CapMan Plc Group's Interim Report, 1 January - 30 June 2010

CapMan Plc Stock Exchange Release 6 August 2010 at 8.30 a.m.

CapMan Plc Group's Interim Report, 1 January - 30 June 2010

Performance and main events during the review period:

- Group turnover totalled MEUR 21.0 million (January-June 2009: MEUR 17.0)
- The Group's operating profit was MEUR 4.5 (MEUR -4.2)
- The Management Company business recorded a profit of MEUR 4.2 (MEUR 0.6) and the Fund Investment business a profit of MEUR 0.3 (MEUR -4.8)
- Profit before taxes was MEUR 6.4 (MEUR -5.6) and profit after taxes was MEUR 5.2 (MEUR -5.0)
- Profit attributable to the owners of the parent company was MEUR 5.1 (MEUR -5.1). Earnings per share were 4.6 cents (-8.0 cents)
- Liquid assets as of 30 June 2010 totalled MEUR 16.0 (30.6.2009: MEUR 19.1)
- Capital under management increased to MEUR 3,541.0 (30.6.2009: MEUR 3,457.3; 31.12.2009: MEUR 3,504.3)

- Lennart Simonsen took over as CapMan Plc's CEO on 1 June 2010
- We expect the overall result for 2010 to exceed the previous year's result.

CEO Lennart Simonsen comments on events during the review period and the company's future prospects:

"The overall economic situation in the markets in which we operate improved during the first half of the year, although there is no certainty on the continuance of this trend. The buyout and M&A markets developed positively during the early part of this year, but a more cautious atmosphere emerged during the second quarter and this caution continues to impact our investments. Market volatility has been high and this has created challenges for exits through IPOs.

Against this background, CapMan pursued an active investment programme during the first half of the year. Our funds made seven new investments and a number of add-on investments for a total of MEUR 123.5 and exited from eight companies and one property. The IPO of our Swedish portfolio company, MQ, was completed successfully in June. The cautious mood has been reflected in our operations, which among other impacts has postponed some planned exits. The effect on our profit performance from exits during the second quarter was minimal. Our result MEUR 5.2 million for the period was satisfactory.

CapMan is very well-placed in its chosen markets. We will continue to focus on improving our profitability. In this respect the success of our investment activities and the efficiency of our fund management operations will be critical."

Business operations

CapMan is an alternative asset manager, which also makes investments in its own funds. The guiding principle for the investment activities of the funds managed by the Group is to work actively and directly towards increasing the value of investments. The Group has two operating segments: the Management Company business and the Fund Investment business.

Income from the Management Company business is derived from management fees paid by funds, carried interest received from funds, and income generated by real estate consulting. Management fees and real estate consulting income normally cover the company's operating costs and generally represent a steady income source.

Income from the Fund Investment business comes from changes in the fair value of investments and realised returns on CapMan's own fund investments, and these can have a significant positive or negative impact on the Group's result, depending on the development of portfolio investments and the general market situation.

As there may be considerable quarterly fluctuations in carried interest and the fair value of fund investments, the Group's financial performance should be analysed over a longer time span than the quarterly cycle.

Group turnover and result during January-June 2010

The Group's turnover increased compared to the equivalent period last year and totalled MEUR 21.0 (January-June 2009: MEUR 17). Operating expenses totalled MEUR 16.9 (MEUR 16.5).

The Group's operating profit rose to MEUR 4.5 (MEUR -4.2). Financial income and expenses amounted to MEUR 0.0 (MEUR -0.2). CapMan's share of the profit of its associated companies increased compared to the first half of 2009 and totalled MEUR 1.9 (MEUR -1.2). Profit before taxes was MEUR 6.4 (MEUR -5.6) and profit after taxes was MEUR 5.2 (MEUR -5.0).

Profit attributable to the owners of the parent company was MEUR 5.1 (MEUR -5.1). Earnings per share were 4.6 cents (-8.0 cents).

A quarterly breakdown of turnover and profit, together with turnover, operating profit/loss, and profit/loss by segment for the review period, can be found in the tables section of this report.

Management Company business

Turnover generated by the Management Company business during the review period totalled MEUR 21.0 (MEUR 16.8). Management fees increased from the comparable period last year and amounted to MEUR 17.3 (MEUR 15.6). This increase was largely attributable to the management fees paid by the CapMan Buyout IX fund that began accruing in the end of June 2009.

Income from real estate consulting totalled MEUR 0.8 (MEUR 1.0). The aggregate total of management fees and income from real estate consulting was MEUR 18.1 (MEUR 16.6).

Carried interest income totalled MEUR 2.5 (MEUR 0.0) and came from the Finnventure V fund following its exit from the financial administration services company Pretax and its sale of the shares in the American company, On2 Technologies, that the fund received when exiting Hantro Products Oy in 2007.

The Management Company business recorded an operating profit of MEUR 4.2 (MEUR 0.6) and a profit of MEUR 3.5 (MEUR 1.0).

The status of the funds managed by CapMan is presented in more detail in Appendix 1.

Fund Investment business

Fair value changes related to fund investments during the first half were MEUR 0.4 (MEUR -4.8) and represented a 0.6% increase in value over the period. Changes during the second quarter were MEUR -0.7 (MEUR -0.3), equivalent to a -1.3% reduction in value over this period. Although the result prospects of portfolio companies for 2010 have remained stable, the decline in the market capitalisation of the listed companies used as their valuation peer group has had a downward impact on their fair value figures. The aggregate fair value of fund investments as of 30 June 2010 was MEUR 60.7 (30 June 2009: MEUR 56.2).

Operating profit for the Fund Investment business was MEUR 0.3 (MEUR -4.8) and the profit for the period was MEUR 1.7 (MEUR -6.0). The profit was positively impacted by CapMan's share of the result of its Maneq associated companies. Changes in the fair value of fund investments made by Maneq companies contributed here.

CapMan made new investments in its funds totalling MEUR 5.5 (MEUR 8.1) during the period. Investments were made in funds including CapMan Buyout IX, CapMan Buyout VIII, CapMan Russia, and CapMan Technology 2007. CapMan received repaid capital from funds totalling MEUR 4.4 (MEUR 0.2). The majority of this capital was received following exits made by the CapMan Equity VII, CapMan Buyout VIII, CapMan Mezzanine IV, and CapMan Public Market funds. CapMan did not give any new commitments to its funds.

The amount of remaining commitments was significantly lower compared to the same period last year as a result of investments made and the sale of commitments announced in summer 2009, and totalled MEUR 37.0 as of 30 June 2010 (30.6.2009: MEUR 61.9). The aggregate fair value of existing investments and remaining commitments as of 30 June was MEUR 97.7 (MEUR 118.1). CapMan's objective is to invest 1-5% of the original capital in the new funds that it manages, depending on fund size, fund demand, and CapMan's own investment capacity.

Investments in portfolio companies are valued at fair value in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVG), while real estate assets are valued in accordance with the value appraisals of external experts, as detailed in Appendix 1. Fair value changes have no impact on the Group's cash flows.

Investments at fair value and remaining investment capacity by investment area are presented in the tables section.

Balance sheet and financial position as of 30 June 2010

No substantive changes took place in CapMan's balance sheet total during the review period, which stood at MEUR 139.7 as of 30 June (30.6.2009: MEUR 134.9). Non-current assets amounted to MEUR 114.6 (30.6.2009: MEUR 104.4). No changes took place in goodwill during the review period, which stood at MEUR 10.2 as of 30 June (30.6.2009: MEUR 10.2).

Fund investments booked at fair value rose to MEUR 60.7 (MEUR 56.2). Long-term receivables amounted to MEUR 25.4 (MEUR 23.9), of which MEUR 24.5 (MEUR 21.7) were loan receivables from Maneq funds. In addition to CapMan Plc, CapMan personnel are investors in Maneq funds. The expected returns from CapMan's Maneq investments are broadly in line with the return expectations for CapMan's other investments in its own funds, and these funds pay market rate interest on loans they receive from CapMan Plc.

Current assets amounted to MEUR 25.1 (MEUR 30.5). Liquid assets (cash in hand and at banks, plus other financial assets at fair value through profit and loss) amounted to MEUR 16.0 (MEUR 19.1).

The size of CapMan's hybrid bond stands at MEUR 29.0. Due to dividend payment, the interest on the bond for the financial year is deducted from equity in line with the terms of the loan and is payable semi-annually. Interest on the hybrid loan totalling MEUR 1.6 was paid in June. CapMan Plc had a bank financing package of MEUR 53.8 (MEUR 60.0) available as of 30 June, of which MEUR 43.8 (MEUR 46.0) was utilised. There were no significant changes in the amount of interest-bearing liabilities. Trade and other payables totalled MEUR 13.7 (MEUR 12.8). Outstanding interest on the hybrid loan for this year is included in current liabilities. The Group's interest-bearing net debts amounted to MEUR 29.1 (MEUR 26.9).

The Group's cash flow from operations totalled MEUR 3.9 (MEUR -5.1). Income from management fees paid by funds is paid semi-annually, in January and July, and is shown under working capital in the cash flow statement. Cash flow from investments totalled MEUR -1.1 (MEUR -9.9) and was primarily related to fund investments and repaid capital received by the company. Cash flow before financing totalled MEUR 2.8 (MEUR -15.1), while cash flow from financing was MEUR -6.2 (MEUR 8.9). Cash flow from financing includes the MEUR 3.4 dividend paid in April.

Key figures as of 30 June 2010

CapMan's equity ratio as of 30 June 2010 was 55.7% (30.6.2009: 54.4%). Return on equity was 13.3% (-14.2%) and return on investment was 11.7% (-7.6%). The target level for the company's equity ratio is at least 50% and for return on equity at least 25%.

Key figures

30.6.2010 30.6.2009 31.12.09
Earnings per share, cents 4.6 -8.0 -3.0
Diluted, cents 4.6 -8.0 -3.0
Shareholders' equity per share, cents* 92.0 89.1 94.2
Share issue adjusted number of shares 84 281 766 82 257 171 83 015 987
Number of shares at end of period 84 281 766 83 674 965 84 281 766
Number of shares outstanding 84 255 467 83 648 666 84 255 467
Own shares held by the Company at end of period 26 299 26 299 26 299
Return on equity, % p.a.** 13.3 -14.2 0.2
Return on investment, % p.a.** 11.7 -7.6 2.8
Equity ratio, % 55.7 54.4 55.1
Net gearing, % 37.4 36.5 34.8

* In line with IFRS standards, the MEUR 29.0 hybrid bond has been included in equity, also when calculating equity per share. The net interest on the hybrid loan for the review period has been included when calculating earnings per share.

** These figures have been annualised.

Fundraising in January-June and capital under management as of 30 June 2010

Capital under management refers to the remaining investment capacity of funds and capital already invested at acquisition cost. CapMan's target is to increase its capital under management by an average of 15% a year. Capital increases as fundraising for new funds progresses and declines as exits are made.

The fundraising market continued to be challenging during the review period. According to a recent study by Preqin*), the second quarter of 2010 saw the least amount of capital raised worldwide by private equity funds for seven years, while the fundraising time frame has lengthened to an average of 20 months. We raised a total of MEUR 21.3 of new capital for the CapMan Buyout IX fund during the review period, and the final size for the fund as of 30 June reached MEUR 294.6. In addition, the investment capacity of the CapMan Hotels RE fund rose during the first quarter from MEUR 872.5 to MEUR 950.0 when debt financing was increased to the maximum amount allowed under the fund's terms.

The operations of the Finnventure Rahasto II Ky, Finnventure Rahasto III Ky, and Finnventure Rahasto III G funds ended during the review period when the funds in question exited their last remaining portfolio company, Oy Turo Tailor Ab.

Fundraising also took place during the review period for the new CapMan Mezzanine V fund. The target size of this new fund is MEUR 150 i.e. approximately half the size of the CapMan Buyout IX fund. The two funds will invest in the same companies.

CapMan is continuing to investigate the potential for taking an active role on the housing property market in Greater Helsinki area.

Capital under management totalled MEUR 3,541.0 as of 30 June 2010 (30.6.2009: MEUR 3,457.3). Of this, MEUR 1,813.2 (MEUR 1,789.2) was in funds making investments in portfolio companies and MEUR 1,727.8 (MEUR 1,640.5) in real estate funds.

Funds under management and their investment activities are presented in more detail in Appendices 1 and 2.

Changes in the company's management

Niko Haavisto was appointed CapMan Plc's CFO and a member of the Management Group on 28 January 2010 and took up these positions on 26 April 2010. Lennart Simonsen was appointed CapMan Plc's CEO and a Senior Partner on 30 March 2010 and took up these positions as of 1 June 2010. These appointments are covered in greater detail in the stock exchange releases issued on 28 January and 30 March this year.

Authorisations held by the Board of Directors

Following a decision by the Annual General Meeting, CapMan Plc's Board of Directors is authorised to purchase CapMan shares and accept them as pledges, and decide on a share issue and the issuance of stock option rights and other entitlements related to CapMan shares. These authorisations will remain in force until 30 June 2011 and their content is covered in more detail in the stock exchange release on the decisions adopted by the Annual General Meeting issued on 30 March 2010.

Personnel

CapMan employed a total of 146 people as of 30 June 2010 (30.6.2009: 148), of whom 103 (107) worked in Finland and the remainder in other Nordic countries, Russia or Luxembourg. A breakdown of personnel by country and team is presented in the tables section.

Shares and share capital

There were no changes in either CapMan Plc's share capital or the number of shares during the review period. Share capital as of 30 June 2010 totalled EUR 771,586.98. B shares totalled 78,281,766 and A shares 6,000,000. B shares entitle holders to one vote per share and A shares to 10 votes per share.

Shareholders

CapMan Plc had 4,871 shareholders as of 30 June 2010 (30.6.2009: 4,735). No significant changes took place in the company's ownership during the review period and no flagging notices were issued.

Company shares

As of 30 June 2010, CapMan Plc held a total of 26,299 CapMan Plc B shares and made no purchases of company shares during the review period.

Stock option programmes

As of 30 June 2010, CapMan Plc had one stock option programme in place - Option Programme 2008 - as part of incentive and commitment arrangements for key personnel. The maximum number of stock options issued under Option Programme 2008 will be 4,270,000, which will carry an entitlement to subscribe to a maximum of 4,270,000 new B shares. The programme is divided into A and B series, both of which cover a maximum of 2,135,000 option entitlements. The subscription period for 2008A options will start on 1 May 2011 and for 2008B options on 1 May 2012. Receivables from shares subscribed using these options will be entered in the company's invested unrestricted shareholders' equity. As of the end of the review period, all option entitlements to the 2008A series had been allocated and 1,910,000 option entitlements to the 2008B series.

Trading and market capitalisation

CapMan Plc's B shares closed at EUR 1.41 on 30 June 2010 (30.6.2009: EUR 1.00). The average price during the review period was EUR 1.67 (EUR 0.95). The highest price paid was EUR 1.98 (EUR 1.21) and the lowest EUR 1.33 (EUR 0.77). A total of 6.3 million (8.3 million) CapMan Plc B shares were traded, valued at MEUR 10.5 (MEUR 16.9).

The market capitalisation of CapMan Plc B shares as of 30 June 2010 was MEUR 110.4 (MEUR 77.7). The market capitalisation of all company shares, including A shares valued at the closing price of B shares, was MEUR 118.9 (MEUR 83.7).

Significant risks and short-term uncertainties

CapMan's Management Company business is profitable on an annual basis, but a major element of uncertainty is associated with forecasting the company's overall financial performance because of the timing of revenue generated from possible carried interest and the development of the fair value of portfolio companies. Structural changes in the Nordic region's export industries could have a negative impact on the operations of some of our portfolio companies and their profitability. The unemployment resulting from the recent economic recession, together with the decline in consumer purchasing power linked to this, could be reflected in the operations and profitability of portfolio companies in the consumer sector and in those of the shopping centres held in the portfolios of our real estate funds. The fundraising environment is expected to remain challenging, for the next 12 months at least, which could impact the outcome of fundraising during this period, and thereby the amount of capital under management, and any new management fees that CapMan could receive.

Business environment

The prospects for growth in the demand for alternative assets continue to remain good over the long term. The financial recession and the impacts that it has have clearly slowed growth in the alternative asset class. The fundraising market is expected to remain difficult over the short term. According to a recent study by Preqin, institutional investors can be expected to increase their investments in private equity funds over the next 12 to 18 months, which, if it transpires, would signal a gradual improvement next year. A more dynamic buyout and M&A market, together with capital repaid through exits, would support this development.

Private equity has consolidated its position in financing M&A activities and growth, and continues to focus typically on sector consolidation, family successions, the privatisation of public services and functions, and the commercialisation of R&D in the technology and life science sectors. Increased entrepreneurial activity has also boosted growth. Real estate funds, for their part, have gained an established share of institutional investors' investment allocations.

CapMan funds investing in portfolio companies will continue to implement their investment strategies. Bank financing for buyouts, mergers and acquisitions, and real estate investments is now available again, and the volume of deal flow has increased across all our investment areas. The mood in the market is still cautious, however, which could postpone buyout and M&A transactions and the exits planned by our funds from some of their portfolio companies.

The development of our portfolio companies during the first half of the year was largely good, and profit and growth projections for 2010 as a whole are positive. In accordance with the IPEVG the fair value development of the portfolio companies will also be impacted by how well listed companies are able to deliver on their profit projections and by how the exchange rates of currencies used in our areas of operations perform against the euro. We plan to keep sufficient reserves in our funds to support the growth and financing of our companies. Long-term cooperation with the Nordic banks is particularly important for us, and has worked well.

In the real estate sector, the gap in price expectations between purchasers and vendors and the element of caution typical of the loan market have seen the volume of real estate transactions remain at a low level. The use of equity for financing real estate transactions has increased, and Finnish insurance companies investing solely their own equity have been active on the property investment market. The combined trend of weakening property demand and rising yield expectations has tailed off and property valuation levels have stabilised or even risen in respect of properties with a low level of lease-related cash flow risk. Demand for real estate with long leases is good. We expect the number of real estate transactions to increase during the latter part of 2010. Occupancy rates and demand for office and retail premises have continued to be satisfactory. The vacancy rates for office premises are expected to rise in Greater Helsinki, however, putting a downward pressure on rents. The demand for real estate consulting has remained stable. The portfolios of CapMan's real estate funds include a number of properties where the value creation process has been completed and from which the funds are ready to exit.

All of CapMan's investment teams are in a good position and have sufficient resources to implement their investment strategies in the Nordic countries and Russia. CapMan funds investing in portfolio companies have some MEUR 750 available for making new and add-on investments, while real estate funds have approximately MEUR 360 of investment capacity, mainly for developing their existing portfolios.

Further consideration of the European Directive on Alternative Investment Fund Managers (AIFM directive) at EU level will now take place in autumn 2010. As and when passed, the directive will stipulate an operating license for participants, as well as other significant requirements, including fund investor and authority reporting. Thanks to its organisation and operating model, CapMan is in a good position to meet the challenge these new regulations represent.

Future outlook

Guidance in the Interim Report published on 7 May 2010:

Management fees and income from real estate consulting will cover CapMan's fixed costs and interest expenses in 2010. Exit negotiations are under way in respect of a number of companies in the portfolios of CapMan funds. We expect the CapMan Equity VII A, B, and Sweden funds, as well as the Finnmezzanine III A and B funds, to transfer to carry during 2010-2011.

The fair value of CapMan's fund investments showed a small positive improvement during the first quarter of 2010, and we expect at least a neutral trend in this area to continue. Progress during the rest of the year will depend on the development of portfolio companies and the general market situation.

The Group's overall result in the first quarter of 2010 was good and the overall result for 2010 is expected to exceed the previous year's result. The overall result will mainly depend on whether new exits are made by funds already generating carried interest, whether new funds will transfer to carry, and on how the value of investments will develop in those funds in which CapMan is a substantial investor.

Revised guidance on 6 August 2010:

Management fees and income from real estate consulting will cover CapMan's fixed costs and interest expenses in 2010. Exit negotiations are under way in respect of a number of companies in the portfolios of CapMan funds, but the cautious atmosphere in the marketplace could well continue to postpone the exits from portfolio companies planned by our funds. We expect the CapMan Equity VII A, B, and Sweden funds, as well as the Finnmezzanine III A and B funds, to transfer to carry during 2011. The development of the fair value of fund investments will depend on the development of portfolio companies and the general market situation; we expect fair value development to be at least neutral for the rest of this year.

We expect the overall result for 2010 to exceed the previous year's result.

CapMan Plc will publish its Interim Report for 1 January-30 September 2010 on Friday, 5 November 2010.

Helsinki, 6 August 2010

CAPMAN PLC

Board of Directors

Press conference:

A press conference (in Finnish) for analysts and the media will be held today at midday EET in CapMan's offices at Korkeavuorenkatu 32, Helsinki, Finland, at which CapMan's CEO Lennart Simonsen will present the interim results and review the market situation. A light lunch will be served. Presentation material for the press conference will be published in Finnish and English on CapMan Plc Group's Internet website once the conference has started.

Further information:
Lennart Simonsen, CEO, tel. +358 207 207 567 or +358 400 439 684
Niko Haavisto, CFO, tel. +358 207 207 583 or +358 50 465 4125

Distribution:

Helsinki Stock Exchange
Principal media
www.capman.com

* Preqin Private Equity Spotlight - July 2010. Preqin is an independent market intelligence company that specialises in alternative asset classes.

Appendices (after the tables section):
Appendix 1: CapMan Plc Group's funds under management as of 30 June 2010, MEUR
Appendix 2: Operations of CapMan's funds under management, 1 January - 30 June 2010
Appendix 3: Capital and mandates under the management of associated company, Access Capital Partners, as of 30 June 2010

Accounting principles

The Interim Report has been prepared in accordance with the International Financial Standards (IFRS) and is in conformity with the accounting policies published in the 2009 financial statements. The revised and amended standards entering into force on 1 January 2010 had no impact on this interim report. The information presented in the Interim Report is un-audited.

GROUP STATEMENT OF COMPREHENSIVE INCOME (IFRS)
€ ('000) 1-6/10 1-6/09 1-12/09
Turnover 20,973 17,040 36,257
Other operating income 65 95 137
Personnel expenses -10,173 -9,074 -18,464
Depreciation and amortisation -456 -494 -957
Impairment of goodwill 0 -700 -700
Other operating expenses -6,294 -6,238 -12,845
Fair value gains / losses of investments 358 -4,846 -3,322
Operating profit / loss 4,473 -4,217 106
Financial income and expenses 24 -187 -185
Share of associated companies' result 1,897 -1,237 1,293
Profit / loss before taxes 6,394 -5,641 1,214
Income taxes -1,194 622 -1,076
Profit / loss for the period 5,200 -5,019 138
Other comprehensive income:
Translation differences -75 -41 270
Total comprehensive income / loss 5,125 -5,060 408
Profit / loss attributable to:
Equity holders of the company 5,057 -5,140 -210
Minority interest 143 121 348
Total comprehensive income / loss attributable to:
Equity holders of the company 4,982 -5,181 60
Minority interest 143 121 348
Earnings per share for profit / loss attributable to the equity holders of the Company:
Earnings per share, cents 4.6 -8.0 -3.0
Diluted, cents 4.6 -8.0 -3.0

Accrued interest payable on the hybrid bond has been taken into consideration for the review period when calculating earnings per share.

GROUP BALANCE SHEET (IFRS)
€ ('000) 30.6.10 30.6.09 31.12.09
ASSETS
Non-current assets
Tangible assets 704 1,024 838
Goodwill 10,245 10,245 10,245
Other intangible assets 2,677 3,131 2,972
Investments in associated companies 7,698 4,345 6,547
Investments at fair value through profit and loss
Investments in funds 60,697 56,190 59,421
Other financial assets 617 796 585
Receivables 25,378 23,944 25,304
Deferred income tax assets 6,586 4,685 6,177
114,602 104,360 112,089
Current assets
Trade and other receivables 9,075 11,451 10,291
Other financial assets at fair value
through profit and loss 1,368 852 1,673
Cash and bank 14,611 18,210 17,978
25,054 30,513 29,942
Total assets 139,656 134,873 142,031
EQUITY AND LIABILITIES
Capital attributable the Company's equity holders
Share capital 772 772 772
Share premium account 38,968 38,968 38,968
Other reserves 38,678 36,625 37,347
Translation difference -317 -703 -392
Retained earnings -585 -2,550 1,097
77,516 73,112 77,792
Minority interest 247 186 413
Total equity 77,763 73,298 78,205
Non-current liabilities
Deferred income tax liabilities 1,897 341 1,824
Interest-bearing loans and borrowings 38,819 43,125 40,625
Other liabilities 1,267 2,297 2,291
41,983 45,763 44,740
Current liabilities
Trade and other payables 13,660 12,806 12,227
Interest-bearing loans and borrowings 6,250 2,875 6,250
Current income tax liabilities 0 131 609
19,910 15,812 19,086
Total liabilities 61,893 61,575 63,826
Total equity and liabilities 139,656 134,873 142,031

GROUP STATEMENT OF CHANGES IN EQUITY

Attributable to the equity holders of the Company
€ ('000) Share capital Share premium account Other reserves Trans-
lation
differ-
ences
Retained earnings Total Minority
interest
Total equity
Equity on
31 Dec 2008
772 38,968 25,829 -226 3,585 68,928 221 69,149
Options 20 20 20
Dividens paid 0 -46 -46
Share issue 1,796 1,796 1,796
Hybrid bond 9,000 9,000 9,000
Hybrid bond, interest
(net of tax)
-1,015 -1,015 -1,015
Other changes -436 -436 -110 -546
Comprehensive profit / loss -41 -5,140 -5,181 121 -5,060
Equity on
30 Jun 2009
772 38,968 36,625 -703 -2,550 73,112 186 73,298
Equity on
31 Dec 2009
772 38,968 37,347 -392 1,097 77,792 413 78,205
Options 1,331 -955 376 376
Dividens paid -3,370 -3,370 -309 -3,679
Hybrid bond, interest
(net of tax)
-2,414 -2,414 -2,414
Comprehensive profit / loss 75 5,057 5,132 143 5,275
Equity on
30 Jun 2010
772 38,968 38,678 -317 -585 77,516 247 77,763



STATEMENT OF CASH FLOW (IFRS)
€ ('000) 1-6/10 1-6/09 1-12/09
Cash flow from operations
Profit / loss for the financial year 5,200 -5,019 138
Adjustments -48 7,063 5,352
Cash flow before change in working capital 5,152 2,044 5,490
Change in working capital 1,645 -3,915 -3,463
Financing items and taxes -2,870 -3,238 -3,825
Cash flow from operations 3,927 -5,109 -1,798
Cash flow from investments -1,096 -9,965 -15,105
Cash flow before financing 2,831 -15,074 -16,903
Dividends paid -3,679 -46 -46
Other net cash flow -2,519 9,000 10,597
Financial cash flow -6,198 8,954 10,551
Change in cash funds -3,367 -6,120 -6,352
Cash funds at start of the period 17,978 24,330 24,330
Cash funds at end of the period 14,611 18,210 17,978

Segment information

The Group reports two segments: Management Company business and Fund Investment business

1-6/2010 Management Company business Fund
Investment
business
Total
€ ('000) CapMan
Private
Equity
CapMan
Real
Estate
Total

Turnover 16,689 4,284 20,973 0 20,973
Operating profit/loss 4,029 166 4,195 278 4,473
Profit/loss for the financial year 3,382 161 3,543 1,657 5,200
Assets 15,184 1,559 16,743 97,859 114,602
Total assets includes:
Investments in associated companies 1,336 0 1,336 6,362 7,698
1-6/2009 Management Company business Fund Total
€ ('000) CapMan Private Equity CapMan Real Estate Total Investment business
Turnover 12,570 4,273 16,843 197 17,040
Operating profit/loss 644 -89 555 -4,772 -4,217
Profit/loss for the financial year 1,117 -89 1,028 -6,047 -5,019
Assets 17,580 1,769 19,349 85,011 104,360
Total assets includes:
Investments in associated companies 2,442 0 2,442 1,903 4,345
1-12/2009 Management Company business Fund Total
€ ('000) CapMan Private Equity CapMan Real Estate Total Investment business
Turnover 27,263 8,994 36,257 0 36,257
Operating profit/loss 3,128 547 3,675 -3,569 106
Profit/loss for the financial year 3,197 544 3,741 -3,603 138
Assets 17,528 1,272 18,800 93,289 112,089
Total assets includes:
Investments in associated companies 1,962 0 1,962 4,585 6,547

Income taxes

The Group's income taxes in the Income Statements are calculated on the basis of current taxes on taxable income and deferred taxes. Deferred taxes are calculated on the basis of all temporary differences between book value and fiscal value.

Dividends
A dividend of EUR 0.04 per share, total MEUR 3.4, was paid for the year 2009. (No dividend was paid for the year 2008.)

Non-current assets
€ ('000) 30.6.10 30.6.09 31.12.09
Investments in funds at fair value through
profit and loss at Jan 1 59,421 53,147 53,147
Additions 5,526 8,114 13,038
Distributions -4,408 0 -586
Disposals 0 -225 -3,616
Fair value gains/losses on investments 158 -4,846 -2,562
Investments in funds at fair value through
profit and loss at end of the period 60,697 56,190 59,421
Investments in funds at fair value through profit and loss at the end of period 30.6.10 30.6.09 31.12.09
Buyout 36,803 29,018 34,233
Technology 3,480 5,043 3,616
Life Science 3,599 2,680 3,683
Russia 1,311 2,274 1,049
Public Market 2,113 2,019 3,422
Mezzanine 3,650 4,308 4,000
Other 208 350 364
Real Estate 4,572 4,695 4,758
Access 4,961 5,803 4,296
Total 60,697 56,190 59,421
Transactions with related parties (associated companies)
€ ('000) 30.6.10 30.6.09 31.12.09
Receivables - non-current at end of review period 23,381 21,140 22,598
Receivables - current at end of review period 1,272 1,193 779
Non-current liabilities
€ ('000) 30.6.10 30.6.09 31.12.09
Interest bearing loans at end of review period 38,819 43,125 40,625

Seasonal nature of business

Carried interest income is accrued on an irregular schedule depending on the timing of exits. One exit may have an appreciable impact on CapMan Plc's result for the full financial year.

Personnel
By country 30.6.10 30.6.09 31.12.09
Finland 103 107 107
Denmark 2 3 3
Sweden 20 20 21
Norway 7 6 7
Russia 13 12 12
Luxembourg 1 0 0
In total 146 148 150
By team
CapMan Private Equity 60 58 61
CapMan Real Estate 40 43 42
Investor Services 24 26 23
Internal Services 22 21 24
In total 146 148 150
Contingent liabilities
€ ('000) 30.6.10 30.6.09 31.12.09
Leasing agreements 10,004 8,811 10,927
Securities and other contingent liabilities 66,825 69,084 68,164
Remaining commitments to funds 36,982 61,911 42,624
Remaining commitments by investment area
Buyout 17,766 23,351 20,967
Technology 4,797 11,759 5,486
Life Science 3,660 5,340 4,160
Public Market 2,548 5,511 2,669
Russia 3,420 10,509 4,067
Mezzanine 904 913 910
Other 429 595 510
Real Estate 1,292 1,654 1,582
Access 2,166 2,279 2,273
Yhteensä 36,982 61,911 42,624

Turnover and profit quarterly
2010
MEUR 1-3/10 4-6/10 1-6/10
Turnover 11.4 9.6 21.0
Management fees 8.4 8.9 17.3
Carried interest 2.4 0.1 2.5
Real Estate consulting 0.4 0.4 0.8
Other income 0.2 0.2 0.4
Other operating income 0.1 0.0 0.1
Operating expenses -8.3 -8.6 -16.9
Fair value gains / losses of investments 1.1 -0.7 0.4
Operating profit / loss 4.3 0.2 4.5
Financial income and expenses -0.1 0.1 0.0
Share of associated companies' result 0.8 1.1 1.9
Profit / loss before taxes 5.0 1.4 6.4
Profit / loss for the period 3.5 1.7 5.2
2009
MEUR 1-3/09 4-6/09 1-6/09 7-9/09 10-12/09 1-12/09
Turnover 8.1 8.7 16.8 9.5 10.0 36.3
Management fees 7.4 8.2 15.6 9.0 8.7 33.3
Carried interest 0.0 0.0 0.0 0.0 0.0 0.0
Real Estate consulting 0.6 0.4 1.0 0.3 1.1 2.4
Other income 0.1 0.1 0.2 0.2 0.2 0.6
Other operating income 0.0 0.1 0.1 0.0 0.0 0.1
Operating expenses -8.4 -8.1 -16.5 -7.9 -8.6 -33.0
Fair value gains / losses of investments -4.3 -0.3 -4.6 0.4 0.9 -3.3
Operating profit -4.7 0.5 -4.2 2.0 2.3 0.1
Financial income and expenses -0.5 0.3 -0.2 -0.2 0.2 -0.2
Share of associated companies' result 0.6 -1.8 -1.2 0.3 2.2 1.3
Profit after financial items -4.6 -1.0 -5.6 2.2 4.6 1.2
Profit for the period -3.7 -1.3 -5.0 2.0 3.1 0.1

APPENDIX 1: CAPMAN PLC GROUP'S FUNDS UNDER MANAGEMENT AS OF 30 JUNE 2010, MEUR

The tables below show the status of funds managed by CapMan as of 30 June 2010. When analysing the schedule for funds to start generating carried interest, the relationship between the cumulative cash flows already distributed to investors and paid-in capital should be compared. When a fund starts generating carried interest the capital must be returned and an annual preferential return paid on it. The fair value of a portfolio, including any of the fund's net cash assets, represents the capital distributable to investors at the end of the review period.

When assessing the cash flow a fund needs in order to start generating carried interest, it should be noted that the capital of some funds has not yet been called and paid in. The percentage figure in the last column on the right of the tables below shows CapMan's share of cash flows if the fund is generating carried interest. After the previous distribution of profits, any new capital paid in, as well as the preferential annual return on it, must be returned to investors before further carried interest income can be paid. Of the funds already generating carried interest, the Finnventure V fund can still make follow-on investments in its current portfolio companies.

The definitions for column headings are presented below the tables.

FUNDS INVESTING DIRECTLY IN PORTFOLIO COMPANIES
Size Paid-in capital Fund's
current
portfolio
Net cash as- sets Distributed
cash flow
CapMan's share of cash flow,
at cost at fair value to in- vestors to man- agement company (carried interest) if fund gene- rates carried interest
Funds generating carried interest
Fenno Program 1) and FM II B, in total 76.0 74.7 8.1 7.0 0.2 145.0 9.3 10-20%
FV V 169.9 165.1 34.6 13.2 0.8 249.5 7.8 20%
Total 245.9 239.8 42.7 20.2 1.0 394.5 17.1
Funds that are expected to transfer to carry during 2011
CME VII A 156.7 151.4 94.2 109.1 4.0 109.2 20%
CME VII B 56.5 56.5 37.8 50.3 2.3 47.3 20%
CME SWE 67.0 65.8 40.3 46.9 1.8 47.0 20%
FM III A 101.4 100.6 33.4 26.4 4.0 105.3 20%
FM III B 20.2 19.9 6.5 8.1 1.2 22.0 20%
Total 401.8 394.2 212.2 240.8 13.3 330.8

Other funds not yet in carry
CME VII C 23.1 19.1 10.9 7.7 0.1 8.2 20%
CMB VIII 2) 440.0 349.3 293.7 275.6 4.6 12.2 14%
CM LS IV 54.1 34.4 23.9 19.0 0.3 10%
CMT 2007 2) 142.3 61.0 41.9 39.0 1.2 10%
CMR 118.1 45.7 35.9 27.4 0.4 3.4%
CMPM 138.0 68.9 51.5 57.4 0.1 35.6 10%
CMB IX 294.6 73.3 63.1 63.1 2.6 10%
CMM IV 4) 240.0 230.0 160.2 151.6 43.2 48.9 15%
Total 1,450.2 881.7 681.1 640.8 52.5 104.9
Funds with no carried interest potential to CapMan
FM III C, FV IV, FV V ET, SWE LS 3), SWE Tech 2), 3) and FM II A, C, D 2)
Total 307.5 293.7 70.5 32.1 4.0 210.4
Funds investing in portfolio companies, total 2,405.4 1,809.4 1,006.5 933.9 70.8 1,040.6 17.1

REAL ESTATE FUNDS
Origi- nal invest- ment Paid-in capital Fund's
current
portfolio
Net cash Distributed
cash flow
CapMan's
share of
cash
flow,
capa- city at cost at fair value as- sets to in- vestors to man- agement company
(carried interest)
if fund
gene-
rates
carried
interest
Funds not yet in carry
CMRE I 5)
Equity
and bonds
200.0 188.5 66.4 51.9 192.3 27.4 26%
Debt
financing
300.0 278.0 98.0 98.0
Total 500.0 466.5 164.4 149.9 1.4 192.3 27.4
CMRE II
Equity 150.0 87.8 96.2 80.3 0.5 12%
Debt
financing
450.0 241.2 230.0 230.0
Total 600.0 329.0 326.2 310.3 -7.8 0.5
CMHRE
Equity 332.5 309.3 335.1 250.2 10.8 12%
Debt
financing
617.5 526.8 508.1 508.1
Total 950.0 836.1 843.2 758.3 3.2 10.8
Real estate funds, total 2,050.0 1,631.6 1,333.8 1,218.5 -3.2 203.6 27.4
All funds, total 4,455.4 3,441.0 2,340.3 2,152.4 67.6 1,244.2 44.5

Abbreviations used to refer to funds:

CMB = CapMan Buyout CMRE = CapMan Real Estate
CME = CapMan Equity CMT 2007 = CapMan Technology 2007
CMLS = CapMan Life Science FM = Finnmezzanine Fund
CMM = CapMan Mezzanine FV = Finnventure Fund
CMHRE = CapMan Hotels RE SWE LS = Swedestart Life Science
CMPM = CapMan Public Market Fund SWE Tech = Swedestart Tech
CMR = CapMan Russia Fund

Explanation of the terminology used in the fund tables

Size/Original investment capacity:

Total capital committed to a fund by investors, i.e. the original size of the fund. For real estate funds, investment capacity also includes the share of debt financing used by the fund.

Capital under management by Access Capital Partners is presented separately in Appendix 3.

Paid-in capital:

Total capital paid into a fund by investors at the end of the review period.

Fund's current portfolio at fair value:

Fund investments in portfolio companies are valued at fair value in accordance with the International Private Equity and Venture Capital Valuation Guidelines (IPEVG, www.privateequityvaluation.com), and investments in real estate assets are valued in accordance with the appraisals of external experts.

Fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. Due to the nature of private equity investment activities, fund portfolios contain investments with a fair value that exceeds their acquisition cost, as well as investments with a fair value less than the acquisition cost.

Net cash assets:

When calculating the investors' share, a fund's net cash assets must be taken into account in addition to the portfolio at fair value. The proportion of debt financing in real estate funds is presented separately in the table.

CapMan's share of cash flow if a fund generates carried interest:

When a fund has generated the cumulative preferential return for investors specified in the fund agreements, the management company is entitled to an agreed share of future cash flows from the fund, known as carried interest.

Cash flow, in this context, includes both profit distributed by funds and repayments of capital. After the previous distribution of profits, any new capital called in, as well as any annual preferential returns on it, must be returned to investors before any new distribution of profits can be paid.

Footnotes to the table

1) The Fenno Rahasto, Skandia I, and Skandia II funds comprise the Fenno Program, which is managed jointly with Fenno Management Oy.

2) The fund is comprised of two or more legal entities (parallel funds are presented separately only if the focus of their investment or portfolios differ significantly).

3) Currency items are valued at the average exchange rates quoted on 30 June 2010.

4) CapMan Mezzanine IV: The paid-in commitment includes a MEUR 192 bond issued by Leverator Plc. Distributed cash flow includes payments to both bond subscribers and to the fund's partners.

5) CapMan Real Estate I: Distributed cash flow includes repayment of the bonds and cash flow to the fund's partners. Following previous distribution of profits, paid-in capital totalling MEUR 57.8 has yet to be returned to investors.

This capital, together with the preferential annual income payable on it, must be paid to investors before any new distribution of profits can be paid. Based on the market situation, CapMan's management considers it unlikely that the CapMan Real Estate I fund will generate any new distribution of profits in the future. As a result, the fund has been transferred out of the category of funds generating carried interest. A total of some MEUR 6 million from the profit distributed by the fund in 2007 was not booked as revenue because of concerns that the money in question would have to be returned at some point in the future.

APPENDIX 2: OPERATIONS OF CAPMAN'S FUNDS UNDER MANAGEMENT, 1 JANUARY - 30 JUNE 2010

The operations of private equity funds managed by CapMan during the review period comprised direct investments in portfolio companies, mainly in the Nordic countries and Russia (CapMan Private Equity), as well as real estate investments, mainly in Finland (CapMan Real Estate). The investment activities of funds making direct investments in portfolio companies include mid-sized buyout investments in manufacturing industry and the service and retail sectors in the Nordic countries, technology investments in growth-stage and later growth-stage technology companies in the Nordic countries, life science investments in companies specialising in medical technology and healthcare services in the Nordic countries, investments in mid-sized companies operating in Russia, and investments in significant minority holdings in listed mid-cap companies in the Nordic countries.

CAPMAN PRIVATE EQUITY

Investments in portfolio companies in January-June 2010

CapMan funds made six new investments, as well as several add-on investments, during the review period, investing MEUR 107.1 in all. Add-on investments accounted for around a third of the total. The new investments were Bank Evropeiskij, Esperi Care Oy, Havator Oy, Hermelinen Hälsovård AB, LMZ, and Oy Lunawood Ab. Significant add-on investments were made in Walki Group Oy, Northern Alliance Oy, Affecto Oyj, Papa John's, and Avelon Group Oy. During the comparable period in 2009, funds made two new investments and a number of add-on investments totalling MEUR 73.8.

Exists from portfolio companies in January-June 2010

CapMan funds exited completely from eight companies and partially from two during the review period. Complete exits were made from Exidio Oy, Foreca Oy, Gammadata Holding AB, Inflight Service AB, Oy Turo Tailor Ab, PacketFront Sweden AB, and Pretax Oy. In addition, funds sold the shares in US-based On2 Technologies received when exiting Hantro Products Oy in 2007. Funds exited partially from MQ Sweden AB and Nobia AB. Exits made during the review period had a combined acquisition cost of MEUR 73.1. During the comparable period last year, complete exits were made from two companies and a partial exit from another, with a combined acquisition cost of MEUR 23.5.

Events after the review period

It was announced at the beginning of July that the CapMan Buyout IX fund has invested in the Swedish bathroom fittings manufacturers INR and Aspen. The investment is expected to be completed in August.

CAPMAN REAL ESTATE

Investments in and commitments to real estate acquisitions and projects in January-June 2010

The CapMan Hotels RE fund invested in a property in the centre of Helsinki that is planned for conversion into a hotel. In addition, the fund made a significant add-on investment in the Rantasipi Airport Hotel in Vantaa and took a significant add-on investment decision to modernise and upgrade the Turun Centrum site in Turku. CapMan's real estate funds made a number of other add-on investments in existing properties. New and add-on investments totalled MEUR 16.4. Funds were committed to finance real estate acquisitions and projects valued at MEUR 29.0 as of 30 June 2010. During the comparable period in 2009, funds made two new investments and various add-on investments totalling MEUR 85.8. Commitments to finance new projects totalled MEUR 22.0 as of 30 June 2009.

Exits from real estate investments in January-June 2010

The CapMan Real Estate I fund exited from Kiinteistö Oy Helsingin Kalevankatu 20 in Helsinki. The acquisition cost of the property was MEUR 8.7. No exits were made during the equivalent period in 2009.

FUND INVESTMENT ACTIVITIES IN FIGURES

Investments and exits made by funds at acquisition cost, MEUR

1-6/2010 1-6/2009 1-12/2009
New and add-on investments
Funds investing in portfolio companies 107.1 73.8 172.0
Buyout 73.0 42.9 80.4
Technology 13.1 5.6 13.5
Life Science 2.9 1.1 8.1
Russia 12.0 3.2 7.1
Public Market 6.1 21.0 62.9
Real estate funds 16.4 85.8 104.9
Total 123.5 159.6 276.9
Exits*
Funds investing in portfolio companies 73.1 3.3 32.4
Buyout 41.7 - 16.8
Technology 17.1 3.3 8.6
Life Science - - 3.9
Russia - - - -
Public Market 14.3 - - 3.1
Real estate funds 8.7 - 9.1
Total 81.8 3.3 41.5

* Including partial exits and repayments of mezzanine loans.

In addition, real estate funds had made commitments to finance real estate acquisitions and projects valued at MEUR 29 as of 30 June 2010.

Funds' aggregate combined portfolio* as of 30 June 2010, MEUR

Portfolio at Portfolio at Share of portfolio
acquisition fair value (fair value) %
cost
Funds investing in portfolio companies 1 006.5 933.9 43.4
Real estate funds 1 333.8 1 218.5 56.6
Total 2 340.3 2 152.4 100.0
Funds investing in portfolio companies
Buyout 748.0 736.0 78.8
Technology 120.7 81.7 8.7
Life Science 50.4 31.4 3.4
Russia 35.9 27.4 2.9
Public Market 51.5 57.4 6.1
Total 1 006.5 933.9 100.0

* Aggregated entity formed of all investments of funds under management.

Remaining investment capacity

After deducting actual and estimated expenses, funds investing in portfolio companies had a remaining investment capacity amounting to some MEUR 770 for new and add-on investments as of 30 June 2010. Of their remaining capital, some MEUR 450 was earmarked for buyout investments (incl. mezzanine investments), some MEUR 125 for technology investments, some MEUR 30 for life science investments, some MEUR 80 for investments by the CapMan Russia team, and some MEUR 85 for investments by the CapMan Public Market team. Real estate funds had a remaining investment capacity amounting to some MEUR 360, which has largely been reserved for developing funds' existing investments.

APPENDIX 3: CAPITAL AND MANDATES UNDER THE MANAGEMENT OF ASSOCIATED COMPANY, ACCESS CAPITAL PARTNERS, AS OF 30 JUNE 2010

CapMan Plc owns a 35% holding in the European fund of funds management company, Access Capital Partners. As of 30 June 2010, Access Capital Partners had approx. EUR 2.7 billion of capital under management. CapMan Plc Group's share of the carried interest from the Access funds and Private Equity Mandates established since 2003 is 25%. For older funds, this share is higher.

Further information on Access Capital Partners can be found at www.access-capital-partners.com.

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