STRATEGIC EQUITY CAPITAL PLC — Proxy Solicitation & Information Statement 2010

Oct 12, 2010

THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt as to the action you should take, you should consult immediately your stockbroker, bank manager, solicitor, accountant or other independent financial adviser authorised u other independent financial adviser under the Financial Services and Markets Act 20 nder Financial Markets Act 2000 or, if you , you are in a country outside the United Kingdom, another appropriately authorised independent financial adviser.

A copy of this document, which comprises a circular prepared in accordance with the Listing Rules and issued by the Company in connection with the Proposals, has been filed with the FSA in accordance with rule 9.6.1 of the Listing Rules.

If you were a Shareholder and have sold or otherwise transferred all your Shares, please send this document, together with the accompanying Form of Proxy, at once to the purchaser or transferee or to the stockbroker, bank or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or transferee.

Canaccord Genuity Limited, which is authorised and regulated in the United Kingdom by the FSA, is acting solely for Strategic Equity Capital plc and for no one else, including any recipient of this document, in connection with the Proposals and will not be responsible to anyone other than Strategic Equity Capital plc for providing the protections afforded to clients of Canaccord Genuity Limited or for affording advice in relation to the Proposals or any other matter referred to in this document.

STRATEGIC EQUITY CAPITAL PLC PLC

(Incorporated in England & Wales under the Companies Act 1985 with registered number 05448627) (An investment company under section 833 of the Companies Act 2006)

RECOMMENDED PROPOSALS REGARDING AMENDMENTS TO TO INVESTMENT MANAGEMENT AGREEMENT INVESTMENT AGREEMENT AND ADOPTION OF NEW ARTICLES OF ASSOCIATION ADOPTION OF NEW ARTICLES OF ASSOCIATION TION ASSOCIATION

AND

NOTICE OF GENERAL MEETING NOTICE MEETING

A notice convening a general meeting of the Company is set out in Part 4 of this document. That meeting will be held at the offices of SVG Investment Managers Limited at 61 Aldwych, London WC2B 4AE, on Tuesday, 9 November 2010 commencing at 11.30 a.m. (or, if later, as soon as the annual general meeting of the Company convened for the same date has concluded or been adjourned).

To be valid for use at the General Meeting, the accompanying Form of Proxy should be completed and returned in accordance with the instructions printed on it as soon as possible and, in any event, so as to be received by no later than 11.30 a.m. on Sunday, 7 November 2010. Appointments of proxies made by utilising the CREST electronic proxy appointment service must be made in accordance with the procedures set out in the notes at the end of the notice convening the General Meeting in Part 4 of this document as soon as possible and, in any event, so as to be received by no later than 11.30 a.m. on Sunday, 7 November 2010.

PART 1	LETTER FROM THE CHAI THE CHAIRMAN LETTER FROM THE CHAI	3
	Introduction 3
	Amendments to the Investment Management Agreement 4
	Adoption of New Articles of Association 5
	General Meeting 5
	Action to be Taken 6
	Recommendation 6
PART 2	ADDITIONAL INFORMATION INFORMATION	7
PART 3	DEFINITIONS DEFINITIONS DEFINITIONS	10
PART 4	NOTICE OF GENERAL MEETING NOTICE OF GENERAL MEETING	12

PART 1

LETTER FROM THE CHAIRMAN CHAIRMAN

Strategic Equity Capital plc

(Incorporated in England and Wales under the Companies Act 1985 with registered number 05448627) (An investment company under section 833 of the Companies Act 2006)

Directors J Hodson (Chairman) Sir Clive M Thompson (Deputy Chairman) J Cornish I Dighé M Phillips

Registered Office Beaufort House 51 New North Road Exeter EX4 4EP

12 October 2010

Dear Shareholder

RECOMMENDED PROPOSALS REGARDING RECOMMENDED PROPOSALS REGARDING AMENDMENTS TO INVESTMENT MANAGEMENT AGREEMENT MANAGEMENT AND ADOPTION OF NEW ARTICLES OF ASSOCIATION ADOPTION OF NEW ARTICLES OF ASSOCIATION

AND

NOTICE OF GENERAL MEETING NOTICE OF GENERAL MEETINGCE MEETING

Introduction

The Board previously undertook to provide Ordinary Shareholders with an opportunity to vote on the continuation of the Company at this year's annual general meeting, which will be held on Tuesday, 9 November 2010. As announced on 6 October 2010, the Board is recommending that Shareholders vote in favour of the continuation resolution at the AGM. Prior to making this recommendation, the Board, in conjunction with its advisers, undertook a strategic review of the Company, including its existing management arrangements. As a result of that review, the Board and SVG Investment Managers Limited have agreed certain amendments to the fee arrangements and notice provisions set out in the investment management agreement between the Company and SVGIM.

The amendments to the Investment Management Agreement constitute a related party transaction for the purpose of the Listing Rules and, as such, require to be approved by an ordinary resolution of the Company before they can become effective. However, only independent Shareholders (being Shareholders who are neither the Investment Manager nor parties associated with the Investment Manager) may vote on that resolution, which will be proposed at a general meeting of the Company which has been convened for Tuesday, 9 November 2010 commencing at 11.30 a.m. (or, if later, as soon as the annual general meeting of the Company convened for the same date has concluded or been adjourned).

The Board is also taking this opportunity to propose that the Company amend its memorandum of association and adopt new articles of association to reflect further changes to company law following the implementation of the Companies Act 2006.

The purpose of this document is to provide you with details of the Proposals, which are conditional on the resolutions being passed at the General Meeting. Details of the resolutions to be proposed at the General Meeting are set out under the heading "General Meeting" below. The notice convening the General Meeting is set out in Part 4 of this document. The procedure for voting at the General Meeting is set out under the heading "Action to be Taken" on page 6 of this document.

Amendments Amendments to the Investment Management Agreement the Investment Management Agreement

Existing Fee Existing Fee Arrangements Arrangements

The Company currently pays the Investment Manager a basic fee of 1.0 per cent. per annum of the net NAV of the Company (being the net asset value less the aggregate of the value of the Company's limited partnership Interest in Strategic Recovery Fund II and the amount of the Company's undrawn loan commitment to that fund from time to time). In addition, the Investment Manager is entitled to a performance fee if two criteria are met in respect of a period of six months ending on either 30 June or 31 December in any year:

• firstly, if the Adjusted NAV per Share at the end of the relevant performance period exceeds a performance hurdle (being the net asset value per Share on the date on which the Company was launched on 19 July 2005 increased at the rate of 7.0 per cent. per annum on a compounding basis to the end of the relevant Existing Performance Period); and
• secondly, if the Adjusted NAV per Share at the end of the relevant Existing Performance Period is higher than a high watermark (being the highest previously recorded Adjusted NAV per Share at the end of an Existing Performance Period in relation to which a performance fee was earned).

If the Performance Hurdle is met, and the High Watermark exceeded, the performance fee is an amount equal to 15 per cent. of the increase since the Existing Performance Period in respect of which a performance fee was last earned. Under the existing arrangements, there is no limit on the quantum of the amount of any performance fee which may be earned. As at the date of this document, the Performance Hurdle was 140.2p and the High Watermark was 118.82p. These compare with the Adjusted NAV per Share of 82.89p as at 8 October 2010 (being the latest practicable date prior to the publication of this document). Further details of the existing fee arrangements are set out in paragraph 1 of Part 2 of this document.

Proposed Fee Arrangements

The Board believes that, having regard to the discount at which the Shares have been trading relative to their underlying NAV (the average discount over the last 12 months prior to 8 October 2010 was approximately 24.4 per cent.), a basic fee calculated by reference to the Company's market capitalisation would provide a closer alignment of SVGIM's interest with that of Shareholders. Calculating the basic fee by reference to the Company's market capitalisation should also reduce the Company's total expense ratio.

Furthermore, as the current Performance Hurdle is more than 69.1 per cent. ahead of the latest unaudited NAV per Share and is continuing to accrue at the rate of 7.0 per cent. per annum on a compounding basis, the Board does not believe that there is a realistic prospect of the Adjusted NAV per Share exceeding the Performance Hurdle in the foreseeable future. Accordingly, in the opinion of the Board, the current performance fee no longer provides a real incentive for the Investment Manager.

The Board is recommending, therefore, that the current fee arrangements with the Investment Manager be revised to provide a closer alignment of the respective interests of Shareholders and the Investment Manager, as well as a better incentive for the Investment Manager to continue to deliver the recent strong investment performance over the longer term. Accordingly, it is proposed that:

• the basic fee should be the lower of (i) the basic fee as calculated under the current fee arrangements and (ii) 1.0 per cent. per annum of the Company's market capitalisation and the basic fee will continue to be calculated weekly and payable quarterly in arrears (for illustrative purpose only, if the net NAV of the Company as described above and the Company's market capitalisation as at 8 October 2010 remained unchanged, the basic fee would be calculated by reference to that market capitalisation, resulting in a saving of approximately £147,000 per annum); and
• the existing performance fee should be replaced with a new performance fee on the following terms:
• the Company's performance should be measured over rolling three year periods ending on 30 June in each year, with the first Proposed Performance Period commencing on 1 July 2008 and ending on 30 June 2011;

• the Company's performance should be measured by comparing the NAV total return per Share over a Proposed Performance Period against the total return performance of the FTSE SmallCap (ex. Investment Companies) Index, being the index against which the Board has historically compared the Company's investment performance;

• if the NAV total return per Share (calculated before any accrual for any performance fee to be paid in respect of the relevant Proposed Performance Period) at the end of the relevant Proposed Performance Period exceeds both:

• (i) the NAV per Share at the beginning of the relevant Proposed Performance Period as adjusted by the aggregate amount of (a) the total return on the FTSE SmallCap (ex. Investment Companies) Index (expressed as a percentage) and (b) 2.0 per cent. per annum over the relevant Proposed Performance Period; and
• (ii) the High Watermark (which, until exceeded at the end of a Proposed Performance Period in respect of which the Investment Manager earns a performance fee, will remain at 118.82p);

the Investment Manager will be entitled to 15 per cent. of the excess over the higher of the Benchmark NAV per Share and the High Watermark; and

– payment of a performance fee that has been earned will be deferred to the extent that the amount payable exceeds 1.75 per cent. per annum of the Company's NAV at the end of the relevant Proposed Performance Period (amounts deferred will be payable when, and to the extent that, following any later Proposed Performance Period(s) with respect to which a performance fee is payable, it is possible to pay the deferred amounts without causing that cap to be exceeded or the relevant NAV total return per Share to fall below the relevant Benchmark NAV per Share and the relevant High Watermark).

The proposed new fee arrangements are conditional on the approval by an ordinary resolution of the Company and only Shareholders independent of the Investment Manager and its associates will vote on such resolution. The relevant resolution will be proposed at the General Meeting.

Notice Period Period

The Board has decided that, if the resolution to continue the Company is passed at the Annual General Meeting, Shareholders should be given an opportunity to vote on an ordinary resolution to continue the Company at next year's annual general meeting, and at every annual general meeting thereafter. The Investment Manager has agreed that, if any such a resolution is not passed, the Company will be entitled to give notice terminating the Investment Manager's appointment without any compensation being payable to the Investment Manager in lieu of any period of notice otherwise required under the Investment Management Agreement.

General

The proposed amendments to the fees and notice period described above are conditional on resolution 1 set out in the Notice of General Meeting being passed. A copy of the deed between the Company and the Investment Manager effecting the proposed amendments, which is referred to in that resolution, will be available for inspection at the address and during the times specified in paragraph 5 of Part 2 of this document.

Adoption of New Articles of Association Association

The law in relation to UK companies has been undergoing a number of changes following the introduction of the Companies Act 2006 and the implementation of the Companies (Shareholders Rights) Regulations 2009 which were introduced in August of last year.

The changes brought about by the Companies Act 2006 have been implemented in stages, and the remaining parts were implemented on 1 October 2009. The Company has been updating its articles of association in stages to accommodate the revisions required as a consequence of the latest parts of the Companies Act 2006 to be implemented. Whilst the majority of the changes introduced on 1 October 2009 apply automatically to the Company, it is best practice to update the Company's articles of association to reflect the law when the opportunity arises. Accordingly, the Board is taking the opportunity of the General Meeting to propose that the Company adopt new articles of association in order to ensure full compliance with the provisions of the Companies Act 2006.

The principal differences between the Existing Articles and the New Articles are described in paragraph 2 of Part 2 of this document. A draft of the New Articles will be available for inspection at the address and during the times specified in paragraph 5 of Part 2 of this document.

General Meeting

A general meeting of the Company will be held at the offices of SVG Investment Managers Limited at 61 Aldwych, London WC2B 4AE, on Tuesday, 9 November 2010 commencing at 11.30 a.m. (or, if later, as soon as the annual general meeting of the Company convened for the same date has concluded or been adjourned) at which the following resolutions will be proposed:

• Resolution 1, which will be proposed as an ordinary resolution: to approve the amendments to the Investment Management Agreement described under the heading "Amendments to the Investment Management Agreement" above. Under the Listing Rules, SVGIM is regarded as a related party of the Company as a consequence of being the Company's investment manager. Accordingly, entering into a deed for the purpose of effecting the proposed amendments to the Investment Management Agreement constitutes a related party transaction under the Listing Rules and, as such, requires to be approved by the requisite majority of Independent Shareholders. As at the date of this document, SVGIM and its associates (as defined in the Listing Rules), which includes its holding company SVG Capital plc, held 22.7 per cent. of the Voting Share Capital. SVGIM has undertaken to take all reasonable steps to ensure that its associates abstain from voting on resolution 1 set out in the Notice of General Meeting (SVGIM itself does not hold any Shares but, if it were to acquire any Shares prior to the General Meeting, it would also abstain from voting on that resolution).
• Resolution 2, which will be proposed as a special resolution: to delete all the provisions of the Company's memorandum of association which, by virtue of section 28 of the Companies Act 2006, are to be treated as provisions of the Company's articles of association and to adopt the New Articles.

For an ordinary resolution to be passed, more than 50 per cent. of the votes cast must be in favour of it. In order to be passed, a special resolution requires at least 75 per cent. of the votes cast to be in favour of it. The quorum requirement for the General Meeting is not less than two Shareholders present in person or by proxy (or, in the case of a corporation, by a duly appointed representative).

Action to be Taken to be

You will find enclosed with this document a Form of Proxy for use at the AGM. Please complete the Form of Proxy and return it by post to the address set out on it as soon as possible and in any event so as to be received not later than 11.30 a.m. on Sunday, 7 November 2010. You may also return your Form of Proxy electronically by following the instructions set out on the Form of Proxy so as to be received by the Company's registrar, Computershare Investor Services plc, by no later than 11.30 a.m. on Sunday, 7 November 2010.

In the case of CREST members wishing to appoint a proxy electronically, Shareholders are required to notify the Company of their appointment of a proxy, by utilising the CREST electronic proxy appointment service in accordance with the procedures set out in the notes at the end of the Notice of General Meeting, not later than 48 hours before the General Meeting.

The completion and return of a Form of Proxy, or the appointment of a proxy electronically, will not prevent a Shareholder from attending the AGM and voting in person if they wish to do so.

Recommendation

Sir Clive Thomson is not regarded as independent of Clive Thomson is not regarded as independent of the Investment the Investment Manager as he is a member of Manager as he is a member of the Investment Manager's investment advisory panel. Accordingly, Sir Clive Thomson has abstained from any recommendation with regard to resolution 1 to be proposed at the General Meeting. eral

The Board, which has been advised by Canaccord Genu Board, Canaccord Genuity Genuity, considers the ity, considers the , Proposals to be in the best to be in the best interests of Shareholders as a whole. Furthermore, the Board, which has been so advised by Canaccord Genuity, considers that the proposed Genuity, considers that , amendments ndmentsndments to the Investment Management the Investment Agreement are fair and reasonable as far as Shareholders are concerned. In providing advice to the Directors, Canaccord Genuity Directors, Genuity Genuity has taken into account the Direct taken into Directors Directors' own commercial assessment of commercial assessment the Proposals. Proposals.

The Board recommends that you vote in favour of the Board recommends that you vote in favour of the resolut resolutions to be proposed at the ions to be proposed at the ions be at General General Meeting. The Directors intend to vote in favour of Meeting. The to in of the resolutions to be proposed at the G solutions to at General Meeting Meeting in respect of their own beneficial holdings in of own beneficial holdings of Shares amounting, res amounting, in aggregate, to in to 3,080,000 3,080,000 3,080,000 Ordinary Shares (representing approximately 4.0 4.0 per cent. of the per cent. of the per Voting Share Capital Voting Share Capital Share Capital).

Yours faithfully

John Hodson Chairman

ADDITIONAL INFORMATION INFORMATION

1. Existing Existing Investment Investment Management Management Arrangements Arrangements

By an investment management agreement between the Company and the Investment Manager dated 12 July 2005 (as amended by a supplemental agreement between the Company and the Investment Manager dated 4 August 2009), the Investment Manager agreed (subject to the overall supervision of the Directors) to manage the Company's assets in accordance with the Company's investment objective and policy in return for the following fees:

1.1 Basic Fee

A basic fee is payable to the Investment Manager at the annual rate of 1.0 per cent. per annum of the net NAV of the Company (being the net asset value less the aggregate of the value of the Company's limited partnership Interest in Strategic Recovery Fund II and the amount of the Company's undrawn loan commitment to that fund from time to time). The basic fee accrues daily and is payable quarterly in arrears.

1.2 Performance Fee

The Investment Manager is entitled to a performance fee in certain circumstances. This fee is payable by reference to the increase in Adjusted NAV per Share over the course of a performance period (each performance period is a period of six months ending on either 30 June or 31 December). The Investment Manager is entitled to a performance fee in respect of an Existing Performance Period only if the following two criteria are met:

• (i) First, a performance hurdle test must be met. The performance hurdle is that the Adjusted NAV per Share at the end of the relevant Existing Performance Period exceeds a target Adjusted NAV per Share for that Existing Performance Period of an amount equal to the Net Asset Value per Share on which the Company was launched on 19 July 2005, increased at a rate of 7.0 per cent. per annum on a compounding basis. As at the date of this document, the Performance hurdle was 140.2p.
• (ii) The second test to be met (a high watermark test) is that the Adjusted NAV per Share at the end of the relevant Existing Performance Period is higher than the highest previously recorded Adjusted NAV per Share at the end of an Existing Performance Period in relation to which a performance fee was earned. As at the date of this document, the highest previously recorded Adjusted NAV per Share was 118.82p.

If the Performance Hurdle is met, and the High Watermark exceeded, the performance fee is an amount equal to 15 per cent. of the increase, since the Existing Performance Period in respect of which a performance fee was last earned, in the Adjusted NAV per Share of the time-weighted average of the total number of Shares in issue.

Payment of a performance fee that has been earned will be deferred to the extent that making payment would cause the Performance Hurdle or High Watermark not to be met – amounts deferred will be payable when, and to the extent that, following any later Existing Performance Period(s) with respect to which a performance fee is payable, it is possible to pay the deferred amounts without causing the Performance Hurdle or High Watermark not to be met.

The Investment Manager's appointment as investment manager is subject to termination by the Company on 12 months' notice. The Investment Management Agreement may also be terminated by either the Investment Manager or the Company if the other party has gone into liquidation, administration or receivership or has committed a substantial or continuing breach of the Investment Management Agreement.

The Investment Management Agreement contains provisions regarding conflicts of interest in accordance with FSA rules. The FSA rules require the Investment Manager to manage conflicts of interest fairly both between itself and its customers and between one customer and another.

The Investment Management Agreement provides for the indemnification by the Company of the Investment Manager in circumstances where the Company is in breach of the Investment Management Agreement or where the Investment Manager suffers loss arising out of action properly taken by it in accordance with the Investment Management Agreement (this indemnity by the Company is usual for an agreement of this nature). The Investment Manager accepts responsibility for loss to the Company to the extent that such loss is attributable to its negligence, fraud, wilful default or breach of the Investment Management Agreement.

2. Principal PrincipalPrincipal Differences between the Existing Articles Differences between Existing Articles and the the New Articles New ArticlesArticles

The principal differences between the Existing Articles and the New Articles are as follows:

2.1 The Company' The Company's Objects Objects

The provisions regulating the operations of the Company are currently set out in the Company's memorandum and articles of association. The Company's memorandum of association contains, among other things, the objects clause which sets out the scope of the activities the Company is authorised to undertake. This is drafted to give a wide scope.

The Companies Act 2006 significantly reduces the constitutional significance of a company's memorandum of association. The Companies Act 2006 provides that a memorandum of association will record only the names of subscribers and the number of shares each subscriber has agreed to take in the company. Under the Companies Act 2006 the objects clause and all other provisions which are contained in a company's memorandum of association, for existing companies at 1 October 2009, are deemed to be contained in the company's articles of association but the company can remove these provisions by special resolution.

Further, the Companies Act 2006 states that, unless a company's articles of association provide otherwise, a company's objects are unrestricted. This abolishes the need for companies to have objects clauses. For this reason the Company is proposing to remove its objects clause together with all other provisions of its memorandum of association which, by virtue of the Companies Act 2006, have been treated as forming part of the Company's articles of association. Resolution 2 to be proposed at the General Meeting confirms the removal of these provisions for the Company.

2.2 Change of N Change Name

Under the Companies Act 1985, a company could only change its name by special resolution. Under the Companies Act 2006 a company will be able to change its name by other means provided for by its articles. To take advantage of this provision, a new article (Article 143) has been incorporated into the New Articles to enable the Directors to pass a resolution to change the Company's name.

2.3 Authorised Share Capital Authorised Capital

The Companies Act 2006 abolishes the requirement for a company to have an authorised share capital and the New Articles reflect this. Directors will still be limited as to the number of shares they can at any time allot because allotment authority continues to be required under the Companies Act 2006.

2.4 Vacation of O Vacation of Office by ffice Directors irectors

The Existing Articles specify the circumstances in which a Director must vacate office. The New Articles (Article 87(iv)) update these provisions to reflect the approach taken on mental and physical incapacity in the model articles for public companies produced by the Department for Business, Innovation and Skills.

2.5 Voting by P Voting by Proxies on a roxies Show of Hands

The Shareholders' Rights Regulations have amended the Companies Act 2006 so that it now provides that each proxy appointed by a member has one vote on a show of hands unless the proxy is appointed by more than one member in which case the proxy has one vote for and one vote against if the proxy has been instructed by one or more members to vote for the resolution and by one or more members to vote against the resolution. The change has been reflected in the New Articles (Article 62).

2.6 Electronic C Electronic Conduct of onduct of General Meetings

Amendments made to the Companies Act 2006 by the Shareholders' Rights Regulations specifically provide for the holding and conducting of electronic meetings. The New Articles (Article 54) contain the change to reflect more closely the relevant provisions.

2.7 Chairman' Chairman's Casting Vote

The New Articles remove the provision giving the chairman a casting vote in the event of an equality of votes at a general meeting, as this is no longer permitted under the Companies Act 2006, as amended by regulation 22 of the Shareholders' Rights Regulations.

2.8 Liability of m Liability of members

The New Articles (Article 144) expressly state that the liability of the members is limited to the amount, if any, unpaid on the shares held by them. This provision previously appeared in the Company's memorandum of association.

3. Major Shareholders Major Shareholders Major Shareholders

As at 8 October 2010, the Company was aware of the following persons being interested, directly or indirectly, in 3.0 per cent. or more of the issued Ordinary Shares:

		% of
Holder	No. of Shares	Voting Share Capital
SVG Capital plc	16,000,000	20.8
Schroders	10,487,129	13.7
Fortelus Special Situations Master Fund	9,710,000	12.6
Midas Capital	5,750,000	7.5
SVM Asset Management	4,200,000	5.5
Sir Clive M Thompson*	3,030,000	3.9
1607 Capital	2,997,850	3.9
Rathbone	2,912,550	3.8

*Note: Sir Clive M Thompson is not regarded as independent of the Investment Manager as he is a member of SVGIM's investment advisory panel.

4. General General General

• 4.1 Save for the Investment Management Agreement and the deed between the Company and the Investment Manager referred to in resolution 1 of the Notice of General Meeting (the purpose of which is to effect the amendments to the Investment Management Agreement described under the heading "Amendments to the Investment Management Agreement" in Part 1 of this document), the Company has not entered into:
• (i) any material contract during the two years preceding the date of this document; or
• (ii) any other contract which contains any provision under which the Company has any obligation or entitlement which is material to the Company at the date of this document;

and which Shareholders would reasonably require for the purpose of enabling them to make a properly informed assessment of how to vote on the Proposals.

• 4.2 There has been no significant change in the financial or trading position of the Company which has occurred since 30 June 2010, being the end of the last financial period for which audited financial information of the Company has been published.
• 4.3 Canaccord Genuity has given and has not withdrawn its written consent to the issue of this document with the inclusion of its name and references to it in the form and context in which they appear.

5. Documents Available for Inspection Documents Available for Inspection Documents Available Inspection

Copies of the following documents will be available for inspection during normal business hours on weekdays (Saturdays, Sundays and public holidays excepted) from the date of this document until the close of business on Tuesday, 9 November 2010 at the offices of SVG Investment Managers Limited, 61 Aldwych, London WC2B 4AE, and at the Company's registered office:

• (i) the existing memorandum and articles of association of the Company;
• (ii) the New Articles;
• (iii) the Investment Management Agreement;
• (iv) a draft of the deed between the Company and the Investment Manager referred to in resolution 1 in the AGM Notice;
• (v) the annual report and accounts of the Company for the two years ended 30 June 2010; and
• (vi) the consent letter referred to in paragraph 4.3 of this Part 2.

In addition, copies of the documents referred to in sub-paragraphs (i) to (iv) above will be available for inspection for at least 15 minutes prior to, and during, the General Meeting at the offices of SVG Investment Managers Limited, 61 Aldwych, London WC2B 4AE, where the General Meeting will be held.

PART 3 DEFINITIONS DEFINITIONS

The following definitions apply throughout this document unless the context otherwise requires:

"Adjusted NAV per Share Adjusted NAV Share"	as at a particular time, the sum of (i) the NAV of the Company at that time, calculated on a basis that does not recognise any liability of the Company to the Investment Manager in respect of any performance fee that is, or may become, payable, divided by the number of Shares in issue at that time and (ii) the aggregate of the amount of any dividends paid or distributions made by the Company at any time since its launch divided by the time-weighted average of the number of Shares in issue since the Company's launch to the end of the relevant Existing Performance Period
"AGM"or"Annual General Annual General Meeting" Meeting"	the annual general meeting of the Company convened for Tuesday, 9 November 2010 at 11.30 a.m. and which will be held at the offices of SVG Investment Managers Limited, 61 Aldwych, London WC2B 4AE
"Benchmark NAV per Share" "Benchmark NAV per Share"	the NAV per Share at the beginning of the relevant Proposed Performance Period as increased by the total return on the FTSE SmallCap (ex. Investment Companies) Index (expressed as a percentage) plus two percentage points
"Board"or"Directors Directors Directors"	the board of directors of the Company, including a duly constituted committee thereof
"Canaccord Genuity Canaccord Genuity"	Canaccord Genuity Limited
"Company Company"	Strategic Equity Capital plc
"Existing Articles Existing Articles"	the articles of association of the Company as at the date of this document
"Existing Performance "Existing Performance Period"	a period of six months ending on either 30 June or 31 December in any year
"Form of Proxy Form Proxy"	the form of proxy issued for use by Shareholders in connection with the General Meeting
"FSA"	Financial Services Authority
"General Meeti General Meeting"	the general meeting of the Company convened for Tuesday, 9 November 2010 at 11.30 a.m. (or, if later, as soon as the AGM has concluded or been adjourned), or any adjournment of such general meeting, and notice of which is set out in Part 4 of this document
"High Watermark High Watermark" Watermark	the highest previously recorded Adjusted NAV per Share at the end of an Existing Performance Period or, if higher, the highest previously recorded NAV total return per Share at the end of a Proposed Performance Period in relation to which a performance fee was earned
"Independent Shareholders "Independent Independent Shareholders	Shareholders other than the Investment Manager and its associates (as defined in the Listing Rules)
"Investment Management Agreement" Agreement"	the investment management agreement between the Company and the Investment Manager dated 12 July 2005 (as amended by a deed between the Company and the Investment Manager dated 4 August 2009)
"Investment Investment Manager Manager"or "SVGIM"	SVG Investment Managers Limited
"Listing Rules "Listing Rules Listing Rules"	the listing rules made by the FSA under section 73A of the Financial Services and Markets Act 2000
"Net Asset Value Net Asset Value Value" or "NAV"	the net asset value of the Company or (as the context requires) per Share, calculated in accordance with the Company's accounting policies

"New Articles Articles New Articles"	the articles of association which will be adopted as the articles of association of the Company if resolution 2 set out in the Notice of General Meeting is passed
"Notice of General Meeting Notice General Meeting Meeting"	the notice convening the General Meeting set out in Part 4 of this document
"Performance Hurdle Performance Hurdle"	the NAV per Share on the date on which the Company was launched on 19 July 2005 increased at the rate of 7.0 per cent. per annum on a compounding basis to the end of the relevant Existing Performance Period
"Proposals Proposals"	the proposed amendments to the Investment Management Agreement described under the heading "Amendments to the Investment Management Agreement", deletion of provisions in the Company's memorandum of association which, pursuant to the Companies Act 2006, are treated as provisions of the Company's articles of association and adoption of the New Articles in substitution for the Existing Articles
"Proposed Performance Period"	a period of three years ending on 30 June in any year
"Shareholders Shareholders"	holders of Shares
"Shares "Shares"	ordinary shares of 10p each in the capital of the Company
"Voting Share Capital Voting Share Capital Capital"	the issued share capital of the Company excluding any Shares held in treasury

PART 4

NOTICE OF GENERAL MEETING NOTICE OF MEETING

Strategic Equity Capital plc

(Incorporated in England and Wales under the Companies Act 1985 with registered number 05448627) (An investment company under section 833 of the Companies Act 2006)

Notice is hereby given that a general meeting of Strategic Equity Capital plc will be held on Tuesday, 9 November 2010 at 11.30 a.m. (or, if later, as soon as the annual general meeting of the Company convened for the same date has concluded or been adjourned) at the offices of SVG Investment Managers Limited, 61 Aldwych, London WC2B 4AE, for the purpose of considering and, if thought fit, passing the following resolutions:

Resolution 1 Resolution 1, which will be proposed as an ordinary resolution

THAT the deed between the Company and the Investment Manager in the form produced to the meeting and signed for the purpose of identification by the chairman of the meeting (the purpose of which is to effect the amendments to the Investment Management Agreement described under the heading "Amendments to the Investment Management Agreement" in Part 1 of the circular to shareholders of the Company dated 12 October 2010, a copy of which is produced to the meeting and signed for the purpose of identification by the chairman of the meeting (the "Circular CircularCircular") be and it is hereby approved (and words and expressions defined in the Circular shall have the same meanings when used in this resolution).

Resolution 2 Resolution 2, which will be proposed as a special resolution

THAT:

• (i) the articles of association of the Company be and they are hereby amended by deleting all the provisions of the Company's memorandum of association which, by virtue of section 28 of the Companies Act 2006, are to be treated as provisions of the Company's articles of association; and
• (ii) the articles of association in the form produced to the meeting and signed for the purpose of identification by the chairman of the meeting be and they are hereby adopted as the articles of association of the Company in substitution for, and to the exclusion of, the existing articles of association of the Company.

Registered Office Beaufort House 51 New North Road

Exeter EX4 4EP

By order of the Board Capita Sinclair Henderson Limited Company Secretary

12 October 2010

Notes

1. Website Giving Information Regarding the General M Website Information Regarding Meeting

Information regarding the General Meeting, including the information required by section 311A of the Companies Act 2006, is available from www.strategicequitycapital.com.

2. Entitlement to Attend and Vote Entitlement to Attend Vote

Only those members registered on the Company's register of members at 6.00 p.m. on Sunday, 7 November 2010 (or, if the General Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned meeting) shall be entitled to attend and vote at the General Meeting in respect of the number of Shares registered in their name at that time (only such members who are Independent Shareholders will be entitled to vote on resolution 1 in the Notice of General Meeting). Changes to entries on the register of members after 6.00 p.m. on Sunday, 7 November 2010 (or, if the General Meeting is adjourned, at 6.00 p.m. on the day two days prior to the adjourned meeting) shall be disregarded in determining the rights of any person to attend, speak and vote at the General Meeting. A member wishing to attend the General Meeting in person should register, on arrival at the venue for the General Meeting (the offices of SVG Investment Managers Limited at 61 Aldwych, London WC2B 4AE), attendance with the Company's registrar, Computershare Investor Services plc (the "Registrar Registrar Registrar").

3. Appointment of Proxi Appointment of Proxi Appointment Proxies

3.1 A member of the Company at the time set out in note 2 above is entitled to appoint a proxy to exercise all or any of their rights to attend, speak and vote at the General Meeting. A proxy does not need to be a member of the Company but must attend the General Meeting to represent the member. A proxy may only be appointed using the procedures set out in these notes and the notes on the Form of Proxy.

• 3.2 A member may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different Shares. A member cannot appoint more than one proxy to exercise rights attached to the same Shares. If a member wishes to appoint more than one proxy, they should contact the Registrar on 0870 707 1285.
• 3.3 Appointment of a proxy will not preclude a member from attending the General Meeting and voting in person. If a member has appointed a proxy and attends the General Meeting in person, the proxy appointment will automatically be terminated.
• 3.4 A person who is not a member of the Company but has been nominated by a member to enjoy information rights does not have a right to appoint any proxies under the procedures set out in these notes and should read note 7 below.

4. Appointment of Proxy Using Hard Appointment Proxy Hard-copy Form of Proxy copy Proxy Proxy

The notes on the Form of Proxy explain how to direct a proxy how to vote, or abstain from voting, on the resolution. To appoint a proxy using the Form of Proxy, the Form of Proxy must be completed and signed and sent or delivered to Computershare Investor Services plc, The Pavilions, Bridgwater Road, Bristol BS99 6ZY, so as to be received by the Registrar no later than 11.30 a.m. on Sunday, 7 November 2010. Any power of attorney or other authority under which the Form of Proxy is signed (or a duly certified copy of such power or authority) must be included with the Form of Proxy.

5. Appointment of Proxies through CREST Appointment of Proxies through CRESTAppointment Proxies CREST

• 5.1 CREST members who wish to appoint a proxy or proxies for the General Meeting by utilising the CREST electronic proxy appointment service may do so by using the procedures described in the CREST Manual, which can be reviewed at www.euroclear.com/CREST. CREST personal members or other CREST sponsored members, and those CREST members who have appointed (a) voting service provider(s), should refer to their CREST sponsor or voting service provider(s), who will be able to take the appropriate action on their behalf.
• 5.2 In order for a proxy appointment made by means of CREST to be valid, the appropriate CREST message (a "CREST Proxy Instruction CREST Proxy InstructionInstruction") must be properly authenticated in accordance with the specifications of Euroclear UK & Ireland Limited ("EUI") and must contain the information required for such instruction, as described in the CREST Manual. The message, regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously appointed proxy, must be transmitted so as to be received by the Company's agent (3RA50) by 11.30 a.m. on Sunday, 7 November 2010. For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the message by the CREST Applications Host) from which the Company's agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
• 5.3 CREST members and, where applicable, their CREST sponsors or voting service providers should note that EUI does not make available special procedures in CREST for any particular messages. Normal system timings and limitations will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed (a) voting service provider(s), to procure that their CREST sponsor or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.
• 5.4 The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations 2001.

6. Appointment of Proxy by Joint Members Appointment Proxy Members

In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-named being the most senior).

7. Nominated Persons Nominated Persons Persons

A person who has been nominated under section 146 of the Companies Act 2006 to enjoy information rights (a "Nominated Person Nominated Person"):

• (i) may have a right under an agreement between the Nominated Person and the member of the Company who has nominated them to have information rights (the "Relevant Member nt Member nt Member") to be appointed or to have someone else appointed as a proxy for the General Meeting; and
• (ii) if they either do not have such a right or if they have such a right but do not wish to exercise it, may have a right under an agreement between them and the Relevant Member to give instructions to the Relevant Member as to the exercise of voting rights.

A Nominated Person's main point of contact in terms of their investment in the Company remains the Relevant Member (or, perhaps, their custodian or broker) and they should continue to contact them (and not the Company) regarding any changes or queries relating to their personal details and their interest in the Company (including any administrative matters). The only exception to this is where the Company expressly requests a response from the Nominated Person.

8. Questions at the General Meeting Questions the General Meeting

Under section 319A of the Companies Act 2006, the Company must cause to be answered any question relating to the business being dealt with at the General Meeting put by a member attending the General Meeting unless (i) answering the question would interfere unduly with the preparation for the General Meeting or involve the disclosure of confidential information, (ii) the answer has already been given on a website in the form of an answer to a question or (iii) it is undesirable in the interests of the Company or the good order of the General Meeting that the question be answered.

9. Issued Shares and Total Voting Rights Issued Shares and Total Voting RightsIssued Rights

As at 6.00 p.m. on 8 October 2010, the Company's issued share capital comprised 79,815,974 Shares, of which 3,045,500 Shares were held in treasury. Each Share carries the right to one vote at a general meeting of the Company and, therefore, the total number of voting rights in the Company as at 6.00 p.m. on 8 October 2010 was 76,770,474.

10. Disclosure Obligations Disclosure Obligations Disclosure Obligations

Any person holding 3 per cent. or more of the total voting rights of the Company who appoints a person other than the chairman of the General Meeting as their proxy will need to ensure that both they and their proxy complies with their respective disclosure obligations under the UK Disclosure and Transparency Rules.

11. Communication Communication Communication

Any electronic address provided either in this notice of General Meeting or any related documents (including the Form of Proxy) to communicate with the Company may not be used for any purposes other than those expressly stated.