APPLYING PRIVATE EQUITY INVESTMENT TECHNIQUES

TO PUBLIC MARKETS

May 2015

1

Notice to recipients

This document is given to the recipient on condition that the recipient accepts that it is not a client of GVQ Investment Management Limited (“GVQ Investment Management” or “GVQIM”) and that hence, none of the client protections applicable to GVQIM’s clients are in fact in force or available, and GVQIM is not providing any financial or other advice to it.

This document has been issued by GVQIM in the UK solely for the purposes of section 21 of the UK Financial Services and Markets Act 2000. GVQIM, whose registered office is at 25 North Row, London, W1K 6DJ, is registered in England: No 4493500 and is authorised and regulated by the UK Financial Conduct Authority.

This document is confidential, is for informational purposes only, and is intended solely for the person to whom it is delivered. It may not be reproduced, photocopied or disseminated to any other person without the express prior written consent of GVQIM. GVQIM acts as the investment manager for the various funds included in this presentation.

The information in this presentation is subject to change without notice, its accuracy is not guaranteed, and it may be incomplete and is condensed. This document is not intended to provide, and should not be relied on for, accounting, legal or tax advice or investment recommendations. Potential investors are advised to independently review and/or obtain independent professional advice and draw their own conclusions regarding the economic benefit and risks of investing in the securities and legal, regulatory, credit, tax and accounting aspects in relation to their particular circumstances. The recipient should consult its tax, legal, and accounting or other advisers about the issues discussed herein and shall be solely responsible for evaluating the risks and merits involved in the content of this document. Past returns are not a predictor of future returns. The financial illustrations and illustrative investor returns contained in this document do not constitute forecasts and should not be construed as such.

All opinions and estimates included in this document as well as the product features and structure speak as of the date of this document and are subject to change without notice and reliance should not be placed on the information given herein. This document addresses only certain aspects of the securities characteristics and thus does not provide a complete assessment; as such it may not reflect the impact of all structural characteristics of the funds included in this presentation.

Although GVQIM has taken all reasonable care that the information contained in this document is accurate at the time of publication, no representation or warranty (including liability towards third-parties), expressed or implied, is made (or accepted) as to its accuracy or completeness or fitness for any purpose by GVQIM. Under no circumstances will GVQIM be liable for any direct, indirect, incidental, special or consequential loss or damages caused by reliance on this information or for the risks inherent in the financial markets.

To the maximum extent permitted by applicable law and regulatory requirements, GVQIM specifically disclaims any liability for errors, inaccuracies or omissions in this document and for any loss or damage resulting from its use, whether caused by negligence or otherwise.

Strategic Equity Capital plc These are not all the risks of an investment in Strategic Equity Capital plc (“Strategic Equity Capital”) shares. Investors should take advice from their own independent, professional financial advisers before making an investment decision and are responsible for ascertaining any income tax or other tax consequences which may affect their acquisition of any investment.

FE Crown Rating : 5 crown rating issued 31st December 2014

GVO UK Focus Fund (formerly known as SVG UK Focus Fund) Source & Copyright:

CITYWIRE. Jamie Seaton is AAA rated by Citywire for his 3 year risk adjusted performance for the period 31/03/2012 - 31/03/2015.

FE Crown Rating: 5 crown rating issued 1st January 2015.

Morningstar RatingTM of as at 31st March 2015.

2

Contents

Introduction to GVQ Investment Management 3

Our products 5

Our team 8

Applying private equity techniques to public markets 12

Conclusion 22

Appendix

• Valuation case study 25

• Key facts – GVO UK Focus Fund 26

• Key facts – Strategic Equity Capital 27

INTRODUCTION TO GVQ INVESTMENT MANAGEMENT

4

GVQ Investment Management (“GVQIM”)

• GVQIM specialises in applying private equity investment techniques to public markets

• Since our foundation in 2002 we have become one of Europe’s leaders in this field1

• Our investment process focuses on proprietary research and draws upon an extensive network of

industrialists and private equity professionals

• We manage and advise concentrated portfolios, unconstrained by equity indices, designed to deliver superior returns over the medium term

• We offer open and closed ended funds based around two core strategies: Unconstrained and Strategic block investing in the UK

• Our Fund Managers have extensive private and public equity experience, and invest in our products

Source: 1. GVQIM

OUR PRODUCTS

6

GVO UK Focus Fund (“Focus Fund”)

• GVO UK Focus Fund (£319.3m) – Citywire AAA rated for 26 consecutive months – Morningstar 5 stars – FE Trustnet 5 crowns and FE Alpha Manager

• Open ended investment company, listed on Dublin Stock Exchange in 2003

• Multi-cap fund investing in UK quoted companies that GVQIM believe are undervalued on a private equity basis and have clear identifiable catalysts to equity value creation

• Aims to outperform the FTSE All Share index over the medium term. Targets companies that GVQIM believe will deliver minimum total annualised returns of 15% over the holding period

31st March 2015 Source: 1. GVQIM 2. Northern Trust 3. Citywire Past performance is no guarantee of future performance and the value of investments can go down as well as up

Consistent outperformance over all time periods; one of the highest risk adjusted return profiles in its IA UK All Companies peer group over 5 years, with strong relative capital preservation characteristics

IA UK All Companies sector: 5 year Sharpe ratio vs maximum drawdown3

Annualised performance1, 2

13.2

20.7 17.5

6.6 10.6

8.3

0

5

10

15

20

25

1 year 3 years 5 years

UK Focus Fund FTSE All-Share

%

-0.2

-0.1

0.0

0.1

0.2

0.3

0.4

0.5

-30 -20 -10 0

Sharpe ratio

Maximum drawdown %

UK Focus Fund IA UK All Companies sector average

7

Strategic Equity Capital plc (“SEC”)

• Strategic Equity Capital plc (£116m) – FE Trustnet 5 crowns – Morningstar 5 star – Only UK smaller companies trust to

produce positive returns in 2011 and every year since 20083

– Multi award winning

• UK main market-listed investment trust, listed in 2005

• Invests predominantly in smaller UK quoted companies that GVQIM believes are undervalued and would benefit from strategic, operational or management initiatives

• Absolute return mentality - aims to deliver a minimum 15% IRR across the cycle

31st March 2015 Source: 1. GVQIM 2. Northern Trust 3. Capita 4. Morningstar Past performance is no guarantee of future performance and the value of investments can go down as well as up

Strong absolute, relative and risk adjusted returns

Annualised performance1, 3

13.5

24.9 24.1

1.2

19.7 14.5

-505

1015202530

1 year 3 years 5 years

SEC NAV Total Return FTSE Small Cap x IT Total Return

%

SEC Sharpe Ratio4

1.9 2.3

1.7

0.1

1.7 1.1

-0.50.00.51.01.52.02.53.0

1 year 3 years 5 years

SEC NAV FTSE Small Cap x IT

OUR TEAM

9

Organisational structure

GVQIM Board Christopher Chambers (Non Executive Chairman)

Jamie Seaton (Chief Executive) Stuart Widdowson (Executive Director)

Ben Russell ( Finance Director) Aron Balas (Non Executive Director)

Jonathan Kestenbaum (Non Executive Director)

Industry Advisory Panel

Stewart Binnie, Sir Clive Thompson, Peter Williams, Chris Rickard, Lindsay Dibden

Research Committee

Stuart Widdowson (Chairman) Jamie Seaton

Amba Analyst Support Tharindu Abeywardana, Gajan Vinothan

GVO UK Focus Fund

Jamie Seaton (Fund Manager) Jeff Harris (Assistant Fund Manager)

Adam Khanbhai (Analyst)

Strategic Equity Capital plc

Stuart Widdowson (Fund Manager) Jeff Harris (Assistant Fund Manager)

Adam Khanbhai (Analyst)

Sales & Marketing

Theresa Russell (Head) To be recruited (Support)

Legal, Compliance, Finance & Operations

Ben Russell (Finance)

Bob Pamment (Legal & Compliance) Rahul Kunder (Operational support)

Support

Beverley Adler (PA)

Fully operationally independent and focused on investment activity; administration, custody and valuations all outsourced to independent third parties

10

Our investment team

Team member Year joined

Investment experience

Principal responsibilities Previous experience

Jamie Seaton Chief Executive Fund Manager

2004 16 years • CEO • Lead Manager GVO UK Focus

Fund • Research Committee

Jamie was appointed CEO of GVQIM in May 2014 and has been Fund Manager of the GVO UK Focus Fund since April 2009. Prior to this, Jamie was an equities analyst for GVQIM, and its first recruit following its formation. Previously he was an Investment Manager at Rothschild Asset Management and worked at Goldman Sachs. Jamie holds the CFA and IMC qualifications.

Stuart Widdowson Fund Manager

2006 14 years • Lead Manager Strategic Equity Capital plc

• Research Committee • Corporate Engagement

Prior to joining GVQIM Stuart was Associate Director at HgCapital (2001 to 2006), responsible for originating and executing £50-£350m of leverage buyouts, including take privates, in the UK and Germany. Before working in private equity he was a Consultant at COBA Group (1998 to 2001) where he performed strategy consulting and commercial due diligence. Stuart holds the IMC qualification. He has been day to day manager of Strategic Equity Capital plc since June 2009.

Jeff Harris Assistant Fund Manager

2012 3 years • Assistant Manger on UK Focus Fund and Strategic Equity Capital plc

• Research

Jeff joined GVQIM in 2012 as an Analyst. He was appointed Assistant Manager of both the GVO UK Focus Fund and Strategic Equity Capital in May 2014. Prior to joining Jeff worked within the Transaction Services team at PricewaterhouseCoopers performing financial due diligence on private equity and corporate transactions. Following this, he worked at Macquarie as a European Banks Analyst. Jeff holds the ACA and IMC qualifications.

Adam Khanbhai Analyst

2014 1 year • Research Analyst Adam joined GVQIM in 2014 as an Analyst. His primary role is performing analysis and due diligence on existing and potential investee companies. Prior to joining he worked at OC&C Strategy Consultants, where he spent six years as a consultant working on commercial due diligence and strategy projects for corporate and private equity clients. He has significant experience in the B2B technology, media and services sectors. Adam was a Girdlers’ Scholar at Cambridge University and is currently studying to do his CFA exams.

Investment team frequently utilise external consultants, recruiters and accountants, and are supported by dedicated Sales & Marketing, Compliance and Finance functions

11

Our Industry Advisory Panel

GVQIM’s Industrial Advisory Panel Year joined IAP Industry experience Previous experience

Sir Clive Thompson 2003 Business services Consumer services FMCG

Chairman of Rentokil Initial plc until 2004, having been Chief Executive for twenty years to 2002. Former President of the CBI, member of the Committee on Corporate Governance and Deputy Chairman of the Financial Reporting Council.

Stewart Binnie 2006 Retail Media Technology

Formerly Chairman of Aurora Fashions. Member of the Investment Committee of the Schroder Private Equity FoF business, a member of the board of Schroder Ventures Asia Pacific Fund; and has advised Schroders plc on private equity related issues since 2005. Stewart is also a Former Partner of Permira (formerly Schroder Ventures) and Schroder Finance Partners.

Chris Rickard 2011 Industrials Business services Healthcare products

Former CFO of Taylor Wimpey plc, Whatman plc, VT Group plc, Weir Group plc and Meggitt plc. Previously he was Head of Corporate Development at Morgan Crucible. Has led numerous successful financial and operational restructurings, as well as executed more than 100 acquisitions, mergers or disposals.

Peter Williams 2013 Media Finance Director from 1991 to 2011 of Daily Mail and General Trust plc, a worldwide media business, spanning newspapers, online consumer businesses, business information and exhibitions, with a current market capitalisation of around £2.6 billion. Peter is currently a Senior Independent Director of Perform Group plc, a FTSE 250 digital sports media business. He is also a director of Ibis Media VCT plc, a small listed VCT that specialises in early stage media investments.

Lindsay Dibden 2014 Healthcare Private Equity

Lindsay spent a 23 year career in private equity investment. He was a founder partner of HgCapital, establishing its Healthcare practice in 1996, which he led for 16 years. During his career he was involved in more than 30 transactions. Prior to retiring from the partnership in 2012, Lindsay served on the firm’s Investment Committee and Executive Committee. He is now the owner of two healthcare businesses providing care in the home across the counties of West Sussex and Hampshire. In addition he acts as an advisor to Spring Ventures, Alvarez & Marsal and EVOCO AG and actively manages a diverse portfolio of other investments.

A proprietary panel network with extensive plc board, operating and M&A experience

APPLYING PRIVATE EQUITY TECHNIQUES TO PUBLIC MARKETS

13

How we identify value in potential investments

Source: GVQIM

We focus on four key drivers of shareholder value creation to maximise the chance of success

All investments are valued using an in-house re-rating model

Focus on GVQ cash yield* * Enterprise value to operating cash less

maintenance capital expenditure

All investments undergo in-house, prospective

cash-flow and historic modelling

Focus on growth in operating cash flow

All investments are valued using an in-house de-gearing model

Focus on transfer of value from debt to equity holders

over investment period

All investments are valued using an in house

leveraged buy-out model Focus on recent relevant trade and private equity

transaction multiples

Main focus of most PUBLIC EQUITY INVESTORS

Main focus of most PRIVATE EQUITY INVESTORS

Growth Corporate Activity

Value De-gearing

14

There are strict criteria for inclusion in our funds

1. Growth at a reasonable price

GVQIM’s research process aims to identify high quality coveted assets with attractive cash flows

Turnaround Distress

A

B

C

A

B

C

Ass

et q

ualit

y Asset quality

Investment focus

Speculative growth Fair valued GARP1 Under valued Recovery

Avoid

Avoid Avoid

15

How we identify coveted assets

Qualitative Quantitative

• Niche market leaders

• Orderly end markets, with some growth

• Sustainable business model/franchise/uniqueness

• Overseas earnings

• Able to pass on price increases

• Intellectual property

• Operational know-how

• High barriers to entry

• High and/or improving ROCE

• Strong cash conversion

• Limited capex or working capital investment needed to finance growth

• Recurring revenues/profits/cashflows

• Ideally achieving, or has potential to achieve double digit operating profit margin

• Realisable surplus tangible fixed assets and/or working capital

We believe coveted assets retain value even in tough times, and are more likely to be acquired

We look for characteristics which GVQIM believes potential acquirers value highly

16

Our Black List screens out companies with fundamental business risks

Operational

• Excessive reliance on a single product, customer, supplier or distributor

• The primary driver of profitability cannot be influenced by management (e.g. resources)

• Inherently low margins

• Structurally declining markets

Financial

• Poor accounting systems or controls

• Weak cash flows – especially when reported profits look good!

• Excessive gearing

Governance

• Controlling shareholder with misaligned interests

• Below average/deteriorating governance practices

• Stakeholders unwilling to engage constructively

We have learnt what to avoid from previous experiences

17

Research Committee ensures consistency of approach

Materials • Watch list • M&A transactions • Cash flow screen • Yield screen • Four drivers screen • LBO screen • Directors dealing

• Company description • Investment thesis • Cash flow model • LBO model

• Company meeting • Management analysis • Stakeholder analysis • Qualitative financial

analysis • Feasibility

• Counterparty analysis • Due diligence

verification • Bespoke research • Forensic accounting • Management

referencing

• Progress against original investment thesis

• Proposed changes to target price

• Changes to consensus estimates

Debate • Are we focusing on the right stocks/sectors?

• What is happening in trade and private equity?

• Is there are credible case for investment?

• Does the company meet our basic criteria?

• Peer group review • Work together to identify

key due diligence questions and investment risks

• Have we properly answered all of the key questions?

• Automatic review against thesis every 12 months or earlier as required

Output • New idea • Initial Target Price • Due diligence questions • Final Target Price • Watch list

Industrial Advisory Panel involvement

Multi-stage research process; fully documented and scrutinised using a variety of methods and people

Idea generation Investment Memorandum

Preliminary Investment

Recommendation

Final Investment Recommendation

Monitoring & review

18

How it works in practice

• Approximately 250 stocks

• Private equity derived target price and catalyst date

• Quality graded

• Black list overlay

Watchlist

• IRR vs. fund’s weighted average IRR

• Level of research completed

• Fund restrictions

• Liquidity

Weighting

• Every investment is appraised by between four and nine people

• Research Committee ensures consistency of approach, reviews investments

• Dedicated Fund Managers on each GVQIM product

Decision

Fully integrated research and investment approach

19

How we adapt our approach for different funds

Investable universe

c.1500 UK equities

c.650 over £50m market cap ex.

investment companies

GVQIM watch list

Approximately 250 companies

Strategic Equity Capital

Smaller company special situations

GVO UK Focus Fund

All companies capital growth

Private equity valuation

One research process with dedicated Fund Managers on each GVQIM product

20

Focused on risk but not constrained by the index

• Not constrained by our benchmark – Invest in our best ideas – Don’t hold investments just because they have a large weight in the index – Avoid bubbles and chasing momentum

• Risk managed at the investment level – Focus of our due diligence and investment research – Avoid companies with poor governance or controls, high business risk and unquantifiable liabilities – Extensive referencing of management teams

• Operational risk tightly managed – GVQIM Investment funds are overseen by independent Board with complimentary skills and

backgrounds – Compliance Officer checks for portfolio construction breaches – Daily reconciliation of funds with restrictions using Arbor order management system – Daily fund compliance checks by independent fund administrators

Focused investing with a well structured and documented risk framework

21

Our guiding engagement principles

Sustainability Promote value creation not arbitrage: we invest for the medium to long term and aim to increase the value of the companies we invest in for all stakeholders on a sustainable basis. We will also monitor progress in non-financial performance

Constructive collaboration

We work collaboratively with other stakeholders: we aim to participate on equal terms with other shareholders and work with management to avoid hostile activism where possible

Alignment of interests

We believe that management teams should be properly incentivised and aligned to deliver shareholder value

Transparency We are transparent: we communicate our aims openly and clearly to our investors, investee companies and other stakeholders

No financial engineering

We do not use debt or increased gearing at the fund or company level to generate risky returns

We act as a responsible and engaged long term owner

CONCLUSION

23

We approach investing in public markets differently

• Valuation focused – We seek all four drivers of return: growth, value, and the potential for

equity value creation through corporate activity and degearing – Our primary valuation tools are leveraged buy out models, cash flow

modelling and relevant M&A transaction data – Investment based on forecast IRRs, not relative value or traditional ratios

• Research driven – Well developed, multi-stage, documented due diligence process – Extensive use of industry experts including a dedicated Industrial Advisory

Panel – Investment proposals include entry and exit strategies, and catalysts for

value creation

• Team based approach – Every investment is appraised by between four and nine people – Research Committee ensures consistency of approach,

reviews investments – Dedicated Fund Managers on each GVQIM product

Our distinctive process has been refined over nearly a decade of investing to deliver consistently high risk adjusted returns

APPENDIX

25

Valuation case study

Source: GVQIM, Factset, e2v company accounts

E2V’s entry valuation clearly showed significant upside on all four of GVQIM’s valuation methodologies

E2V Technologies – first investment October 2009

e2v

Growth Corporate Activity

Value De-gearing

Entry valuation significant discount to historic rating – implied 2x upside • EV Sales 0.8x vs. 1.4x five

year average • P/Book 1x vs. 2x five year

average

• Operating profit to more than double over three years (24% EBIT growth p.a.), even in the event of no end market recovery

• Significant upside from top line recovery due to high operational gearing

• GVQIM estimated a 50% minimum absolute three year return (15% p.a.) from de-gearing alone, assuming no sales recovery, nor re-rating

• Entry valuation metrics were 50% of rating of peer CPI when it IPOd in 2006

• No poison pills to prevent future bid approach or take private

• Cashflow dynamics and market leadership attractive

26

Key facts – GVO UK Focus Fund

Manager GVQ Investment Management Management charge 0.75% per annum (I class) 1.25% per annum (A class)

Share classes I class and A class (intended for institutional and high net worth investors respectively)

Initial charge None

ISIN IE 0033377494 (I class) IE0033377502 (A class)

Bloomberg-ticker* SVIUKFI (I class) SVIUKFA (A class)

Sedol 3337749 (I class) 3337750 (A class)

Minimum initial investment £10,000 (I class) £1,000 (A class)

Benchmark FTSE All Share Total Return Index Fund leverage Zero

Currency GBP (for all payments) Fund size £319.3m (As at 31st March 2015)

Legal structure Dublin listed OEIC Liquidity Open-ended fund; daily liquidity

Launch date 5th August 2003 Dividend frequency Semi- annual

Listing The Irish Stock Exchange Dividend yield 1.9%

The Prospectus and key information document (KID’s) for the GVO UK Focus Fund [sub fund of GVO Investment Funds (Dublin) plc] are available in English on GVQIM’s website www.gvqim.com. Please see offering documents for full term and conditions.

27

Key facts – Strategic Equity Capital plc

As at 31st March 2015

We believe that SEC has the most shareholder friendly structure in the sector

Shares in issue 57,901,013

Governance London Stock Exchange listed, UK domiciled investment trust, independent Board

Corporate broker Canaccord Genuity

Discount control Semi annual tender of 4% of shares in issue at a 10% discount to NAV on a mix and match basis

Continuation vote Annual

Gearing Up to 25% of net assets. At present, the policy is ‘no gearing’

Fees Management fee lower of 1% of NAV or market capitalisation. Performance fee of 15% above rolling three year FTSE Small Cap ex Investment Trusts total return + 2% p.a. High watermark c.174p

Analysts Alan Brierley (Canaccord), Innes Urquhart (Winterflood), Ewan Lovett–Turner (Numis), Paul Locke (Westhouse)

Market makers Canaccord, Investec, Numis, Westhouse, Winterflood

Manager holding 6% including members of the Industrial Advisory Panel