DEA Capital — Interim / Quarterly Report 2016

Nov 4, 2016

INTERIM MANAGEMENT REPORT TO 30 SEPTEMBER 2016

Third quarter 2016 First nine months of 2016

Board of Directors Milan, 3 November 2016

DeA Capital S.p.A.

Corporate information DeA Capital S.p.A. is subject to the management and coordination of De Agostini S.p.A. Registered office: Via Brera 21, Milan 20121, Italy Share capital: EUR 306,612,100 (fully paid up), comprising 306,612,100 shares with a nominal value of EUR 1 each (including 45,001,156 treasury shares at 30 September 2016) Tax code, VAT code and recorded in the Milan Register of Companies under no. 07918170015

Board of Directors (*)

Chairman Lorenzo Pellicioli

Chief Executive Officer Paolo Ceretti

Directors Lino Benassi Marco Boroli Donatella Busso (1/5) Marco Drago Carlo Enrico Ferrari Ardicini Francesca Golfetto (3/5) Severino Salvemini (2/3/5) Daniela Toscani (1/5) Elena Vasco (4/5)

Board of Statutory Auditors (*)

Chairman	Cesare Andrea Grifoni
Permanent Auditors	Annalisa Raffaella Donesana Fabio Facchini
Deputy auditors	Andrea Augusto Bonafè Michele Maranò Marco Sguazzini Viscontini
Manager responsible for preparing the Company's accounts	Manolo Santilli
Independent Auditors	PricewaterhouseCoopers S.p.A.

(*) In office until the approval of the Financial Statements for the Year Ending 31 December 2018 (1) Member of the Control and Risks Committee

• (2) Member and Chairman of the Control and Risks Committee
• (3) Member of the Remuneration and Appointments Committee

(4) Member and Chairman of the Remuneration and Appointments Committee

(5) Independent Director

Contents

Interim Report on Operations

• 1. Profile of DeA Capital S.p.A.
• 1. Information for shareholders
• 1. The DeA Capital Group's key Statement of Financial Position and Income Statement figures
• 1. Significant events in the third quarter of 2016
• 1. Results of the DeA Capital Group
• 1. Other information

Consolidated Financial Statements and Notes to the Accounts for the period 1 January to 30 September 2016

Statement of Responsibilities for the Interim Management Report to 30 September 2016

Interim Report on Operations

1. Profile of DeA Capital S.p.A.

With assets under management of around EUR 10,800 million and an investment portfolio of approximately EUR 450 million, DeA Capital S.p.A. is one of Italy's largest alternative investment operators.

The Company, which operates in both the Private Equity Investment and Alternative Asset Management businesses, is listed on the FTSE Italia STAR section of the Milan stock exchange and heads the De Agostini Group in the area of financial investments.

In the Private Equity Investment business, DeA Capital S.p.A. has "permanent" capital, and therefore has the advantage – compared with traditional private equity funds, which are normally restricted to a pre-determined duration – of greater flexibility in optimising the timing of entry to and exit from investments. In terms of investment policy, this flexibility allows it to adopt an approach based on value creation, including over the medium to long term.

With regard to Alternative Asset Management activities, DeA Capital S.p.A. – through its subsidiaries IDeA FIMIT SGR and IDeA Capital Funds SGR – is Italy's leading operator in real estate fund management and private equity funds of funds programmes, respectively. The two asset management companies are active in the promotion, management and value enhancement of investment funds, using approaches based on sector experience and the ability to identify opportunities for achieving the best returns.

Alternative Asset Management has been the Company's main focus for strategic development in recent years. In view of this, DeA Capital S.p.A. is expected to continue to concentrate its asset allocation in this business, partly through investments in funds managed by the above-mentioned private equity/real estate platform, with the aim of generating financial returns.

PRIVATE EQUITY	ALTERNATIVE ASSET
INVESTMENT	MANAGEMENT
 Direct investment in companies mainly operating in Europe and Emerging Europe.  Indirect Investment in private equity and real estate funds.	 IDeA Capital Funds SGR, which manages private equity funds (funds of funds, co-investment funds and theme funds). Assets under management: EUR 1.9 billion  IDeA FIMIT SGR, which manages real estate funds. Assets under management: EUR 8.0 billion  SPC, a company that specialises in secured and unsecured debt recovery, with a focus on the banking, leasing, consumer and commercial sectors in Italy. Assets under management: EUR 0.9 billion IRE/IRE Advisory, which operates in  project, property and facility management, as well as real estate brokerage.

At 30 September 2016, DeA Capital S.p.A. reported Group shareholders' equity of EUR 530.8 million, corresponding to a net asset value (NAV) of EUR 2.03 per share, with an investment portfolio of EUR 447.4 million.

More specifically, the investment portfolio consists of Private Equity Investment shareholdings of EUR 87.0 million, Private Equity Investment funds of EUR 192.4 million and net assets relating to the Alternative Asset Management business of EUR 168.0 million.

At 30 September 2016, the corporate structure of the Group headed by DeA Capital S.p.A. (the DeA Capital Group, or the Group) was as summarised below:

PRIVATE EQUITY INVESTMENT

o Main investments

• minority shareholding in Migros, Turkey's leading food retail chain operator, whose shares are listed on the Istanbul Stock Exchange. The investment is held through the Luxembourg-registered company Kenan Investments S.A., an investment recorded in the AFS portfolio of the DeA Capital Group (with a stake of 17.11%);
• strategic shareholding in Sigla, which provides consumer credit for nonspecific purposes (salary-backed loans and personal loans) and services nonperforming loans in Italy. The investment is held through the Luxembourgregistered company Sigla Luxembourg S.A., an associate of the DeA Capital Group (with a stake of 41.39%).

o Funds

• units in seven funds managed by the subsidiary IDeA Capital Funds SGR, i.e. in the three funds of funds IDeA I Fund of Funds (IDeA I FoF), ICF II and ICF III, in the co-investment fund IDeA Opportunity Fund I (IDeA OF I) and in the theme funds IDeA Efficienza Energetica e Sviluppo Sostenibile (Energy Efficiency and Sustainable Development - IDeA EESS) and IDeA Taste of Italy (IDeA ToI) and in the credit fund IDeA Corporate Credit Recovery I (IDeA CCR I);
• units in the real estate fund Atlantic Value Added (AVA), managed by IDeA FIMIT SGR;
• units in six venture capital funds.

ALTERNATIVE ASSET MANAGEMENT

• total control of IDeA Capital Funds SGR (100%), which manages private equity funds (funds of funds, co-investment funds and theme funds) with approximately EUR 1.9 billion in assets under management and nine managed funds;
• controlling interest in IDeA FIMIT SGR (64.30%), Italy's largest independent real estate asset management company, with approximately EUR 8.0 billion in assets under management and 38 managed funds (including five listed funds);
• controlling interest in SPC (66.32%), a company that specialises in secured and unsecured debt recovery, with a focus on the banking, leasing, consumer and commercial sectors in Italy, with assets under management of around EUR 0.9 billion. The stake is held via Mato, a wholly-owned subsidiary;
• strategically important stake in IRE/IRE Advisory (45%), which operate in project, property and facility management, as well as real estate brokerage.

2. Information for shareholders

> Shareholder structure - DeA Capital S.p.A. (#)

(#) Figures at 30 September 2016 based on the latest communications available.

Note: At 3 November 2016, there were 45,017,206 treasury shares representing approximately 14.7% of share capital.

Share performance (°)

- Period from 11 January 2007, when DeA Capital S.p.A. began operations, to 30 September 2016

- From 1 January 2016 to 30 September 2016

^(°) Source: Bloomberg

The performance of the DeA Capital share

The Company's share price fell by 51.8% between 11 January 2007, when DeA Capital S.p.A. began operations, and 30 September 2016. In the same period, the FTSE All-Share® and LPX50® fell by 57.4% and 14.8% respectively.

The DeA Capital share fell by 18.5% in the first nine months of 2016, while the Italian market index FTSE All-Share® fell by 22.4%, and the LPX50® gained 0.1%. The share's liquidity was lower than in 2015, with average daily trading volumes of around 170,000 shares.

The prices recorded during the first nine months of 2016, adjusted for the amount (EUR 0.12 per share) paid to shareholders in May 2016, are shown below:

(in EUR per share)	1 Jan – 30 Sept 2016
Maximum price	1.29
Minimum price	1.00
Average price	1.12
Price at 30 September 2016	1.05
Market capitalisation at 30 September 2016 (EUR
million)	322

NB: Capitalisation net of treasury shares: EUR 275 million

Investor Relations

DeA Capital S.p.A. maintains stable and structured relationships with institutional and individual investors. In the first nine months of 2016, as in previous years, the Company continued with its communication activities, including attendance at the STAR Conference held in Milan in March and in the STAR Conference held in London in October 2016. Since the start of 2016, the Company has also held meetings and conference calls with institutional investors, portfolio managers and financial analysts from Italy and abroad.

Coverage of the DeA Capital stock is currently carried out via research by the two main intermediaries on the Italian market, Equita SIM and Intermonte SIM, with the latter acting as a specialist, and by Edison Investment Research, an independent equities research specialist based in London.

The research prepared by these intermediaries is available in the Investor Relations/Analyst Coverage section of the website www.deacapital.it.

In December 2008, the DeA Capital share joined the LPX50® and LPX Europe® indices. The LPX® indices measure the performance of the major listed companies operating in private equity (Listed Private Equity or LPE). Due to its high degree of diversification by region and type of investment, the LPX50® index has become one of the most popular benchmarks for the LPE asset class. The method used to construct the index is published in the LPX Equity Index Guide. For further information please visit the website: www.lpx.ch. The DeA Capital share is also listed on the GLPE Global Listed Private Equity Index created by Red Rocks Capital, a US asset management company specialising in listed private equity companies. The index was created to monitor the performance of listed private equity companies around the world and is composed of 40 to 75 stocks. For further information: www.redrockscapital.com (GLPE Index).

The DeA Capital S.p.A. website is available in Italian and English at www.deacapital.it. The site is a source of information, financial data, tools, documents, videos and news about the DeA Capital Group's activities, strategy and investment portfolio. The social networks where DeA Capital S.p.A. has a presence can also be accessed from the homepage; while articles, communications and interesting sections can also be shared on social media. DeA Capital S.p.A. has strengthened its presence on Wikipedia and the social networks Slideshare and LinkedIn, adding its most recent documents for institutional investors such as reports and presentations.

Since April 2014, DeA Capital S.p.A. has published an interactive report containing the annual results; the versions for 2013, 2014 and 2015 are available from the "Financial Statements and Reports" section of the website.

The website has always been the primary mode of contact for investors. They can subscribe to various mailing lists and receive any news on the DeA Capital Group that interests them, in a timely manner, as well as send questions or requests for information and documents to the Company's Investor Relations area, which is committed to answering queries promptly, as stated in the Investor Relations Policy published on the site.

In this way, DeA Capital S.p.A. is continuing its efforts to strengthen its presence on the web and to make information for stakeholders available through many channels.

3. The DeA Capital Group's key Statement of Financial Position and Income Statement figures

The DeA Capital Group's key Statement of Financial Position and Income Statement figures to 30 September 2016 are shown below, compared with the corresponding figures to 31 December 2015/30 September 2015.

(EUR million)	30.9.2016	31.12.2015 "adjusted" (*)	31.12.2015 "as reported"
NAV/share (EUR)	2.03	1.95	2.07
Group NAV	530.8	515.4	547.0
Investment portfolio	447.4	454.8	454.8
Net financial position - Holding companies	83.7	58.4	90.0
Consolidated net financial position	116.3	102.2	133.8

(*) The "adjusted" results at 31.12.2015 take into account the extraordinary dividend distribution of 0,12 € / share, for a total 31,6 million Euro, which was completed in May 2015

(EUR million)	First nine months of 2016	First nine months of 2015
Group net profit/(loss)	9.8	72.8
Comprehensive income (Group share) (Statement of Performance – IAS 1)	18.0	13.8

The table below shows the composition of the Group's NAV during the first nine months of 2016.

Change in Group NAV	Total value (EUR m)	No. shares (millions)	Value per share (EUR)
Group NAV "as reported" at 31.12.2015 Extraordinary dividend distributed	547.0 (31.6)	263.9	2.07 (0.12)
"Adjusted" Group NAV at 31.12.2015	515.4		1.95
Purchase of own shares	(3.3)	(2.8)	(1.20) (*)
Treasury shares delivered to the incentive plans Comprehensive income - Statement of Performance – IAS 1	0.6 18.0	0.5	1.32 (#)
Other changes in NAV	0.1
Group NAV at 30.9.2016	530.8	261.6	2.03

(*) Average price of purchases in 2016

(#) Market price at the date of delivery of shares

The table below provides details of the Group's statement of financial position at 30 September 2016.

	September 30, 2016			December 31, 2015 "adjusted" (*)
	M€	€/Sh.	M€	€/Sh.
Private Equity Investment
- Kenan Inv. / Migros	75.3	0.29	76.3	0.29
- Funds - Private Equity / Real Estate	192.4	0.74	194.1	0.74
- Other (Sigla, )	11.7	0.04	11.7	0.05
Total PEI (A)	279.4	1.07	282.1	1.08
Alternative Asset Management
- IDeA FIMIT SGR	123.4	0.47	121.7	0.46
- IDeA Capital Funds SGR	38.7	0.15	39.7	0.15
- IRE / SPC	5.9	0.02	11.3	0.04
Total AAM (B)	168.0	0.64	172.7	0.65
Investment Portfolio (A+B)	447.4	1.71	454.8	1.73
Other net assets (liabilities)	(0.3)	0.00	2.2	0.00
Net Financial Position Holdings	83.7	0.32	58.4	0.22
NAV	530.8	2.03	515.4	1.95

(*) The "adjusted" results at December 31, 2015 take into account the extraordinary dividend distribution of 0,12 € / share, for a total 31,6 million Euro, which was completed in May 2016

4. Significant events in the third quarter of 2016

The significant events that occurred in the third quarter of 2016 are summarised below. For events that took place during the first half of the year, please refer to the Half-Year Report to 30 June 2016, which was approved by the Board of Directors on 8 September 2016.

Private equity funds – paid calls/distributions

In the third quarter of 2016, the DeA Capital Group increased its respective investments with payments totalling EUR 1.3 million. Investments in the first nine months of 2016 totalled EUR 6.8 million, and relate to the IDeA I FoF, ICF II, ICF III, IDeA EESS, IDeA ToI and IDeA CCR I funds.

At the same time, the DeA Capital Group received capital reimbursements totalling EUR 6.6 million during the third quarter. The cumulative total of reimbursements received in the first nine months of 2016 amounted to EUR 17.8 million, and relate to the IDeA I FoF, ICF II, IDeA OF I and IDeA EESS funds.

Thus, in the third quarter of 2016, the private equity funds in which DeA Capital S.p.A. invested produced a net positive cash balance totalling EUR 5.3 million for the portion relating to the Group (EUR 11.0 million in the first nine months of 2016).

Acquisition of an indirect stake in SPC

In July 2016, the DeA Capital Group acquired, via its subsidiary DeA Capital Real Estate, an indirect stake of 66.3% in SPC, a company that specialises in secured and unsecured debt recovery, with a focus on the leasing, banking, consumer and commercial sectors in Italy.

The transaction was carried out via the acquisition of the vehicle, Mato, holder of a majority stake in SPC, and the subsequent capital increase by SPC, with a total investment, to date, of EUR 1 million for the DeA Capital Group.

Under the agreements signed with the minority shareholders (SPC management, industrial partners), regulated by a shareholders' agreement, further capital increases will be carried out by the company by the end of 2017, for a planned further investment of EUR 0.6 million for DeA Capital (representing a stake of 68.7% at the conclusion of these capital increases).

Third closing of IDeA Taste of Italy private equity fund

On 6 September 2016, the IDeA Taste of Italy fund completed a third closing for a total of EUR 48.5 million, bringing the fund's total commitment to EUR 188.5 million. The fund's final target, which is expected to be achieved by the end of the current financial year, is EUR 200 million.

5. Results of the DeA Capital Group

The consolidated results relate to the operations of the DeA Capital Group in the following businesses:

• Private Equity Investment, which includes the reporting units involved in private equity investment, broken down into shareholdings (direct investments) and investments in funds (indirect investments);
• Alternative Asset Management, which includes reporting units dedicated to asset management activities and related services, with a focus on the management of private equity and real estate funds.

Private Equity Investment

In terms of shareholdings, at 30 September 2016, the DeA Capital Group was a shareholder of:

• Kenan Investments, the indirect parent company of Migros (valued at EUR 75.3 million);
• Sigla Luxembourg, the parent company of Sigla (valued at EUR 11.5 million);
• Harvip, which manages funds and investment vehicles used to purchase distressed real estate and other investments (valued at EUR 0.2 million).

The DeA Capital Group is also a shareholder in other smaller companies which are not included in the investment portfolio as they are either dormant or in liquidation and have zero carrying value.

At 30 September 2016, the DeA Capital Group was subscribed to units in the following funds (net carrying value from the funds' consolidated financial statements shown in brackets):

• IDeA I FoF (valued at EUR 73.3 million);
• ICF II (valued at EUR 44.8 million);
• ICF III (valued at EUR 6.3 million);
• IDeA OF I (valued at EUR 45.6 million);
• IDeA EESS (valued at EUR 7.1 million);
• IDeA ToI (valued at EUR 1.9 million);
• AVA (valued at EUR 3.7 million);
• IDeA CCR I (valued at EUR 0.2 million);
• six venture capital funds (with a total value of approximately EUR 9.5 million);

Valuations of shareholdings and funds in the portfolio reflect estimates made using the information available on the date this document was prepared.

Investments in associates

Sigla Luxembourg (parent company of Sigla)

Registered office: Italy

Sector: Consumer credit

Website: www.siglacredit.it

Investment details:

On 5 October 2007, the DeA Capital Group finalised the acquisition of a stake (currently 41.39%) in Sigla Luxembourg, the holding company that fully controls Sigla, which operates in Italy and provides consumer credit for non-specific purposes.

Brief description:

Sigla specialises in "salary-backed loans". It is a benchmark operator in the provision of financial services to households throughout Italy, chiefly through a network of agents.

It activities also include servicing unsecured non-performing loans (personal loans and credit cards).

The investment in Sigla Luxembourg, of EUR 11.5 million, which was unchanged compared with 31 December 2015, was classified under "Held-for-sale assets" ahead of the start of the process to sell the shareholding in the fourth quarter of 2015.

$\left $ Sigla (mln €)	2016	First Nine Months of I First Nine Months of 2015	Change
Loans to customers*	31.3	36.5	(5.2)
Revenues from loans to customers	0.0	0.4	(0.4)
CQS granted	130.5	108.8	21.7
Revenues from CQS	9.6	6.8	2.8
Group net profit	2.1	0.9	1.2

* Receivables for personal loans net of impairment provisions

With the market continuing to consolidate the expansion seen in 2015 (growth of 28.7% in salary-backed loans at August 2016, compared with 6.1% at the end of 2015), Sigla, taking advantage of the new salary-backed funding raised (renewed in an amount of approximately EUR 500 million in the fourth quarter of 2015), recorded significant growth in salary-backed loans disbursed (+20%).

This increase in business volumes has resulted in a healthy rise in net profit and a corresponding improvement in Sigla's risk profile, given the gradual recovery of the portfolio of outstanding personal loans and the continuous strengthening of the company's net financial position.

Investments in other companies

Kenan Investments (holder of a stake in Migros)

Registered office: Turkey

MiGROS

Sector: Food retail

Website: www.migros.com.tr

Investment details:

In 2008, the DeA Capital Group acquired about 17% of the capital of Kenan Investments, the company heading the structure to acquire the controlling interest in Migros.

As of 15 July 2015, following the sale by Moonlight Capital, a wholly-controlled subsidiary of Kenan Investments, of a 40.25% stake in Migros to Anadolu Endüstri Holding, a leading Turkish conglomerate, Kenan Investments jointly controlled Migros with a stake of 40.25%.

Brief description:

Migros was established in 1954 and is the leading company in the food retail sector in Turkey. The company has 1,528 sales outlets (at 30 June 2016), with a total net area of 1,044 thousand square metres.

Migros is present in all seven regions of Turkey, and has a marginal presence in Kazakhstan and Macedonia.

The company operates under the following names: Migros and Macrocenter (supermarkets), 5M (hypermarkets), Ramstore (supermarkets abroad) and Kangurum (online store).

Growth in the retail sector in Turkey is a relatively recent phenomenon, brought about by the transition from traditional systems such as bakkals (small stores typically run by families) to an increasingly widespread organised distribution model driven by expansion and the modernisation process under way in Turkey.

The stake in Kenan Investments is recorded in the Consolidated Financial Statements to 30 September 2016 at EUR 75.3 million (compared with EUR 76.3 million at 31 December 2015). This amount (indirectly corresponding to approximately 6.9% of Migros' capital, i.e. 40.25% of the latter's capital via the Group's interest in Kenan Investments) reflects a price per share of Migros of:

• TRY 26.00 (plus interest of 7.5% per annum from 30 April 2015) for the stake subject to put/call options agreed with Anadolu on 9.75% of Migros and exercisable from 30 April 2017:
• TRY 18.28, being the market price on 30 September 2016, for the remaining stake (30.5% of Migros' capital).

The change in the value of the stake in Kenan Investments at 30 September 2016 compared with 31 December 2015 is attributable to a decrease of EUR -1.0 million in the fair value reserve due to the combined effect of the rise in the share price (TRY 18.28 per share at 30 September 2016 compared with TRY 17.45 per share at 31 December 2015) and the depreciation of the Turkish lira against the euro (3.37 TRY/EUR at 30 September 2016 versus 3.17 TRY/EUR at 31 December 2015).

Migros (mln YTL)	First Half 2016	First Half 2015	Change
Revenues	5,079	4,369	16.2%
EBITDA	308	267	15.3%
Group net profit	(53)	(114)	n.a.
Net financial debt	(1,712)	(1,748)	+36 mln YTL

* Awaiting publication of the data of the first 9 months - the data for half year are provided

Funds

At 30 September 2016, the DeA Capital Group's Private Equity Investment business included investments – other than the investment in the IDeA OF I fund (fully consolidated in accordance with IFRS 10) and the AVA real estate fund (classified under "Investments in associates", based on the units held) – in three funds of funds (IDeA I FoF, ICF II and ICF III), three theme funds (IDeA EESS, IDeA ToI and IDeA CCR I) and six venture capital funds, for a total net carrying amount in the Consolidated Financial Statements to 30 September 2016 of EUR 192.4 million (corresponding to the estimated fair value calculated using the information available on the date this document was prepared).

Residual commitments for all the funds in the portfolio were approximately EUR 100.4 million.

$-$ IDeA OF I

Capital Funds Sor

IDeA Opportunity Fund I

Registered office: Italy Sector: Private equity Website: www.ideasgr.com

Investment details:

IDeA OF I is a closed-end fund under Italian law, for qualified investors, which began operations on 9 May 2008 and is managed by IDeA Capital Funds SGR.

The DeA Capital Group has a total commitment of up to EUR 101.8 million in the fund.

Brief description:

IDeA OF I has total assets of approximately EUR 217 million. Its objective is to invest, independently or via syndicates with a lead investor, by purchasing qualified minority interests.

At 30 September 2016, IDeA OF I had called up 82.8% of the total commitment and distributed 27.0% of that commitment, after making nine investments (of which seven were still in the portfolio at that date):

Portfolio investments

• On 8 October 2008, it acquired a 5% stake in Giochi Preziosi S.p.A., a company active in the production, marketing and sale of children's games with a product line covering childhood to early adolescence. In May 2015, IDeA OF I completed the sale of the entire stake in Giochi Preziosi for EUR 4.4 million (of which EUR 1.7 million was deferred until 31 December 2018), plus a potential earn-out conditional upon Giochi Preziosi achieving various performance targets. In addition to the above-mentioned transaction, IDeA OF I paid EUR 5.2 million to subscribe to a bond convertible into 5% of the shares of Giochi Preziosi (maturing on 31 December 2018);

• On 22 December 2008, it acquired a 4% stake in Manutencoop Facility Management S.p.A. by subscribing to a reserved capital increase. This company is Italy's leading integrated facility management company, providing and managing a wide range of property management services and other services for individuals and government agencies. On 2 July 2013, IDeA OF I sold a 1% stake in the company's capital to the controlling shareholder (Manutencoop Società Cooperativa), backed by the issue of a remunerated vendor note, thereby reducing its own stake to 3%. Subsequently, on 7 October 2016, new agreements between the financial investors and Manutencoop Società Cooperativa became effective under which it was agreed to (i) extend the repayment term of the existing vendor loan to 30 June 2019; and (ii) increase the stake held in the company (from 3% to 4.73% for IDeA OF I) in return for waiving the exercise of the put option on the whole stake held;

• - On 10 February 2011, it invested in bonds convertible into shares of Euticals, the Italian leader in the production of active ingredients for pharmaceutical companies that operate in the generics sector. As part of the extraordinary operation that led to the transfer of the controlling share in Euticals S.p.A., on 3 April 2012, these bonds were transferred into the acquisition vehicle, Lauro 57, which thus now owns 100% of Euticals S.p.A.; in exchange, a stake of 7.77% was acquired in the same acquisition vehicle. On 2 April 2015, a share capital increase totalling EUR 12.5 million (of which EUR 1.2 million was for IDeA OF I) was completed; this brought the stake held in the company to 8.0%. On 11 July 2016, the acquisition vehicle completed the sale of the entire stake held in Euticals to AMRI (a NASDAQ-listed group that provides manufacturing services to the pharmaceutical and biotechnology industries) for an equity value of EUR 243.5 million, i.e. EUR 19.4 million for the OF I stake. The price was settled partly in AMRI shares (for an indirect stake of 1.31% in the company for the OF I stake) and partly via the issue of a vendor note (EUR 4.4 million for the OF I stake, repayable in three tranches after the third, fourth and fifth year following the sale) with the remaining portion paid in cash (EUR 7.3 million, gross of transaction costs and the escrow account), with a total return on investment of 1.65 times;

• - On 11 September 2012, an agreement was signed with the main shareholder, Filocapital S.r.l., for an investment in Iacobucci HF Electronics S.p.A. ("Iacobucci"), a company that manufactures trolleys for aeroplanes and trains, and specialises in the design, production and marketing of components for aircraft fittings and furnishings. At the date of this document, the investment in Iacobucci consists of a stake of 34.85%, following two reserved capital increases on 7 August 2013 (EUR 3 million) and 19 May 2014 (EUR 3 million), and the conversion of a bond into shares of Iacobucci, for EUR 6 million, which took place on 10 October 2014;
• - On 9 October 2012, an indirect stake of 4.6% was acquired in Patentes Talgo S.A. (Talgo), a Spanish company that designs and produces solutions for the rail sector, chiefly sold on the international market (high-speed trains, rolling stock and maintenance systems). On 7 May 2015, a 45% partial stake in the subsidiary was sold as part of its listing on the Madrid stock exchange with net proceeds for the fund of EUR 24.3 million, a return on investment of 3.6 times. After this sale, IDeA OF I holds an indirect stake of approximately 2.5% in Talgo;
• - On 12 December 2012, it acquired a stake of 29.34% in 2IL Orthopaedics, a Luxembourg-registered vehicle which, through a public takeover bid and subsequent delisting of previously listed shares, obtained full control (on 15 February 2013) of the British company Corin Group PLC (Corin). Corin is active in the production and marketing of orthopaedic devices, especially for hips and knees;
• - On 27 February 2013, it acquired a 10% stake in Elemaster S.p.A. Elemaster), the leading operator in ODM (original design manufacturing) and EMS (electronic manufacturing services), i.e. the design and construction of electronic equipment. At the same time, the IDeA Energy Efficiency and Sustainable Development Fund, also managed by IDeA Capital Funds SGR, invested an equal amount.

Investment disposals

- On 31 March 2009, a 17.43% stake was acquired in Grandi Navi Veloci S.p.A. (GNV), an Italian shipping company that transports passengers and goods on various routes around the Mediterranean Sea. On 2 May 2011, with the finalisation of Marinvest's entry into the shareholder structure of GNV through the subscription of a reserved capital increase, the stake held by IDeA OF I was diluted to 9.21%. Subsequently, IDeA OF I's decision not to subscribe, on a pro-rata basis, to two further capital increases (August 2012, January 2014) led to a further dilution in its shareholding to 3.12%. On 25 February 2016, the sale of the entire stake held in GNV to a company in the Marinvest Group, GNV's main shareholder, was completed for a purchase price of EUR 3.4 million;

- On 25 February 2011, it purchased a 9.29% stake in Telit Communications PLC (Telit), the largest operator in machine-to-machine communications systems in the world. The stake held by IDeA OF I was subsequently diluted to 8.53% due to the exercise of stock options by the company's management. In 2016, the sale of the Telit shares still held by IDeA OF I, which was launched in 2014, was completed for a total price of EUR 30.9 million, with a total return on investment of 3.45 times.

The units held in IDeA OF I were reported in the consolidated financial statements to 30 September 2016 at a net value of EUR 45.6 million, versus EUR 48.5 million at 31 December 2015. The change is attributable to capital calls of EUR +1.6 million, capital reimbursements of EUR -4.3 million, a pro-rata net profit for the period of EUR +0.8 million and a EUR 1.0 million decrease in fair value.

The table below shows a breakdown of the fund's NAV at 30 September 2016.

(EUR million)	100%	DeA Capital
Investments in Portfolio
Giochi Preziosi	5.2	2.4
Manutencoop Facility Management	18.8	8.8
Lauro Cinquantasette (Euticals)	13.6	6.4
Iacobucci HF Electronics	6.0	2.8
Pegaso Transportation Investments (Talgo)	14.3	6.7
2IL Orthopaedics LTD (Corin)	11.6	5.5
Elemaster	8.5	4.0
Total Investments in Portfolio	78.0	36.6
Other long term receivables	9.7	4.6
Other aseets (liabilities)	(0.5)	(0.3)
Cash and cash equivalents	9.9	4.7
Net equity	97.1	45.6

The table below shows the key figures for IDeA OF I at 30 September 2016.

IDeA OF I	Registered office	Year of commitment	Fund Size	Subscribed commitment	% DeA Capital in fund
Eur (€)
IDeA Opportunity Fund I	Italy	2008	216,550,000	101,750,000	46.99
Residual Commitments
Total residual commitment in:		Eur		17,531,525

- IDeA I FoF

Capital Funds Sgr

IDeA I Fund of Funds

Registered office: Italy Sector: Private equity Website: www.ideasgr.com Investment details:

IDeA I FoF is a closed-end fund under Italian law, for qualified investors, which began operations on 30 January 2007 and is managed by IDeA Capital Funds SGR.

The DeA Capital Group has a total commitment of up to EUR 173.5 million in the fund.

Brief description:

IDeA I FoF, which has total assets of approximately EUR 681 million, invests its assets in units of unlisted closed-end funds that are mainly active in the local private equity sector in various countries. It optimises the risk-return profile through careful diversification of assets among managers with a proven track record of returns and solidity, different investment approaches, geographical areas and maturities.

According to the latest report available, the IDeA I FoF portfolio was invested in 41 funds with different investment strategies; these funds in turn hold 330 positions, with varying maturities, in companies active in geographical regions with different growth rates.

The funds are diversified in the buy-out (control) and expansion (minorities) categories, with overweighting towards medium- and small-scale transactions and special situations (distressed debt/equity and turnaround).

At 30 September 2016, IDeA I FoF had called up 85.3% of its total commitment and had made distributions totalling 70.6% of that commitment.

Other important information:

Below is an analysis of the portfolio, at the date of the latest report available, broken down by year of investment, geographical area, sector and type of underlying fund.

The units in IDeA I FoF were valued at approximately EUR 73.3 million in the Consolidated Financial Statements to 30 September 2016 (EUR 77.2 million at 31 December 2015). The change was due to capital calls of EUR +1.0 million, capital reimbursements of EUR -8.7 million and an increase in fair value of EUR 3.8 million.

The table below shows the key figures for IDeA I FOF at 30 September 2016.

IDeAIFoF	Registered office	Year of commitment Fund Size		Subscribed commitment	$%$ DeA Capital in fund
Eur $(\epsilon)$
IDeA I Fund of Funds	Italy	2007	681.050.000	173.500.000	25.48
Residual Commitments
Total residual commitment in:		Eur		25,573,892

$-ICFII$

Capital Funds Sor

ICFII

Registered office: Italy
Sector: Private equity
Website: www.ideasgr.com
Investment details:

ICF II is a closed-end fund under Italian law, for qualified investors, which began operations on 24 February 2009 and is managed by IDeA Capital Funds SGR.

The DeA Capital Group has a total commitment of up to EUR 51 million in the fund.

Brief description:

ICF II, with total assets of EUR 281 million, invests in units of unlisted closed-end funds that are mainly active in the local private equity sector of various countries. It optimises the risk-return profile through careful diversification of assets among managers with a proven track record of returns and solidity, different investment approaches, geographical areas and maturities.

The fund started building its portfolio by focusing on funds in the area of mid-market buy-outs, distressed and special situations, loans, turnarounds and funds with a specific sector slant, targeting, in particular, opportunities offered in the secondary market.

Based on the latest report available, the ICF II portfolio was invested in 27 funds with different investment strategies; these funds in turn hold positions, with varying maturities, in around 382 companies active in various geographical regions.

At 30 September 2016, ICF II had called up around 71.5% of its total commitment and had made distributions totalling 23.8% of that commitment.

Other important information:

Below is an analysis of the portfolio, at the date of the latest report available, broken down by year of investment, geographical area, sector and type of underlying fund.

The units in ICF II had a value of EUR 44.8 million at 30 September 2016 (EUR 41.7 million at 31 December 2015). The increase was due to capital calls of EUR +1.4 million, capital reimbursements of EUR -1.1 million and a fair value increase of EUR +2.8 million.

The table below shows the key figures for ICF II at 30 September 2016:

ICF II	Registered office	Year of commitment	Fund Size	Subscribed commitment	% DeA Capital in fund
Eur (€)
IC F II	Italy	2009	281,000,000	51,000,000	18.15
Residual Commitments Total residual commitment in:		Eur		14,528,171

$-$ ICF III

Capital Funds Sor

ICF III

ICF III is a closed-end fund under Italian law, for qualified investors, which began operations on 10 April 2014 and is managed by IDeA Capital Funds SGR.

The DeA Capital Group has a total commitment of up to EUR 12.5 million in the fund.

Brief description:

ICF III, with total assets of approximately EUR 67 million, intends to invest its assets in units of closed-end private equity funds or in schemes that replicate the financial model, either as lead investor or with other co-investors.

The fund is divided into three segments:

• Core, with a focus on buy-outs, expansion capital and special situations;
• Credit & Distressed, which invests in special credit operations (preferred equity, mezzanine, senior loans), turnarounds and other credit strategies;
• Emerging Markets, which focuses on expansion capital, buy-outs, distressed assets and venture capital operations in emerging markets.

At 30 September 2016, ICF III had called up 41.5%, 58.2% and 41.8% in the Core, Credit & Distressed and Emerging Markets segments respectively.

The units in ICF III have a total value of EUR 6.3 million in the consolidated financial statements at 30 September 2016 (EUR 4.8 million at 31 December 2015). The increase was the combined effect of capital calls of EUR $+1.4$ million and an increase in fair value of EUR $+0.1$ million.

The table below shows the key figures for ICF III at 30 September 2016.

	Year of commitment	Fund Size	commitment	Capital in fund
Italy	2014	66,950,000	12,500,000	18.67
		34,600,000	1,000,000	2.89
		17,300,000	4,000,000	23.12
		15,050,000	7,500,000	49.83

Eur

Total residual commitment in:

6,620,079

- IDeA EESS

Capital Funds Sor

IDeA Efficienza Energetica e Sviluppo Sostenibile (IDeA Energy Efficiency and Sustainable Development)

Registered office: Italy

Sector: Private equity

Website: www.ideasgr.com

Investment details:

IDeA EESS is a closed-end fund under Italian law, for qualified investors, which began operating on 1 August 2011 and is managed by IDeA Capital Funds SGR.

At 30 September 2016, the DeA Capital Group had a total commitment of EUR 15.3 million in the fund. Following the end of the third quarter 2016. DeA Capital S.p.A., acquired the units held by M&C S.p.A. in said fund, taking its total commitment in IDeA EESS to EUR 30.4 million.

Brief description:

IDeA EESS, which has total assets of EUR 100 million, is a closed-end mutual fund under Italian law, for qualified investors, which seeks to acquire minority and controlling interests in unlisted companies in Italy and abroad, by investing jointly with local partners.

The fund is dedicated to investing in small and medium-sized manufacturing and service companies operating in the field of energy savings and the efficient use of natural resources. It focuses on the development of solutions that are faster and cheaper in the use of renewable energy sources without compromising effectiveness in reducing CO₂ emissions.

At 30 September 2016, IDeA EESS had called up 67.2% of the total commitment and distributed 34.8% of that commitment, after making seven investments (of which six were still in the portfolio at that date):

Portfolio investments

• On 8 May 2012, the fund acquired 48% of Domotecnica Italiana, (independent Italian franchising company for thermo-hydraulic installers) for approximately EUR 3.6 million, which was written down in full at 31 December 2014. On 21 April 2016, the company, which had gone into liquidation in 2015 as a result of the gradual deterioration in its results and financial position, was declared bankrupt;
• On 27 February 2013, the fund invested EUR 8.5 million to acquire a stake of 10% in Elemaster, a leading operator in ODM (original design manufacturing) and EMS (electronic manufacturing services), i.e. the design and construction of electronic equipment. At the same time, the IDeA OF I fund, also managed by IDeA Capital Funds SGR, invested an equal amount;
• On 23 April 2013, the fund invested EUR 3.5 million to acquire a 29.9% stake in SMRE, which specialises in the design and construction of industrial systems to cut and process fabric, and also has know-how in electrical drives with particularly innovative technology in integrated electric transmission. The acquisition was carried

out via subscription to a reserved capital increase in SMRE. On 20 April 2016, the process of listing the company's shares on AIM (the section of the Italian stock exchange relating to SMEs) was completed, raising funds of EUR 5.3 million; the resulting dilution reduced the stake held by IDeA EESS in SMRE from 29.9% to 26.6%;

• - On 27 December 2013, the fund invested EUR 3.9 million in the special purpose acquisition company (SPAC) GreenItaly 1, as part of the latter's IPO. This investment breaks down as follows: EUR 3.5 million in ordinary shares, which entitle it to 10% of the company, and EUR 0.4 million, in its capacity as promoter of the vehicle, in special shares without voting rights. In December 2015, the fund increased its investment by EUR 3.1 million (of which EUR 0.1 million was for the abovementioned special shares), bringing it to a total of EUR 7.0 million, for a stake of 18.57% in the SPAC. On 31 December 2015, in line with the SPAC's objectives, GreenItaly 1 completed the merger with Zephyro S.p.A.. (formerly Prima Vera S.p.A.), an Italian leader in the energy efficiency sector and the supply of energy services via complex structures. After the merger, GreenItaly 1 held a stake of 8.1% in the company;
• - During the first half of 2014, the fund invested in several further tranches in Meta System totalling EUR 12.5 million, representing a stake of 16.0% in the company; this subsequently increased to 21.5% through the reinvestment of its pro-rata proceeds of the sale of a subsidiary of Meta System. Meta System is active in the production of transmission equipment, electronic antennas and alarm systems for the automotive sector, as well as home telematics systems and battery chargers for electric vehicles. On 4 August 2015, an agreement was signed for the full disposal of the company in two tranches. The first tranche has been completed (60% of Meta System) for EUR 12.2 million, i.e. 1.6 times the initial investment, and the second tranche will take place via put/call mechanisms exercisable between October 2017 and February 2018;
• - On 5 February 2015, the fund acquired a shareholding in Baglioni via a first capital increase of EUR 8.0 million for a 35.9% stake in the company. This was later increased to 41.2% through a further capital increase of EUR 2 million. Baglioni is a company involved in the design and manufacture of compressed air tanks for applications across a broad spectrum of industrial sectors;
• - Following the end of the third quarter of 2016, IDeA EESS completed the acquisition of a 96.77% stake in Tecnomeccanica, an Italian company operating in the production of aluminium components for the automotive lighting sector, for a price of EUR 4.6 million.

Investment disposals

- On 30 July 2015, the fund acquired a 26.81% stake in Italchimici S.r.l. for EUR 11.3 million. Italchimici is a pharmaceutical company specialising in the sale of respiratory and alimentary tract products; it has established itself as a leader in Italy in the paediatrics segment. On 31 May 2016, as part of the acquisition of 100% of Italchimici's share capital by pharmaceutical company Recordati, IDeA EESS completed the sale of the full stake held in said company for a price of EUR 25.3 million, with a return on investment of about 2.5 times.

The units in IDeA EESS had a value of approximately EUR 7.1 million at 30 September 2016 (EUR 7.3 million at 31 December 2015). The decrease was due to capital calls of EUR +0.2 million, capital reimbursements of EUR -3.7 million and a fair value increase of EUR +3.3 million.

The table below shows the key figures for IDeA EESS at 30 September 2016.

IDeA EESS	Registered office	Year of commitment	Fund Size	Subscribed commitment	% DeA Capital in fund
Euro (€)
IDeA Efficienza Energetica e Sviluppo Sostenibile	Italy	2011	100,000,000	15,300,000	15.30
Residual Commitments
Total residual commitment in:		Eur		5,026,050

- IDeA Tol

Capital Funds Sgr

IDeA Taste of Italy (Tol) Registered office: Italy

Sector: Private equity

Website: www.ideasgr.com

Investment details:

IDeA ToI is a closed-end fund under Italian law for qualified investors, which began operating on 30 December 2014 and is managed by IDeA Capital Funds SGR.

The DeA Capital Group has a total commitment of EUR 14.3 million in the fund.

Brief description:

IDeA ToI, which had total assets of EUR 188.5 million at 30 September 2016, is a closed-end mutual fund under Italian law, for qualified investors, which seeks to acquire minority and controlling interests in mainly small and medium-sized enterprises in Italy, either independently or with other co-investors. The fund invests in companies operating in the agricultural foods sector, especially areas involved in the production and distribution of foodstuffs and in secondary (processed) products or related services.

At 30 September 2016, IDeA ToI had called up 18.0% of its total commitment from subscribers, after making two investments:

• On 15 May 2015, IDeA ToI made its first investment, acquiring, together with coinvestors, a total stake of 70% in a vehicle that wholly owns Gruppo La Piadineria; IDeA Tol's pro-rata stake was EUR 10.6 million. Gruppo La Piadineria is Italy's largest chain of shops selling piadine (traditional flatbread sandwich wraps), with outlets in towns and cities across northern and central Italy;
• On 22 June 2016, the fund invested EUR 14.9 million in an indirect 68.6% holding in Indian S.r.I., a leading manufacturer of private label multi-pack ice cream, distributed mainly to large retail chains in Italv.

The units in IDeA ToI were valued at approximately EUR 1.9 million at 30 September 2016 (EUR 1.1 million at 31 December 2015). The changes during the period were mainly due to capital calls of EUR $+1.0$ million and a EUR 0.2 million decrease in fair value.

The table below shows the key figures for IDeA ToI at 30 September 2016.

IDeA Tol	Registered office	Year of commitment Fund Size		Subscribed commitment	% DeA Capital in fund
Eur $(\epsilon)$
IDeA Taste of Italy	Italv	2014	188,500,000	14.250.000	7.56
Residual Commitments Total residual commitment in:		Eur		11,679,658

- IDeA CCR I

Capital Funds Sgr

IDeA Corporate Credit Recovery I (IDEA CCR I) Fund

Registered office: Italy

Sector: Private equity

Website: www.ideasgr.com

Investment details:

IDeA CCR I is a closed-end fund under Italian law, for qualified investors, which began operations on 23 June 2016 and is managed by IDeA Capital Funds SGR.

The DeA Capital Group has a total commitment of EUR 15.2 million in the fund.

Brief description:

IDeA CCR I, which has total assets of EUR 262.8 million, is a closed-end mutual fund under Italian law, for qualified investors, which aims to help relaunch medium-sized Italian companies that are facing financial difficulties but have solid business fundamentals (Target Companies), sharing the profits between creditors and new investors, by

• proactive management of loans to the Target Companies:
• potential investments to be carried out via debtor-in-possession financing transactions, which means that the new investments have greater seniority than existing financial $d$ eht $\cdot$
• "equity-style" involvement in the management of debtor companies.

The fund is divided into two segments:

• Loans segment, which has acquired eight loans and financial equity instruments relating to financing operations for the Target Companies from eight banks for a consideration of approximately EUR 177 million, in exchange for the allocation of units in the fund's loans segment;
• New finance segment, which has obtained commitments for new financial resources of up to around EUR 85 million, which could be used for the Target Companies or companies with similar characteristics.

At 30 September 2016, the new finance segment had called up 0.9% of the total commitment from subscribers.

The units in IDeA CCR I are valued at approximately EUR 0.2 million in the consolidated financial statements to 30 September 2016, due to net capital calls of EUR 0.2 million.

The table below shows the key figures for the IDeA CCR I fund at 30 September 2016.

IDeA CCR I	Registered office	Year of commitment	Fund Size	Subscribed commitment	% DeA Capital in fund
Euro (€)
IDeA CCR I	Italy	2016	262,809,252	15,150,000	5.76
of which:
Segment New Financing			85,250,000	15,075,000	17.68
Segment C redit			177,559,252	75,000	0.04
Residual Commitments
Total residual commitment in:		Eur		14,936,596

AVA

Atlantic Value Added

Registered office: Italy

Sector: Private Equity - Real Estate Website: www.ideafimit.it

Investment details:

The "Atlantic Value Added Closed-End Speculative Real Estate Mutual Fund" is a mixedcontribution fund for qualified investors that began operations on 23 December 2011.

DeA Capital S.p.A. has a commitment in the fund of up to EUR 5 million (corresponding to 9.1% of the total commitment), with payments of approximately EUR 4.8 million already made at 30 September 2016.

Brief description:

The fund, which is managed by the subsidiary IDeA FIMIT SGR and has a commitment of around EUR 55 million, began its operations with a primary focus on real estate investments in the office and residential markets. The duration of the fund is eight years. From 29 December 2011 onwards, the fund successively invested a total of EUR 73.8 million to purchase/subscribe for units of the Venere fund, receiving capital reimbursements from the fund of EUR 21.0 million. The Venere fund is a closed-end speculative reserved real estate fund managed by IDeA FIMIT SGR. The Venere fund's real estate portfolio consists of properties primarily for residential use located in northern Italy.

The units in the AVA fund were valued at approximately EUR 3.7 million in the Consolidated Financial Statements to 30 September 2016 (EUR 3.8 million at 31 December 2015). The changes during the period were due to the pro-rata portion of the net loss for the period (EUR $-0.1$ million).

The table below shows the key figures for the AVA fund at 30 September 2016.

AVA	Registered office	Year of commitment Fund Size		Subscribed commitment	% DeA Capital in fund
Eur $(\epsilon)$
Atlantic Value Added	Italv	2011	55,000,000	5,000,000	9.09
Residual Commitments
Total residual commitment in:		Eur		150,000

- Venture capital funds

The units in venture capital funds had a total value of approximately EUR 9.5 million in the financial statements to 30 September 2016 (EUR 9.7 million at 31 December 2015). The decrease was due to a EUR 0.2 million fall in fair value.

The table below shows the key figures for venture capital funds in the portfolio at 30 September 2016.

Venture Capital Funds	Registered office	Year of commitment	Fund Size	Subscribed commitment	% DeA Capital in fund
Dollars (USD)
Doughty Hanson & Co Technology	UK EU	2004	271,534,000	1,925,000	0.71
GIZA GE Venture Fund III	Delaware U.S.A.	2003	211,680,000	10,000,000	4.72
Israel Seed IV	Cayman Islands	2003	200,000,000	5,000,000	2.50
Pitango Venture Capital III	Delaware U.S.A.	2003	417,172,000	5,000,000	1.20
Totale Dollars				21,925,000
Eur (€)
Nexit Infocom 2000	Guernsey	2000	66,325,790	3,819,167	5.76
Sterlings (GBP)
Amadeus Capital II	UK EU	2000	235,000,000	13,500,000	5.74
Residual Commitments
Total residual commitment in:		Eur		4,327,179

> Alternative Asset Management

At 30 September 2016, DeA Capital S.p.A. was the owner of:

• 100% of IDeA Capital Funds SGR;
• 64.30% of IDeA FIMIT SGR:
• 66.32% of SPC (which operates in debt recovery in Italy);
• 45% of IRE/IRE Advisory (which operates in project, property and facility management and real estate brokerage).

IDeA Capital Funds SGR

Capital Funds

Registered office: Italy

Sector: Alternative Asset Management - Private Equity

Website: www.ideasgr.com

Investment details:

IDeA Capital Funds SGR operates in the management of private equity funds (funds of funds, coinvestment funds and theme funds). At 30 September 2016, the asset management company managed nine closed-end private equity funds, including four funds of funds (IDeA I FoF, ICF II, ICF III and IDeA Crescita Globale, which serves the retail market), a "direct" co-investment fund (IDeA OF I), three theme funds (IDeA EESS, which operates in energy efficiency, IDeA ToI, in the agricultural foods sector, and IDeA CCR I, Italy's leading debtor-in-possession financing fund) and, since April 2015, Investitori Associati IV (in liquidation).

The investment programmes of IDeA Capital Funds SGR, which are regulated by the Bank of Italy and Consob, capitalise on the management teams' wealth of experience.

The investment strategies of the funds of funds focus on building diversified portfolios in private equity funds in the top quartile or that are next-generation leaders with balanced asset allocation through diversification by:

• industrial sector:
• investment strategy and stage (buy-outs, venture capital, special situations, etc.);
• geographical area (Europe, US and the Rest of the World);
• maturity (commitments with investment periods diluted over time).

The investment strategies of the "direct" co-investment fund focus on minority interests in businesses that primarily concentrate on Europe, and on diversification based on the appeal of individual sectors, while limiting early stage investments.

The investment philosophy of the IDeA EESS sector fund focuses on growth capital and buy-out private equity to support the growth of small and medium-sized enterprises with products/services of excellence in energy efficiency and sustainable development.

The investment target of the IDeA ToI fund is small and medium-sized enterprises operating in the agricultural foods industry, through operations in development capital and early-stage buyouts.

The IDeA CCR I fund's objective is to relaunch medium-sized Italian companies that are in financial difficulties but have solid business fundamentals.

The table below summarises the value of assets under management and management fees for IDeA Capital Funds SGR at 30 September 2016.

(EUR million)	Asset Under Management at 30 september 2016	Management fees at 30 september 2016
IDeA Capital Funds SGR
IDeA I FoF	681	2.6
IDeA OF I	217	1.4
ICF II	281	1.5
IDeA EESS	100	1.4
Idea Crescita Globale	55	1.0
ICF III	67	0.6
Taste of Italy	189	4.2
Investitori Associati IV	86	0.6
IDeA CCR I	263	1.8
Total IDeA Capital Funds SGR	1,939	15.1

With regard to operating performance, the company posted a year-on-year increase of EUR 287 million in assets under management in the first nine months of 2016. This increase is due to the third closing of the IDeA ToI fund (EUR 49 million), the closing of the IDeA CCR I fund (EUR 263 million) and the final closing of the ICF III fund (approximately EUR 10 million).

IDeA Capital Funds SGR (EUR million)	First Nine Months of 2016	First Nine Months of 2015
AUM	1,939	1,652
Management fees	15.1	12.8
Net profit	3.8	4.1

IDeA FIMIT SGR

$\blacksquare$ IDeA FIMIT_sgr

Registered office: Italy

Sector: Alternative Asset Management - Real Estate

Website: www.ideafimit.it

Investment details:

IDeA FIMIT SGR is the largest independent real estate asset management company in Italy, with around EUR 8.0 billion in assets under management and 38 managed funds (including five listed funds). This makes it a benchmark operator, for Italian and international institutional investors, in the promotion, creation and management of mutual real estate investment funds.

IDeA FIMIT SGR undertakes three main lines of business:

• the development of mutual real estate investment funds designed for institutional $\bullet$ clients and private investors;
• the promotion of innovative real estate financial instruments to satisfy investors' increasing demands;
• the professional management (technical, administrative and financial) of real estate funds with the assistance of in-house experts and independent technical, legal and tax advisors.

The company has concentrated investments in transactions with low risk, stable returns, low volatility, simple financial structures and, most importantly, an emphasis on property value. In particular, the asset management company specialises in "core" and "core plus" properties, although its major investments also include "value added" transactions.

Due in part to successful transactions concluded in recent years, the asset management company is able to rely on a panel of prominent unit-holders consisting of Italian and international investors of high standing, such as pension funds, banking and insurance groups, companies and sovereign funds.

The table below summarises the value of assets under management and management fees for IDeA FIMIT SGR at 30 September 2016:

(EUR million)	Asset Under Management at 30 september 2016	Management fees at 30 september 2016
Breakdown of funds
Atlantic 1	582	2.0
Atlantic 2 Berenice	163	0.5
Alpha	371	3.2
Beta	81	0.3
Delta	217	1.9
Listed funds	1,414	7.9
Reserved funds	6,586	22.4
Total IDeA FIMIT SGR	8,000	30.3

Some of the key financials of the listed funds in the asset management portfolio are provided below, with an analysis of the real estate portfolio at the date of the latest report available, broken down by geographical area and by intended use, i.e. Atlantic 1, Atlantic 2, Alpha, Beta and Delta (in EUR).

Atlantic 1	30/06/2016
Market value of properties	561,100,000
Historical cost and capitalised
charges	612,564,276
Financing	302,859,991
Net Asset Value (NAV)	259,411,185
NAV/unit (EUR)	497.4
Market price/unit (EUR)	247.0
Dividend yield from investment*	5.45%

* Ratio of income per unit to annual average nominal value per unit

Atlantic 1: Diversification by geographical area Atlantic 1: Diversification by intended use

Atlantic 2 - Berenice	30/06/2016
Market value of properties	147,359,000
Historical cost and capitalised
charges	182,632,301
Financing	66,400,766
Net Asset Value (NAV)	89,714,111
NAV/unit (EUR)	149.5
Market price/unit (EUR)	99.0
Dividend yield from investment*	8.74%

* Ratio of income per unit to annual average nominal value per unit

Atlantic 2: Diversification by geographical area Atlantic 2: Diversification by intended use

17%

Alpha	30/06/2016
Market value of properties	317,250,000
Historical cost and capitalised charges	303,351,292
Financing	20,625,497
Net Asset Value (NAV)	343,260,021
NAV/unit (EUR)	3,304.5
Market price/unit (EUR)	1,101.0
Dividend yield from investment*	4.94%

* Ratio of income per unit to annual average nominal value per unit

Alpha: Diversification by geographical area Alpha: Diversification by intended use

Beta	30/06/2016
Market value of properties Historical cost and capitalised	51,745,000
charges	71,892,107
Net Asset Value (NAV)	56,840,510
NAV/unit (EUR)	211.7
Market price/unit (EUR)	114.6
Dividend yield from investment*	8.00%

* Ratio of income per unit to annual average nominal value per unit

Beta: Diversification by geographical area Beta: Diversification by intended use

Delta	30/06/2016
Market value of properties	199,130,000
Historical cost and capitalised charges	256,435,137
Financing	12,421,882
Net Asset Value (NAV)	197,084,958
NAV/unit (EUR)	93.6
Market price/unit (EUR)	52.1
Dividend yield from investment*	n.a.

* No distribution from investment

Delta: Diversification by geographical area Delta: Diversification by intended use

* * *

Turning to the management performance of IDeA FIMIT SGR, the company recorded lower management fees (EUR -6.8 million) in the first nine months of 2016 than in the year-earlier period; this was mainly due to sales by the funds managed by the asset management company, and partly due to a review of the fees agreed with some of the managed funds. Note, however, that part of the difference is due to the extraordinary impact on the 2015 figure of revenues relating to variable fees (approx. EUR 2 million) received by the Omicron Plus fund on the sale of a large building (Palazzo Broggi in Milan).

At the same time, during the first nine months of 2016, the company provided a fresh impetus to the development of its managed assets, notably by (i) launching the "Trophy Value Added" fund and the IDeA NPL fund, for the purposes of investing in notes issued by securitisation vehicles relating to secured non-performing loans (ii) taking over the management of the Aries fund and (iii) increasing the assets under management of the Ippocrate fund, with the full impact on revenues expected from 2017.

IDeA FIMIT SGR (EUR million)	First Nine Months of 2016	First Nine Months of 2015
AUM	8,000	8,599
Management fees	30.3	37.1
Net profit	3.9	6.5
-of which:
- Shareolders	4.2	6.5
- Owner of financial equity instruments	(0.3)	0.0

SPC

Registered office: Italy Sector: Debt recovery

Website: www.spc-spa.com

Investment details:

SPC Credit Management has been operating for over 15 years in the restructuring, outsourced management and enhancement of non-performing loans.

Over the years, the company has developed specific expertise, namely:

• debt recovery actions in and out of court (with a significant performance in out-of-court resolutions of non-performing loans);
• $\bullet$ advisory services via the valuation and clustering of credit portfolios and the identification of strategic solutions to value these;
• due diligence and asset quality reviews of NPL portfolio acquisitions.

With specific regard to debt recovery, the company has acquired the expertise to monitor the entire range of non-performing loans, namely:

• banking (current accounts; mortgages, personal loans);
• leasing (terminated or active agreements; remaining leased properties post-sale of nonperforming portfolio):
• consumer (consumer credit, salary-backed loans, credit cards);
• commercial (outstanding invoices);

with a focus on secured loans

The interest in SPC, which was fully consolidated by the DeA Capital Group from July 2016, contributed EUR 0.2 million to the Group's net profit at 30 September 2016.

- Innovation Real Estate

Tre
INNOVATION real estate
Registered office: Italy
Sector: Property Services
Website: www.innovationre.it
Investment details:
Innovation Real Estate (IRE) operates in property valuation and is structured along the following strategic lines:

• project & construction management (property planning, development and refurbishment);
• property management (administrative and legal management of properties);
• facility & building management (services connected with buildings and related maintenance):
• due diligence (technical and environmental due diligence, town-planning regularisation procedures);
• asset management (strategic support for improving the rental condition of buildings and optimising associated management costs, in order to maximise the return on property investment).

IRE currently manages a property portfolio comprising 50% offices and the remainder split between commercial, tourist, logistics & industrial and residential property.

The investment in IRE, which was classified under "Investments in associates" following the sale of the controlling interest (55%) in the first half of 2016, is recorded at a value of EUR 5.2 million in the consolidated financial statements to 30 September 2016.

Innovation Real Estate (EUR million)	$2016*$	First Nine Months of First Nine Months of $2015*$
IRevenues	10.8	12.7
IEBITDA	3.8	3.6
Net profit	2.6	25

* Data presented in accordance with Italian accounting principles adopted by the company

Consolidated income statement

In the first nine months of 2016, a net profit of around EUR 12.0 million was recorded (of which EUR 9.8 million related to the Group), compared with a profit of around EUR 90.1 million (of which EUR 72.8 million related to the Group) in the same period in 2015, which included large capital gains from the partial sales of Migros and stakes held by the IDeA OF I fund.

Revenues and other income break down as follows:

• Alternative Asset Management fees of EUR 43.9 million (EUR 48.2 million in the same period of 2015);
• other investment income, net of liabilities, totalling EUR 6.1 million (net investment income of EUR 73.6 million in the same period of 2015);
• service revenues of EUR 8.3 million (compared with EUR 13.4 million recorded in the same period of 2015).

Costs totalled EUR 44.3 million (EUR 51.2 million in the same period of 2015), of which EUR 39.1 million was attributable to Alternative Asset Management, EUR 1.5 million to Private Equity Investment and EUR 3.6 million to holding company activities. Alternative Asset Management costs include the effects of the amortisation of intangible assets, totalling EUR 3.5 million in the first nine months of 2016, recorded when a portion of the purchase price of the investments was allocated.

Net financial expenses, which amounted to EUR -1.6 million at 30 September 2016, mainly relate to exchange rate losses on foreign investments and to other financial income.

The total tax impact for the first nine months of 2016 (EUR -1.1 million compared with EUR -- 1.2 million in the same period of 2015) is the combined result of taxes of EUR -5.0 million due in respect of Alternative Asset Management activities and tax credits of EUR +3.9 million relating to holding activities.

Of the net profit of EUR 12.0 million, about EUR 1.6 million was attributable to Private Equity Investment, EUR 11.2 million to Alternative Asset Management and a loss of EUR 0.8 million to holding company operations/eliminations.

Of the Group's net profit of EUR 9.8 million, EUR +0.7 million was attributable to Private Equity Investment, EUR +10.0 million to Alternative Asset Management and EUR -0.8 million to holding company operations/eliminations.

Summary Consolidated Income Statement

	Third Quarter	First nine months of	Third Quarter	First nine months of
(EUR thousand)	2016	2016	2015	2015
Alternative Asset Management fees	15,477	43,938	17,009	48,222
Income (loss) from equity investments	547	444	0	(227)
Other investment income/expense	8,077	6,148	38,211	73,588
Income from services	810	8,302	4,796	13,441
Other income	53	120	3,040	3,162
Other expenses	(11,973)	(44,281)	(16,009)	(51,239)
Financial income and expenses	(329)	(1,592)	1,220	4,073
PROFIT/(LOSS) BEFORE TAX	12,662	13,079	48,267	91,020
Income tax	(222)	(1,111)	(2,218)	(1,235)
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS	12,440	11,968	46,049	89,785
Profit (Loss) from discontinued operations/held-for-sale assets	0	0	116	286
PROFIT/(LOSS) FOR THE PERIOD	12,440	11,968	46,165	90,071
- Group share	7,945	9,849	49,141	72,785
- Non controlling interests	4,495	2,119	(2,976)	17,286
Earnings per share, basic (€)		0.038		0.275
Earnings per share, diluted (€)		0.038		0.275

Performance by business in the first nine months of 2016

(EUR thousand)	Private Equity Investment	Alternative Asset Management	Holdings/ Eliminations	Consolidated
Alternative Asset Management fees	0	45,369	(1,431)	43,938
Income (loss) from equity investments	(56)	500	0	444
Other investment income/expense	4,891	1,257	0	6,148
Income from services	0	8,100	322	8,422
Other expenses	(1,541)	(39,109)	(3,631)	(44,281)
Financial income and expenses	(1,664)	47	25	(1,592)
PROFIT/(LOSS) BEFORE TAXES	1,630	16,164	(4,715)	13,079
Income tax	0	(5,012)	3,901	(1,111)
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS	1,630	11,152	(814)	11,968
Profit (Loss) from discontinued operations/held-for-sale assets	0	0	0	0
PROFIT/(LOSS) FOR THE PERIOD	1,630	11,152	(814)	11,968
- Group share	671	9,992	(814)	9,849
- Non controlling interests	959	1,160	0	2,119

Performance by business in the first nine months of 2015

		Alternative
	Private Equity	Asset	Holdings/
(EUR thousand)	Investment	Management	Eliminations	Consolidated
Alternative Asset Management fees	0	49,968	(1,746)	48,222
Income (loss) from equity investments	(101)	(126)	0	(227)
Other investment income/expense	72,141	1,447	0	73,588
Income from services	3,010	13,321	272	16,603
Other expenses	(1,906)	(45,536)	(3,797)	(51,239)
Financial income and expenses	4,772	26	(725)	4,073
PROFIT/(LOSS) BEFORE TAXES	77,916	19,100	(5,996)	91,020
Income tax	0	(6,724)	5,489	(1,235)
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS	77,916	12,376	(507)	89,785
Profit (Loss) from discontinued operations/held- for-sale assets	286	0	0	286
PROFIT/(LOSS) FOR THE PERIOD	78,202	12,376	(507)	90,071
- Group share	63,537	9,755	(507)	72,785
- Non controlling interests	14,665	2,621	0	17,286

Comprehensive income - statement of performance (IAS 1)

Comprehensive Income or the Statement of Performance (IAS 1), in which performance for the period attributable to the group is reported including results posted directly to shareholders' equity, shows a net positive balance of approximately EUR 18.0 million compared with a net positive balance of approximately EUR 13.8 million in the same period of 2015. This comprised:

• net profit of EUR 9.8 million recorded on the income statement;
• profits posted directly to shareholders' equity totalling EUR +8.2 million (due mainly to the change in the fair value of IDeA I and IDeA EESS).

(EUR thousand)	First nine months of 2016	First nine months of 2015
Profit/(loss) for the period (A)	11,968	90,071
Comprehensive income/expense which might be subsequently reclassified within the profit (loss) for the period Comprehensive income/expense which will not be subsequently reclassified within the profit (loss) for the period	9,809 111	(64,166) 24
Other comprehensive income, net of tax (B)	9,920	(64,142)
Total comprehensive income for the period
(A)+(B)	21,888	25,929
Total comprehensive income attributable to: - Group Share	18,015	13,812
- Non Controlling Interests	3,873	12,117

Consolidated statement of financial position

Below is the Group's statement of financial position at 30 September 2016, compared with 31 December 2015.

(EUR thousand)	September 30, 2016	December 31, 2015
ASSETS
Non-current assets
Intangible and tangible assets
Goodwill	128,408	129,595
Intangible assets	33,755	37,539
Property, plant and equipment	2,314	3,119
Total intangible and tangible assets	164,477	170,253
Investments	-	-
Investments valued at equity	16,517	11,467
Investments held by Funds	78,023	90,675
- available for sale investments	46,154	52,536
- invest. in associates and JV valued at FV through P&L	31,869	38,138
Other available-for-sale companies	75,477	76,464
Available- for-sale funds	187,758	173,730
Other avalaible-for-sale financial assets	22	26
Total Investments	357,797	352,362
Other non-current assets	-	-
Deferred tax assets	2,544	3,676
Tax receivables from Parent companies	1,698	0
Other non-current assets	31,675	31,795
Total other non-current assets	36,495	35,471
Total non-current assets	558,769	558,086
	-	-
Current assets	-	-
Trade receivables	9,272	17,818
Available- for-sale financial assets	4,241	7,532
Financial receivables Tax receivables from Parent companies	5,791 0	3,467 2,667
Other tax receivables	1,692	4,567
Other receivables	3,327	2,876
Cash and cash equivalents	106,065	123,468
Total current assets	130,388	162,395
Total current assets	130,388	162,395
Held-for-sale assets	11,487	11,487
TOTAL ASSETS	700,644	731,968
	-	-
SHAREHOLDERS' EQUITY AND LIABILITIES	-	-
SHAREHOLDERS' EQUITY	-	-
Net equity Group	530,842	546,988
Minority interests	136,073	138,172
Shareholders' equity	666,915	685,160
LIABILITIES	-	-
Non-current liabilities	-	-
Deferred tax liabilities	11,618	10,801
Provisions for employee termination benefits	3,837	4,713
Long term financial loans	48	0
Payables to staff	0	0
Total non-current liabilities	15,503	15,514
Current liabilities	-	-
Trade payables	6,551	15,598
Payables to staff and social security organisations	4,148	7,341
Current tax	3,001	3,384
Other tax payables	954	1,571
Other payables	3,205	2,749
Short term financial loans	367	651
Total current liabilities	18,226	31,294
Held-for-sale liabilities	0	0
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	700,644	731,968

At 30 September 2016, Group shareholders' equity was EUR 530.8 million, compared with EUR 547.0 million at 31 December 2015. The decrease of approximately EUR 16.2 million in Group shareholders' equity in the first nine months of 2016 was due to the extraordinary dividend paid (EUR -31.6 million) and to the reasons already discussed relating to the Statement of Performance - IAS 1 (EUR +18.0 million).

Consolidated net financial position

At 30 September 2016, the consolidated net financial position was EUR 116.3 million, as shown in the table below, which provides a comparison with 31 December 2015:

Net financial position (EUR million)	30.9.2016	31.12.2015	Change
Cash and cash equivalents Available-for-sale financial assets Financial receivables Non-current financial liabilities	106.1 4.2 6.4 0.0	123.5 7.5 3.5 0.0	(17.4) (3.3) 2.9 0.0
Current financial liabilities	(0.4)	(0.7)	0.3
TOTAL	116.3	133.8	(17.5)
of which: - Alternative Asset Management - Private Equity Investment	0.0 22.7 9.9	0.0 40.4 3.4	0.0 (17.7) 6.5
- Holdings	83.7	90.0	(6.3)

The change in the consolidated net financial position in the first nine months of 2016 was broadly due to the distribution of the extraordinary dividend by DeA Capital S.p.A. (EUR -31.6 million) and net liquidity generated by investments in private equity funds in the portfolio of EUR +11.0 million.

The Company believes that the cash and cash equivalents and the other financial resources available are sufficient to meet the requirement relating to payment commitments already subscribed in funds, also taking into account the amounts expected to be called up/distributed by these funds. With regard to these residual commitments, the Company believes that the resources currently available, as well as those that will be generated by its operating and financing activities, will enable the DeA Capital Group to meet the financing required for its investment activity and to manage working capital.

6. Other information

Transactions with parent companies, subsidiaries and related parties

Transactions with related parties, including intercompany transactions, are typical, usual transactions that are part of the normal business activities of Group companies. Such transactions are concluded at standard market terms for the nature of the goods and/or services offered.

Other information

At 30 September 2016, the Group had 193 employees, including 35 senior managers, 57 middle managers and 101 clerical staff. Of these, 178 worked in Alternative Asset Management and 15 in Private Equity Investment/the Holding Company. These staff levels do not include personnel on secondment from the Parent Company De Agostini S.p.A.

With regard to the regulatory requirements set out in art. 36 of the Market Regulation on conditions for the listing of parent companies of companies formed or regulated by laws of non-EU countries and of major importance in the consolidated accounts, it is hereby noted that no Group company falls within the scope of the above-mentioned provision.

Furthermore, conditions prohibiting listing pursuant to art. 37 of the Market Regulation relating to companies subject to the management and coordination of other parties do not apply.

Consolidated Financial Statements and Notes to the Accounts for the period 1 January – 30 September 2016

Consolidated Statement of Financial Position

(EUR thousand)	September 30, 2016	December 31, 2015
ASSETS
Non-current assets
Intangible and tangible assets
Goodwill	128,408	129,595
Intangible assets	33,755	37,539
Property, plant and equipment	2,314	3,119
Total intangible and tangible assets	164,477	170,253
Investments	-	-
Investments valued at equity	16,517	11,467
Investments held by Funds	78,023	90,675
- available for sale investments	46,154	52,536
- invest. in associates and JV valued at FV through P&L	31,869	38,138
Other available-for-sale companies	75,477	76,464
Available-for-sale funds	187,758	173,730
Other avalaible-for-sale financial assets	22	26
Total Investments	357,797	352,362
Other non-current assets	-	-
Deferred tax assets	2,544	3,676
Tax receivables from Parent companies	1,698	0
Other non-current assets	31,675	31,795
Total other non-current assets	36,495	35,471
Total non-current assets	558,769	558,086
	-	-
Current assets	-	-
Trade receivables	9,272	17,818
Available-for-sale financial assets	4,241	7,532
Financial receivables	5,791	3,467
Tax receivables from Parent companies	0	2,667
Other tax receivables	1,692	4,567
Other receivables	3,327	2,876
Cash and cash equivalents	106,065	123,468
Total current assets	130,388	162,395
Total current assets	130,388	162,395
Held-for-sale assets	11,487	11,487
TOTAL ASSETS	700,644	731,968
SHAREHOLDERS' EQUITY AND LIABILITIES	- -	- -
SHAREHOLDERS' EQUITY	-	-
Net equity Group	530,842	546,988
Minority interests	136,073	138,172
Shareholders' equity	666,915	685,160
LIABILITIES	-	-
Non-current liabilities	-	-
Deferred tax liabilities	11,618	10,801
Provisions for employee termination benefits	3,837	4,713
Long term financial loans	48	0
Payables to staff	0	0
Total non-current liabilities	15,503	15,514
Current liabilities	-	-
Trade payables	6,551	15,598
Payables to staff and social security organisations	4,148	7,341
Current tax	3,001	3,384
Other tax payables	954	1,571
Other payables	3,205	2,749
Short term financial loans	367	651
Total current liabilities	18,226	31,294
Held-for-sale liabilities	0	0
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	700,644	731,968

Consolidated Income Statement

	Third	First nine	Third	First nine
	Quarter	months of	Quarter	months of
(EUR thousand)	2016	2016	2015	2015
Alternative Asset Management fees	15,477	43,938	17,009	48,222
Income from equity investments	547	444	0	(227)
Other investment income/expense	8,077	6,148	38,211	73,588
Income from services	810	8,302	4,796	13,441
Other income	53	120	3,040	3,162
Personnel costs	(5,586)	(21,870)	(7,342)	(23,834)
Service costs	(4,182)	(15,479)	(5,069)	(17,023)
Depreciation, amortization and impairment	(1,514)	(4,607)	(1,670)	(5,055)
Other expenses	(691)	(2,325)	(1,928)	(5,327)
Financial income	152	674	1,634	5,115
Financial expenses	(481)	(2,266)	(414)	(1,042)
PROFIT/(LOSS) BEFORE TAX	12,662	13,079	48,267	91,020
Income tax	(222)	(1,111)	(2,218)	(1,235)
PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS	12,440	11,968	46,049	89,785
Profit (Loss) from discontinued operations/held-for-sale assets	0	0	116	286
PROFIT/(LOSS) FOR THE PERIOD	12,440	11,968	46,165	90,071
- Group share	7,945	9,849	49,141	72,785
- Non controlling interests	4,495	2,119	(2,976)	17,286
Earnings per share, basic (€)		0.038		0.275
Earnings per share, diluted (€)		0.038		0.275

Consolidated Statement of Comprehensive Income (Statement of Performance – IAS 1)

(Euro thousands)	First nine months of 2016	First nine months of 2015
Profit/(loss) for the period (A)	11,968	90,071
Comprehensive income/expense which might be subsequently reclassified within the profit (loss) for the period	9,809	(64,166)
Gains/(Losses) on fair value of available-for-sale financial assets	9,809	(54,655)
Share of other comprehensive income of associates	0	(9,511)
Comprehensive income/expense which will not be subsequently reclassified within the profit (loss) for the period	111	24
Gains/(losses) on remeasurement of defined benefit plans	111	24
Other comprehensive income, net of tax (B)	9,920	(64,142)
Total comprehensive income for the period (A)+(B)	21,888	25,929
Total comprehensive income attributable to: - Group Share - Non Controlling Interests	18,015 3,873	13,812 12,117

Consolidated Statement of Changes in Shareholders' Equity

(EUR thousand)	Share Capital	Treasury share reserve, capital reserve, retained earnings	Fair value Reserve	Profit (loss) for the Group	Total Group	Non controlling interests	Consolidated net equity
Total at 31 December 2014	271,626	323,073	116,415	(57,601)	653,513	173,109	826,622
Allocation of previous year's net result	0	(57,601)	0	57,601	0	0	0
Cost of stock options	0	(274)	0	0	(274)	0	(274)
Purchase of own shares	(5,446)	(4,424)	0	0	(9,870)	0	(9,870)
Dividends distributed	0	(79,854)	0	0	(79,854)	0	(79,854)
Other changes	0	12	0	0	12	(10,850)	(10,838)
Total comprehensive profit/(loss)	0	0	(6,673)	23,644	16,971	17,339	34,310
Total at 30 September 2015	266,180	180,932	109,742	23,644	580,498	179,598	760,096
(EUR thousand)	Share Capital	Treasury share reserve, capital reserve, retained earnings	Fair value Reserve	Profit (loss) for the Group	Total Group	Non controlling interests	Consolidated net equity
Total at 31 December 2015	263,923	179,815	62,178	41,072	546,988	138,172	685,160
Allocation of previous year's net result	0	41,072	0	(41,072)	0	0	0
Cost of stock options	0	51	0	0	51	0	51
Purchase of own shares	(2,775)	(552)	0	0	(3,327)	0	(3,327)
Treasury shares delivered to the incentive plans	463	148	0	0	611	0	611
Dividends distributed	0	(31,557)	0	0	(31,557)	0	(31,557)
Other changes	0	61	0	0	61	(5,972)	(5,911)
Total comprehensive income	0	0	8,166	9,849	18,015	3,873	21,888
Total at 30 September 2016	261,611	189,038	70,344	9,849	530,842	136,073	666,915

Consolidated Cash Flow Statement - Direct Method

(EUR thousand)	First nine months of 2016	First nine months of 2015
CASH FLOW from operating activities
Investments in funds and shareholdings	(17,071)	(22,536)
Capital reimbursements from funds	11,496	30,326
Proceeds from the sale of investments	16,752	152,363
Interest received	229	205
Interest paid	(26)	(746)
Cash distribution from investments Realized gains (losses) on exchange rate derivatives	49 (1)	2,686 15
Taxes paid	(161)	768
Dividends received	1,500	0
Management and performance fees received	41,280	49,278
Revenues for services	12,123	17,824
Operating expenses	(43,901)	(54,551)
Net cash flow from operating activities	22,269	175,632
CASH FLOW from investment activities
Acquisition of property, plant and equipment	(46)	(125)
Sale of property, plant and equipment	70	354
Purchase of licenses	(228)	(70)
Net cash flow from investing activities	(204)	159
CASH FLOW from investing activities
Acquisition of financial assets	(1,939)	0
Sale of financial assets	4,503	982
Share capital issued	2,369	1,745
Own shares acquired	(3,327)	(11,634)
Dividends paid	(33,492)	(99,652)
Loan	1,404	(3,187)
Quasi-equity loan	0	0
Bank loan paid back	(466)	(4,000)
Net cash flow from financing activities	(30,948)	(115,746)
CHANGE IN CASH AND CASH EQUIVALENTS	(8,883)	60,045
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	123,468	55,583
Cash and cash equivalents relating to held-for-sale assets	0	0
Cash and cash equivalents at beginning of period	123,468	55,583
Effect of change in basis of consolidation: cash and cash equivalents	(8,520)	(97)
CASH AND CASH EQUIVALENTS AT END OF PERIOD	106,065	115,531
Held-for-sale assets and minority interests	0	0
CASH AND CASH EQUIVALENTS AT END OF PERIOD	106,065	115,531

Structure and content of the Interim Management Report to 30 September 2016

The Interim Management Report to 30 September 2016 (the Report) constitutes the document set out by art. 154-ter of the Testo Unico della Finanza law (TUF). Information regarding the Company's operating performance and financial position is prepared in accordance with the valuation and measurement criteria set out by the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and adopted by the European Commission pursuant to the procedures set out at art. 6 of Regulation (EC) no. 1606/2002 of the European Parliament and Council of 19 July 2002. The accounting standards used in the Report do not differ significantly from those used in the Financial Statements to 31 December 2015 and in the Half-Year Report to 30 June 2016.

The Report comprises the following Consolidated Financial Statements – the Statement of Financial Position, the Income Statement, the Cash Flow Statement, the Statement of Changes in Shareholders' Equity and the Statement of Comprehensive Income (IAS 1) – and these Notes to the Accounts; it is also accompanied by the Interim Report on Operations and the Statement of Responsibilities for the Interim Management Report.

The Consolidated Financial Statements in the Report have not been audited by the Independent Auditors.

Financial information is discussed with reference to the first nine months of 2016 and the same period in 2015; information on the Statement of Financial Position relates to 30 September 2016 and 31 December 2015. The Consolidated Financial Statements are provided in the same format as those relating to 31 December 2015.

As allowed by IAS/IFRS, the preparation of the Report required the use of significant estimates by the Company's management, especially with regard to the valuations of the investment portfolio (equity investments and funds). These valuations were calculated by directors based on their best judgement and estimation using the knowledge and evidence available at the time the Report was prepared. However, due to objective difficulties in making assessments, the values attributed to such assets could differ, in some cases significantly, from those that could be obtained when the assets are sold.

In accordance with the provisions of IAS/IFRS and current laws, the Company authorised the publication of the Report by the legal deadline.

Scope of consolidation

The basis of consolidation had changed at 30 September 2016 compared to 31 December 2015, as a result of:

• the sale of a 55% stake in Innovation Real;
• the acquisition of a 66.3% indirect stake in SPC, via the acquisition of the Mato vehicle.

Therefore, at 30 September 2016, the following companies formed part of the DeA Capital Group's scope of consolidation:

Company	Registered office	Currency	Share capital		% holding Consolidation method
DeA Capital S.p.A.	Milan, Italy	Euro	306,612,100	Holding
IDeA Capital Funds SGR S.p.A.	Milan, Italy	Euro	1,200,000	100.00%	Full consolidation
IDeA OF I	Milan, Italy	Euro	-	46.99%	Full consolidation
DeA Capital Real Estate S.p.A.	Milan, Italy	Euro	600,000	100.00%	Full consolidation
IDeA FIMIT SGR S.p.A.	Rome, Italy	Euro	16,757,574	64.30%	Full consolidation
Idea Real Estate S.p.A.	Milan, Italy	Euro	50,000	100.00%	Full consolidation
Mato S.r.l.	Milan, Italy	Euro	10,000	100.00%	Full consolidation
SPC S.p.A.	Milan, Italy	Euro	70,032	66.32%	Full consolidation
Innovation Real Estate S.p.A.	Milan, Italy	Euro	597,725	45.00%	Equity accounted
Innovation Real Estate Advisory S.r.l.	Milan, Italy	Euro	105,000	45.00%	Equity accounted
Atlantic Value Added	Rome, Italy	Euro	-	27.27%	Equity accounted

Notes to the Consolidated Statement of Financial Position

NON-CURRENT ASSETS

Non-current assets totalled EUR 558.8 million at 30 September 2016, compared with EUR 558.1 million at 31 December 2015.

Intangible assets and property, plant and equipment

This item includes goodwill (EUR 128.4 million), other intangible assets (EUR 33.8 million) and property, plant and equipment (EUR 2.3 million).

This item, which was EUR 128.4 million at 30 September 2016 (compared with EUR 129.6 million at 31 December 2015), chiefly relates to the goodwill accounted for in relation to IDeA Capital Funds SGR (EUR 31.3 million) and IDeA FIMIT SGR (EUR 96.6 million).

Intangible assets mainly relate to customer contracts, which arise from the allocation of the merger costs for the acquisition of IDeA Capital Funds SGR and FIMIT SGR.

Investments in associates

This item, which totalled EUR 16.5 million at 30 September 2016 (EUR 11.5 million at 31 December 2015), relates to the assets below:

• the investment in IRE, which was valued at EUR 5.2 million;
• the units held in the AVA fund, which were valued at EUR 11.3 million.

The table below provides details of investments in associates at 30 September 2016 by area of activity.

(EUR million)	Private Equity Investment	Alternative Asset Management	Total
AVA fund	3.7	7.6	11.3
IRE	0.0	5.2	5.2
Total	3.7	12.8	16.5

Shareholdings held by funds

At 30 September 2016, the DeA Capital Group was a minority shareholder, through the IDeA OF I fund, in Giochi Preziosi, Manutencoop, Euticals, Elemaster, Talgo, Corin and Iacobucci. This item, which totalled EUR 78.0 million at 30 September 2016 (EUR 90.7 million at 31 December 2015), relates to the assets below:

(EUR million)	30.9.2016
Investments in Portfolio
Giochi Preziosi	5.2
Manutencoop Facility Management	18.8
	-
Lauro Cinquantasette (Euticals)	13.6
Telit Communications	-
Elemaster	8.5
Investments available for sale	46.1
Iacobucci HF Electronics	6.0
Pegaso Transportation Investments (Talgo)	14.3
2IL Orthopaedics LTD (Corin)	11.6
Investments in associates and JV valued
at FV through P&L	31.9
Total investments in Portfolio	78.0

Evidence of the impact on the fund's overall earnings in the first nine months of 2016 is shown below:

IDeA OF I - Other comprehensive income
(EUR million)	Income Statement (a)	Fair Value Reserve Change (b)	OCI (a + b)
Investments in Portfolio
Giochi Preziosi	0.0	0.0	0.0
Manutencoop Facility Management	0.4	0.0	0.4
Lauro Cinquantasette (Euticals)	6.0	0.6	6.6
Telit Communications	2.9	(2.9)	0.0
Elemaster	0.0	0.0	0.0
Investments available for sale (*)	9.2	(2.3)	7.0
Iacobucci HF Electronics	0.0	0.0	0.0
Pegaso Transportation Investments (Talgo)	(3.9)	0.0	(3.9)
2IL Orthopaedics LTD (Corin)	(2.0)	0.0	(2.0)
Investments in associates and JV valued at FV
through P&L (#)	(5.9)	0.0	(5.9)
Totale Portfolio OF I	3.3	(2.3)	1.1
Management cost of the Fund	(1.5)	0.0	(1.5)
Total Change of Shareholders'equity OF I	1.8	(2.3)	(0.5)
of which: DeA Capital	0.8	(1.0)	(0.2)

(*) Change of value of assets are recognised in P&L only when realized

(#) All the changes of assets value , realized and not, are booked at P&L

Available-for-sale investments in other companies

At 30 September 2016, the DeA Capital Group was a minority shareholder of Kenan Investments (the indirect parent company of Migros), Stepstone, Harvip, TLcom Capital LLP (management company under English law) and TLcom II Founder Partner SLP (limited partnership under English law).

The stake in Kenan Investments is recorded in the Consolidated Financial Statements to 30 September 2016 at EUR 75.3 million (compared with EUR 76.3 million at 31 December 2015). This amount (indirectly corresponding to approximately 6.9% of Migros' capital, i.e. 40.25% of the latter's capital via the Group's interest in Kenan Investments) reflects a price per share of Migros of:

• - TRY 26.00 (plus interest of 7.5% per annum from 30 April 2015) for the stake subject to put/call options agreed with Anadolu on 9.75% of Migros and exercisable from 30 April 2017;
• - TRY 18.28, being the market price on 30 September 2016, for the remaining stake (30.5% of Migros' capital).

The change in the value of the stake in Kenan Investments at 30 September 2016 compared with 31 December 2015 is attributable to a decrease of EUR -1.0 million in the fair value reserve due to the combined effect of the rise in the share price (TRY 18.28 per share at 30 September 2016 compared with TRY 17.45 per share at 31 December 2015) and the depreciation of the Turkish lira against the euro (3.37 TRY/EUR at 30 September 2016 versus 3.17 TRY/EUR at 31 December 2015).

The table below provides details of equity investments in other companies at 30 September 2016 by area of activity.

(EUR million)	Private Equity Investment	Alternative Asset Management	Total
Kenan Investments	75.3	0.0	75.3
Minority interests	0.2	0.0	0.2
Total	75.5	0.0	75.5

Available-for-sale funds

This item relates to investments in units of three funds of funds (IDeA I FoF, ICF II and ICF III), three theme funds (IDeA EESS, IDeA ToI and IDeA CCR), six venture capital funds and 12 real estate funds, totalling approximately EUR 187.8 million at 30 September 2016, compared with EUR 173.7 million at the end of 2015.

(EUR thousand)	Balance at 1.1.2016	Change in consolidation area	Increases (Capital call)	Decreases (Capital distribution)	Impairment	Fair value adjustment	Translation effect	Balance at 30.9.2016
Venture capital funds	9,673	0	0	0	(109)	(42)	(16)	9,506
IDeA I FoF	77,217	0	1,006	(8,675)	0	3,793	0	73,341
ICF II	41,710	0	1,363	(1,122)	0	2,805	0	44,756
ICF III Core	541	0	71	(119)	0	(27)	0	466
ICF III Credit & Distressed	2,525	0	237	(79)	0	8	0	2,691
ICF III Emerging Markets	1,751	0	1,266	(6)	0	166	0	3,177
IDeA EESS	7,312	0	235	(3,718)	0	3,271	0	7,100
Taste of Italy	1,074	0	1,760	(693)	0	(206)	0	1,935
IDeA CCR I	0	0	214	0	0	0	0	214
IDeA FIMIT SGR Funds	31,927	0	10,000	(1,852)	(367)	4,864	0	44,572
Total funds	173,730	0	16,152	(16,264)	(476)	14,632	(16)	187,758

The table below provides a breakdown of the funds in the portfolio at 30 September 2016 by area of activity.

(EUR million)	Private Equity Investment	Alternative Asset Management	Total
Venture capital funds	9.5	0.0	9.5
IDeA I FoF	73.3	0.0	73.3
ICF II	44.8	0.0	44.8
ICF III	6.3	0.0	6.3
IDeA EESS	7.1	0.0	7.1
IDeA ToI	1.9	0.0	1.9
IDeA CCR I	0.2	0.0	0.2
IDeA FIMIT SGR Funds	0.0	44.6	44.6
Total funds	143.2	44.6	187.8

Deferred tax assets

The balance on the item "deferred tax assets" comprises the value of deferred tax assets minus deferred tax liabilities, where they may be offset. At 30 September 2016, deferred tax assets totalled EUR 2.5 million, compared with EUR 3.7 million at 31 December 2015.

Other non-current assets

This item, valued at EUR 31.7 million at 30 September 2016, compared with EUR 31.8 million at 31 December 2015, relates mainly to the receivable from the IDeA OF I fund for the sale of 1% of Manutencoop and the receivable from the Beta Immobiliare fund corresponding to the portion of the overperformance fee that has accrued since the fund was launched and which IDeA FIMIT SGR expects to receive when the fund is liquidated.

CURRENT ASSETS

At 30 September 2016, current assets totalled EUR 130.4 million, versus EUR 162.4 million at 31 December 2015. The item mainly comprised:

• - EUR 106.1 million relating to cash and cash equivalents (EUR 123.5 million at 31 December 2015);
• - EUR 9.3 million relating to commercial loans (EUR 17.8 million at 31 December 2015);
• - EUR 4.2 million relating to investments to be considered as a temporary use of cash (EUR 7.5 million at 31 December 2015);
• - EUR 5.8 million relates to financial receivables (EUR 3.5 million at 31 December 2015), mainly in connection with the loan agreement for Sigla S.r.l. (EUR 2.0 million), receivables due from associate IRE for the extraordinary dividend not yet received (EUR 2.0 million) and the receivable due from the purchasers of the majority stake in IRE relating to the short-term portion of the deferred purchase price (EUR 1.7 million).

SHAREHOLDERS' EQUITY

At 30 September 2016, Consolidated Shareholders' Equity totalled around EUR 666.9 million, including EUR 530.8 million pertaining to the Group, compared with EUR 685.2 million (EUR 547.0 million pertaining to the Group) at 31 December 2015.

The decrease of about EUR 16.2 million in Group shareholders' equity in the first nine months of 2016 was due to the extraordinary dividend paid (EUR -31.6 million), the reasons already discussed relating to the Statement of Performance - IAS 1 (EUR +18.0 million) and the effects of the share buy-back plan (EUR -2.7 million).

NON-CURRENT LIABILITIES

At 30 September 2016, non-current liabilities totalled EUR 15.5 million, unchanged compared with 31 December 2015.

Deferred tax liabilities

This item totalled EUR 11.6 million at 30 September 2016, compared with EUR 10.8 million at 31 December 2015. It mainly included deferred tax liabilities related to the tax effects of allocating part of the acquisition cost of the subsidiaries in the purchase price allocation (PPA) phase.

End-of-service payment fund

At 30 September 2016, this item totalled EUR 3.8 million, compared with EUR 4.7 million at 31 December 2015, and includes end-of-service payments that are part of defined benefit plans, which were therefore valued using actuarial assessments.

CURRENT LIABILITIES

At 30 September 2016, current liabilities totalled EUR 18.3 million (EUR 31.3 million at 31 December 2015) and consisted of trade payables (EUR 6.6 million), payables to staff and social security institutions (EUR 4.1 million), current tax and other tax payables (EUR 4.0 million), other payables (EUR 3.2 million) and short-term financial payables (EUR 0.4 million).

Notes to the Consolidated Income Statement

Alternative Asset Management fees

In the first nine months of 2016, Alternative Asset Management fees totalled EUR 43.9 million, compared with EUR 48.2 million in the same period of 2015; these essentially related to management fees paid to IDeA FIMIT SGR and to IDeA Capital Funds SGR for the funds they manage.

Income from investments valued at equity

This item includes the share of income from companies valued at equity for the period. In 2016, income from investments valued at equity was positive at EUR 0.4 million (EUR -0.2 million in the same period of 2015).

Other investment income/expenses

Other net investment income from investments in shareholdings and funds totalled EUR 6.1 million in 2016, compared with EUR 73.6 million in 2015. It mainly relates to the capital gain of EUR 46.3 million from the disposal of the stakes in Migros and the resulting distribution of liquidity by Kenan Inv., as well as income totalling EUR 28.5 million generated on investments held by IDeA OF I.

Service revenues

This item, which totalled EUR 8.3 million in 2016 (EUR 13.4 million in 2015), chiefly refers to services relating to real estate consultancy and management, and the sale of buildings in the portfolios of the real estate funds. The item only contains IRE revenues received up to 10 June 2016, given the sale on that date of the controlling interest in the company and the subsequent switch to valuing it at equity.

Personnel costs and costs for services, amortisation and other costs

In 2016, personnel costs totalled EUR 21.9 million, compared with EUR 23.8 million in 2015.

In 2016, service costs totalled EUR 15.5 million, compared with EUR 17.0 million in 2015.

Amortisation was EUR 4.6 million in 2016 (EUR 5.1 million in 2015) and mainly included amortisation relating to purchase price allocation.

Other costs totalled EUR 2.3 million in 2016, compared with EUR 5.3 million in 2015; the item mainly consists of pro-rata non-deductible VAT on costs incurred by IDeA FIMIT SGR (EUR 1.1 million), and the impairment of receivables relating to fees from certain funds managed by IDeA FIMIT SGR (EUR 1.1 million).

Financial income (charges)

In the first nine months of 2016, financial income came in at EUR 0.7 million (EUR 5.1 million in the same period of 2015), and financial charges totalled EUR 2.3 million (EUR 1.0 million in the same period of 2015).

Income tax

Income tax totalled EUR -1.1 million in the first nine months of 2016, versus EUR -1.2 million in the same period of 2015.

Significant events after the end of the period and outlook

Significant events after the end of the period

Private equity funds – paid calls/distributions

After the end of the third quarter of 2016, the DeA Capital Group increased its investments in the IDeA I FoF, ICF II, ICF III, IDeA OF I and IDeA EESS funds with payments totalling EUR 3.9 million.

At the same time, the DeA Capital Group received capital reimbursements from the IDeA I FoF, ICF III and IDeA OF I funds (EUR 2.9 million, EUR 1.7 million and EUR 4.6 million respectively) to be used in full to reduce the carrying value of the units.

Acquisition of further units in the Idea Energy Efficiency and Sustainable Development fund

On 14 October 2016, DeA Capital S.p.A. completed the acquisition from M&C S.p.A. of all the units and associated rights held by the latter in the Idea Energy Efficiency and Sustainable Development fund, managed by IDeA Capital Funds SGR, for a price of EUR 5.35 million. This represents a discount of approximately 20% on the value of the units, as estimated according to the latest report available on the transaction date.

The units comprising the transaction, equal to 15.1% of the total size of the fund, will be added to the stake already held by DeA Capital S.p.A. in the fund (15.3%), increasing its total stake to 30.4%.

Note that, as a result of the acquisition, DeA Capital S.p.A. has assumed the residual commitments for the payment of capital that may be called up on the units involved in the transaction up to a maximum of EUR 5.0 million.

Outlook

The outlook continues to focus on the strategic guidelines followed last year, with an emphasis on increasing the value of assets in the Private Equity Investment area and developing Alternative Asset Management platforms.

With regard to the Private Equity Investment area, having completed the sale of the stake in Générale de Santé and half the stake in Migros, the Company will continue its efforts to increase the value of the investments in its portfolio, and will evaluate new direct investment or co-investment initiatives.

Turning to Alternative Asset Management, as referred to above, the Company will continue to develop platforms for both private equity (through IDeA Capital Funds SGR) and real estate (through IDeA FIMIT SGR), with a particular focus on launching new products and, more generally, on taking advantage of the business opportunities offered by the Italian economic system.

In order to support the strategic guidelines above, the Company will continue to maintain a solid asset/financial base, optimised by returning profits to shareholders (including through buy-back operations), based on the available liquidity.

Statement of Responsibilities for the Interim Management Report to 30 September 2016

STATEMENT OF RESPONSIBILITIES FOR THE INTERIM MANAGEMENT REPORT TO 30 September 2016 (PURSUANT TO ART. 154-BIS OF LEGISLATIVE DECREE 58/98)

Manolo Santili, Chief Financial Officer of DeA Capital S.p.A., the manager responsible for preparing the company's accounting statements, hereby declares, pursuant to art. 154-bis, para. 2 of the Testo Unico della Finanza law, that the information contained in this document accurately represents the figures in the company's accounting records.

Milan, 3 November 2016

Manolo Santilli

Manager responsible for preparing the Company's accounting statements