OCI Annual Report 2015 | Quarterlytics

FY2015 Annual Report · OCI

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ANNUAL REPORT AND ACCOUNTS 2015CONTENTSCONTENTS

CONTENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

04 Chairman’s Statement 06 Financial Report 15 Directors’ Report 19 Independent Auditor’s Report 20 Financial Statements 21 Statements of Assets and Liabilities 22 Schedules of Investments 26 Statements of Operations 27 Statements of Changes in Net Assets 28 Statements of Cash Flows 29 Notes to the Financial Statements 42 Directors and Advisers 43 Notice of Annual General Meeting04

CHAIRMAN’S STATEMENT

CHAIRMAN’S STATEMENT CHAIRMAN’S STATEMENT

I am pleased to report that the underlying performance of
the Funds’ portfolio companies has been strong, reflected
in the 33.6% like-for-like growth in the fair value of their
investment portfolios over the last twelve months, driven
mainly by substantial EBITDA growth. The impact of this
growth was to add 18p to the Company’s net asset value
(“NAV”) per share, also calculated on a like-for-like basis.
During 2015, Fund I realised its holding in Verivox which
generated a gross IRR of 71.4%, providing a good return
for Fund I’s investors, including the Company.

The placing of 78.8 million new ordinary shares by
the Company in the period raised gross proceeds of
£130.0 million enabling it to invest £77.9 million in 2015 in
its continuing co-investment programme. Whilst the
placing had a dilutive impact on the Company’s NAV per
share (15p impact calculated at 31 December 2014),
underlying positive performance of the Funds compensated
for the dilution resulting in a NAV per share at the year-end
of £2.00 (2014: £2.01).

The Company currently achieves its investment objective
primarily through its investments in two private equity funds
(the “Funds”), Oakley Capital Private Equity L.P. (“Fund I”),
an exempted limited partnership established in Bermuda,
and the fund group comprising the following exempted
limited partnerships established in Bermuda: Oakley
Capital Private Equity II-A L.P., Oakley Capital Private
Equity II-B L.P., Oakley Capital Private Equity II-C L.P.
(collectively the “Feeder Funds”) and OCPE II Master L.P.
(the “Master Fund”) (collectively “Fund II”). The Company
invests
through Oakley Capital Private
Equity II-A L.P.

in Fund

The Company has a capital commitment of €188.4 million
to Fund I of which 95.0% had been called at 31 December
2015, making Fund I essentially fully invested with three
portfolio companies remaining.

The Company also has a capital commitment of
€200.0 million to Fund II of which 57.0% had been called at
31 December 2015. Fund II deployed €153.2 million in the
year in new and follow-on investments, bringing it to 72.5%
invested, represented by called capital from limited partners
and bridge financing facilities provided by Investec.

PERFORMANCE

The Company’s net asset value increased in the year by
£125.2 million to £382.1 million. Of this total net asset
value, £56.3 million represents the fair value of its
investment in Fund I, £102.1 million represents the fair
value of its investment in Fund II and £102.6 million
represents unquoted debt and equity securities provided

directly to a certain number of the Funds’ portfolio
companies and Bellwood Holdings Limited (a founder
partner in Educas). The Company has short-term revolving
credit facilities with Fund I, the Master Fund and Oakley
Capital GP II Limited (“GP II”), the general partner of the
Fund
limited partnerships which, at
31 December 2015, had an aggregate of £12.9 million in
principal outstanding. The net balance of £108.2 million
was held by the Company as cash and cash equivalents
and other net assets.

II constituent

Whilst historically the Company has not generally invested
directly in the Funds’ portfolio companies, other than by
the provision of debt finance, it is possible to “look through”
each Fund to understand the impact of the performance of
those portfolio companies on the investment values
attributed to each Fund held by the Company.

The performance of Fund I, a 2007 vintage fund, has been
strong with a realised gross IRR of 49.1% and gross money
multiple of 3.6x invested cost. In June 2015, Fund I
disposed of its controlling stake in Verivox to ProSieben
Sat.1 Media AG, generating a gross money multiple of
14.5x and an IRR of 71.4%. Total proceeds of €56.1 million
were distributed to Fund investors, including €36.8 million
to the Company. The fair value of the Company’s investment
in Fund I at the end of the year was £56.3 million.

At 31 December 2015, Fund II was effectively 72.5%
invested across nine portfolio companies. Fund II is still
relatively young, having only closed in December 2014.
Nevertheless, performance driven increases in fair values of
its portfolio investments have resulted in an IRR of 53.0%
and gross money multiple of 1.6x (realised and unrealised)
for Fund II. The fair value of the Company’s investment in
Fund II as at 31 December 2015 was £102.1 million.

During the year, the Company made co-investments and
loans alongside the Funds of £77.9 million providing an
efficient means of utilising the Company’s assets in a
prudent way. From inception to 31 December 2015, the
IRR generated by the Company’s investments in loans and
cash has been in excess of 5.0% per annum.

POST BALANCE SHEET EVENTS

As a result of new investments made by Fund II during the
past 12 months, Fund II is now almost fully invested so the
Company has made, in line with its investing policy, a
commitment of €250.0 million to Oakley Capital Private
Equity III-A L.P., a successor private equity fund.

Fund III will execute the same proven strategy as the
Funds.

CHAIRMAN’S STATEMENT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL REPORT

FINANCIAL REPORTFINANCIAL REPORT

THE COMPANY AND THE FUNDS

MARKET BACKGROUND AND OUTLOOK

The overall economic backdrop for the Funds has remained
favourable to the Investment Adviser’s strategy. There are
increasing opportunities for buyout and cross-border M&A
activity in the Funds’ core markets. And debt has become
very inexpensive, with a narrow spread between the cost of
investment grade and high yield funding and growth in
alternative debt provision (e.g. mezzanine and high yield).

The biggest challenge facing private equity firms is pricing.
Despite increased volatility in capital markets, driven in
recent months by falling oil prices and headwinds from
emerging markets, asset valuations and
investor
confidence remains high.

Private equity firms are under pressure to deploy capital,
but there is a general scarcity of primary deals especially in
the UK mid-market. High valuations need not necessarily
cause concern for private equity funds, since they tend to
be more confident they can improve portfolio company
performance and therefore valuations. However, in these
conditions, private equity firms may struggle to meet the
growth expectations of investors if they cannot find a way
to meet the pressure to deploy capital and the requirement
to maintain pricing discipline.

With this economic backdrop, the Investment Adviser’s
emphasis on proprietary deal flow gains
increasing
significance as a means to exercise some control over
pricing. The Investment Adviser maintains pricing discipline
in its consideration and execution of deals and its track
record to date demonstrates that it has been able to
consistently buy at lower than sector average multiples.

The Company provides investors with exposure to the
Funds. The Funds are unlisted private equity funds
established in Bermuda, which invest primarily in UK and
European mid-market businesses with the aim of providing
investors with significant long-term capital appreciation.

Oakley Capital (Bermuda) Limited (the “Manager”), a
Bermudian company, acts as adviser and arranger to the
Company and as the manager of Fund I. Oakley Capital
Limited (the “Investment Adviser”) acts as investment
adviser to the Manager with respect to the Company, as
the investment adviser to the Manager with respect to
Fund I, and as the investment adviser to the general partner
of the constituent limited partnerships of Fund II.

The Investment Adviser is primarily responsible for advising
the Manager (as the manager of Fund I) and GP II (as
general partner of the constituent limited partnerships of
Fund II) on the investment and realisation of the assets of
Fund I and Fund II respectively.

The Funds’ investment strategy is to invest in sectors that
are growing or where consolidation is taking place. Within
the core sector interests, the Funds invest in both
performing and under-performing businesses, 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 Funds’ objective is to work proactively with
the portfolio companies’ management teams, together
with other stakeholders, in order to create substantial
shareholder value.

The Funds look to acquire a controlling interest in
companies with an enterprise value of between
£20.0 million and £100.0 million, although companies with
a lower enterprise value are considered where the
Investment Adviser believes that anticipated returns justify
the investment. The Funds aim to deliver in excess of 25.0%
gross internal rate of return (IRR) per annum on investments.
The life of each Fund is expected to be approximately
10 years, including a five year investment period.

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL REPORT continued

FINANCIAL HIGHLIGHTS

Assets at:

Net asset value (£m)

Net asset value per share (£)

Share price (mid-market) (£)

FTSE All Share Index

FTSE Small-Cap Index

Operational performance

Increase in net assets resulting from operations (£m)

Net change in net asset value per share (£)

ANALYSIS OF MOVEMENTS IN NET ASSET VALUE

Opening net asset value as at start of year

Gross revenue

Other expenditure

Realised gain on investments

Net change in unrealised appreciation on investments

Shares issued

Treasury shares bought

Treasury shares sold

Closing net asset value as at end of year

The Company’s NAV increased in 2015 by £125.2 million
from £256.9 million to £382.1 million. As at 31 December
2015, the Company’s NAV per share was £2.00. The
Company’s net earnings for 2015 were £21.6 million, an
increase from 2014 of £18.5 million, driven by the uplift in
valuation of the underlying portfolio in Fund II.

In addition to the increase arising from net earnings in the
period, the Company placed 78.8 million new shares in
April 2015, contributing £126.8 million to the uplift in net
asset value. This was partly offset by net repurchases into
treasury amounting to 15.8 million shares at a net cost of
£23.2 million.

31 Dec
2014

31 Dec
2015

% change
2015/2014

% change
since inception

256.9

2.01

1.55

3,533

4,366

3.1

0.01

382.1

2.00

1.44

3,444

4,635

21.6

(0.01)

49%

-7%

-3%

282%

100%

40%

18%

2015
£m

2014
£m

256.9

5.4

(9.0)

29.0

(3.8)

126.8

(24.6)

1.4

382.1

246.9

6.5

(1.6)

38.6

(40.4)

–

6.9

256.9

SUMMARY OF INVESTMENT ACTIVITY

The total amount invested by the Company increased by
£65.8 million to £273.9 million at 31 December 2015. The
increase comprises a £6.5 million increase in the fair value
of its investments in the Funds; new unquoted equity
securities of £25.9 million; £52.3 million invested in
new or additional loan instruments; less a reduction of
£18.9 million in revolving loan facilities.

The 2015
investment portfolio is summarised in the following table:

transactional activity

the Company’s

for

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL REPORT continued

Opening
cost

Opening
fair value

Investment
additions

Realisations
(cost relieved)

Closing
cost

Change in
unrealised
gain/(loss)

Closing
fair value

Figures in £m

Investment

Investments held at 31.12.15

Investments in Funds

Fund I

Fund II

Total

Unquoted Equity Securities

Time Out Group

Total

Senior Loans

Time Out Group

North Sails

Total

Mezzanine Loans

Time Out Group

Daisy

Total

Financing Loans

Bellwood Holdings

Broadstone

Daisy

Damovo

Total

Revolving Loan Facility

Fund I

Fund II

GP II

Total

73.3

64.6

137.9

87.2

64.7

151.9

–

5.2

1.2

6.4

9.3

–

9.3

2.6

6.0

–

8.6

19.3

8.0

4.5

31.8

–

5.2

1.2

6.4

9.4

–

9.4

2.6

6.0

–

8.6

19.3

8.0

4.5

31.8

5.9

21.2

27.1

25.9

–

15.0

–

14.1

–

25.0

4.1

29.1

17.7

4.5

–

22.2

Total Investments

194.0

208.1

133.4

Investment

Investments realised 2015

Fund I

Fund II

North Sails

Fund I Revolver

Fund II Revolver

GP II Revolver

Total

–

(16.5)

–

(6.2)

–

(26.6)

(12.5)

(2.0)

(41.1)

(63.8)

79.2

69.2

148.4

(36.8)

32.7

(4.1)

56.3

102.1

158.4

25.9

5.2

10.0

15.2

9.3

14.1

23.4

2.6

6.0

25.0

4.1

37.7

10.4

–

2.5

12.9

–

0.2

–

0.2

0.1

–

0.1

–

25.9

5.4

10.0

15.4

9.5

14.1

23.6

2.6

6.0

25.0

4.1

37.7

10.4

–

2.5

12.9

263.4

(3.8)

273.9

Cost realised

Proceeds Realised gain

–

16.5

6.2

26.6

12.5

2.0

63.8

26.6

18.9

6.2

26.6

12.5

2.0

92.8

26.6

2.4

–

29.0

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL REPORT continued

The decline in the fair value of £30.9 million of the
Company’s investment in Fund I during the year was driven
principally by the distribution of the Verivox sale proceeds
to the Fund I Limited Partners, including £26.6 million to
the Company, in August 2015. This was partly offset by
capital calls by Fund I in 2015 of 4.5% of commitments,
amounting to €8.5 million (£5.9 million) for the Company.
As at 31 December 2015, Fund I had called €179.0 million
(£131.7 million) from the Company, representing 95.0% of
the Company’s total capital commitment.

The fair value of the Company’s investment in Fund II
increased by £37.4 million in 2015. The main elements of
this were capital calls of 15.0% by Fund II amounting to
£21.2 million for the Company, and increases to the values
of the underlying portfolio businesses following strong
performances in the year adding a further £35.1 million.
This was offset by distributions in relation to the sale of
intergenia and refinancing of Facile amounting to aggregate
distributions of £18.9 million by Fund II to the Company. As
at 31 December 2015, Fund II had called €114.0 million
(£83.9 million) from the Company, representing 57.0% of
the Company’s total capital commitment to Fund II.

The unquoted equity securities of £25.9 million relate
to preferred share co-investments
in Time Out of
£13.3 million, in Time Out Mercado of £5.5 million and
in Flypay Limited (“Flypay”) of £7.1 million.

Loans comprised mezzanine, senior and financing loans to
certain of the Funds’ portfolio companies and short-term
revolving credit facilities provided to Fund I, Master Fund
and GP II, thereby ensuring that un-invested cash continues
to work for the Company, earning a positive return.
At 31 December 2015 the total value of loans outstanding
was £89.6 million.

Within the senior loan portfolio, a facility was provided to
the apparel business of North Sails of £15.0 million which
consolidated earlier facilities, and of which £10.0 million

was drawn at the year end. The loan carries interest of 8%
per annum and matures in November 2018.

As part of Fund II’s acquisition of an interest in Daisy, the
Company provided a mezzanine loan of £14.1 million to
Daisy at an interest rate of 15% per annum, maturing in
March 2022. The Company also provided a financing loan
of £25.0 million at 6.5% per annum, maturing on 30 June
2016, as part of the acquisition structure.

The Company provided a financing loan of £4.1 million to
Damovo as part Fund II’s acquisition of the business. The
loan carries interest of 5.7% per annum and matures in
May 2016.

The Company provides revolving credit facilities to Fund I
and the Master Fund. Each drawing under these facilities is
generally for a term of six months at an interest rate of
6.5%. The loans are used by the Funds to fund short-term
cash requirements. The interest generated from the
revolving credit facilities exceeds the interest earned on the
Company’s bank deposits, allowing the Company to earn
higher returns on part of its cash reserves. As at
31 December 2015, the principal amount available under
the revolving credit facility for Fund I was £5.0 million, of
which £0.8 million had been drawn down, and the principal
amount available under the revolving credit facility for the
Master Fund was £15.0 million, of which £nil was
outstanding at the year end. On 18 September 2015, the
Company and Fund I entered into a £10.0 million refinancing
facility. The facility has the same terms as the revolving
credit facilities and as at 31 December 2015, Fund I had
drawn £9.6 million under this facility.

In relation to the loans made by the Company to GP II,
£2.0 million was repaid during the year, leaving an aggregate
of £2.5 million outstanding at 31 December 2015.

The exchange rates used by the Company as at
31 December 2015 were a USD:GBP exchange rate of
1:0.6774 and a EUR:GBP exchange rate of 1:0.7360.

COMPANY ASSET TYPES 2015

COMPANY ASSET TYPES 2014

2014

29% Cash and other assets

48% Funds and unquoted
equity securities

23% Mezzanine, senior
loan and revolving
credit facility

19% Cash and other assets

2015

59% Funds and unquoted
equity securities

2015

2014
29%
22% Mezzanine, senior
loan and revolving
48%
credit facility
23% Mezzanine, senior loan and revolving credit facility

Cash & other assets
Limited Partnership

2015

Cash & other assets

Limited Partnership

23% Mezzanine, senior loan and revolving credit facility

2014

19%
59%
22% Mezzanine, senior loan and revolving credit facility

Cash & other assets
Limited Partnership

Cash & other assets

Limited Partnership

22% Mezzanine, senior loan and revolving credit facility

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

2015

29%

48%

2014

19%

59%

FINANCIAL REPORT continued

FUND I PORTFOLIO INVESTMENT ACTIVITY FOR THE YEAR 2015

There are three portfolio companies remaining in Fund I: Broadstone, Time Out and Educas. The table below summarises
the investment activity of Fund I during 2015. The values are denominated in Euros and as at 31 December 2015 the
Company held a 65.5% interest in Fund I. The EUR:GBP exchange rate as at 31 December 2015 was 1:0.7360.

Figures in €m

Investment

Opening
cost

Opening
fair
value

Investment
additions

Investment
disposals

Closing
cost

Change in
unrealised
gain/(loss)

Closing
fair
value

Money
multiple

Gross
IRR

Investments held at 31.12.15

Broadstone

Time Out Group

Educas

Educas Australia

Other

34.2

62.8

17.2

3.8

0.1

24.3

69.8

19.8

3.8

0.1

Total investments

118.1

117.8

Investments realised 2015

Verivox

Total

–

68.8

–

8.1

0.4

0.3

–

8.8

–

34.2

70.9

17.6

4.1

0.1

(14.5)

4.1

6.4

0.9

–

9.8

82.0

26.6

5.0

0.1

126.9

(3.1)

123.5

0.3

1.2

1.5

1.2

1.0

-31%

18%

17%

(68.0)

–

(68.8)

–

14.5

71%

Total investments

118.1

186.6

8.8

(68.0)

126.9

(71.9)

123.5

2.2

39%

Investment

Realisations 2015

Verivox

Total

Total distributions to Limited Partners 2015

Cost

Proceeds Realised gain

Distributions

–

68.0

56.1

The total decrease in the year in the fair value of the portfolio
companies of Fund I was €63.1 million. The change in
values of the portfolio companies is attributable to three
key factors:

Decrease of €68.0 million as a result of investments in
the underlying portfolio companies sold by Fund I:

Verivox was sold in 2015 by Fund I, realising €68.0 million
for Fund I.

Increase of €8.8 million as a result of additional
funding into existing portfolio companies made by
Fund I:

Fund I provided further equity funding to certain Time Out
Group companies of €8.1 million during 2015. Additionally,
there were follow-on investments in Educas of €0.4 million
and Educas Australia of €0.3 million.

Decrease of €3.1 million as a result of a net reduction
to the fair values of the underlying portfolio
companies of Fund I held at year end:

Educas and Educas Australia showed a marked increase in
fair value of €6.4 million and €0.9 million respectively in
2015 due to significant growth in profitability.

The fair value of Broadstone decreased by €14.5 million.
The 31 December 2015 valuation is based on an offer
price received for its corporate benefits division and
deferred consideration receivable from the sale of the
private client division.

Foreign exchange movements account for the change in
the fair value of Time Out.

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL REPORT continued

FUND II PORTFOLIO INVESTMENT ACTIVITY FOR THE YEAR 2015

Fund II has made a total of ten investments since launch, of which one has been realised. The following new investments
were made during 2015:

• Damovo II Sarl (“Damovo”), a provider of enterprise information communication technology (ICT) services and solutions,
which will seek to replicate the success of Daisy through a European roll-up strategy led by the founder of Daisy,
Matthew Riley.

• Parship GmbH (“Parship”), one of Europe’s earliest online dating businesses and the leading online matchmaker in
Germany. Parship has a strong record of growth, which is continuing. Shortly after the acquisition of Parship by Fund II,
Parship acquired the second player in the market, Elite Partner, in an off-market transaction which consolidates Parship’s
market position.

• Daisy Group Holdings Limited (“Daisy”) is the leading UK supplier of unified business communications and IT services
and solutions. The Company is familiar with Daisy, having received considerable value when Fund I exited its 13.6%
holding in Daisy in late 2014. The acquisition of Phoenix by Daisy provided an opportunity for Fund II to participate in its
next strategic phase as a minority investor alongside the founder and chairman, Matthew Riley.

• Verivox GmbH (“Verivox”), a market leader in Germany for online price comparison. Fund II had the opportunity to acquire
a minority stake alongside ProSieben Sat.1 Media AG when Fund I exited its holding in Verivox, and therefore benefit from
the synergies that will be achieved as well as the ongoing growth in this market. Fund II has a put option after five years.

• Host Europe GmbH (“Host Europe”), a leading provider of domains and hosting services in Europe. Simultaneously
with the completion of the intergenia sale to Host Europe, Fund II invested in the enlarged, Cinven owned,
Host Europe Group.

• Educas Americas LLP (“Educas Americas”), a new Educas partnership established to acquire schools in South America.
During 2015, the partnership made its first acquisition of a 57.0% stake in Colegio San Mateo, a premium private school
in Bogota, Colombia.

Fund II has also benefitted from an exit and refinancing to return proceeds to its investors:

• intergenia, Fund II’s first investment, was sold to Host Europe, the market leader, representing a gross money multiple of

1.4x and IRR of 46.6% for Fund II in under 12 months. Proceeds of €20.4 million were distributed to the Company.

• Facile.it (“Facile”), the leading Italian price comparison website acquired in 2013, was able to refinance its debt during the
summer thanks to strong trading and cash generation, returning 19.8% of invested capital to Fund II, which in turn
distributed €5.2 million to the Company.

The table opposite summarises the investment activity of Fund II during 2015. The values are denominated in Euros.
The Company holds a 60.45% interest in Oakley Capital Private Equity II-A L.P. which in turn holds a 63.10% interest in the
Master Fund, providing an effective ownership interest of the Company of 38.14% in Fund II. The EUR:GBP exchange rate
as at 31 December 2015 was 1:0.7360.

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL REPORT continued

Figures in €m

Investment

Opening
cost

Opening
fair
value

Investment
additions

Investment
disposals

Closing
cost

Change in
unrealised
gain/(loss)

Closing
fair
value

Money
multiple

Gross
IRR

Investments held at 31.12.15

North Sails

Educas Europe

Facile

Host Europe

Damovo

Parship

Daisy

Educas Americas

Verivox

65.4

10.2

68.3

–

73.9

10.4

68.3

–

5.0

13.9

1.5

20.0

10.5

56.6

22.3

2.8

20.6

–

(13.5)

–

(0.8)

–

70.4

24.1

56.3

20.0

10.5

55.8

22.3

2.8

20.6

18.4

13.7

67.0

6.4

5.8

52.1

(1.0)

–

97.3

38.0

123.3

26.4

16.3

107.9

21.3

2.8

20.6

Total investments

143.9

152.6

153.2

(14.3)

282.8

162.4

453.9

1.4

1.6

2.0

1.3

1.6

1.9

1.0

1.6

21%

79%

75%

34%

60%

169%

-11%

53%

Investment

Realisations 2015

Facile

Parship

Total

intergenia sale in 2014 distributed in 2015

Total distributions to the Feeders 2015

The investment value of Fund II’s portfolio companies as at
31 December 2015 was €453.9 million, representing an
increase of €301.3 million over the year; the components of
which were:

Increase of €153.2 million as a result of new and
follow-on investments made by Fund II:

During 2015, Fund II invested €132.8 million to acquire
controlling interests in Damovo and Parship, and non-
controlling interests in Host Europe Group, Daisy, Educas
Americas and Verivox.

During 2015, Fund II made follow-on investments in
Educas Europe of €13.9 million to fund the acquisition
of private schools in Kenya and Switzerland. Fund II also
made
in North Sails totalling
€5.0 million and Facile of €1.5 million.

investments

follow-on

Cost

Proceeds Realised gain

Distributions

13.5

0.8

14.3

13.5

0.8

14.3

–

13.5

0.8

14.3

56.1

70.4

Increase of €162.4 million as a result of a net increase
to the fair values of the underlying portfolio
companies of Fund II held at year end:

The portfolio companies performed very strongly in 2015,
resulting in significant increases in fair value as can be seen
in the above table, amounting to an overall increase of
62.1% on a like-for-like basis.

Foreign exchange movements account for the change in
the fair value of Daisy.

Decrease of €14.3 million as a result of distributions
from portfolio companies in Fund II:

Facile repaid its short-term debts and certain loan
notes, resulting in a distribution to Limited Partners of
€13.5 million. In addition, there was a repayment of the
bridge loan facility provided to certain members of the
Parship management team to facilitate their investment
alongside Fund II.

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL REPORT continued

CO-INVESTMENT ACTIVITY FOR THE YEAR 2015

The placing of Company shares in April 2015 has enabled the Company to further its co-investment programme.
The table below summarises the co-investment activity of the Company during 2015.

Figures in £m

Investment

Investments held at 31.12.15

Time Out Group

Broadstone

North Sails

Daisy

Damovo

Total investments

Investment

Realisations 2015

North Sails

Total

Opening
cost

Opening
fair
value

Investment
additions

Investment
disposals

Closing
cost

Change in
unrealised
gain/(loss)

Closing
fair
value

14.5

6.0

1.2

–

14.6

6.0

1.2

–

21.7

21.8

25.9

–

15.0

39.1

4.1

84.1

–

(6.2)

–

(6.2)

40.4

6.0

10.0

39.1

4.1

99.6

0.3

–

40.8

6.0

10.0

39.1

4.1

0.3

100.0

Cost

Proceeds Realised gain

6.2

–

The above table includes a number of new investments:

• Time Out Mercado, currently comprising Mercado de
Ribiera in Lisbon, the city’s largest covered market
bringing together some of the city’s favourite food shops
and restaurants in a concept which is to be rolled-out to
other cities.

• Flypay, a developer of mobile ordering and payment

solutions for the hospitality sector.

Both of which are included under Time Out Group in the

table above.

• North Sails Apparel, a premium brand in the marine
lifestyle apparel sector, leveraging off the North Sails
brand. The Company provided a credit facility of
£15.0 million which consolidated earlier facilities, and
of which £10.0 million was drawn at the year end.

• Daisy, where

the Company supported Fund

II’s
investment by providing a mezzanine
loan of
£14.1 million and a financing loan of £25.0 million as part
of the acquisition structure.

• Damovo, where the Company supported Fund II’s
investment by providing a financing loan of £4.1 million
as part of the acquisition structure.

Christopher Wetherhill
Chairman

12 April 2016

FINANCIAL REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

DIRECTORS’ REPORT

DIRECTORS’ REPORT16

DIRECTORS’ REPORT

investment decisions, and

DIRECTORS’ FUNCTIONS
The Directors are responsible for the overall management
and control of the Company, including key portfolio
management and
risk
management, of the Company. The Directors review the
operations of the Company at regular meetings and meet at
least quarterly and as otherwise required for the purpose of
considering key investment decisions of the Company.
For this purpose, the Directors receive periodic reports from
the Manager detailing the Company’s performance, and
receive from the Manager and other service providers such
other information as may from time to time be reasonably
required by the Directors for the purpose of such meetings.

For the avoidance of doubt, the Directors do not make
investment decisions on behalf of the Funds, nor do they
have any role or involvement in selecting or implementing
transactions by the Funds.

DIRECTORS
The Directors of the Company are:

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 Professional Accountants, a Fellow of the
Institute of Directors and a Freeman of the City of London.
He is a resident of Bermuda.

Christopher is Chairman of the Board of Directors.

James Keyes
James Keyes was a Managing Director of Renaissance
Capital an emerging markets investment bank from 2008
until 2013. He established the Renaissance Bermuda office
and remained with the firm until the office closed in 2013.
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.

in Bermuda and a number of

Tina Burns
Tina Burns has held senior positions as Tax Director with
international
KPMG
companies and currently holds that position at Ironshore
Inc., a Bermuda based reinsurance company. Prior to her
work in the international insurance sector, she was a tax
consultant with Schroders Private Equity Services in
Bermuda. Tina graduated from the University of North
Carolina with a Masters of Accounting 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.

Laurence Blackall
Laurence Blackall has thirty years’ experience in the
information, media and communication
industries,
pioneering electronic publishing (especially at McGraw Hill
where he was a vice-president) and the internet in the
United Kingdom. He has proven expertise in establishing
internet companies and developing them through to public
offering and subsequent sale. He holds directorships in a
number of public and private companies. Laurence is a
resident of the United Kingdom.

Ian Pilgrim
Ian Pilgrim is Chief Executive Officer of the Company’s
Administrator, Mayflower Management Services (Bermuda)
Limited. 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, he practiced from January
1997 until December 2000 as a Barrister and Attorney with
M.L.H. Quin & Co. (now Wakefield Quin) in Bermuda. From
1994 to 1996, he practiced as a solicitor with Allen & Overy
in Hong Kong where he was involved primarily in banking
and project finance, and prior to that from 1991 to 1994
with Deacons in Hong Kong. He 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 the Manager and of Oakley Capital
GP Limited, the general partner of Fund I. Ian is a resident
of Bermuda.

Peter Dubens
Peter Dubens is the founder and Managing Partner of the
Oakley Capital Group, a privately owned asset management
and advisory group comprising Private Equity, Venture
Introduction
Capital, Corporate Finance and Capital
operations managing over US$1.1 billion. Peter founded
Oakley Capital in 2002 to be a best of breed entrepreneurially
driven UK investment house, creating an ecosystem that
supports the companies Oakley Capital invests in whether

DIRECTORS’ REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

DIRECTORS’ REPORT continued

they are early stage companies or established businesses.
Peter is the Managing Partner of Oakley Capital Limited,
the investment adviser to Fund I and Fund II. Since 2002
Oakley Capital has sold 11 businesses for a combined
value of over £1 billion.

David Till serves as an alternate director to Peter Dubens.

MANAGER
The Manager was incorporated in Bermuda on 18 June
2007 under the Bermuda Companies Act. The Manager is
responsible for advising and arranging in respect of the
assets of the Company in accordance with the Management
Agreement, subject to the review by the Directors, in a
manner consistent with the investment objective, approach
and restrictions described in the Company’s admission
document. The Manager is also the manager of Fund I.

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

INVESTMENT ADVISER
The Investment Adviser was incorporated in England and
Wales on 12 October 2000 under the Companies Act
1985. The Investment Adviser serves as investment adviser
to the Manager with respect to the Company and Fund I,
and to Oakley Capital GP II Limited, the general partner of
the Fund II constituent limited partnerships, with respect
to Fund II.

The Investment Adviser is authorised and regulated by the
Financial Conduct Authority. It 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 nineteen investment
professionals are
for
together primarily
performing its investment advisory obligations with respect
to the Company, Fund I and Fund II.

responsible

The Investment Adviser is committed to being a responsible
investor and is a signatory of the UN Principles for
Responsible Investing. The Investment Adviser recognises
that investments have an impact beyond a financial return
for investors, in particular human, environmental and social
factors. This is collectively referred to as Environmental,
Social and Governance. In order to address these issues,
the Investment Adviser has created the Oakley ESG Policy,
which dictates the agenda for its ESG Committee that
meets on a quarterly basis. In addition, the sustainability of
each individual investment through a long term strategy is
reviewed during quarterly review meetings.

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 Directors note that Bermuda, the
country of incorporation of the Company, has no specific
corporate governance regulatory regime.

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

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

The remuneration committee reviews the scale and
structure of the Directors’ remuneration and the terms of
their engagement, including share option schemes and
other bonus arrangements if any. The remuneration and
terms and conditions of engagement 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.

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

During 2015 the Company established a risk management
committee which assists the Board by providing a central
role in the oversight of the risk management process.
The Committee
identifying and
responsible
assessing material risks and the monitoring and mitigation
thereof in accordance with the Company’s risk policy and
internal procedures.

for

DIRECTORS’ REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

DIRECTORS’ REPORT continued

During 2015, the Company also established a portfolio
management committee, responsible on an ongoing basis
for monitoring the investment decisions taken by the Board
in accordance with the Company’s investment policy and
internal procedures.

The Funds have established investor committees to
address any conflict of interest in the Funds. Christopher
Wetherhill acts on the committee for Fund I and James
Keyes acts on the committee for Fund II.

SUBSTANTIAL SHAREHOLDINGS
As at 8 April 2016, the Company has been made aware of
the following disclosable beneficial interests in 3.0% or
more of the issued ordinary share capital of the Company,
which includes the placing shares admitted on that date:

AS A PERCENTAGE OF VOTING RIGHTS

Woodford Investment Management

20.8%

20.1%

18.9%

10.1%

5.7%

5.6%

4.1%

3.7%

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.

Invesco Perpetual

Ruffer LLP

Sarasin & Partners

Fidelity International

DIRECTORS’ INTERESTS
As at 12 April 2016, Directors who are beneficial owners of
shares in the Company are:

Rathbones

Red Rocks Capital

Henderson Volantis Capital

Laurence Blackall

Christopher Wetherhill

James Keyes

200,000

175,000

10,000

Save as disclosed above, none of the Directors nor any
member of their respective
families, nor
any person connected with a Director, has any interest
whether beneficial or non-beneficial in the share capital of
the Company.

immediate

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

Christopher Wetherhill

James Keyes

Tina Burns

Peter Dubens

Laurence Blackall

Ian Pilgrim

£46,500

£39,000

£nil

£39,000

The above fees do not include reimbursed expenses.

DIRECTORS’ REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

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, which comprise the
statements of assets and liabilities, including the schedules of investments, as of 31 December 2015 and 2014, 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 U.S.
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.

Auditor’s 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 auditor’s judgment, including the assessment of the risks 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 2015 and 2014, and the results of its operations and its cash flows
for the years then ended in accordance with U.S. generally accepted accounting principles.

This report, including our opinion, has been prepared for and only for the Board of Directors and Shareholders and for no
other purpose. We do not, in giving this opinion, accept or assume responsibility for any other purpose, or to any other
person to whom this report is shown, or into whose hands it may come, save where expressly agreed by our prior consent
in writing.

KPMG Audit Limited
Chartered Professional Accountants
Hamilton, Bermuda
12 April 2016

INDEPENDENT AUDITOR’S REPORT | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL STATEMENTS

FINANCIALSTATEMENTSFINANCIAL STATEMENTS

STATEMENTS OF ASSETS AND LIABILITIES
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

Assets

Investments (cost 2015: £263,386,947; 2014: £193,969,326)

5, 7

273,888,150

208,147,262

Notes

2015
£

2014
£

Cash and cash equivalents

Accrued interest and accounts receivable

Other receivables

Total assets

Liabilities

Accounts payable and accrued expenses

Total liabilities

95,519,939

6,882,217

15,328,153

42,882,162

5,079

21,844

384,741,321

257,933,485

2,590,835

1,010,647

Net assets attributable to shareholders

382,150,486

256,922,838

Represented by:

Share capital

Share premium

Retained earnings

Less: Treasury stock

Number of shares outstanding

Net asset value per share

Signed on behalf of the Board on 12 April 2016

Christopher Wetherhill
Director

Tina Burns
Director

2,069,129

1,281,250

246,244,260

120,209,349

157,006,355

135,432,239

405,319,744

256,922,838

(23,169,258)

–

382,150,486

256,922,838

191,078,315

128,125,000

2.00

2.01

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

SCHEDULES OF INVESTMENTS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

31 December 2015

Investments in funds

Bermuda
Oakley Capital Private Equity L.P.
Oakley Capital Private Equity II-A L.P.

Total investments in funds

Unquoted equity securities

Portugal
Time Out Mercado (ordinary)

Time Out Mercado (preferred)

United Kingdom
Flypay (preferred)

Time Out London (preferred)

Total unquoted equity securities

Unquoted debt securities

Investments in senior loan notes

Netherlands
North Sails

Interest at 8% p.a.

Maturity date November 2018
United Kingdom
Time Out London

Interest at 10% p.a.

Maturity date December 2017
United States
Time Out New York

Interest at 8.5% p.a.

Maturity date December 2017

Total senior loan notes

Investments in financing loan facilities

United Kingdom
Bellwood

Interest at 6% p.a.

Maturity date February 2016
Broadstone

Interest at 6% p.a.
Maturity date May 2016
Daisy

Interest at 6.5% p.a.
Maturity date June 2016
Damovo

Interest at 5.7% p.a.
Maturity date May 2016

Total finance loans

Fair value as a
percentage of net assets

Percentage
interest

Principal amount/
Quantity

Cost
£

Fair value
£

14.74%
26.70%

41.44%

0.00%

1.46%

1.86%

3.47%

6.79%

65.50%
60.45%

79,164,916
69,256,073

56,317,561
102,051,432

148,420,989

158,368,993

£18

€7,715,973

5,490,090

5,563,649

£7,115,360

7,115,360

£13,270,620

13,270,620

25,876,088

25,949,647

2.62%

£10,000,000

10,000,000

0.80%

£3,070,482

3,070,482

0.60%

4.02%

0.69%

1.57%

6.52%

1.08%

9.86%

$3,400,000

2,109,020

2,303,160

15,179,502

15,373,642

£2,625,000

2,625,000

£6,000,000

6,000,000

£24,932,382

24,932,382

£4,130,000

4,130,000

37,687,382

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL STATEMENTS continued

SCHEDULES OF INVESTMENTS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

31 December 2015

continued

Investments in mezzanine loans

United Kingdom
Daisy

Interest at 15% p.a.

Maturity date March 2022
Time Out London

Interest at 10% p.a.

Maturity date December 2017
United States
Time Out New York

Interest at 15% p.a.
Maturity date May 2018

Total mezzanine loans

Investments in revolving loan facility

Bermuda
Oakley Capital Private Equity L.P.

Interest at 6.5% p.a.

Oakley Capital Private Equity L.P.

Interest at 6.5% p.a.
Oakley Capital G.P. II Limited
Interest at 6.5% p.a.

Total revolving loans

Total investments

Fair value as a
percentage of net assets

Percentage
interest

Principal amount/
Quantity

Cost
£

Fair value
£

3.68%

1.62%

0.89%

6.19%

2.51%

0.20%

0.65%

3.36%

71.66%

£14,000,000

14,060,588

£6,200,000

6,200,000

$5,000,000

3,101,500

3,387,000

23,362,088

23,647,588

£9,587,398

9,587,398

£773,500

773,500

£2,500,000

2,500,000

12,860,898

263,386,947

273,888,150

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

SCHEDULES OF INVESTMENTS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

31 December 2014

Investments in funds

Bermuda
Oakley Capital Private Equity L.P.
Oakley Capital Private Equity II-A L.P.

Total investments in funds

Unquoted debt securities

Investments in senior loan notes

Netherlands
North Sails

Interest at 8% p.a.

Maturity date November 2018
United Kingdom
Time Out London

Interest at 10% p.a.

Maturity date December 2017
United States
Time Out New York

Interest at 8.5% p.a.
Maturity date May 2016

Total senior loan notes

Investments in financing loan facility

United Kingdom
Bellwood Holdings Ltd
Interest at 6% p.a.

Maturity date January 2016

Total finance loans

Fair value as a
percentage of net assets

Percentage
interest

Principal amount/
Quantity

Cost
£

Fair value
£

33.94%
25.17%

59.11%

65.50%
60.45%

73,297,935
64,560,999

87,192,510
64,663,678

137,858,934

151,856,188

1.20%

£1,250,000

1,250,000

1,251,762

0.49%

£3,070,482

3,070,482

0.85%

2.54%

1.02%

$3,400,000

2,109,020

2,181,440

6,429,502

6,503,684

£2,625,000

2,625,000

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL STATEMENTS continued

SCHEDULES OF INVESTMENTS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

31 December 2014

continued

Investments in mezzanine loans

United Kingdom
Broadstone

Interest at 15% p.a.

Maturity date November 2015
Time Out London

Interest at 10% p.a.

Maturity date November 2015
United States
Time Out New York

Interest at 15% p.a.
Maturity date May 2018

Total mezzanine loans

Investments in revolving loan facility

Bermuda
Oakley Capital Private Equity L.P.

Interest at 6.5% p.a.

OCPE II Master L.P.

Interest at 6.5% p.a.
Oakley Capital G.P. II Limited
Interest at 6.5% p.a.

Total revolving loans

Total investments

Fair value as a
percentage of net assets

Percentage
interest

Principal amount/
Quantity

Cost
£

Fair value
£

2.34%

2.41%

1.25%

6.00%

7.51%

3.10%

1.75%

12.36%

81.03%

£6,000,000

6,000,000

£6,200,000

6,200,000

$5,000,000

3,101,500

3,208,000

15,301,500

15,408,000

£19,286,390

19,286,390

£7,968,000

7,968,000

£4,500,000

4,500,000

31,754,390

193,969,326

208,147,262

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

Investment income

Interest

Withholding tax on interest

Other

Expenses

Management fees

Professional fees

Other

Interest

Total expenses

Notes

2015
£

2014
£

5,053,548

(235,297)

597,176

6,756,083

(317,697)

84,134

5,415,427

6,522,520

5,175,574

1,431,806

490,075

1,718

7,099,173

–

493,213

337,303

84,418

914,934

6,10

Net investment (loss) income

(1,683,746)

5,607,586

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

Net realised losses on foreign exchange

Net change in unrealised (losses) gains on foreign exchange

Net realised gains on sale of investments

Net change in unrealised depreciation on investments

(1,906,689)

(93,537)

(833,926)

113,587

29,040,535

38,601,878

(3,782,447)

(40,366,788)

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

23,257,862

(2,485,249)

Net earnings

Net earnings per share

21,574,116

3,122,337

0.10

0.02

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL STATEMENTS continuedFINANCIAL STATEMENTS continued

STATEMENTS OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

Net increase in net assets resulting from operations

Net investment (loss) income

Net realised losses on foreign exchange

Net change in unrealised (losses) gains on foreign exchange

Net realised gains on sale of investments

Net change in unrealised depreciation on investments

Net increase in net assets resulting from operations

Net increase in net assets resulting from capital transactions

Shares sold

Shares repurchased

Net increase in net assets resulting from capital transactions

Net increase in net assets

Net assets at beginning of year

Net assets at end of year

Notes

2015
£

2014
£

(1,683,746)

5,607,586

(1,906,689)

(93,537)

(833,926)

113,587

29,040,535

38,601,878

(3,782,447)

(40,366,788)

21,574,116

3,122,337

128,244,189

6,860,223

(24,590,657)

–

103,653,532

6,860,223

125,227,648

9,982,560

256,922,838

246,940,278

382,150,486

256,922,838

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED 31 DECEMBER 2015 AND 2014
(Expressed in British Pounds)

Cash flows from operating activities

Net increase in net assets resulting from operations

Adjustments to reconcile net increase in net assets resulting from operations
to net cash provided by (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 and accounts receivable

Change in other receivables

Change in accounts payable and accrued expenses

Net cash used in operating activities

Cash flows from financing activities

Proceeds from shares sold

Payments for shares repurchased

Net cash provided by financing activities

Net effect of foreign exchange

Net increase (decrease) in cash and cash equivalents

Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year

Interest paid during the year

2015
£

2014
£

21,574,116

3,122,337

(23,257,862)

2,485,249

(133,335,581)

(142,988,335)

92,852,781

117,435,035

27,554,009

(33,508,356)

16,765

1,580,188

20,802

386,230

(13,015,584)

(53,047,038)

128,244,189

6,860,223

(24,590,657)

–

103,653,532

6,860,223

(2,000,226)

(720,339)

88,637,722

(46,907,154)

6,882,217

53,789,371

95,519,939

6,882,217

1,718

84,418

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

FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

FINANCIAL STATEMENTS continued

NOTES TO THE FINANCIAL STATEMENTS

1. THE COMPANY

Oakley Capital Investments Limited (the “Company”) is a closed-end investment company 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 currently
achieves its investment objective primarily through its investments in two private equity funds (the “Funds”), Oakley
Capital Private Equity L.P. (“Fund I”), an exempted limited partnership established in Bermuda, and Oakley Capital
Private Equity II-A L.P., which together with Oakley Capital Private Equity II-B L.P., Oakley Capital Private Equity II-C
L.P. (collectively the “Feeder Funds”) and OCPE II Master L.P. (the “Master Fund”) comprise Oakley Capital Private
Equity Fund II (“Fund II”). The Company’s manager is Oakley Capital (Bermuda) Limited (the “Manager”), whose
investment adviser in relation to the Company is Oakley Capital Limited (the “Investment Adviser”). The Company, the
Manager, the Investment Adviser, the general partner of each Fund and the Company’s administrator, Mayflower
Management Services (Bermuda) Limited (the “Administrator”) have 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 U.S. generally accepted accounting
principles. The Company is an investment company and follows the accounting and reporting guidance contained
within Topic 946 of the FASB Accounting Standards Codification (“ASC”).

b) Use of estimates

The preparation of financial statements in conformity with U.S. 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

Funds
Security transactions are accounted for on a trade date basis based on the capital drawdown and distribution dates
for proceeds received from the Funds. The Company’s investment in each Fund is valued at the balance of the
Company’s capital account in that Fund as at the reporting date. Any difference between the net capital invested and
the balance on the Company’s capital account in each Fund is recognised in the net change in unrealised appreciation
and depreciation on investments in the Statements of Operations.

The Funds value their investments at fair value and recognise gains and losses on security transactions using the
specific cost method.

Unquoted equity securities
Security transactions are accounted for on a trade date basis. Subsequent to initial recognition the securities are
valued on a fair value basis.

Realised and unrealised gains and losses are determined by the specific cost method and are reflected in the
Statements of Operations.

Unquoted debt securities (mezzanine loans, senior loans, financing loans and revolving loan facilities)
Mezzanine loans, senior loans, financing loans and revolving loan facilities are initially valued at the price each loan was
granted. Subsequent to initial recognition the loans are valued on a fair value basis taking into account market
conditions and the operating performance and financial condition of the borrower.

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 and are reflected in the Statements of Operations.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

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 U.S.
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 their fair value.

The hierarchy of inputs is summarised below:
Level 1 – quoted prices in active markets for identical investments;

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

speeds, credit spreads, etc.); and

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 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.

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 these circumstances, the Investment
Adviser will use consistent fair valuation criteria and the Company 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 distributions received from
the Funds 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
gains or losses 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.

g) Treasury stock

Treasury shares are included at cost as a reduction in shareholder’s equity. Gains or losses resulting from the
subsequent sale of treasury shares are recorded as an adjustment to equity.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTES TO THE FINANCIAL STATEMENTS continued

3. CASH AND CASH EQUIVALENTS

Cash and cash equivalents at 31 December 2015 and 2014 consist of the following:

Cash

Short-term deposits

2015
£

2014
£

67,296,902

6,660,420

28,223,037

221,797

95,519,939

6,882,217

4. MANAGEMENT AND PERFORMANCE FEES

(a) The Company has entered into a Management Agreement with the Manager for the purpose of advising and arranging
in relation to the Company’s investment portfolio. The Manager will not receive a management fee from the Company
in respect of funds either committed to, or invested, by the Company, in the Funds or any other investment funds
managed by the Manager or any affiliate of the Manager. The Manager will receive a management fee at the rate of 1%
per annum in respect of those funds 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. All management fees are payable monthly in arrears.

For the year ended 31 December 2015, the Company incurred management fees of £5,175,574 (2014: £nil) of which
£482,496 remains payable at year end (2014: £nil). During 2015, the Company undertook a review of management
fees paid to the Manager since the inception. Following such review, it was determined that management fees had
been underpaid by £2,797,887, primarily as a result of certain co-investments made by the Company being excluded
from the management fee calculation or being included in the management fee calculation but charged at a rate of 1%
instead of 2%. This amount is included in the 2015 management fee expense balance of £5,175,574.

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% per annum hurdle rate on any monies invested as a co-investment with the Funds.
Each co-investment will be treated as a segregated investment 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 amount earned 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 2015, the Company did not incur any performance fees (2014: £nil).

(b) The Manager has entered into an Investment Adviser Agreement with the Investment Adviser to advise the Manager
with regard to the investment of the assets of the Company. The Investment Adviser will not receive any management
or performance fees from the Company. Any fees due to the Investment Adviser will be paid by the Manager out of the
management and performance fees it receives from the Company.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

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)

Significant unobservable inputs (Level 3)

31 December
2015
£

31 December
2014
£

–

273,888,150

208,147,262

The instruments comprising investments in securities are disclosed in the Schedules of Investments.

The Company has investments in the Funds, both of which are private equity limited partnerships. These investments
are included at fair value based on the Company’s balance of its capital account as reported by each Fund.
The valuation of non-public investments requires significant judgment by the Investment Adviser (in its capacity as the
investment advisor to the Funds) due to the absence of quoted market values, inherent lack of liquidity and the
long-term nature of such investments. Private equity investments are valued initially based upon the transaction price.
Valuations are reviewed periodically utilising available market data to determine if the carrying value of these investments
requires adjustment. Such market data primarily includes observations of the trading multiples of public companies
considered comparable to the private companies being valued. A variety of additional factors are considered by the
Investment Adviser (in its capacity as the investment advisor to the Funds), 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. Due to 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.

Unquoted equity investments are valued initially based upon transaction price. Subsequent to initial recognition, the
unquoted equity investments are valued on a fair value basis taking into account market conditions and the operating
performance and financial condition of the investment.

Mezzanine loans, senior loans, financing loans and revolving loan facilities are valued at the principal amount for which
the relevant loan was granted. For the purposes of these financial statements, the Investment Adviser conducted a fair
value exercise of the loans taking into account market conditions and the operating performance and financial condition
of the borrower to ensure that valuing the loans at their principal amount was not materially different to their fair values.
Such fair values were determined based on a discounted cash flow valuation approach consistent with prior years.
The discount rate used to value the mezzanine loans was 15% (2014: 15%), for the secured loans it was 8.5%
(2014: 8.5%) and for the revolving loan facilities it was 6.5% (2014: 6.5%). A discount rate of 10% was used for the
mezzanine and secured loans provided to Time Out London and intergenia. A discount rate of 8% was used for
the loan to North Sails. A discount rate of 6.5% was used for the loan provided to Daisy. A discount rate of 6% was
used for the loans provided to Broadstone and Bellwood Holdings Ltd. A discount rate of 5.7% was used for the loan
provided to Damovo.

The Company’s policy is to recognise transfers into and out of the various levels as of the end of the period or the date
of the change in circumstances that caused the transfer. For the year ended 31 December 2015, there were no
transfers between Levels 1, 2 or 3 (2014: none).

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

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 the Funds

Fair value at beginning of year

Purchases

Proceeds on disposal

Realised gain on disposal

Net change in unrealised appreciation (depreciation) on investments

Fair value at end of year

Unquoted equity securities

Fair value at beginning of year

Purchases

Net change in unrealised appreciation on investments

Fair value at end of year

Unquoted debt securities

Fair value at beginning of year

Purchases

Proceeds on disposal

Net realised gain (loss) on disposal

Net change in unrealised appreciation (depreciation) on investments

Fair value at end of year

Total fair value at end of year

Investment in
securities
2015
£

Investment in
securities
2014
£

151,856,188

130,624,846

27,146,097

84,431,315

(45,518,862)

(61,531,752)

29,040,535

39,218,009

(4,154,965)

(40,886,230)

158,368,993

151,856,188

–

25,876,087

73,560

25,949,647

–

56,291,074

53,734,026

80,313,397

58,557,020

(47,333,919)

(55,903,283)

–

298,958

(616,131)

519,442

89,569,510

56,291,074

273,888,150

208,147,262

Of the investments held by the Funds, 100% are classified as Level 3 investments for the year ending 31 December
2015 (2014: Level 3 – 100%).

6. ADMINISTRATION FEE

Under the terms of the Administration Agreement dated 30 July 2007 between the Administrator and the Company,
the Administrator receives an annual administration fee at prevailing commercial rates. During the year ended
31 December 2015, the Company incurred administration fees of £381,249 (2014: £181,163), which is included in
professional fees in the Statements of Operations.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

7. INVESTMENTS

Funds

The Company has committed substantially all of its capital to the Funds. Their 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 investments in the Funds are denominated in Euros. Fund I has an initial period of
ten years from its final closing date of 30 November 2009 and Fund II has an initial period of ten years from its final
closing date of 29 December 2014; however the life of each Fund may be extended, at the discretion of its general
partner, by up to three additional one year periods, to provide for the orderly realisation of investments. The Funds will
make distributions as their investments are realised.

The Company’s share of the total capital called by Fund I up to 31 December 2015 was £131,745,962 (€178,978,348)
(2014: £137,293,160 (€176,152,373)), representing 95.0% (2014: 93.5%) of the Company’s total capital commitment
to Fund I. In November 2015, Fund I recycled 3.0% (£3,981,797 (€5,651,948)) of the capital commitments that had
been previously distributed. During the year ended 31 December 2014 the Company acquired an additional interest in
Fund I comprising a commitment of €700,000, representing 0.24% of Fund I’s total commitments.

The Company’s share of the total capital called by Fund II as at 31 December 2015 was £83,915,400 (€114,000,000)
(2014: £65,469,600 (€84,000,000)) representing 57.0% (2014: 42.0%) of the Company’s total capital commitment to
Fund II.

The Company may also make co-investments alongside the Funds.

At 31 December 2015 and 2014, all of the Funds’ investments are carried at fair value.

Fund I

Fund I made follow-on investments in three of its portfolio companies in 2015. These investments were in Educas,
Educas Australia and the Time Out Group. Fund I funded the follow-on investments using loans drawn under a
revolving loan facility made available to Fund I by the Company.

Broadstone
Fund I, through its wholly owned subsidiary, Broadstone Holdco (Bermuda) Limited, has an 84.4% interest in
Broadstone Finance Limited (“Broadstone”), a UK-wide independent provider of investment advice and solutions to
private individuals and corporates, acquired from BDO LLP. The date of the initial investment in Broadstone was
November 2010.

Time Out Group
The Time Out Group consists of investments in Time Out Group HC Limited (“Time Out London”) and Time Out
America LLC (“Time Out New York”). Time Out London provides services across traditional print, digital channels and
live events and controls the worldwide rights to the Time Out brand. The date of the initial investment in the Time Out
Group was November 2010.

Fund I, through its wholly owned subsidiary, TO (Bermuda) Limited, acquired 50.0% of Time Out London, and also
acquired, through its wholly owned subsidiary, TONY (Bermuda) Limited, 65.7% of Time Out New York.

In September 2014, Time Out London and Time Out New York were merged into a single group structure under Time
Out Group HC Limited and shares in Time Out Group HC were issued to Fund I’s subsidiaries. As at 31 December
2015, Fund I had an effective ownership interest in the Time Out Group of 70.4% (2014: 74.3%).

Educas
During July 2013, Fund I acquired 50.5% of Educas Investments LLP (“Educas”), an entity investing in private schools in
several countries.

Educas Australia
During July 2014, Fund I acquired 50.5% of Educas Australia Investments LLP (“Educas Australia”), an entity which owns
early learning schools in Australia.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTES TO THE FINANCIAL STATEMENTS continued

Verivox
Fund I, through VVX (Bermuda) Limited, held a 51.0% interest in Verivox Holdings Limited (“Verivox”), 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. Fund I disposed of its investment Verivox to ProSieben Sat.1 Media AG
during the year ending 31 December 2015.

intergenia
Fund I, through its wholly owned subsidiary, WHDI (Bermuda) Limited, acquired a 51.0% stake in Intergenia Holdings
GmbH (“intergenia”), a web hosting company providing managed, dedicated and cloud hosting. Fund I sold its
investment in intergenia at fair value during the year ending 31 December 2014 to Fund II.

Daisy
Fund I had a 13.6% stake in Daisy Group plc (“Daisy”), a then listed company providing integrated voice and
data services to small and medium sized businesses. Fund I sold its investment in Daisy during the year ending
31 December 2014. A distribution payable to the Company of £29,726,191 is included in the Statements of Assets
and Liabilities as accounts receivable on 31 December 2014.

Certain directors of the Company, the Manager, the Investment Adviser and the general partner of Fund I are also
directors of the investee companies in which Fund I has an interest.

Fund II

Oakley Capital Private Equity II-A L.P., together with Oakley Capital Private Equity II-B L.P. and Oakley Capital Private
Equity II-C L.P. (collectively the “Feeder Funds”) are feeder funds in OCPE II Master L.P. (the “Master Fund”).
The Feeder Funds and the Master Fund collectively comprise the fund structure known as “Oakley Capital Private
Equity Fund II” (“Fund II”). The Company invests in this fund structure through its investment in Oakley Capital
Private Equity II-A L.P. All investments of Fund II are owned directly or indirectly by the Master Fund.

The Master Fund made six new investments and two follow-on investments during 2015.

North Sails
North Sails is a leading marine technology group which includes a worldwide leading sail maker.

On 10 March 2014 the Master Fund, through its wholly owned subsidiary, Oakley NS (Bermuda) LP, acquired a 65.2%
stake in North Sails Technology Group LLC. Additionally on 30 June 2014 the Master Fund acquired a 70.3% interest
in North Sails Europe LLC. On 11 March 2015, the Master Fund made a follow-on investment to fund the acquisition
of NSG Apparel BV (“NSG Apparel”) and Future Fibres. As at 31 December 2015, the Master Fund held a 66.6%
holding in the North Sails Group (“North Sails”) (2014: 66.4%).

Educas Europe
On 27 August 2014, the Master Fund acquired 50.5% of Educas Europe Investments LLP (“Educas Europe”), an entity
established to invest in private schools in Europe. The Master Fund made a follow-on investment in Educas Europe on
24 October 2014. During 2015, the Master Fund made follow-on investments to fund the acquisition of private schools
in Kenya and Switzerland.

Facile
On 19 September 2014, the Master Fund, through its wholly owned subsidiary, Facile.it (Bermuda) Limited, acquired
a 68.2% stake in Facile.it SpA (“Facile”), Italy’s largest price comparison website. On 23 July 2015, Facile.it (Bermuda)
Limited repurchased a portion of its shares from the Master Fund.

Host Europe
On 19 January 2015, the Master Fund acquired a minority stake in Host Europe Group (“Host Europe”), a leading
provider of domains and hosting services in Europe. The Master Fund invested in Host Europe through a wholly owned
subsidiary, HEG Holdings (Bermuda) Limited.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

Damovo
On 23 January 2015, the Master Fund acquired a 60.0% stake in Damoco Holdco Limited (“Damovo”), a provider of
enterprise information communication technology (ICT) services and solutions. The Master Fund invested in Damovo
through a wholly owned subsidiary, Damoco (Bermuda) Limited.

Parship
On 14 April 2015, the Master Fund acquired an 80.0% stake in Parship GmbH (“Parship”), a leading online matchmaking
company in Europe. At the same time, the Master Fund provided a bridge loan facility to Parship through a wholly
owned subsidiary, THMMS (Bermuda) Limited. The bridge loan facility was repaid by Parship on 9 June 2015.
The Master Fund made a follow-on investment in Parship on 26 October 2015.

Daisy
On 30 July 2015, the Master Fund acquired a minority stake in Daisy Group Limited (“Daisy”), one of the UK’s leading
business communication providers to the SME and mid-market sector.

The Master Fund made the investment through a wholly owned subsidiary, Ellisfield (Bermuda) Limited. At the same
time, the Master Fund provided a loan note to Daisy. The loan note carries interest of 15% and is repayable on
21 March 2022.

Educas Americas
On 21 August 2015, the Master Fund acquired 50.5% of Educas Investments Americas LLP (“Educas Americas”),
an entity established to acquire private schools in South America.

Verivox
On 17 September 2015, the Master Fund acquired a minority stake in Verivox GmbH, Germany’s largest independent
online consumer energy price comparison site. The Master Fund acquired the investment in Verivox through a wholly
owned subsidiary, Velocity SPV II Limited.

intergenia
The Master Fund, through its wholly owned subsidiary, WHDI 2 (Bermuda) Limited, acquired a 51.0% stake in intergenia
from Fund I. intergenia is a web hosting company providing managed, dedicated and cloud hosting. The Master Fund
sold its investment in intergenia during December 2014. As at 31 December 2015, deferred proceeds from the sale
were receivable.

Unquoted equity securities

All of the Company’s investments in unquoted equity securities were made through OCIL Investments L.P.

Time Out Mercado
On 27 May 2015, the Company invested €4,566,658 (£3,245,542) in ordinary and preferred shares of Time Out
Mercado Limited (“Time Out Mercado”). Time Out Mercado is part of the Time Out Group and holds an investment in
Mercados da Capital, Lda, a Portuguese company that operates a cultural hub encompassing the best of Lisbon’s
food, drink and events which has quickly become one of the leading tourist destinations in Lisbon. On 15 July 2015,
17 August 2015, 23 October 2015 and 12 November 2015, the Company made follow-on investments totalling
€3,113,967 (£2,244,566). The fair value of Time Out Mercado as at 31 December 2015 was £5,563,667 which is the
transaction price adjusted for foreign exchange differences.

Flypay
On 10 July 2015, the Company invested £6,989,999 in preferred shares of Flypay Limited (“Flypay”). Flypay is a
leading company in the UK hospitality mobile payments and loyalty sector allowing mobile payment for bills and tabs
in restaurants, bars and other venues. Flypay is part of the Time Out Group. The fair value of Flypay as at 31 December
2015 was £7,115,360 which is the transaction price including capitalised deal costs.

Time Out London
On 16 July 2015, the Company invested £3,500,000 in preferred shares of Time Out London. On 17 September 2015,
13 November 2015 and 15 December 2015, the Company made follow-on investments totalling £9,770,620. The fair
value of the Company’s investment in Time Out London as at 31 December 2015 was £13,270,620 which is the
transaction price.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTES TO THE FINANCIAL STATEMENTS continued

Senior Loan notes

North Sails
On 19 December 2014, the Company provided, through its wholly owned subsidiary OCIL Financing (Bermuda)
Limited (“OCIL Financing”), a £5,000,000 loan facility to NSG Apparel at an interest rate of 8% per annum. On 22 July
2015 the Company provided, through OCIL Financing, a further £5,000,000 loan facility to NSG Apparel at an interest
rate of 8% per annum. As at 30 November 2015, the total amount drawn under these facilities was £6,250,000.

On 30 November 2015, the Company provided, through OCIL Financing, a senior loan facility of £15,000,000 to NSG
Apparel. The instrument carries an interest rate of 8% and matures no later than 30 November 2018. This facility was
used to refinance the above two £5,000,000 facilities. The balance outstanding as at 31 December 2015 was
£10,000,000. The fair value of the loan is considered to approximate its amortised cost at 31 December 2015.

Time Out London
As part of Fund I’s acquisition of Time Out London, the Company provided a secured senior loan of £5,000,000 to
Time Out Group MC Limited, a wholly owned subsidiary of Time Out London. The instrument carries a fixed interest
rate of 10% per annum, maturing on 31 December 2017. On 10 April 2013, £1,929,518 of this loan was repaid. The
balance outstanding as at 31 December 2015 was £3,070,482. The fair value of the loan is considered to approximate
its amortised cost at 31 December 2015.

Time Out New York
As part of Fund I’s acquisition of Time Out New York, the Company provided, through OCIL Financing, a secured
senior loan of $3,400,000 (£2,109,020) to TONY MC LLC. The instrument carries a fixed interest rate of 8.5%
per annum before withholding tax and 5.95% per annum after withholding tax. The instrument matures no later than
31 December 2017. The balance outstanding as at 31 December 2015 was $3,400,000 (£2,303,160). The fair value
of the loan is considered to approximate its amortised cost at 31 December 2015.

intergenia
On 20 December 2013 the Company provided a secured senior loan of €2,500,000 (£2,090,000) to intergenia at
an interest rate of 10% per annum. The loan was fully repaid on 16 September 2014.

Financing loan facilities

Broadstone
As part of Fund I’s acquisition of Broadstone, the Company provided a mezzanine loan of £6,000,000 to Broadstone
Holdco (Bermuda) Limited. During June 2015, the instrument was restructured and is now secured, carrying an
interest rate of 6% per annum and maturing on 31 May 2016. The balance outstanding as at 31 December 2015 was
£6,000,000. The fair value of the loan is considered to approximate its amortised cost at 31 December 2015.

Damovo
As part of Fund II’s acquisition of Damovo, the Company provided a loan of £4,130,000 to Damoco Holdco Ltd.
The instrument carries a fixed interest rate of 5.7% per annum and a maturity date of 18 May 2016. The balance
outstanding as at 31 December 2015 was £4,130,000. The fair value of the loan is considered to approximate its
amortised cost at 31 December 2015.

Daisy
As part of Fund II’s acquisition of Daisy, the Company provided a loan of £24,932,382 to Ellisfield (Bermuda) Limited.
The instrument carries a fixed interest rate of 6.5% per annum and matures on 30 June 2016. The balance outstanding
as at 31 December 2015 was £24,932,382. The fair value of the loan is considered to approximate its amortised cost
at 31 December 2015.

Bellwood Holdings Ltd.
On 12 November 2014, the Company provided a loan of £2,625,000 to Bellwood Holdings Ltd. The instrument carries
a fixed interest rate of 6% per annum. The instrument matures no later than February 2016. The balance outstanding
as at 31 December 2015 was £2,625,000. The fair value of the loan is considered to approximate its amortised cost
at 31 December 2015. The loan was fully repaid in January 2016.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

intergenia
On 21 June 2013, the Company provided a finance loan of €8,000,000 (£6,834,400) to intergenia. During 2014, the
Company provided intergenia with additional loan facilities of €8,800,000 (£7,086,160). These loans carried interest at
10% per annum and were fully repaid on 16 September 2014.

Mezzanine loans

Daisy
Through OCIL Investments L.P. and as part of Fund II’s acquisition of Daisy, the Company provided a loan of
£14,000,000 to Daisy Group Holdings Limited. The instrument carries a fixed interest rate of 15% per annum. The
instrument matures on 21 March 2022. The balance outstanding as at 31 December 2015 was £14,000,000 with a
fair value of £14,060,588 (inclusive of deal costs). The fair value of the loan is considered to approximate its amortised
cost at 31 December 2015.

Time Out London
As part of Fund I’s acquisition of Time Out London, the Company provided debt finance of £6,200,000 in the form of
a mezzanine loan to TO (Bermuda) Limited. The instrument carried a fixed interest rate of 15% per annum. On 4 April
2013 the instrument was restructured and now carries a fixed interest rate of 10% per annum, maturing on
30 November 2015. During 2015, the Company extended the maturity date to 31 December 2017. The balance
outstanding as at 31 December 2015 was £6,200,000. The fair value of the loan is considered to approximate its
amortised cost at 31 December 2015.

Time Out New York
As part of Fund I’s acquisition of Time Out New York, the Company provided a mezzanine loan of $5,000,000
(£3,101,500) to TONY OCIL. The instrument carries a fixed interest rate of 15% per annum before withholding tax and
10.5% per annum after withholding tax. The instrument matures no later than May 2018. The balance outstanding as
at 31 December 2015 was $5,000,000 (£3,387,000). The fair value of the loan is considered to approximate its
amortised cost at 31 December 2015.

Revolving loan facility

Oakley Capital Private Equity L.P.
On 19 March 2012, the Company provided a revolving loan facility of £23,000,000 to Fund I. Loans drawn under this
facility carried an interest rate of 6.5% per annum. During 2014, the amount available under the revolving loan facility
was increased to £30,000,000. On 18 September 2015, the Company and Fund I entered into a £10,000,000
refinancing facility. On 18 September 2015, Fund I made its only drawing under the refinancing facility in the amount
of £9,587,398 which was used to repay the outstanding balance on the £30,000,000 revolving loan facility. The
balance outstanding as at 31 December 2015 under the refinancing facility was £9,587,398. The fair value of the loan
is considered to approximate its amortised cost at 31 December 2015.

On 18 September 2015, the Company provided a revolving loan facility of £5,000,000 to Fund I. Loans drawn under
this facility carried an interest rate of 6.5% per annum. As at 31 December 2015, £773,500 had been drawn under the
facility. The fair value of the loan is considered to approximate its amortised cost at 31 December 2015.

OCPE II Master L.P.
On 19 September 2014, the Company provided a revolving loan facility of £15,000,000 to the Master Fund at an
interest rate of 6.5% per annum. During 2015, Fund II repaid the outstanding balance (2014 balance outstanding:
£7,968,000).

Oakley Capital GP II Limited
On 2 December 2013, the Company provided a loan facility of £2,500,000 to Oakley Capital GP II Limited (“GP II”) at
an interest rate of 6.5% per annum. A further loan facility of £2,500,000 was made available to GP II at the same
interest rate on 31 March 2014. As at 31 December 2015, an aggregate of £2,500,000 (2014: £4,500,000) remains
outstanding under these facilities. The fair values of these loans are considered to approximate their amortised cost at
31 December 2015.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTES TO THE FINANCIAL STATEMENTS continued

8. CAPITAL COMMITMENT

The Company has made the following capital commitments:

Fund I

Total capital commitment (2015: £138,679,959; 2014: £146,837,604)

Called capital, beginning of year

Capital calls during year

– November 2015 1.5%

– March 2014 7% call

– August 2014 5% call

Additional interests acquired (2015: nil; 2014: 0.24%)

2015
€

2014
€

188,398,260

176,152,373

152,974,082

2,825,975

–

13,138,878

9,384,913

654,500

Called capital, end of year (2015: £131,745,962; 2014: £137,293,160)

178,978,348

176,152,373

Unfunded capital commitment (2015: £6,933,997; 2014: £9,544,444)

9,419,912

12,245,887

Recycled commitment (3%)

5,651,948

–

Fund II

Total capital commitment (2015: £147,220,000; 2014: £155,880,000)

Called capital, beginning of year

Capital calls during year

– June 2015 6% call

– July 2015 9% call

– January 2014 24% call

– February 2014 follow-on commitment call

– September 2014 15% call

– September 2014 follow-on commitment call

200,000,000

84,000,000

3,000,000

12,000,000

18,000,000

–

24,000,000

13,500,000

22,500,000

21,000,000

Called capital, end of year (2015: £83,915,400; 2014: £65,469,600)

114,000,000

84,000,000

Unfunded capital commitment (2015: £63,304,600; 2014: £90,410,400)

86,000,000

116,000,000

Each Fund may call the unfunded portion of the Company’s capital commitment to that Fund at any time, subject to
two weeks’ notice, on an as needed basis.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

9. SHARE CAPITAL

(a) Share capital

In April 2015, the Company increased its authorised share capital to 280,000,000 Ordinary Shares of par value £0.01
each by authorising an additional 80,000,000 Ordinary Shares of par value £0.01 each. The Company’s issued share
capital was 191,078,315 Ordinary Shares as at 31 December 2015 (2014: 128,125,000).

(b) Share issuance

On 20 April 2015, the Company sold 78,787,879 shares at a price of 165 pence per share.

On 2 September 2014, the Company sold 4,425,950 shares at a price of 155 pence per share from the treasury stock.

On 10 February 2015, the Company authorised and repurchased 7,000,000 shares at a price of 152 pence per share.
On 18 February 2015, the Company authorised the repurchase of up to 4,000,000 shares and repurchased 2,967,155
shares at a price of 151 pence per share. On 24 February 2015, the Company repurchased 667,033 shares at a price
of 161 pence per share. On 22 April 2015, the Company sold 819,250 shares at a price of 174 pence from treasury
stock. On 15 September 2015, the Company authorised the repurchase of an additional 500,000 shares.
On 6 November 2015, the Company repurchased 169,626 shares at a price of 143 pence per share. On 26 September
2015, the Company authorised the repurchase of an additional 6,000,000 shares. On 27 November 2015, the
Company repurchased 5,278,868 shares at a price of 139 pence per share. On 4 December 2015, the Company
repurchased 181,132 shares at a price of 141 pence per share. On 11 December 2015, the Company repurchased
390,000 shares at a price of 144 pence per share.

As at 31 December 2015 there were 15,834,564 shares held in treasury stock at a cost of £23,169,258 (2014: £nil).

Ordinary Shares outstanding are made up of:

Ordinary Shares

Balance at beginning of year

Shares issued

Shares repurchased (held in treasury stock)

Shares sold from treasury stock

Balance at end of year

10. RELATED PARTIES

2015

2014

128,125,000

123,699,050

78,787,879

(16,653,814)

–

819,250

4,425,950

191,078,315

128,125,000

Certain directors of the Company are also directors, members and/or shareholders of the Manager, the Investment
Advisor, Oakley Capital Corporate Finance LLP (“Oakley Finance”), and the Administrator; entities which provide
services to and receive compensation from the Company. These service agreements are based on normal
commercial terms.

During 2014, the Company had a financial advisory agreement with Oakley Finance. During 2014, the Company
incurred financial advisory fees of £20,833, which is included in professional fees in the Statements of Operations.
The agreement was terminated by mutual agreement on 31 May 2014.

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 31 March 2035.

The Company was not required to recognise any amounts for uncertain tax positions under FASB ASC 740-10 during
the years ended 31 December 2015 and 2014.

The Company may, however, be subject to foreign withholding tax and capital gains tax in respect of income derived
from its investments in other jurisdictions.

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTES TO THE FINANCIAL STATEMENTS continued

12. INDEMNIFICATIONS, WARRANTIES AND GUARANTEES

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.

During 2015, the Company agreed to guarantee the following with respect to its investment in Time Out Mercado:
a) €1,400,000 contingent consideration payment based on certain performance criteria; and b) provided certain bank
guarantees on behalf of Time Out Mercado totalling €3,134,000.

13. SUBSEQUENT EVENTS

The Directors have evaluated subsequent events from the year end through 12 April 2016, which is the date the
financial statements were available to be issued. The following events have been identified for disclosure.

On 28 January 2016, the Company committed €250,000,000 (£190,725,000) to Oakley Capital Private Equity III-A
L.P. (“Fund III”), the successor private equity fund of Fund II. Fund III is managed by Oakley PE Management (Bermuda)
Limited who is in turn advised by the Investment Adviser.

On 29 January 2016, the Company repurchased 1,274,279 shares at a price of 145 pence per share.

14. FINANCIAL HIGHLIGHTS

Per share operating performance

Net asset value per share, at start of year

Gains/(losses) from investment operations

Net investment income (loss)

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

Total from investment operations

Shares issued and net shares repurchased to treasury stock

Net asset value per share, end of year

Total return

Ratio of expenses to average net assets1

Ratio of net investment income to average net assets1

1Expenses include interest expense of, 2015: £1,718 (2014: £84,418).

2015
£

2014
£

2.01

2.00

(0.01)

0.13

0.12

(0.13)

2.00

5.98%

2.22%

(0.53)%

0.04

(0.02)

0.02

(0.01)

2.01

1.23%

0.36%

2.23%

NOTES TO THE FINANCIAL STATEMENTS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

DIRECTORS AND ADVISERS

DIRECTORS

Christopher Wetherhill
Independent Director and Chairman

Peter Adam Daiches Dubens
Director

Laurence Charles Neil Blackall
Independent Director

Christine (Tina) Michelle Burns
Independent Director

James Michael Keyes
Independent Director

Ian Patrick Pilgrim
Director

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

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

Auditors to the Company and
the Limited Partnership
KPMG
Crown House
4 Par-La-Ville Road
Hamilton HM08
Bermuda

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

ADVISERS

Registered Office
3rd Floor, Mintflower Place
8 Par-La-Ville Road
Hamilton HM08
Bermuda

Manager to the Company
and the Limited Partnership
Oakley Capital (Bermuda) Limited
3rd Floor, Mintflower Place
8 Par-La-Ville Road
Hamilton HM08
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
3rd Floor, Mintflower Place
8 Par-La-Ville Road
Hamilton HM08
Bermuda

DIRECTORS AND ADVISERS | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTICE OF ANNUAL GENERAL MEETING

NOTICE is hereby given that the 2016 Annual General Meeting of the members of the Company will be held at 3rd Floor,
Mintflower Place, 8 Par-La-Ville Road, Hamilton HM08, Bermuda on:

7 June 2016 at 11.00 a.m. (Bermuda time)

AGENDA

Ordinary Resolutions

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 2015.

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) elect Caroline Foulger as a Director of the Company so to serve until the next Annual General Meeting or until her

successor is elected or appointed;

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

h) confer general authority on the Directors to appoint alternate Directors.

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

13 May 2016
BY ORDER of the Directors
Mayflower Management Services (Bermuda) Limited
Secretary

NOTICE OF ANNUAL GENERAL MEETING | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTES

1. The Company has established 11 May 2016 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 6 June 2016 at:

Mayflower Management Services (Bermuda) Limited

Secretary
Oakley Capital Investments Limited
3rd Floor, Mintflower Place
8 Par-La-Ville Road
Hamilton HM08
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 Note 3 above before commencement of the Meeting. Notice of Revocation may be served by scanned e-mail
or by facsimile.

NOTICE OF ANNUAL GENERAL MEETING | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

NOTICE OF ANNUAL GENERAL MEETING continuedFOR YOUR NOTES

FOR YOUR NOTES | OAKLEY CAPITAL INVESTMENTS LIMITED ANNUAL REPORT AND ACCOUNTS 2015

Oakley Capital Investments Limited is registered
in Bermuda with company number 40324.

Registered office: 3rd Floor, Mintflower Place,
8 Par-La-Ville Road, Hamilton HM08, Bermuda