OCI

OAKLEY CAPITAL INVESTMENTS LIMITED
ANNUAL REPORT AND ACCOUNTS 2012

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CONTENTS

04

Chairman’s Statement

06 Manager’s Report

12

16

18

20

22

24

26

28

30

Directors’ Report

Review of Investments

Daisy

Verivox

Time Out Group

Emesa

Broadstone

Intergenia

Headland Media

32 Monument Securities

34

36

38

39

40

42

43

44

45

55

56

Host Europe

Independent Auditor’s Report

Financial Statements

Statements of Assets and Liabilities

Schedules of Investments

Statements of Operations

Statements of Changes in Net Assets

Statements of Cash Flows

Notes to the Financial Statements

Directors and Advisers

Notice of Annual General Meeting

03

CONTENTS

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04

CHAIRMAN’S
STATEMENT

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CHAIRMAN’S STATEMENT

I am pleased to report another year of solid progress 
for the Company. Oakley Capital Private Equity L.P. (the 
“Limited  Partnership”)  continued  to  seek  acquisition 
opportunities  to  enhance  its  investment  portfolio.  In 
addition, there was a focus during 2012 on improving 
the  market  positioning  of  a  number  of  the  Limited 
Partnership’s  portfolio  companies  and  on  promoting 
growth  in  those  companies.  The  overall  trading 
performance  of  the  portfolio  companies,  once  again, 
has been good, contributing to uplift to the value of the 
Company’s investment in the Limited Partnership. This, 
together  with  income  earned  on  the  Company’s 
outstanding loans has contributed to an increase in the 
net asset value per share from £1.71 at 31 December 
2011 to £1.81 at 31 December 2012.

Within  the  Limited  Partnership’s  portfolio  companies, 
Emesa B.V. (“Emesa”) continued to perform strongly in 
2012.  The  Limited  Partnership’s  Investment  Manager 
was active in the final quarter of 2012, working with the 
management  team  of  Emesa  on  its  disposal.  Emesa 
was  successfully  sold  on  31  January  2013,  for  an 
enterprise value of €95 million. The Company received 
proceeds of £25.6 million providing the Company with 
a 3.1x return and an IRR of 94%.

In  the  year  there  were  a  number  of  follow-on 
investments in Broadstone Pensions and Investments 
Limited  (“Broadstone”)  and  Time  Out.  The  Limited 
Partnership  provided  a 
to 
Broadstone to fund the roll out of a new client platform; 
to  take  on  additional  staff  and  for  regulatory  and 
working capital. In addition, £3.3 million was provided 
to  fund  the  acquisition  of  the  pensions  and  actuarial 
business of Pope Anderson. 

further  £4.1  million 

The  Limited  Partnership  provided 
funding  of 
£4.8  million  to  Time  Out  Group  Limited  (“Time  Out 
London”)  to  pursue  its  digital  strategy  and  to  finance 
the costs of moving the print based magazine from a 
subscription  paid  model  to  a  free  magazine  from 
September  2012.  The  Limited  Partnership  also 
provided funding of £1.8 million to Time Out New York 
Limited  (“Time  Out  New  York”)  to  assist  with  the 
overhaul of its website and the addition of a bespoke 
e-commerce  platform  and  to  launch  the  Time  Out 
website in Los Angeles in September 2012. 

PERFORMANCE

The Company’s net asset value increased in the year 
by  £8.6  million  to  £227.6  million  as  at  31  December 
2012.  Of  this  total  net  asset  value,  £117.9  million 

represented  the  fair  value  of  investments  made  by 
the  Company 
into  the  Limited  Partnership  and 
£24.5  million  was  investments  made  directly  to  the 
Limited  Partnership’s  portfolio  companies  in  the  form 
of  mezzanine  finance  and  senior  loan  notes.  The 
Company  also  entered  into  a  short-term  revolving 
credit facility with the Limited Partnership to enable it to 
consolidate 
in 
advance  of  a  capital  call.  At  31  December  2012  the 
Limited  Partnership  had  borrowed  £19.3  million 
(including  accrued  interest)  under  this  facility.  The 
balance of £65.8 million was held by the Company as 
cash and cash equivalents and other assets. 

investments 

follow-on 

funding 

for 

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 
has 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 2012 have 
been established in accordance with The International 
Private Equity and Venture Capital Valuation Guidelines. 
The fair value of the underlying portfolio investments in 
the  Limited  Partnership  attributable  to  the  Company 
has  increased  by  £5.4  million  to  £117.9  million  at 
31 December 2012. 

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  interest  rates  typically  of  8.5%.  These 
investments in loan instruments fell by £8.1 million from 
£32.6 million as at 31 December 2011 to £24.5 million 
at 31 December 2012, due principally to the repayment 
of  loans  by  Intergenia  and  Headland  Media.  The 
interest  rate  on  the  revolving  credit  facility  with  the 
Limited Partnership is 6.5% of the balance owed by the 
Limited Partnership to the Company at 31 December 
2012  of  £19.3  million;  £16.2  million  was  repaid  in 
February 2013 from the proceeds of a capital call.

The  Company  held  cash  and  cash  equivalents  of 
£56.0 million at 31 December 2012. 

 
 
 
 
 
 
05

CHAIRMAN’S
STATEMENT

FOLLOW-ON INVESTMENTS

OUTLOOK

2013 started very positively for the Limited Partnership 
with the successful disposal of Emesa. The Investment 
Adviser to the Limited Partnership expects to consider 
additional realisation prospects in 2013. 

The  Investment  Adviser  continues  to  report  a  strong 
it  will  be 
deal  pipeline  and  anticipates 
the 
in 
recommending  acquisition  opportunities 
current year.

that 

James Keyes 
Chairman
23 April 2013

Broadstone 

During  2012, 
the  Limited  Partnership  provided 
additional funding to Broadstone in the form of equity 
financing  of  £7.3  million.  The 
funding  provided 
additional  working  capital  to  pursue  its  turnaround 
strategy  and  to  fund  regulatory  capital  and  to  fund 
the  pensions  and  actuarial 
the  acquisition  of 
consulting business of Pope Anderson LLP, and UBS’s 
London  based  corporate  pension  and  benefits 
consulting team.

Time Out London

In  2012,  the  Limited  Partnership  provided  additional 
funding  to  Time  Out  London  in  the  form  of  equity  of 
£4.8 million to fund working capital.

Daisy Group plc (“Daisy”)

On 15 April 2012, Daisy announced the completion of 
the  acquisition  of  Worldwide  Group  Holdings,  a 
market-leader in audio-conferencing and call-handling 
technology  with  a  focus  on  voice  services  and 
data connectivity.

Post balance sheet events

The  Limited  Partnership  successfully  completed  the 
sale of Emesa on 31 January 2013. Emesa was sold to 
a  fund  managed  by  Cyrte  Investments  B.V.  for 
€95 million, after a holding period of 22 months, with 
the  Limited  Partnership  receiving  net  proceeds  of 
€51.9 million. Following the sale, the Limited Partnership 
distributed  €45.6  million  to  Limited  Partners,  net  of 
performance  fees,  of  which  the  Company  received 
€29.7  million  (£25.6  million),  which  represents  a  3.1x 
money multiple and an IRR of 94% for the Company.

Coincidental with the distribution of Emesa proceeds, 
the  Limited  Partnership  made  a  capital  call  of  7%  of 
total  commitments,  amounting  to  €13.12  million 
(£11.3  million)  for  the  Company  lifting  total  drawn-
down capital to 72.5% of total commitments. To date, 
the  Limited  Partnership  has  returned  63%  of  total 
commitments to Limited Partners.

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06

MANAGER’S
REPORT

Manager’s Report

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MANAGER’S REPORT

THE COMPANY AND THE LIMITED PARTNERSHIP 

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

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

The  Limited  Partnership’s  investment  strategy  is  to 
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 
in  companies  with  an  enterprise  value 
interest 

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

MARKET BACKGROUND 

The  Investment  Adviser  has  operated  against  a 
backdrop of difficult market conditions almost from the 
inception  of  the  Limited  Partnership.  Despite  a 
background of faltering or stagnant economic activity 
the Limited Partnership’s portfolio companies have, in 
general, demonstrated good growth and the Investment 
Adviser  anticipates  that  this  will  continue.  Investor 
confidence  increased  during  the  year  against  a 
background  of  more  stability  to  the  currency  and 
financial  markets.  Whilst  economic  activity  in  Europe 
remains  subdued,  the  Investment  Adviser  has  seen 
growing  evidence  that  banks  are  concentrating  on 
clearing up their mid-market poor performing portfolios 
of assets and are selectively lending. One of the Limited 
Partnership’s  investments,  Daisy  Group  plc  (“Daisy”), 
secured in early 2013 a new £200 million debt facility. 
The Investment Adviser believes that it will continue to 
see good investment opportunities in 2013.

FINANCIAL HIGHLIGHTS

Assets at:

31 Dec
2007

31 Dec
2008

31 Dec
2009

31 Dec
2010

31 Dec
2011

31 Dec
2012

% change
2012/2007

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

227.6

1.81

136.5

3,105

3,416

129%

82%

34%

(6%)

0%

Operational performance

Increase in net assets resulting 
from operations (£m)

Net gain per share (£)

(0.6)

(0.01)

5.1

0.06

55.0

0.47

34.8

0.27

4.0

0.03

11.1

0.09

07

MANAGER’S
REPORT

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08

MANAGER’S
REPORT
continued

ANALYSIS OF MOVEMENTS IN NET ASSET VALUE FOR THE YEAR ENDED 31 DECEMBER 2012

Opening net asset value as at 1 January 2012

Gross revenue

Other expenditure

Realised gain on investments

Net unrealised appreciation of investments (excluding accrued interest)

Purchase of treasury shares

Closing net asset value as at 31 December 2012

£m

218.9

5.6

(1.4)

(1.1)

8.1

(2.5)

227.6

PERFORMANCE

The Company’s net asset value increased in the
year  from  £218.9  million  at  31  December  2011  to
£227.6  million,  a  rise  of  £8.7  million.  The  net  asset
value at 31 December 2012 is equivalent to £1.81 per
share, up from £1.71 at 31 December 2011, an
improvement of 10 pence, or 6%.

During 2012, the Limited Partnership did not call any
capital. However, the Company entered into a revolving
credit facility with the Limited Partnership to enable the
Partnership to make follow-on investments without the
need for a series of capital calls to raise the necessary

funds. This provided the Company with an opportunity
to utilise excess cash and generate a higher return than
it  would  have  done  if  the  cash  had  been  placed  on
deposit.  The  interest  on  the  revolving  credit  facility  is
6.5%. The Limited Partnership used the funds for
including a
follow-on investments into Broadstone,
bolt-on acquisition and Time Out, and smaller follow-
on investments into Emesa, Monument Securities
Limited (“Monument Securities”) and Headland Media
Limited (“Headland Media”). As at 31 December 2012,
the
facility was
£19.3 million.

outstanding

revolving

credit

MOVEMENTS IN INVESTMENT PORTFOLIO VALUES FOR THE YEAR ENDED 31 DECEMBER 2012

Verivox
Verivox

Daisy
Daisy

Emesa
Emesa

Intergenia
Intergenia

Time Out
Time Out

Broadstone
Broadstone

Headland
Headland
Media
Media

Monument
Monument

Cost at 31 December 2012
Cost at 31 December 2012

D

Value at 31 December 2011
Value at 31 December 2011

D

Value at 31 December 2012
Value at 31 December 2012

D

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£m
£m

–
–

5.0
5.0

10.0
10.0

15.0
15.0

20.0
20.0

25.0
25.0

30.0
30.0

 
 
 
 
 
 
09

MANAGER’S
REPORT
continued

The total increase in the year in the investment value of 
the  portfolio  companies  attributable  to  the  Company 
was £20.4 million. The change in values of the portfolio 
companies is attributable to two key factors:

(cid:2)

£8.8  million  as  a  result  of  additional  funding 
made  by  the  Limited  Partnership  into  existing 
portfolio companies:

The Limited Partnership injected further equity funding 
into Broadstone and Time Out London. The investment 
value of Broadstone was increased from £8.5 million at 
31  December  2011  to  £13.3  million  at  31  December 
2012, an increase of £4.8 million. Time Out increased 
from  £12.3  million  as  at  31  December  2011  to 
£16.3 million as at 31 December 2012 an increase of 
£4.0 million. 

(cid:2)

£11.6 million as a result of a net increase in the 
fair values of the underlying portfolio companies

Two of the portfolio companies, Intergenia and Emesa 
showed marked increases in their fair values in 2012. 
Intergenia  has  performed  well  since  its  acquisition 
in  December  2011.  The  web-hosting  sector  also 
enjoyed ratings expansion and as a result of these two 
factors,  the  investment  value  of  Intergenia  was  lifted 
to  £25.2  million,  an  increase  of  £8.8  million  from  its 
carrying value of cost at 31 December 2011.

Emesa also performed strongly in 2012, with increases 
in  revenue  and  EBITDA  from  2011.  The  investment 
value  at  31  December  2012  reflected  the  disposal 
proceeds at exit. For the Company, this represented a 
value of £24.1 million at 31 December 2012, an increase 
of £7.6 million over the value at 31 December 2011. 

The investment value in Verivox at 31 December 2012 
was  £23.1  million,  a  £4.4  million  reduction  from  its 
value  at  31  December  2011.  The  Investment  Adviser 
has taken a more cautious approach to valuation as a 
result of the demand-dampening factors which arose 
in 2011 and continued in the first quarter of 2012. In 
May 2012, a new CEO was appointed who initiated a 
new  growth  strategy.  Verivox  successfully  launched 
price  comparison  services  for  two  new  product 
verticals, car insurance and savings accounts in 2012. 
In  addition,  Verivox  ran  a  successful  nationwide  TV 
campaign  to  improve  transaction  volumes  and  gain 
market share. This campaign is continuing in 2013. On 
1 June 2012, Verivox made a distribution returning its 
cost of investment to the Limited Partners; amounting 
to  £2.7  million  for  the  Company.  Though  reduced, 
Verivox’s  restated  fair  value  still  represents  a  7.7x 
money multiple on cost.

There  was  a  small  increase  to  the  investment  value 
in  Headland  Media  of  £0.3  million  to  £6.1  million 
as  at  31  December  2012  from  £5.8  million  at 
31 December 2011.

fell 

Daisy’s  share  price 
from  95.5  pence  on 
31  December  2011  to  92  pence  on  31  December 
2012. This reduced the Company’s investment value in 
Daisy from £18.3 million to £17.7 million, a decrease of 
£0.6 million.

The combined effect of the changes to the fair values of 
the portfolio companies resulted in a net increase to the 
Company of £11.6 million. 

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10

MANAGER’S
REPORT
continued

PORTFOLIO INVESTMENT GROWTH 2012 BY SOURCE

Opening
Opening
valuation
valuation
£107.2m
£107.2m

Current
Current
valuation
valuation
£127.7m
£127.7m

50.0
50.0

40.0
40.0

30.0
30.0

20.0
20.0

10.0
10.0

–
–

£m Acquisitions
£m Acquisitions
during 2012
during 2012

Net trading
Net trading
performance
performance

Ratings
Ratings
expansion
expansion

Net
Net
debt
debt

Forex
Forex
movements
movements

Management
Management
share
share

Performance
Performance
fees
fees

Total
Total
increase
increase
in value
in value

of

the

The  above  chart  shows  the  growth  in  2012  of  the
investment  portfolio  attributed  to  its  source.  The  fair
value
Limited Partnership grew from
£107.2 million to £127.7 million, an increase of
£20.4  million.  The  increase  in  the  investment  value  is
primarily  due  to  the  improved  performance  of  Emesa
and Intergenia, which is reflected in both “Net trading
performance” and “Ratings expansion” above.

As mentioned earlier, Verivox’s investment value fell in
the  period  by  £4.4  million.  Within  this  net  decline,  a
downgrade in trading performance was largely

mitigated by an improvement in ratings enjoyed by the
sector. Indeed, the ratings not only for price comparison
websites but also for web-hosting and on-line
businesses have increased in 2012 from 2011, thereby
resulting in an overall increase in the values for these
companies.  As  a  result  of  the  underlying  investment
growth in 2012, the share attributable to management
has  also  increased  which  is  denoted  by  a  decrease
to NAV as seen above. Follow-on investments
“Acquisitions during 2012” also contributed to an
increase in values.

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COMPANY ASSET TYPES 2012

COMPANY ASSET TYPES 2011

52% Limited Partnership

29% Cash

19% Mezzanine, Senior
Loan Finance and
revolving credit
facility

51% Limited Partnership

34% Cash

15% Mezzanine and
Senior Loan
Finance

At  31  December  2012  the  Company’s  assets  were
divided between its investment in the Limited Partnership
(52%),  cash  and  cash  equivalents  (29%)  and  loans
provided  directly  to  portfolio  companies  (19%).  These
loans comprise mezzanine and senior finance loans to
the portfolio companies and a short-term revolving
credit facility with the Limited Partnership, ensuring that
uncalled cash continues to work for the Company
earning  a  positive  return.  At  31  December  2012  the

total value of
loans outstanding was £43.9 million
(2011:  £32.6  million).  The  net  increase  in  the  loans  of
£11.4 million is due to the new revolving credit facility
with  the  Limited  Partnership,  which  at  31  December
2012  was  £19.3  million  offset  by  the  repayment  of
£6.2 million of the Intergenia loan (of £8.4 million) and
the  repayment  in  full  of  the  Headland  Media  loan  of
£1.6 million.

SPLIT OF INVESTMENTS IN
LIMITED PARTNERSHIP 2012

SPLIT OF INVESTMENTS IN
LIMITED PARTNERSHIP 2011

19% Intergenia

18% Verivox

18% Emesa

14% Daisy

13% Time Out Group

10% Broadstone

5% Headland Media

1% Monument

2% Cash and other
net assets

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

2012 shows a moderately more even distribution than
2011 with, in broad terms, a reduction in the influence
of Verivox, being taken up by small
increases in
Intergenia and Emesa such that all three represent very
similar percentages in 2012.

The diversification of the portfolio distribution by sector
shows a similar flattening distribution in 2012 compared
to 2011. The relatively high decline in the influence of
consumer services, driven by the adjustment
to
Verivox’s fair value is taken up by increases in

technology (Intergenia) and e-commerce (Emesa). With
six sectors, none of which account for over 20% of the
total,  the  sector  distribution  at  the  end  of  2012  was
very evenly balanced.

The  diversification  of  the  geographical  spread  of  the
portfolio  companies  has  not  changed  significantly.  In
2012, the division was 39% Germany; 37% UK; 19%
Netherlands; and 5% in the USA. In 2011 the division
was; 41% Germany; 38% UK; 16% Netherlands; and
5% in the USA.

PORTFOLIO DISTRIBUTION BY SECTOR 2012

PORTFOLIO DISTRIBUTION BY SECTOR 2011

20% Technology

19% e-Commerce

18% Consumer services

17% Digital media/
Publishing

14% Telecoms

12% Financial
services

26% Consumer services

17% Digital media/
Publishing

17% Telecoms

15% Technology

15% e-Commerce

10% Financial
services

11

MANAGER’S
REPORT
continued

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12

DIRECTORS’
REPORT

Directors’ Report

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DIRECTORS’ REPORT

DIRECTORS’ FUNCTIONS 

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.  He 
established  the  Bermuda  office  of  Renaissance,  for 
which he has responsibility, in 2008. 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  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.

PETER DUBENS 

Peter  Dubens  is  the  founder  of  Oakley  Capital,  a 
privately  owned  asset  management  and  advisory 
funds, 
group  comprising  private  equity, 
corporate  finance,  capital  introduction  and  venture 

fund  of 

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  the 
Limited  Partnership  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. Peter is also 
a  director  of  Oakley  Capital  (Bermuda)  Limited  (“the 
Investment Manager”) and Oakley Capital GP Limited, 
the general partner of the Limited Partnership. During 
the  last  23  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  industry 
and  the  Pipex  platform  consolidated  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.  Peter  is  a  resident  of  the 
United Kingdom.

LAURENCE BLACKALL 

Laurence has had a 30 year career in the information, 
media  and  communication  industries.  After  an  early 
career  at  Virgin  and  SEMA  he  went  on  to  pioneer 
electronic  publishing  at  Frost  &  Sullivan  and  then 
McGraw  Hill  where  he  was  a  vice-president.  He  then 
went on to found AIM listed Internet Technology Group 
plc in 1995 and successfully negotiated its sale in 2000 
for  a  consideration  of  almost  £150  million.  Laurence 
was  also 
in  the  creation  of  Pipex 
Communications  plc.  He  has  interests  in  a  range  of 
leisure  and  TMT  businesses  and  currently  holds  a 
number  of  directorships  in  public  and  private  UK 
companies. He has an MA in Marketing. Laurence is a 
resident of the United Kingdom. 

instrumental 

IAN PILGRIM 

Ian Pilgrim is chief executive officer of the Administrator, 
Mayflower Management Services (Bermuda) Limited, a 
corporation  which  provides  consultancy  and  other 
services to hedge funds and is the administrator to the 
Company  and  the  Limited  Partnership.  Prior  to 
founding  the  Administrator  in  January  2006,  he  was 
the  managing  director  of  Citco  Fund  Services 
(Bermuda) Limited and also served as general counsel 
to  Citco  Fund  Services  from  January  2001  until 
December  2005.  Before  joining  Citco,  Ian  practiced 
from January 1997 until December 2000 as a barrister 
and  attorney  with  M.L.H.  Quin  &  Co.  (now  Wakefield 
Quin) in Bermuda. From 1994 to 1996, he practiced as 
a solicitor with Allen & Overy in Hong Kong where he 

13

DIRECTORS’
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14

DIRECTORS’
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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  Oakley  Capital  (Bermuda)  Limited 
(“the  Investment  Manager”)  and  Oakley  Capital  GP 
Limited, the General Partner of the Limited Partnership. 
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 
full 
Management  Agreement, 
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 

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

The Investment Adviser is authorised and regulated by 
the FCA. 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  are  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 are each 
comprised of all the Independent Directors. The audit 
committee 
the 
remuneration committee is chaired by James Keyes. 

is  chaired  by  Tina  Burns  and 

the 

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

to,  and  oversees 

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 of the Company may participate in any meeting 
at which discussion or any decision regarding his own 
remuneration takes place. 

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

 
 
 
 
 
 
15

DIRECTORS’
REPORT
continued

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 
140,000 shares of the Company and Laurence Blackall 
is  the  beneficial  owner  of  200,000  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 2 April 2013, 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

Rothschild Bank, Zurich

Blackrock Investment Management

Henderson Global Investors 

Henderson Volantis Capital

31.4%

17.9%

10.0%

 7.0%

 7.0%

 6.8%

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16

REVIEW OF
REVIEW OF
INVESTMENTS
INVESTMENTS

REVIEW OF INVESTMENTS

SUMMARY

Assets at fair value

Investment in Limited Partnership

Mezzanine loans:

Headland Media
Broadstone
Time Out

Senior loans:

Verivox
Time Out
Intergenia

Revolving credit facility

Total investments

1Repaid to the Company in full in 2012

2Part repayment to the Company in 2012

in  the  Limited 
invests  principally 
The  Company 
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 2012, the Company had invested by 
way  of  capital  calls  a  total  of  £102.2  million  in  the 
Limited  Partnership  since  inception.  In  2012,  the 
Company also provided the Limited Partnership with a 
short-term  revolving  credit  facility  to  fund  follow-on 
investments into existing portfolio companies, of which 
£19.3 million was outstanding at 31 December 2012. 
The  Limited  Partnership  made  no  capital  calls  during 
follow-on 
2012,  choosing 
investments  via 
facility  and 
as  a  result,  the  percentage  of  capital  called  at 
31  December  2012  remained  at  the  31  December 
2011 level of 65.5%. 

instead 
to 
the  revolving  credit 

fund 

the 

At  31  December  2012,  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 
£5.3  million  from  £112.6  million  as  at  31  December 
2011  to  £117.9  million  as  at  31  December  2012.  Of 
this  increase,  £12.9  million  is  attributable  to  the  net 
increase  in  fair  values  of  the  underlying  portfolio 
companies, particularly Emesa and Intergenia; follow-
on  investments  made  by  the  Limited  Partnership  in 
Broadstone and Time Out group and smaller follow-on 
investments in Emesa, Headland Media and Monument 
Securities.  The  total  follow–on  investments  on  a  look 

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Fair value   
2012 (£m)   

Fair value
2011 (£m)

 117.9   

 112.6 

– 1
6.0   
9.3   

–   
7.1   
2.2 2

19.3   

1.6
6.0
9.4

–
7.2
8.4

–

161.8   

145.2

through  basis  for  the  Company  accounted  for  an 
investment  increase  of  £9.3  million.  Verivox  made  a 
cash distribution of the total invested cost back to the 
Limited  Partnership  amounting  for  the  Company  to 
£2.7 million, which results in a decrease in value in the 
Limited Partnership. The Limited Partnership cash and 
net  assets  decreased  by  £2.2  million.  Also  offsetting 
the increase in value of the Limited Partnership is the 
revolving  credit  facility  with  the  Company  which  is 
shown  as  a  liability  in  the  Limited  Partnership.  The 
Company’s share of this on a look through basis is a 
liability of £12.9 million. Whilst this is shown as a liability 
in  the  Limited  Partnership’s  books,  for  the  Company 
the gross value of the facility represents an investment 
asset which is earning interest at 6.5% per annum.

In addition to its investments in the Limited Partnership, 
the Company has provided loans directly to a number 
of the portfolio companies.

At  31  December  2011,  Headland  Media  had  a 
mezzanine  loan  of  £1.6  million  outstanding.  This  was 
repaid in full in February 2012. 

At  31  December  2012, 
the  Company  had  an 
outstanding  mezzanine  loan  with  Broadstone  via 
Fitzwilliam  Holdco  Limited  of  £6.0  million  with  an 
interest  rate  of  15.0%  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  £6.2  million.  The  interest  rate  is 
15.0%  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 no later than March 2016. 

 
 
 
 
 
 
 
 
The  Company  also  provided  mezzanine  loans  and 
senior  debt  finance  to  Time  Out  New  York.  The 
mezzanine finance was £3.1 million at an interest rate 
of 15.0% 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.

In December 2011, the Company provided senior debt 
finance to Intergenia of £8.4 million (€10.0 million). The 
loan notes have an annual interest rate of 8.5% and are 
due  to  be  repaid  in  November  2013.  During  2012, 
Intergenia repaid £6.2 million (€8.0 million) of the debt 
plus interest.

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.  These  take  the  form  of  a  revolving  credit 
facility and generally have a term of six months and an 
interest  rate  of  6.5%.  The  revolving  credit  facility  is 
underwritten  by  capital  calls.  The  interest  generated 
from  the  facility  exceeds  the  interest  earned  on  the 
Company’s  bank  deposits,  allowing  the  Company  to 
earn  higher  returns  on  part  of  its  cash  reserves. 
During  2012,  the  Company  provided  to  the  Limited 
Partnership  £19.3  million  at  an  interest  rate  of  6.5%. 
£16.2 million of the revolving credit facility was repaid in 
February 2013.

The  following  pages  under  Review  of  Investments 
provide  a  summary  in  relation  to  each  of  the  Limited 
Partnership’s  portfolio  companies,  including  those 
which have been sold. In these summaries, the values 
of  the  Company’s  interest  in  the  relevant  portfolio 
company  represent  the  values  attributable  to  the 
Company on a look through basis.

17

REVIEW OF 
INVESTMENTS

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19

REVIEW OF
INVESTMENTS
continued

Sector:
Telecoms 

Location:
United Kingdom

Investment date:
21 July 2009 

Website:
www.daisygroupplc.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 
telecommunications  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  28  November  2012  Daisy  announced  its  interim  results  for  the  six  months 
ended 30 September 2012. Revenues were £178 million which were £2 million 
higher than those in the previous six month period. Adjusted EBITDA increased 
from £26.6 million in the six months to 30 September 2011 to £27.3 million for the 
six months to 30 September 2012. Cash conversion remained strong with free 
cash flow of £17 million being generated in the six months to 30 September 2012. 
In  April  2012,  the  Group  completed  the  acquisition  of  the  audio-conferencing 
specialist Worldwide Group Holdings Limited for an initial cash consideration of 
£28.4  million.  In  order  to  complete  the  acquisition,  the  Group  increased  its 
borrowing facility by a further £25 million taking total bank facility to £140 million. 
On 10 April 2013, Daisy announced its intention to declare a maiden dividend of 
4.0 pence per ordinary share in respect to the year to 31 March 2013.

The  Daisy  share  price  on  31  December  2012  was  92  pence;  down  from 
95.5 pence at 31 December 2011. The share price at 31 December 2012 was 
used to establish the fair value of the investment.

DAISY GROUP 

Enterprise
value at
acquisition

N/A

Total
equity
held

13.6%

Value of
Company’s 
interest at 
acquisition

Fair value
of the
Company’s
interest

N/A

£17.7m

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21

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 and this contribution was fully repaid to the 
Limited Partnership from operating cash flow on 1 June 2012. 

In addition, the Company provided €13.0 million in the form of mezzanine finance 
and a bridging loan. These loans were fully repaid from operating cash flow in the 
first 16 months of ownership.

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  13  year  history.  The  company  receives 
commission  from  energy  suppliers  when  consumers  elect  to  switch  providers 
through its website. Verivox is a well recognised brand in Germany and is regularly 
quoted by media as an independent source of energy price data. The company 
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. 

BUSINESS UPDATE

Trading in 2012 started slowly as a result of the continuation of the factors which 
depressed switching levels in the second half of 2011. These were primarily; a loss 
of consumer confidence in the sector following the insolvency of a highly active 
new entrant in the German energy supply market; and the sacrifice by a number 
of energy suppliers of their anticipated price increases in 2011, which previously 
provided a stimulus to consumer switching. A new CEO was appointed on 1 May 
2012 who has subsequently introduced a number of initiatives to improve Verivox’s 
positioning and profitability. Verivox has successfully launched price comparison 
services  for  two  new  products,  car  insurance  and  savings  accounts  and  has 
launched a nationwide TV advertising campaign to improve transaction volumes 
and market share. Verivox also updated its website to improve the conversion rate 
of its visitors to customers. 

The fair value of Verivox as at 31 December 2012 is based on its forecast EBITDA 
for 2013.

PERFORMANCE

Revenue for the year to 31 December 2012 was €42.8 million with an EBITDA of 
€15 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

£23.1m

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

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REVIEW OF
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23

REVIEW OF
INVESTMENTS
continued

Sector:
Digital media/publishing

Investment dates:
25 November 2010 and 26 May 2011 

Location:
United Kingdom and USA 

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  balance  is  held  by  Tony  Elliott,  the  founder.  The  Limited  Partnership 
subscribed for total equity of £9.3 million to 31 December 2011 and the Company provided loan funding in the form 
of mezzanine finance of £6.2 million and senior debt of £5 million. Of this funding, £1.7 million was used to provide 
a loan to Tony Elliott, secured against 10% of the Company’s equity held by him. During 2012 the Limited Partnership 
provided additional funding of £4.8 million to assist Time Out with its strategic objectives and to provide working 
capital.  In  addition,  Tony  Elliott  repaid  £1.0  million  of  the  loan  provided  to  him,  the  proceeds  of  which  were  re-
invested by the Limited Partnership in Time Out London, as a result of which the Limited Partnership’s equity stake 
increased to 51% on a fully diluted basis.

On 26 May 2011, the Limited Partnership acquired 65.7% of Time Out America LLC (“Time Out New York”) on a 
fully  diluted  basis.  The  Limited  Partnership  subscribed  for  equity  of  £9.3  million  ($15  million)  and  the  Company 
provided a mezzanine loan of £3.1 million and a senior loan of £2.1 million. The investment was anticipated to be 
synergistic and would enhance the Fund’s previous investment in Time Out London to create a global digital media 
group. In combination, Time Out New York and Time Out London control the worldwide rights to the Time Out 
brand (excluding Chicago). During 2012, the Limited Partnership provided additional funding of £1.8 million to Time 
Out New York to provide working capital and to assist with the rollout of a new platform.

BUSINESS OVERVIEW

Time Out was established in 1968 by Tony Elliott and today is a globally recognised brand in the publishing industry 
that  publishes  city-based  magazines  and  travel  guides  and  is  beginning  to  build  an  online  presence.  The 
development of the internet has presented Time Out 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

During 2012, the Time Out New York website was re-launched on the new Global Platform providing additional 
content and a better user experience which will form the basis of Time Out’s worldwide digital growth. In addition 
the first Time Out iPad application was launched covering London and New York and further improvements were 
made to the mobile applications. 

As a result of the digital investment, Time Out London has seen strong digital brand growth with corresponding 
growth in digital advertising and e-commerce revenues. The London website had five million monthly unique users 
at the year end. Digital revenues for the year were 79% up year on year. 

In September 2012, Time Out London re-launched as a free magazine resulting in an increase in weekly circulation 
from  50,000  to  305,000  in  the  final  four  months  of  2012.  The  increase  in  circulation  has  driven  growth  in  print 
advertising revenues and significantly increased the overall reach of the Time Out brand. 

Following the fair value exercise at 31 December 2012, it has been decided to value Time Out at its total cost as 
the business is still in its development phase. 

PERFORMANCE

Revenue  for  the  year  to  31  December  2012  was  £28  million  with  an  EBITDA  loss  of  £3.1  million.  Time  Out 
London’s total revenues were up by 12% compared to the previous year. Trading in New York has been slower 
than anticipated. 

TIME OUT GROUP

 Enterprise value
at acquisition

Total
equity held

Value of Company’s 
interest at acquisition 

Fair value of the
Company’s interest

£32.4m 

Time Out London 51.0% 
Time Out New York 65.7% 

£25.8m

£32.7m

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25

REVIEW OF
INVESTMENTS
continued

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. 
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. Since acquisition, the Limited Partnership provided a further 
£2.4  million  to  fund  part  of  the  deferred  consideration  and  to  provide  working 
capital to support the German operation.

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  2012  received  over 
2.3  million  transactions  with  a  current  run  rate  of  over  two  million  customer 
transactions per annum.

BUSINESS UPDATE

Emesa continued to trade well in the Netherlands, outperforming the budget for 
2012. Management pursued a revised strategy in Germany, targeting partnerships 
with key media players to provide traffic and content. As a result, the cost base in 
Germany was reduced. 

Emesa’s value at 31 December 2012 was valued at its exit value.

PERFORMANCE

Net revenue for the year to 31 December 2012 was €34.0 million with an EBITDA 
of €8.6 million for the Group.

POST BALANCE SHEET EVENTS

On  31  January  2013,  the  Fund  announced  the  disposal  of  Emesa  to  Cyrte 
Investments B.V. for a gross consideration of €95 million. The consideration was 
used  to  pay  bank  debt;  vendor  loan  note,  locked  box  adjustments  and 
management  interests  resulting  in  net  proceeds  to  the  Limited  Partnership  of 
€51.9  million.  The  Company  received  proceeds  of  €29.7  million  (approx 
£25 million) as a result of the disposal of Emesa. This represents a 3.1x multiple 
for the Company and an IRR of 94%.

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

£24.1m

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

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27

REVIEW OF
INVESTMENTS
continued

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. The Limited Partnership 
provided additional funding in the form of equity of £6.2 million during 2011 and 
£7.3  million  in  2012.  The  funding  provided  additional  working  and  regulatory 
capital and £3.3 million was used to fund the acquisition of Pope Anderson.

BUSINESS OVERVIEW

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

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

BUSINESS UPDATE

Since acquisition the business has made a significant investment in people and 
technology. The business recruited two new senior directors in each of its divisions 
to drive revenue growth. The business has engaged a number of consultants who 
can  bring  value  and  assets  to  Broadstone.  On  7  November  2012  Broadstone 
completed the acquisition of the pensions and actuarial consultancy business of 
Pope Anderson LLP. The business is expected to generate around £4 million of 
revenue per annum and will add approximately £1 million of annual EBITDA. The 
Pope Anderson acquisition also provided Broadstone with a northern base from 
which  to  operate.  In  addition,  Broadstone  engaged  the  corporate  pension  and 
benefits team formerly with UBS, London. The fair value of the Limited Partnership’s 
investment  in  Broadstone  remains  at  cost  but  has  increased  from  its  value  at 
31  December  2011  due  to  the  bolt-on  acquisition,  additional  funding  and 
exchange movements.

PERFORMANCE

Broadstone’s year end is 30 June. Total revenues for the 12 months to 30 June 
2012 were £13.4 million with an EBITDA loss of £1.7 million. The business has 
invested in a scalable client asset platform whilst seeking to grow the business 
through both organic growth and 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

£19.3m

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29

REVIEW OF
INVESTMENTS
continued

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  currently  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. £6.2 million of 
debt  plus  interest  was  repaid  during  2012,  leaving  a  balance  of  £2.2  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 
trades  under 
three  different  hosting  brands:  PlusServer,  Serverloft  and 
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. 
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, the largest series of hosting conferences worldwide.

BUSINESS UPDATE

Intergenia reported a strong trading performance in 2012. During the first quarter 
of  2012,  management  launched  a  new  product  range  for  SERVER4YOU  and 
Serverloft which has been well received. Intergenia appointed a new CEO, CMO 
(Chief Marketing Officer), CFO, and CTO (Chief Technology Officer) during 2012 
significantly  strengthening  the  management  team.  Management  successfully 
launched a new high bandwidth hosting product. Intergenia began to build-out 
another  data  room  in  its  Strasbourg  data  centre  which  is  forecast  to  provide 
European capacity through to 2015.

PERFORMANCE

Intergenia  has  traded  well  in  2012  with  revenues  of  €30.5  million  (2011: 
€26.7  million)  and  EBITDA  of  €13.3  million  (2011:  €12.4  million).  In  the  year, 
Intergenia  was  able  to  repay  £6.2  million  of  its  senior  debt  plus  interest  out  of 
operating cash flow to the Company leaving a balance of £2.2 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

£27.4m

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30

REVIEW OF
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continued

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31

REVIEW OF
INVESTMENTS
continued

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  (“Headland  Media”)  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 had £1.6 million of mezzanine loan outstanding, which 
was fully repaid in February 2012.

BUSINESS OVERVIEW 

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 
(one-off 
installation)  charges.  Headland  Media  has  a  loyal  customer  base  and  provides 
services to 1,600 hotels and 7,600 cruise and merchant ships.

(subscription)  revenue  and  non-recurring 

from  recurring 

BUSINESS UPDATE 

Headland Media launched a number of new products in 2012 including a social 
network product for mariners to allow Headland Media to engage with crew and 
a  streaming  only  music  platform  for  smaller  retailers  and  leisure  clients.  A  new 
pay-as-you-go news digest platform has been developed for budget cruise lines. 
Headland Media has continued to grow its hotel business with 347 new hotels 
added in the year.

PERFORMANCE

Headland Media’s financial performance for the year to 31 December 2012 was 
slightly behind budget due to the effect of the weak Euro. On 16 February 2012, 
Headland Media repaid the Company its £1.6 million mezzanine debt and interest 
in full which was funded by £1.0 million of bank debt and the remaining balance 
from internally generated cash. Revenues for the year to 31 December 2012 were 
£8.1 million (2011: £8.4 million) and EBITDA was £2.2 million (2011: £2.2 million).

HEADLAND MEDIA 

Enterprise
value at
acquisition

£7.9m

Total
equity
held

80%

Value of
Company’s 
interest at 
acquisition

Fair value
of the
Company’s
interest

£5.9m

£6.1m

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32

REVIEW OF
INVESTMENTS
continued

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33

REVIEW OF
INVESTMENTS
continued

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 
(“Monument Securities”) which was funded by equity of £2.8 million. The Limited 
Partnership  provided  additional  funding  in  the  form  of  equity  of  £0.6  million 
during 2012.

BUSINESS OVERVIEW 

Monument  Securities  is  an  independent  equity,  derivatives  and  fixed  income 
broker  with  a  history  in  excess  of  20  years.  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 

Trading volumes and overall levels of market activity continued to be depressed 
for much of 2012. Accordingly, a cost cutting programme was instigated involving 
closing  down  a  research  project,  cancellation  of  various  data  systems  and  a 
number of redundancies. 

The fair value at 31 December 2012 has been assessed at its initial cost. 

PERFORMANCE

Total  revenue  for  2012  was  £4.2  million  compared  to  £6.4  million  for  2011. 
Losses were held at £0.3 million (2011: £0.2 million).

HEADLAND MEDIA 

Enterprise
value at
acquisition

£5.6m

Total
equity
held

51%

Value of
Company’s 
interest at 
acquisition

Fair value
of the
Company’s
interest

£1.8m

£1.8m

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DISPOSALS

35

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

Total
equity
held

Value of
Company’s 
interest at 
acquisition

Exit value
of the
Company’s
interest

£128.0m

83%

£51.0m

£92.6m

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Independent Auditor’s Report

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37

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  financial  statements  of  Oakley  Capital 
Investments Limited (the “Company”), which comprise the statements of assets 
and  liabilities, including the schedules  of investments as of 31 December 2012 
and  2011,  and  the  related  statements  of  operations,  changes  in  net  assets 
and  cash  flows  for  the  years  then  ended,  and  the  related  notes  to  the 
financial statements.

Management’s responsibility for the financial statements

Management  is  responsible  for  the  preparation  and  fair  presentation  of  these 
financial  statements  in  accordance  with  US  generally  accepted  accounting 
principles; this includes the design, implementation, and maintenance of internal 
control  relevant  to  the  preparation  and  fair  presentation  of  financial  statements 
that are free from material misstatement, whether due to fraud or error.

Auditors’ responsibility

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 from material misstatement. 

An  audit  involves  performing  procedures  to  obtain  audit  evidence  about  the 
amounts  and  disclosures  in  the  financial  statements.  The  procedures  selected 
depend on the auditors’ judgment, including the assessment of the risk of material 
misstatement of the financial statements, whether due to fraud or error. In making 
those  risk  assessments,  the  auditor  considers  internal  control  relevant  to  the 
entity’s  preparation  and  fair  presentation  of  the  financial  statements  in  order  to 
design audit procedures that are appropriate in the circumstances, but not for the 
purpose  of  expressing  an  opinion  on  the  effectiveness  of  the  entity’s  internal 
control. Accordingly, we express no such opinion. An audit also includes evaluating 
the  appropriateness  of  accounting  policies  used  and  the  reasonableness  of 
significant accounting estimates made by management, as well as evaluating the 
overall presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate 
to provide a basis for our audit opinion.

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 2012 and 2011, and the results of its operations and its cash 
flows  for  the  years  then  ended  in  accordance  with  US  generally  accepted 
accounting principles. 

KPMG
Chartered Accountants
Hamilton, Bermuda
23 April 2013

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38

FINANCIAL
STATEMENTS

Financial Statements

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FINANCIAL STATEMENTS

STATEMENTS OF ASSETS AND LIABILITIES 
FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011
(Expressed in British Pounds)

Assets

Investments (cost 2012: £102,333,819; 2011: £93,752,827)

Cash and cash equivalents

Accrued interest and accounts receivable

Other receivables 

Total assets 

Liabilities

notes

5, 7

3

2012
£

2011
£

161,806,610

145,143,787

56,036,923

70,108,870

10,087,914

3,961,377

33,993

15,638

227,965,440

219,229,672

Accounts payable and accrued expenses

4

401,043

300,960

Total liabilities 

401,043

300,960

Net assets attributable to shareholders

227,564,397

218,928,712

Represented by:

Share capital

Share premium 

Retained earnings 

Less: Treasury stock (2,063,650 shares at cost)

Number of shares outstanding

1,281,250

1,281,250

119,276,094

119,276,094

109,519,050

98,371,368

230,076,394

218,928,712

(2,511,997)

–

227,564,397

218,928,712

126,061,350

128,125,000

9

9

Net asset value per share

1.81

1.71

Signed on behalf of the Board on 23 April 2013

Ian Pilgrim 
Director 

 Tina Burns
 Director

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

39

FINANCIAL
STATEMENTS

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40

FINANCIAL
STATEMENTS
continued

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SCHEDULES OF INVESTMENTS
FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011
(Expressed in British Pounds)

31 December 2012

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. 

51.83%

65.15%

58,354,206

117,940,422

Unquoted debt securities

Investments in senior loan notes 

United Kingdom 

Time Out London
Interest at 8.5% p.a.
Maturity date March 2013

United States

Time Out New York
Interest at 8.5% p.a.
Maturity date May 2014

Germany

Intergenia
Interest at 8.5% p.a.
Maturity date November 2013

Total senior loan notes

Investments in mezzanine loans

United Kingdom

Broadstone
Interest at 15% p.a.
Maturity date November 2015

Time Out London
Interest rate at 15% p.a. 
Maturity date November 2015

United States

Time Out New York
Interest rate at 15% p.a. 
Maturity date May 2016

Total mezzanine loans

Investments in revolving loan facility

Bermuda

2.20%

£5,000,000

5,000,000

5,000,000

0.92%

$3,400,000

2,109,020

2,091,000

0.95%

4.07%

€2,660,415

2,226,236

2,157,331

9,335,256

9,248,331

2.64%

£6,000,000

6,000,000

6,000,000

2.72%

£6,200,000

6,200,000

6,200,000

1.35%

6.71%

$5,000,000

3,101,500

3,075,000

15,301,500

15,275,000

Oakley Capital Private Equity L.P.

8.50%

£19,342,857

19,342,857

19,342,857

Total revolving loan facility

8.50%

19,342,857

19,342,857

Total Investments 

71.11%

102,333,819

161,806,610

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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SCHEDULES OF INVESTMENTS (continued)
FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011
(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 London
Interest at 8.5% p.a. 
Maturity date March 2013

United States

Time Out New York
Interest at 8.5% p.a. 
Maturity date May 2014

Germany

Intergenia
Interest at 8.5% p.a. 
Maturity date November 2013

Total senior loan notes

Investments in mezzanine loans

United Kingdom

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

Broadstone
Interest at 15% p.a.
Maturity date November 2015

Time Out London
Interest rate at 15% p.a. 
Maturity date November 2015

United States

Time Out New York
Interest rate at 15% p.a. 
Maturity date May 2016

Total mezzanine loans

Total Investments 

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%

66.29%

$5,000,000

3,101,500

3,228,000

16,947,445

17,042,000

93,752,827

145,143,787

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

41

FINANCIAL
STATEMENTS
continued

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42

FINANCIAL
STATEMENTS
continued

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011
(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

2012
£

2011
£

5,821,871

5,570,248

(210,897)

(117,436)

5,610,974

5,452,812

665,995

81,465

330,617

331,392

6,595

591,481

–

339,923

339,023

1,721

1,416,064

1,272,148

4

4

6,10

Net investment income

4,194,910

4,180,664

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

Net realised (losses) gains on foreign exchange

Net change in unrealised (losses) gains on foreign exchange

Net realised losses on sales of investments

Net change in unrealised appreciation (depreciation) on investments 

Net realised and unrealised gains (losses) on foreign exchange 
and investments

Net earnings

(409,762)

(26,119)

(693,178)

8,081,831

502,413

12,362

(524,533)

(189,536)

6,952,772

(199,294)

11,147,682

3,981,370

Net earnings per share

9

0.09

0.03

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

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43

FINANCIAL
STATEMENTS
continued

STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011
(Expressed in British Pounds)

2012
£

2011
£

Net increase in net assets resulting from operations

Net investment income

4,194,910

4,180,664

Net realised (losses) gains on foreign exchange

Net change in unrealised (losses) gains on foreign exchange

Net realised losses on sales of investments

Net change in unrealised appreciation (depreciation) on investments

(409,762)

(26,119)

(693,178)

8,081,831

502,413

12,362

(524,533)

(189,536)

Net increase in net assets resulting from operations

11,147,682

3,981,370

Net decrease in net assets resulting from capital transactions

Share repurchase

Net decrease in net assets resulting from capital transactions

(2,511,997)

(2,511,997)

–

–

Net increase in net assets

8,635,685

3,981,370

Net assets at beginning of year

218,928,712

214,947,342

Net assets at end of year

227,564,397

218,928,712

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

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STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011
(Expressed in British Pounds)

2012
£

2011
£

Cash flows from operating activities

Net increase in net assets resulting from operations

11,147,682

3,981,370

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

Net realised and unrealised (gains) losses on foreign exchange 
and investments

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 

(6,952,772)

199,294

(19,582,473)

(80,448,664)

10,308,303

28,299,047

(6,126,537)

(3,147,238)

(18,355)

100,083

13,915

(219,356)

Net cash used in operating activities

(11,124,069)

(51,321,632)

Cash flows from financing transactions

Payments for shares repurchased

Cash used in financing transactions

Net effect of foreign exchange

Net decrease in cash and cash equivalents

(2,511,997)

(2,511,997)

–

–

(435,881)

514,775

(14,071,947)

(50,806,857)

Cash and cash equivalents at beginning of year

70,108,870

120,915,727

Cash and cash equivalents at end of year

56,036,923

70,108,870

Interest paid during the year

6,595

1,721

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

44

FINANCIAL
STATEMENTS
continued

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45

NOTES TO THE 
FINANCIAL
STATEMENTS

NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 

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 two directors 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 may 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 received 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  its  investments  at  fair  value  and  recognises  gains  and  losses  on  security 
transactions using the specific cost method.

 Mezzanine loans, bridge loans, senior loans and revolving credit facilities
 Mezzanine loans, bridge loans, senior loans and revolving credit facilities 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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 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 spreads, 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 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  discretion  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 the 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.

46

NOTES TO THE 
FINANCIAL
STATEMENTS
continued

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47

NOTES TO THE 
FINANCIAL
STATEMENTS
continued

3. CASH AND CASH EQUIVALENTS

 Cash and cash equivalents at 31 December 2012 and 2011 consist of the following:

Cash

Short-term deposits 

2012
£

2011
£

14,437,917

1,010,856

41,599,006

69,098,014

56,036,923

70,108,870

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  2012,  the  Company 
incurred management fees of £665,995 (2011: £591,481). As at 31 December 2012, management fees in the 
amount of £38,641 were payable to the Manager (2011: £105,892).

 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 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 2012, the Company incurred performance fees of £81,465 (2011: £nil). 

(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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48

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
2012
£

31 December
2011
£

–

–

–

–

Significant unobservable inputs (Level 3)

161,806,610

145,143,787

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

 The Company has an investment in 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. 

 Because of the inherent uncertainty of valuing unquoted private equity investments, the estimated fair values 
may differ from the values that would have been used had a ready market for such investments existed and 
such differences may be material. Mezzanine loans, bridge loans, senior loans and revolving credit facilities 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% (2011: 15%), the secured loans 8.5% (2011: 8.5%) 
and the revolving credit facility 6.5%.

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49

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 loss on disposal

Net change in unrealised appreciation (depreciation) on investments

Investment
in Securities
2012
£

Investment
in Securities
2011
£

112,553,747

73,977,584

239,616

39,049,714

(2,737,153)

(476,619)

8,360,831

–

–

(473,551)

Limited Partnership, fair value at end of year

117,940,422

112,553,747

Unquoted debt securities

Fair value at beginning of year

Purchases 

Proceeds on disposal 

Net realised loss on disposal 

Net change in unrealised (depreciation) appreciation on investments

32,590,040

19,730,655

19,342,857

41,398,950

(7,571,150)

(28,299,045)

(216,559)

(279,000)

(524,533)

284,013

Unquoted debt securities, fair value at end of year

43,866,188

32,590,040

Fair value at end of year

161,806,610

145,143,787

 The net change in unrealised appreciation or depreciation on investments relates to investments held at the 
respective year end. Of the investments held by the Limited Partnership, 15% (2011: 19%) are classified as 
Level 2 investments and 85% (2011: 81%) are classified as Level 3 investments by the Limited Partnership. 

6. ADMINISTRATION FEE

 Under  the  terms  of  the  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 2012, the Company 
incurred  administration  fees  of  £157,060  (2011:  £161,296),  which  is  included  in  professional  fees  in  the 
Statements of Operations.

7. INVESTMENTS

 Limited Partnership
 The Company has committed substantially all of its capital to the Limited Partnership and its successor fund, 
Oakley  Capital  Private  Equity  II  L.P.  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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50

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  2012  was 
£99,534,618 (€122,745,860) (2011: £101,932,105 (€122,485,000), representing 65.15% of the Company’s 
total  capital  commitment.  During  the  year  ended  31  December  2012  the  Company  acquired  Centrecourt 
Ventures  Inc.’s  interest  in  the  Limited  Partnership  comprising  a  commitment  of  €398,260,  accounting  for 
0.14% of the Limited Partnership’s committed capital. 

 As at 31 December 2012, the Company accounted for 65.15% of the total capital and commitments in the 
Limited Partnership (2011: 65.01%). The Company may also make co-investments with the Limited Partnership 
based on the recommendations of the Manager. 

 At  31  December  2012  all  of  the  Limited  Partnership’s  investments  are  carried  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. 

 Limited Partnership’s investments
 The  Limited  Partnership  made  follow-on  investments  in  six  of  the  portfolio  companies  in  2012.  These 
investments were in Emesa, The Time Out Group, Broadstone, Monument Securities and Headland Media. 
The  Company  also  increased  its  investment  in  the  Limited  Partnership  through  a  revolving  credit  facility 
advanced to the Limited Partnership.

 Headland Media 
 Headland Media Limited (“Headland Media”) is a leading business-to-business media content provider of news 
digest services to the hotel and shipping sectors; as well as a leading provider of entertainment and training 
services to offshore industries.

 Monument Securities 
 Monument Securities Group 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.

 Verivox
 The Limited Partnership, through V VX (Bermuda) Limited, acquired 51% of Verivox Holdings Limited, an online 
consumer  energy  price  comparison  service  in  Germany.  The  company  receives  commissions  from  energy 
suppliers when consumers elect to switch providers through its website. 

 Broadstone
 The Limited Partnership through its wholly owned subsidiary, Fitzwilliam Holdco Limited, acquired 84.4% of 
Broadstone, the UK-wide independent provider of investment advice and solutions to private individuals and 
corporates, from BDO LLP. 

 Time Out London and Time Out New York
 The Limited Partnership acquired 50% of Time Out Group Limited (“Time Out London”), the international multi-
channel publisher. Time Out provides services across traditional print, digital channels and live events. 

 The Limited Partnership acquired 65.7% of Time Out America LLC (“Time Out New York”). In combination, 
Time  Out  New  York  and  Time  Out  London  control  the  worldwide  rights  to  the  Time  Out  brand 
(excluding Chicago).

 Emesa
 On  25  March  2011,  the  Company  acquired  68.0%  of  Sun  Cooperatief  U.A.  (“Emesa”),  an  e-commerce 
company active in the Dutch online leisure market. 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.

 Intergenia
 On 20 December 2011, the Limited Partnership acquired a 51% stake in Intergenia AG (“Intergenia”), a web 
hosting  company  providing  managed,  dedicated  and  cloud  hosting.  The  Limited  Partnership  acquired  the 
investment in Intergenia through a fully owned subsidiary, WHDI (Bermuda) Limited.

 Certain directors of the Company and the general partner of the Limited Partnership are also directors of the 
investee companies.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
51

NOTES TO THE 
FINANCIAL
STATEMENTS
continued

Mezzanine financing investments
 Headland Media
 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. The instrument carries a fixed 
interest rate of 15% and was due in December 2014. The debt was fully repaid on 16 February 2012.

 Time Out London
 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 to TO (Bermuda) Limited. The instrument carries a fixed 
interest rate of 15% maturing on 30 November 2015. The fair value of the loan is considered to approximate 
its amortised cost at 31 December 2012.

 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 to Fitzwilliam Holdco Limited. The instrument carries an interest 
rate of 15% and matures on 30 November 2015. The fair value of the loan is considered to approximate its 
amortised cost at 31 December 2012.

 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) to TONY OCIL (Bermuda) Limited 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  of  the  loan  is 
considered to approximate its amortised cost at 31 December 2012.

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52

NOTES TO THE 
FINANCIAL
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continued

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 Senior loan notes
 Time Out London
 As part of the Limited Partnership’s acquisition of Time Out Group Limited, the Company provided a secured 
senior loan of £5.0 million to Time Out Group BC Limited. The instrument carries a fixed interest rate of 8.5% and 
matures on 31 March 2013. The fair value is considered to approximate its amortised cost at 31 December 2012.

 Time Out New York
 As part of the Limited Partnership’s acquisition of Time Out New York, the Company provided a secured senior 
loan of £2.1 million ($3.4 million) to TONY OCIL (Bermuda) Limited. 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 to approximate its amortised cost at 31 December 2012.

 Intergenia
 As part of the Limited Partnership’s acquisition of Intergenia, the Company provided a secured senior loan of 
£8.4  million  (€10.0  million)  to  Intergenia  GmbH.  The  instrument  carries  a  fixed  interest  rate  of  8.5%.  The 
instrument matures no later than November 2013. On 8 March 2012 £6.0 million (€7.4 million) of this loan was 
repaid. The fair value is considered to approximate its amortised cost at 31 December 2012.

 Bridge financing investments
 Oakley Capital Private Equity L.P.
 On  24  March  2011,  the  Company  provided  a  bridging  loan  to  the  Limited  Partnership  of  £12  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 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. The fair value is considered 
to approximate its amortised cost.

 Revolving credit facility
 Oakley Capital Private Equity L.P.
 On 19 March 2012, the Company provided a revolving loan facility of £23 million to the Limited Partnership at 
an interest rate of 6.5%. As at 31 December 2012 £19.3 million of the funding had been provided from the 
facility.  The  fair  value  is  considered  to  approximate  its  amortised  cost  at  31  December  2012.  Details  of  a 
subsequent repayment of the facility are included in Note 13.

8. CAPITAL COMMITMENT

 The total capital commitment made by the Company in the Limited Partnership is £151,961,249 (€187,398,260) 
(2011: £156,197,795 (€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 
£99,534,618  (€122,745,860)  (2011:  £101,932,105  (€122,485,000))  was  called  by  the  Limited  Partnership. 
As at 31 December 2012, the amount of capital commitment available to be called by the Limited Partnership 
was  £52,426,631  (€64,652,400)  (2011:  £54,265,690  (€64,515,000)).  During  the  year  ended  31  December 
2012  the  Company  acquired  Centrecourt  Ventures  Inc.’s  interest  in  the  Limited  Partnership  of  €398,260, 
accounting for 0.14% of the Limited Partnership’s committed capital.

 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. On 23 November 2011, the Limited Partnership issued a 
further  capital  call  of  €26.2  million  (£22.5  million)  representing  14%  of  the  outstanding  commitments  of 
€187 million. No capital calls were made by the Limited Partnership during 2012. The total funded commitment 
as at 31 December 2012 was €122.5 million (2011: €122.5 million) representing 65.5% (2011: 65.5%) of the 
Company’s total commitments. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
53

NOTES TO THE 
FINANCIAL
STATEMENTS
continued

9. SHARE CAPITAL

(a) Share capital

 The authorised share capital of the Company consists of 200,000,000 Ordinary Shares with the issued share 
capital of the Company consisting of 100,000,000 Ordinary Shares.

(b) 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.

(c) Share repurchase

 On 2 October 2008, the Board of Directors authorised a repurchase programme of 7,589,000 shares. Under 
a tender offer, the Company repurchased 7,589,000 shares for £4,576,316 at a price of 60 pence per share 
and held them as treasury stock. 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.

 On 3 July 2012, the Company repurchased 603,650 shares at a price of 114 pence per share, on 5 July 2012 
the Company repurchased an additional 1,355,000 shares at a price of 125 pence and finally on 9 July 2012 
the Company repurchased an additional 105,000 shares at 122 pence per share. Directly attributable costs of 
£1,987 were incurred in relation to the shares repurchased. At 31 December 2012, a total of 2,063,650 shares 
are held as treasury stock.

 Shares of common stock are:

Common stock

2012

2011

Balance at beginning of year

128,125,000

128,125,000

Shares repurchased

Balance at end of year

(2,063,650)

–

126,061,350

128,125,000

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54

NOTES TO THE 
FINANCIAL
STATEMENTS
continued

10. RELATED PARTIES

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

 The Company has a financial advisory agreement with Oakley Finance. During 2012, the Company incurred 
financial advisory fees of £25,000 (2011: £25,000), which is included in professional fees in the Statements 
of Operations. 

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 2035. 

 The Company was not required to recognise any amounts for uncertain tax positions under FASB ASC 740-10 
during the year ended 31 December 2012.

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 current likelihood of such an event is remote.

13. SUBSEQUENT EVENTS 

 The Directors have evaluated subsequent events from the year end through 23 April 2013 which is the date 
the financial statements were available to be issued. The following events have been identified for disclosure.

 The Limited Partnership successfully completed the sale of Emesa on 31 January 2013. The Limited Partnership 
distributed €29.7 million (£25.6 million) to the Company on 15 February 2013.

 Coincidental with the distribution of Emesa proceeds, the Limited Partnership made a capital call of 7% of total 
commitments, which for the Company was €13.1 million (£11.3 million) bringing the total drawn down capital 
to 72.5% of total capital commitments. 

 As at 31 December 2012, the revolving credit facility provided to the Limited Partnership was £19.3 million. 
On 25 February 2013, £16.2 million of the revolving credit facility was repaid.

 On 14 February 2013, the Company provided debt finance to Daisy Data Centre Solutions Limited in the form 
of  a mezzanine loan facility of £4.5 million. The mezzanine loan facility carries a fixed interest rate of 15%, 
maturing no later than 14 February 2014.

 On 5 April 2013 the £5 million senior loan note provided to Time Out Group BC Limited matured and its term 
was extended to 31 March 2016.

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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

ADVISERS

Registered Office
102 St. James Court
Smiths FL04
Bermuda

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

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 HM08 
Bermuda

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

55

DIRECTORS
AND
ADVISERS

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NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the 2013 Annual General Meeting of the Members of the Company will be held at 
102 St. James Court, Smiths FL04, Bermuda on:

24 June 2013 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 2012.

4. To re-appoint KPMG of Crown House, 4 Par la Ville Road, Hamilton HM08, Bermuda as auditors for the ensuing 

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

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

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

6. To: 

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

twelve (12);

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

his successor is elected or appointed;

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

his successor is elected or appointed;

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

until his successor is elected or appointed;

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

Meeting or until his successor is elected or appointed;

f)

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

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

his successor is elected or appointed;

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

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

14 May 2013
BY ORDER of the Directors
Mayflower Management Services (Bermuda) Limited
Secretary

56

NOTICE OF 
ANNUAL
GENERAL
MEETING

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57

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 21 June 2013 at:

Mayflower Management Services (Bermuda) Limited 
Secretary 
Oakley Capital Investments Limited 
102 St. James Court
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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58

FOR YOUR NOTES

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Designed by addtotaste.com and printed by Portman Lodge Limited

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