the  respective  
year end.

 Of the investments held by the Limited Partnership, 19% (2010: 29%) are classified as Level 2 investments and 
81% (2010: 71%) 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. During the year ended 31 December 2011, the 
Company incurred administration fees of £161,296 (2010: £63,044), which is included in professional fees in 
the Statements of Operations. As at 31 December 2011, there was a balance payable of £nil (2010: £35,002), 
which is included in accounts payable and accrued expenses.

  7. INVESTMENTS 

 Limited Partnership
 The Company has committed substantially all of its capital to the Limited Partnership and its successor fund. 
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 Limited 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.

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52

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

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 The  Company’s  share  of  the  total  capital  called  by  the  Limited  Partnership  to  31  December  2011  was 
£101,932,105 (€122,485,000) (2010:  £62,882,391 (€77,605,000)), representing 65.01% of the Company’s 
total capital commitment. As at 31 December 2011, the Company accounted for 65.01% of the total capital 
and commitments in the Limited Partnership (2010: 65.01%).

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

 At 31 December 2011 all of the Limited Partnership’s investments have been valued at fair value. The Limited 
Partnership appointed a third party valuer to determine the fair value of certain underlying businesses taking 
into account financial information provided by the Limited Partnership’s investment adviser. The Company’s 
participation in the Limited Partnership has been valued at £112,553,747 (2010: £73,977,584) at year end.

 Limited Partnership’s investments
 The Limited Partnership made three direct acquisitions in 2011, Emesa B.V., Time Out New York and Intergenia 
AG. The Company invested alongside the Limited Partnership directly into the three portfolio companies by 
providing mezzanine or senior loans.

 Host Europe Corporation 
 On 15 September 2010 the Limited Partnership announced the disposal of Host Europe to Montagu Private 
Equity,  subject  to  approval  by  Germany’s  Federal  Cartel  Office  (Bundeskartellamt).  Having  received  this 
approval,  the  sale  was  completed  on  28  October  2010.  Total  consideration  for  the  sale  was  £222  million.  
The consideration was used to repay third party debt of £51 million; to repay debt due and interest to the 
Company of £20 million; to pay Host Europe management in respect of their interests of £19 million; and to 
meet transaction costs of £4.3 million. Net proceeds from the investment were therefore £126.5 million.

 The total net proceeds paid to the Limited Partners on 9 November 2010 were £112 million, after performance 
fees. The Company received £73 million representing approximately 45% of the Company’s total commitments 
and approximately 114% of its called capital.

 Prior to the sale of Host Europe, the shares it held in Daisy Group plc (“Daisy”) were extracted and continue to 
be  held  by  the  Limited  Partnership  through  Host  Europe  (Bermuda)  Limited.  These  36.25  million  shares, 
representing  14%  of  Daisy  were  acquired  as  part  of  the  consideration  for  the  disposal  of  Host  Europe’s  
Vialtus  division  in  July  2009.  The  value  of  the  Daisy  shares  as  at  31  December  2011  was  95.5  pence  
(2010: 100 pence). 

 As at 31 December 2011, the net fair value of this investment attributable to the Company was £18.3 million 
(2010: £19.2 million).

 Headland Media Limited
 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. In total the Limited Partnership has invested £4.4 million in Headland Media.  
As  at  31  December  2011,  the  net  fair  value  of  investment  attributable  to  the  Company  was  £5.8  million,  
(31 December 2010: £5.4 million).

 Monument Securities Limited
 Monument Securities Limited (“Monument Securities”) is a global equity, derivatives and fixed income broker 
with  a  20  year  history.  Monument  Securities  provides  services  to  institutions,  fund  managers,  market 
professionals, corporate and hedge funds. The Limited Partnership has a 51% interest in Monument Securities 
and its contribution was £2.8 million. As at 31 December 2011, the net fair value of the investment attributable 
to the Company was £1.8 million (2010: £1.4 million).

 VVX (Bermuda) Limited 
 The Limited Partnership, through VVX (Bermuda) Limited, acquired 51% of Verivox Holdings Limited (“Verivox”), 
Germany’s largest independent online consumer energy price comparison service. Verivox receives commission 
from energy suppliers when consumers elect to switch providers through its website. The Limited Partnership 
contributed £4.6 million in equity. As at 31 December 2011, the net fair value of the investment attributable to 
the Company was £27.6 million (2010: £35.5 million).

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
53

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

 Fitzwilliam Holdco Limited (Broadstone Pensions and Investments “Broadstone”)
 On  4  November  2010,  the  Limited  Partnership  announced  that,  through  its  wholly  owned  subsidiary,  
Fitzwilliam  Holdco  Limited,  it  has  acquired  84.4%  of  Broadstone,  the  UK-wide  independent  provider  of 
investment advice and solutions to private individuals and corporates, from BDO LLP. The total transaction 
value  was  £14.2  million  funded  through  a  combination  of  debt  and  equity.  The  Limited  Partnership’s  
contribution as at 31 December 2011 was a total of £13.1 million (31 December 2010: £7.0 million). The net 
fair value of investment attributable to the Company at 31 December 2011 was £8.5 million (31 December 
2010: £4.7 million).

 TO (Bermuda) Limited (Time Out London) and TONY (Bermuda) Limited (Time Out New York)
 On 25 November 2010, the Limited Partnership acquired 50% of Time Out London, the international multi-
channel  publisher.  Time  Out  was  founded  in  1968  and  publishes  in  over  30  countries  around  the  world.  
Time Out is uniquely positioned to provide services across traditional print, digital channels and live events.

 In  May  2011,  the  Limited  Partnership  acquired  65.7%  of  Time  Out  America  LLC  (“Time  Out  New  York”).  
The investment is anticipated to be synergistic and will enhance the Limited Partnership’s previous investment, 
in November 2010, in Time Out Group Limited (“Time Out London”) to create a global digital media group (the 
“Time Out Group”). In combination, Time Out New York and Time Out London control the worldwide rights to 
the  Time  Out  brand  (excluding  Chicago).  The  Limited  Partnership  subscribed  for  equity  of  £9.3  million  
($15.0  million).  The  net  fair  value  of  the  investment  attributable  to  the  Company  as  at  31  December  2011  
was £6.3 million.

 The  total  transaction  value  of  the  two  portfolio  companies  was  a  combined  £32  million  funded  through  a 
combination  of  debt  and  equity.  The  Limited  Partnership’s  contribution  as  at  31  December  2011  for  both 
portfolio companies was £18.6 million. At 31 December 2011 and 31 December 2010, the acquisition was 
valued at cost. The net fair value of the combined investments attributable to the Company at 31 December 
2011 was £12.4 million (31 December 2010: £3.1 million).

 Sun Cooperatief U.A. (Emesa B.V.)
 On 25 March 2011, the Company announced that it had acquired 68.0% of Emesa B.V. (“Emesa”) through a 
Company called Sun Cooperatief U.A. Emesa is a leading e-commerce company active in the Dutch online 
leisure market. Emesa was founded in 2004 and has grown significantly to become a leading online consumer 
auction platform in the European leisure industry. Emesa enables online customers to find and book leisure 
deals such as short holidays, weekend breaks, spa/beauty visits, event tickets and restaurant visits through its 
websites.  The  Limited  Partnership  provided  equity  of  £10.4  million.  The  net  fair  value  of  the  investment 
attributable to the Company at 31 December 2011 was £16.5 million.

 WHDI (Bermuda) Limited (Intergenia AG)
 In December 2011, the Limited Partnership acquired a 51% stake in Intergenia AG, a leading web hosting 
company  providing  managed,  dedicated  and  cloud  hosting.  The  Limited  Partnership  acquired  the  
investment in Intergenia AG through a fully owned subsidiary, WHDI (Bermuda) Limited, in the form of equity 
for  €30.2  million.  The  net  fair  value  of  the  investment  attributable  to  the  Company  at  31  December  2011  
was £16.4 million.

 Certain Directors of the Company and the general partner of the Limited Partnership may also be directors of 
the investee companies.

 Mezzanine financing investments
 Headland Media Limited
 As part of the Limited Partnership’s acquisition of Newslink through Headland Media, the Company provided 
£1.6 million of debt finance, in the form of a secured mezzanine instrument from the Company. The instrument 
carries a fixed interest rate of 15% and is due December 2014. The debt was fully repaid in February 2012.

 Time Out (Bermuda) Limited
 As  part  of  the  Limited  Partnership’s  acquisition  of  Time  Out  Group  Limited,  the  Company  provided  debt 
finance of £6.2 million in the form of a mezzanine loan. The instrument carries a fixed interest rate of 15% 
maturing on 30 November 2015. 

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54

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

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 Fitzwilliam Holdco Limited (Broadstone)
 As  part  of  the  Limited  Partnership’s  acquisition  of  Broadstone,  the  Company  provided  debt  finance  of  
£6.0 million in the form of a mezzanine loan. The instrument carries an interest rate of 15% and matures on  
30 November 2015. The fair value is considered to equal the amortised cost.

 VVX (Bermuda) Limited (Verivox)
 As part of the Limited Partnership’s acquisition of Verivox, the Company provided debt finance of £7.3 million 
(€8 million), in the form of an unsecured mezzanine instrument. The instrument carried a fixed interest rate of 
15%, maturing no later than 4 December 2019. Due to the strong trading performance enjoyed by Verivox, it 
was able to pay £6.35 million of the loan on 21 December 2010 leaving a principal balance of £1.42 million 
(€1.65 million) at 31 December 2010. This was repaid in full on 11 March 2011. 

 Emesa Group Holdings B.V. (Emesa)
 As part of the Limited Partnership’s acquisition of Emesa, the Company provided debt finance of £4.7 million 
(€5.4 million), in the form of an unsecured mezzanine instrument. This instrument carried a fixed interest rate 
of 15%. The loan was repaid in full on 22 December 2011.

 TONY OCIL (Bermuda) Limited (Time Out New York)
 As part of the Limited Partnership’s acquisition of Time Out New York, the Company provided debt finance of 
£3.1 million ($5.0 million) in the form of a mezzanine loan. The instrument carries a fixed interest rate of 15% 
before withholding tax and 10.5% after withholding tax and matures on 26 May 2016. Interest income on the 
loan is shown net of withholding tax. The fair value is considered to be equal to the amortised cost.

 Senior loan notes
 Time Out (Bermuda) Limited 
 As part of the Limited Partnership’s acquisition of Time Out Group Limited, the Company has also provided  
a  secured  senior  loan  of  £5.0  million.  The  instrument  carries  a  fixed  interest  rate  of  8.5%  and  matures  on  
31 March 2013. The fair value is considered equal to the amortised cost.

 Emesa Group Holdings B.V. (Emesa)
 As  part  of  the  Limited  Partnership’s  acquisition  of  Emesa,  the  Company,  provided  a  secured  loan  of  
£8.7 million (€10.0 million). The instrument carried a fixed interest rate of 8.5% and the loan was repaid in full 
on 22 December 2011.

 TONY OCIL (Bermuda) Limited (Time Out New York)
 As  part  of  the  Limited  Partnership’s  acquisition  of  Time  Out  New  York,  the  Company  has  also  provided  a 
secured senior loan of £2.2 million (€3.4 million). The instrument carries a fixed interest rate of 8.5% before 
withholding tax and 5.95% after withholding tax. The instrument matures no later than May 2014. The fair value 
is considered equal to the amortised cost.

 WHDI (Bermuda) Limited (Intergenia AG)
 As part of the Limited Partnership’s acquisition of Intergenia AG, the Company also provided a secured senior 
loan of £8.4 million (€10.0 million). The instrument carries a fixed interest rate of 8.5%. The instrument matures 
no later than November 2013. £2.1 million (€2.5 million) of this loan was repaid in March 2012.

 Bridge financing investments
 Oakley Capital Private Equity L.P.
 On  24  March  2011,  the  Company  provided  a  bridging  loan  to  the  Limited  Partnership  for  £12.0  million  at  
an interest rate of 6.5% and a maturity date of 29 July 2011. The loan was repaid in full on 15 April 2011.  
On 24 November 2011, the Company provided a bridging loan of £3.0 million at an interest rate of 6.5% and 
a maturity date of 29 February 2012. The debt was repaid in full on 8 December 2011. On 19 March 2012,  
the Company entered into a £12 million revolving credit facility with the Limited Partnership, as of April 2012, 
the Limited Partnership had drawn down £2.48 million from this facility. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
55

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

  8. CAPITAL COMMITMENT

 The total capital commitment made by the Company in the Limited Partnership is £156,197,795 (€187,000,000) 
(2010: £160,950,900 (€187,000,000)). 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 £101,932,105 
(€122,485,000) (2010: £62,882,391 (€77,605,000)) was called from the Company by the Limited Partnership. 
As at 31 December 2011, the amount of capital commitment available to be called from the Company by the 
Limited Partnership was £54,265,690 (€64,515,000) (2010: £94,156,277 (€109,395,000)).

 On  5  April  2011,  the  Limited  Partnership  issued  a  capital  call  for  €18.7  million  (£16.5  million)  representing  
10% of the outstanding commitments of €187 million. In December 2011, the Limited Partnership issued a 
further capital call of €26.2 million (£22.5 million) representing 14% of the total commitments of €187 million. 
The total funded commitment to 31 December 2011 was €122.5 million representing 65.5% of the Company’s 
total commitments.

  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  conferred  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 were capable of exercise 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.

 In accordance with the terms and conditions set out in the warrant instrument dated 30 July 2007, the final 
date for exercising the subscription rights conferred by the warrants was 3 August 2010. Cancellation of the 
listing of the warrants took place on 4 August 2010.

  (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 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). 

 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.

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56

NOTES TO THE 
FINANCIAL  
STATEMENTS
continued

 Shares of common stock and warrants outstanding are:

Common stock 

2011 

2010

Balance at beginning of year 

128,125,000 

128,125,000

Balance at end of year 

128,125,000 

128,125,000

Warrants  

Balance at beginning of year 

Expired 

Balance at end of year 

 10. RELATED PARTIES

2011 

2010

– 

– 

– 

48,750,000

(48,750,000)

–

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

 The Company has a financial advisory agreement with Oakley Finance. During 2011, the Company incurred 
financial advisory fees of £25,000 (2010: £42,500), which is included in professional fees in the statements of 
operations. As at 31 December 2011, there was no balance payable (2010: £nil) to Oakley Finance.

 11. TAXATION

 Under current Bermuda law the Company is not required to pay any taxes in Bermuda on 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 was not required to recognise any amounts for uncertain tax positions under FASB ASC 740-10 
during the year ended 31 December 2011.

 12. INDEMNIFICATIONS AND WARRANTIES 

 In the ordinary course of business, the Company may enter into contracts or agreements that may contain 
indemnifications or warranties. Future events could occur that lead to the execution of these provisions against 
the Company. Based on its history, experience and assessment of existing contracts, management feels that 
the likelihood of such an event is remote.

 13. SUBSEQUENT EVENTS 

 The Directors have evaluated subsequent events from the year end through 19 April 2012 which is the date 
the financial statements were available to be issued. The following events have been identified for disclosure.

 In February 2012, Headland Media Limited repaid the outstanding balance on the mezzanine loan in full.

 In March 2012, the Company increased its commitment in the Limited Partnership by €398,260. This increased 
the Company committed capital to €187,398,260 and its ownership in the Limited Partnership to 65.15%.

 In March 2012, Intergenia AG repaid £2.1 million (€2.5 million) of its senior loan back to the Company leaving 
an outstanding balance of £6.3 million (€7.5 million). In March 2012, the Company entered into a £12 million 
revolving credit facility with the Limited Partnership, as of 19 April 2012, the Limited Partnership had drawn 
down £2.48 million from this facility.

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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

Legal Advisers to the Company  
as to Bermuda Law
Conyers Dill & Pearman Limited  
Clarendon House  
2 Church Street  
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

ADVISERS

Registered Office 
102 St. James Court 
Flatts 
Smiths FL04 
Bermuda

Manager to the Company  
and the Limited Partnership 
Oakley Capital (Bermuda) Limited  
102 St. James Court 
Flatts 
Smiths FL04 
Bermuda

Investment Adviser to the Manager 
Oakley Capital Limited  
3 Cadogan Gate  
London SW1X 0AS  
United Kingdom 

Legal Advisers to the Company  
Simpson Thacher & Bartlett LLP 
City Point 
1 Ropemaker Street  
London EC2Y 9HU 
United Kingdom 

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

Administrator to the Company  
and the Limited Partnership
Mayflower Management Services (Bermuda) Limited  
102 St. James Court 
Flatts 
Smiths FL04 
Bermuda

57

DIRECTORS 
AND  
ADVISERS

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the 2012 Annual General Meeting of the members of the Company will be held at 102 
St. James Court, Flatts, Smiths FL04, Bermuda on:

15 June 2012 at 11.00 a.m. (Bermuda time)

AGENDA

1.  To elect a Chairman, if necessary.

2.  To read the Notice convening the Meeting.

3.  To lay before the Members the Company’s audited report and accounts for the financial year ended 31 December 

2011.

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 James Keyes and Christopher Wetherhill 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. 

11 May 2012 
BY ORDER of the Directors 
Mayflower Management Services (Bermuda) Limited 
Secretary

58

NOTICE OF 
ANNUAL 
GENERAL 
MEETING

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59

NOTICE OF 
ANNUAL 
GENERAL 
MEETING

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 13 June 2012 at:

  Mayflower Management Services (Bermuda) Limited  

Secretary  
Oakley Capital Investments Limited  
102 St. James Court 
Flatts 
Smiths FL04 
Bermuda

  Email: ipilgrim@mayflower.bm  

Fax: (441) 542 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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60

FOR YOUR NOTES

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Designed by addtotaste.com and printed by Portman Lodge Limited

Oakley Capital Investments Limited is registered in Bermuda with company number 40324. 
Registered office: 102 St. James Court, Flatts, Smiths FL04, Bermuda