Bluehone Holdings Plc

November 11, 2009 02:00 ET

Commencement of Trading


                                                                                       11 November 2009

                                           BLUEHONE HOLDINGS PLC
                                  ("Bluehone Holdings" or the "Company")
                                      Commencement of trading on PLUS

The  Directors  of  Bluehone Holdings plc are pleased to announce that trading in  the  Company's Ordinary
Shares has commenced today on the PLUS-quoted Market.

Type of Issue:                                                                           Introduction

Number of Ordinary Shares in issue:                                                       118,670,411

Expected Start Price:                                                               2 pence per share

Par    Value:                                                                            2 pence each

Market Capitalisation on Admission:                                                     £ 2.4 million

Sector classification:                                                             Financial Services

Stock Symbol:                                                                                    BLUP

Corporate Adviser:                                                                            FinnCap


Bluehone Holdings plc
John Wheatley                                                                            07836 601938
Bill Brown                                                                              020 7496 8929

Charles Cunningham                                                                      020 7600 1658
Ed Frisby


Bluehone  Holdings plc (previously named Investments West Midlands Plc) is the ultimate parent  company  of
Bluehone Limited and Bluehone Investors LLP.


The principal operating subsidiary of Bluehone Holdings is Bluehone Investors. Bluehone Investors is a fund
management  company  focussed on managing small company investment and currently  manages  two  closed  end
investment  companies which are listed on the London Stock Exchange. As at 30 September 2009, Bluehone  had
approximately £59.0 million of funds under management. These funds are predominately invested in companies
listed on AIM. Bluehone Investors is authorised and regulated by the FSA.

Bluehone Holdings intends to expand the size, scale and areas of its operation through launching new funds
of its own, acquiring fund management mandates and through strategic acquisitions.

Background to Bluehone Investors

Bluehone Investors was established as a limited liability partnership  in  January  2005.  The founding
partners, Bill Brown, Robert Mitchell and Stuart Rollason, were all previously employed at FCAM and in  May
2005  FCAM  was  introduced as a partner in the business. The equity of the partnership was owned  100  per
cent.  by  the  founding partners and the interest of FCAM is represented by a profit share  determined  by
excess revenues achieved from the initial clients over a hurdle amount.

Bluehone  Investors commenced trading in May 2005, when fund management contracts were signed  with  Active
Capital Trust plc, Bluehone AiM VCT plc and Bluehone AiM VCT2 plc.

On  31  March  2009, Bluehone was introduced as a partner in Bluehone Investors, assuming a 9.9  per  cent.
equity  interest. On  21 August 2009, Bluehone became the 100 per cent. owner of the  equity  in  Bluehone
Investors. Bluehone is now a wholly owned subsidiary of Bluehone Holdings.

Bluehone currently employs five members of staff, including the partners, all of whom are based in London.
Bluehone's employees comprise four fund managers and one administrator.

Sources of Revenue

Bluehone Investors' principal sources of revenue are the management fees which it charges on the funds  it
manages.  Management fees are calculated on a percentage of funds under management. The level  of  Bluehone
Investors' fee income therefore depends on:

*       the general levels of stock markets;

*       the performance of specific funds managed by Bluehone Investors;

*       the launch of new funds managed by Bluehone Investors; and

*       Bluehone Investors being awarded fund management contracts for existing funds.

Funds Managed by Bluehone Investors

Bluehone Investors currently manages two funds.

Active Capital Trust plc

Active  Capital is an investment trust invested predominantly in assets traded on AIM. Active Capital  has
historically used gearing to seek to enhance returns and at 31 May 2008 had bank debt of £30  million  and
total assets of £93 million. In the year to 31 May 2009, £19.6 million of Active Capital's debt was repaid
with  a like-for-like fall in Active Capital's total assets of 36.7 per cent., which compares to the  fall
in  the  FTSE  AIM Index of 49.2 per cent. over the same period. However, the gearing effect  and  revenue
costs  resulted in a 58 per cent. fall in net asset value over the year. As at 30 September  2009,  Active
Capital  had net assets of £33.7 million and had paid down a further £10.4 million of debt since the  year

Active  Capital  was scheduled to have a continuation vote at a General Meeting in October  2009.  However,
after  a  strategic review, the board of directors of Active Capital, in consultation with Active Capital's
major shareholders, decided to place the fund into an orderly realisation mode.

Following  the  approval of Active Capital's shareholders at a meeting held on 27  August  2009,  Bluehone
Investors  was  appointed  to  manage the orderly realisation process with  the  objective  of  maximising
shareholder return in the most appropriate time scale.

Bluehone  Investors will receive specified monthly fees as well as additional fees based on the timing  of
realisations and the value achieved for shareholders of Active Capital.

Bluehone AiM VCT2 plc

Bluehone  AiM  VCT2 is a venture capital trust invested in securities traded on AIM. The  company  is  the
result  of  a  merger between Bluehone AiM VCT plc and Bluehone AiM VCT2 plc which was concluded  in  July
2008. As at 30 September 2009, Bluehone AiM VCT2 had total assets of £25.2 million. Bluehone Investors  is
paid  an  annual management fee of 2 per cent. per annum on the value of the total assets of Bluehone  AiM
VCT2.  However,  to  facilitate an accelerated return for the shareholders following  the  merger  of  the
Bluehone  VCTs,  Bluehone Investors has agreed to reduce the management fee to  1.5  per  cent.  until  30
November 2009.

Small Quoted Companies Sector

In  the year to 31 May 2009, the level of UK markets fell approximately 27 per cent., with the FTSE  Small
Cap  down  27.6  per cent., the FTSE 100 down 27.2 per cent. and the FTSE All Share down  27.1  per  cent.
However, the worst performing sector of the UK market was the FTSE AIM Index, which declined 49 per  cent.
over the same period.

The  Directors are of the opinion that the degree of underperformance of AIM has created a number of  good
investment  opportunities  as  company  valuations  have  been  impacted  more  severely  by  the   recent
deterioration  in  the  economic  environment than can be justified. These good  investment  opportunities
include  not only simple good value situations in individual companies but also the creation of  new  fund
vehicles  to  take advantage of low valuations. Opportunities identified by Bluehone Holdings include  the
development of a strategic product which would acquire influential holdings in public companies  and  seek
to  introduce  private  equity  style value driven exit strategies to these companies.  Another  potential
opportunity identified by Bluehone Holdings comprises an income product, which would take advantage of the
high cost of capital to small companies and the continuing difficulty for small companies in securing bank
debt finance.

The  fall in small company valuations and the FTSE AIM Index in particular has seen the size and scale  of
many investment funds fall to levels which the Directors believe will make them subscale and expensive  to
manage. Also, as funds become smaller, investors can suffer problems with liquidity. As a result of  these
factors,  Bluehone  Holdings  believes that there will be opportunities for  consolidation  in  the  small
company  funds  sectors.  Bluehone Holdings will actively seek to participate in this  activity  with  the
objective of being well placed to take advantage of the anticipated recovery in small company markets.


Set  out below is a summary of Bluehone Investors' results for the three years ended 31 March 2009 derived
from the audited consolidated financial statements of Bluehone Investors.

Year ended 31 March                                        2007                2008              2009
                                                           £                   £                 £
Turnover                                                   2,665,686           2,212,470         1,305,792
Profit  for  the  year  before members'  remuneration and                                       
profit shares                                              2,227,372           1,826,881         862,595
Profit  for the year available for discretionary  division                                       
among members                                              1,614,749           1,375,507         808,147

Bluehone  Investors  is the principal operating entity within the Group. Any surplus income  generated  by
Bluehone Investors will firstly be applied in paying FCAM a prior profit share calculated as 40 per  cent.
of  the  excess  revenue  over £1m per annum (this figure is indexed to the RPI movements  since  November
2006).  Secondly the surplus income will be applied in paying its salaried partners (namely Messrs  Brown,
Mitchell and Rollason) in fixed profit entitlements, which will be reviewed annually. Bluehone, as the 100
per cent equity partner in Bluehone Investors, will be entitled to receive any remaining surplus, on which
it  will pay corporation tax. Bluehone will retain any surplus necessary to provide additional capital for
Bluehone Investors and is expected to distribute any balance by way of dividend to Bluehone Holdings.


The  Directors intend to continue to develop the Company as a fund management business with  a  focus  on
both  smaller  quoted companies and private equity situations. The aim is to continue to manage  existing
assets,  launch new products, acquire assets or mandates and use the benefits of the PLUS-quoted  listing
to acquire other fund management businesses

The Directors believe that due to the large falls in market values of small companies over the past year,
a  number of funds and fund managers may have become sub-scale, particularly in the venture capital trust
sector,  where  they believe that many funds have become too small to justify the annual  running  costs.
Bluehone Holdings intends to participate in the consolidation of this sector, both in respect of AIM and
also, potentially, unquoted funds.

In line with this strategy, the Company has entered into two initiatives which will form the basis of the
future expansion of the Group and which the Directors believe will provide a platform for growth.

These initiatives are as follows:

Strategic Agreement with Evolve

Bluehone  Holdings and Evolve have entered into a strategic mutual cooperation agreement as a  result of
which,  Evolve  owns  23,615,411 Ordinary Shares representing approximately 19.9 per  cent. of  Bluehone
Holdings'  Issued  Share Capital and Bluehone Holdings own 9,148,037 Evolve Ordinary Shares representing
approximately 5.1 per cent. of Evolve's issued ordinary share capital.

The Directors  believe  that  the  strategic cross holding with Evolve will  encourage  mutual business
development and enhance the opportunities for each company in their respective areas of interest in the
quoted company arena. The Directors also believe that the Evolve Agreement provides a basis to leverage a
larger  skills  base  in  the  small companies' arena and could lead to new  fund  launch  and  corporate

Evolve  is  quoted on AIM and owns approximately 54 per cent. of Astaire Group plc, which is the  holding
company of a number of regulated financial services businesses, including:

*       Astaire Securities plc - provides research and stockbroking services to institutional investors 
        for UK quoted companies, with particular expertise in the Oil and Gas, Mining, Leisure, Telecoms, 
        Technology, Life Sciences, Transport and Support Services sectors and, through its corporate
        finance business, fund raising and corporate advisory services to quoted companies;

*       Rowan Dartington & Co. Limited - provides private client stockbroking and wealth  management
        services through a network of branch offices in the southwest and southeast of England; and

*       Astaire & Partners Limited - provides agency stockbroking and private client investment management
        for a range of international clients.

Astaire has recently acquired Dowgate Capital plc and Ruegg & Co Limited. Evolve, through its acquisition
of  Whim  Gully Capital LLP, has also recently acquired the business and associated assets of St Helen's
Capital Plc, which had previously been PLUS Corporate Adviser to Bluehone Holdings.

Subsequent  to  its acquisition by Evolve, Whim Gully Capital LLP changed its name to St  Helens  Capital
Partners  LLP  and assumed the role of PLUS Corporate Adviser to Bluehone Holdings. As a  result  of  the
conflict  of interest created by Evolve's ownership of St Helens Capital and its 19.9 per cent.  interest
in  the Company, St Helens Capital has resigned as the Company's PLUS Corporate Adviser and FinnCap  have
been appointed in its place.

If further Ordinary Shares are issued by Bluehone Holdings in the two years following 11 November 2009 (a
"New  Issue") then Evolve will have the right to subscribe for further Ordinary Shares at the same  price
as the New Issue in order to maintain its interest in Bluehone Holdings at 19.9 per cent. Pursuant to the
Lock  In  Agreement  referred to in paragraph below, Evolve has agreed not to sell  any  Ordinary  Shares
during  this two-year period. Evolve also has the right to appoint a non-executive director to the  board
of  the Company and Michael Jackson, a non-executive director of Evolve, has been appointed to the  Board
as a non-executive Director.
FSA approval of the investment in Bluehone Holdings by Evolve was received on 10 August 2009.

Investment in Elderstreet

Bluehone  Holdings  has  acquired  a  19.9%  equity interest  in  Elderstreet  Investments  Limited.  The
consideration  for  this  acquisition  was the allotment to Elderstreet  of  6,000,000  Ordinary  Shares,
representing approximately 5.1% of the Issued Share Capital.

The  investment in Elderstreet represents a strategic investment by the Group and will represent Bluehone
Holdings' first direct interest in a private equity focussed investment manager.

Elderstreet provides funding for management buy-outs and development capital in most industry sectors and
has  a  specialist technology practice investing in the software and computer services market. As  at  30
September  2009,  Elderstreet had more than £30.0 million under management  for  both  institutional  and
private  investors. The company manages the Elderstreet VCT plc which has invested in management  buyouts
and development capital investments in both mature and early stage businesses.

The  Directors  believes  that  this  strategic investment will enable  both  businesses  to  develop  in
complementary areas and may also lead to co-marketing of funds and sharing of resources. Michael  Jackson
is also a non- executive director of Elderstreet.

FSA approval of the investment in Elderstreet by Bluehone Holdings was received on 26 October 2009.


The Directors of the Company are as follows:

John Wheatley, (Non-executive Chairman) (aged 58)

John  qualified  as a Chartered Accountant in 1974 with Peat Marwick Mitchell. After a three-year  period
working  as  finance  director  of a small packaging manufacturer in West Bromwich  he  returned  to  the
profession  and became a partner in the Midlands Region of KPMG in 1985. He has had extensive  experience
of  working with private companies in a wide range of industries. He left KPMG at the end of 1998 to  set
up  his  own practice. He is chairman of Cradley Group Holdings plc, a printing group based in  the  West
Midlands. In addition he holds a number of other non-executive directorships.

Gordon Harvey, (Non-executive Director) (aged 66)

Gordon has wide Midlands based connections and also has considerable investment experience. He is a  non-
executive  director of Bluehone AiM VCT2 plc and an investment consultant with the stockbroking  firm  of
Williams de Broë. He became a member of the Birmingham Stock Exchange in 1966 and has continued to manage
private  client portfolios. In addition to this, he has past experience in bringing companies  to  public
markets.  He  is  also  Chairman of Margetts Holdings Limited which operates as a successful  Unit  Trust
management  company  as  well  as  an Independent Financial Adviser. He is  currently  President  of  the
Birmingham and West Midlands Branch of the Securities & Investment Institute.

William (Bill) Brown (Finance Director) (aged 46)

William  Brown is a Chartered Accountant and has been advising and investing in small companies for  well
over  20 years. He co-founded Bluehone in 2005. Prior to founding Bluehone, Bill was Head of Pan European
Small  Companies at ISIS Asset Management (F&C). He has been actively involved in small quoted  companies
since 1995 when he launched the AiM Trust.

Robert Mitchell (Executive Director) (aged 43)

Robert  Mitchell, a BsC Economics and MBA graduate, began his career at Throgmorton Investment Management
in  1987 initially as a smaller companies analyst and latterly as a fund manager of specialist small  cap
pension  funds.  When Throgmorton merged with Framlington, Robert took on balanced pension  fund  remits.
Robert  joined F&C in 1995 to support the launch of the AiM Trust and assist in its management. A  member
of the Securities Institute, Robert is lead manager for Bluehone AiM VCT2.

Stuart Rollason (Executive Director) (aged 48)

Stuart  Rollason,  a qualified medical doctor, has a history of both medical practice  and  research  and
analysis.  Following  five  years  of  medical practice and six  years  of  medical  research  at  Oxford
University,  Stuart changed career direction and joined Beeson Gregory as a research analyst specialising
in  biotechnology, pharmaceuticals and healthcare. Subsequent similar roles at WestLB Panmure and  Nomura
International  led to Stuart's appointment at FCAM where he went on to manage the ISIS  UK  Institutional
Smaller Companies Fund and UK Small cap sub-fund of a pooled pension fund. Stuart's current focus  is  on
investing in small caps for Active Capital Trust.

Michael Jackson (Non-executive Director) (aged 58)

Michael Jackson has specialised in raising finance and investing in the smaller companies sector for  the
past  20  years. He qualified as a Chartered Accountant with Coopers & Lybrand and spent 23  years  as  a
director  of Sage plc. During that time Sage's capitalisation rose from approximately £1 million  to  its
current  level  of  over £2 billion. Michael is founder and chairman of Elderstreet Investments  Limited,
which  is  best known for its investment in young, ambitious technology businesses. Michael is a director
and  personal investor in many other quoted and unquoted companies, many of which have been  involved  in
the technology sector.

Additional information on the Directors

In  addition  to  their  directorship  of the Company, the Directors  hold  or  have  held  the  following
directorships or have been partners in the following partnerships within the five years prior to the  date
of this announcement:

John Wheatley           Current Directorships / Partnerships          Past Directorships
                        Frederick Woolley Limited                     Mentor-UK.Com Limited
                        AFH Price Pearson Wheatley Limited            Southern Bear Plc
                        Cradley Group Holdings Plc                    V Eight Limited
                        PPW Financial Services Limited                Maple (183) Limited
                        Bromsgrove School Foundation                  MPT Holdings Limited
                        CW Xperts Limited                             JDR Products Limited
                        Dodderhill School                             
                        FW Cables Limited                             
                        FW Cables  (Holdings) Limited                 
                        Advantage Designs Limited                     
                        AFH Group Limited                             
                        Crofts & Assinder Holdings Limited            
                        Price Pearson Wheatley Partnership            

Gordon Harvey           Current  Directorships/ Partnerships          Past Directorships
                        Bluehone AIM VCT Plc                          TFP Wealth Management Limited
                        Bluehone AIM VCT 2 Plc                        
                        Margetts Fund Management Limited              
                        Margetts Holdings Limited                     
William Brown           Current  Directorships/ Partnerships          Past Directorships
                        Target Dealing Company Limited
                        WB (No.1) Limited                             
                        Impax Environmental Markets Plc               
                        Bluehone General Partner (DCP) Limited        
                        Bluehone Partner Limited                      
                        Bluehone Ventures Limited                     
                        Bluehone Ventures Nominees Limited            
                        Landround Plc (in administration)             
                        Bluehone Limited                              
                        Bluehone Investors LLP                        
Robert Mitchell         Current  Directorships/ Partnerships          Past Directorships
                        Bluehone Investors LLP                        ISIS Equity Partners Plc
                        Target Dealing Company Limited                Ivory & Sime UK Discovery Limited
                        Bluehone General Partner (DCP) Limited        The Columbus Dealing Company Limited
                        Bluehone Partner Limited                      
                        Bluehone Ventures Limited                     
                        Bluehone Ventures Nominees Limited            
                        Bluehone Limited                              
                        Resources In Insurance Group Plc              
Stuart Rollason         Current  Directorships/ Partnerships          Past Directorships
                        Bluehone Investors LLP
                        Bluehone General Partner (DCP) Limited        
                        Bluehone Partner Limited                      
                        Bluehone Ventures Limited                     
                        Bluehone Ventures Nominees Limited            
                        Aortech International Plc                     
                        Bluehone Limited                              
                        Cambridge Sensors Limited                     
Michael Jackson         Current  Directorships/ Partnerships          Past Directorships
                        2Zero Software Limited                        Alterian (Newbury) Limited
                        Access Intelligence Plc                       Apertio Limited
                        Aconite Technology Limited                    Astaire Group Plc
                        Advanced Computer Software plc                Computer Software Group Limited
                        Burra Burra Distribution Limited              Computer Software Limited
                        Concorde Solutions Limited                    Guildford Acquisitionco Limited
                        Contact London (Services) Limited             Guildford Bankco Limited
                        Contis Group Limited                          Guildford Equityco Limited
                        Due North Limited                             Guildford Debtco Limited
                        E-Trader Group Limited                        Guildford Guaranteeco Limited
                        Ether-Ray Ltd                                 Guildford Midco 1 Limited
                        Elderstreet Ballater Limited                  Guildford Midco 2 Limited
                        Elderstreet Capital Partners Nominees Ltd     Interbizz Financial Systems Limited
                        Elderstreet  General  Partner  (Kinetique)    The Kellan Group Plc
                        Ltd                                           Medialoom Limited
                        Elderstreet Holdings Limited                  Mediasurface Limited
                        Elderstreet Investments Limited               Netstore Ltd
                        Elderstreet Private Equity Limited            Planit Employee Incentive Trustees Ltd
                        Elderstreet VCT plc                           Planit Holdings Limited
                        Evolve Capital plc                            Pinnacle Computer Systems Limited
                        Fords Packaging Systems 1998 Limited          Retirement Villages Limited
                        Fords Packaging Systems Limited               Searchspace Group Limited
                        Forsyth Whitehead & Associates Ltd            Steve Dudman Plant Limited
                        Intelligent Environments Group Plc            Systems Team Bristol Limited
                        The Kellan Group plc                          Sage (South Gosforth)
                        Lupus Capital plc                             The Sage Group plc
                        Management Services 2000 Limited     Group plc
                        Netcall Plc                                   Wimbledon 123 Limited
                        Old Vicarage Nominees Limited                 Young Enterprise London Ltd.
                        Royal Albert Hall Developments Ltd            
                        Select Software Tools plc                     
                        Soames Limited                                
                        Solcara Limited                               
                        Sky High plc                                  
                        Snacktime plc                                 
                        Snacktime UK Limited                          
                        Syncissue Limited                             
                        The Web Factory Birmingham Ltd
                        Willow Starcom Limited
                        Wired Gov Limited
On  14  May  1998 and as disclosed at that time, whilst John Wheatley was acting as liquidator  for  W  F
Bannocks Ltd, he was reprimanded by the Institute of Chartered Accountants for failing to file an  annual
return in respect of that company and was fined £500.

Michael  Jackson  was  a  director  of Steve Dudman Plant Limited  which  was  ordered  to  be  wound  up
compulsorily on 23 October 2000.

Michael  Jackson  was a director of Group Plc ("Travelstore") Travelstore  was  wound  up
voluntarily  by  its  members  on  16  December 2003. According to  the  members'  voluntary  winding  up
declaration  of  solvency dated 16 December 2003, Travelstore would be able to  pay  its  debts  in  full
together  with  interest at the official rate within a period of 12 months from the commencement  of  the
winding up.

Michael Jackson was a director of Medialoom Limited which was wound up voluntarily by creditors on 9 July

Michael Jackson was a director of Weyrad Electronics Limited ("Weyrad"). In January 2000, Weyrad was  put
in  administration. Weyrad was struck off the register under section 652(5) of the Act on 8 June 2004 and
dissolved on 15 June 2004.

Michael  Jackson  was  a  director  of  Worktops (No 1) Limited  ("Worktops").   Worktops  was  wound  up
voluntarily by its members on 9 June 2003. According to the members' voluntary winding up declaration  of
solvency dated 9 June 2003, Worktops will be able to pay its debts in full together with interest at  the
official  rate  within  a  period of 12 months from the commencement of  the  winding  up.  Worktops  was
dissolved on 10 December 2003.  However, the dissolution was subsequently held to be void pursuant  to  a
court order made on 9 June 2005.  Worktops (No 1) Limited was then dissolved on 15 April 2008.

Michael Jackson was a director of Select Software Tools Plc ("Select"). On 27 May 1999, Select was put in
administration  and  on  19  August 1999 the creditors of Select approved the voluntary  arrangement  put
together by the administrator.

Michael Jackson was a director of Interbizz Financial Systems Limited which went into receivership on  10
April 2003.

Michael Jackson was a director of Abercorn Place School plc, which was wound up via a Creditors Voluntary
Liquidation on 8 March 1996 and was subsequently dissolved on 3 July 1998.

Michael  Jackson was a director of both EU Smart Limited and Wimbledon 123 Limited, which were  dissolved
via a voluntary strike off on 5 December 2006 and 20 November 2007 respectively.


The  Vendor  Concert  Party comprises William Donald Brown, Robert James Grenville  Mitchell  and  Stuart
Bernard  Rollason,  all  of whom are Directors of the Company. As at the date of this  announcement,  the
Vendor Concert Party is interested in 75,000,000 Ordinary Shares representing approximately 63.2 cent. of
the Issued Share Capital.

No  individual member of the Vendor Concert Party is interested in Ordinary Shares carrying more than  30
per cent. of the Company's voting share capital. However, the members of the Vendor Concert Party between
them  hold more than 50 per cent. of the Company's voting share capital and (for so long as they continue
to  be  treated  as  acting  in  concert) may accordingly increase their aggregate  shareholding  without
incurring a further obligation under Rule 9 of the City Code to make a general offer, although individual
members  of  the Vendor Concert Party will not be able to increase their percentage shareholding  through
the Rule 9 threshold without Panel consent.


The  interests of the Directors, persons connected with them and persons with an interest of 3% or more  in
the Issued Share Capital are as follows:

Name                                                Number of Ordinary Shares                        %
John Wheatley                                                1,000,000                              0.84
Gordon Harvey                                                1,000,000                              0.84
William Brown                                               31,875,000                             26.86
Robert Mitchell                                             31,875,000                             26.86
Stuart Rollason                                             11,250,000                              9.48
Michael Jackson                                                    Nil                               Nil
Evolve                                                      23,615,411                              19.9
Elderstreet                                                  6,000,000                              5.06



The Directors believe the following risks to be the most significant for potential investors.  However, the
risks  listed  do  not necessarily comprise all those associated with an investment  in  the  Company.   In
particular,  the Company's performance may be affected by changes in market or economic conditions  and  in
legal, regulatory and tax requirements.

If any of the following risks were to materialise, the Company's business, financial conditions, results or
future operations could be materially adversely affected.  Additional risks and uncertainties not presently
known  to  the Directors, or which the Directors currently deem immaterial may also have an adverse  effect
upon the Company.

The list below is not exhaustive, nor is it an explanation of all the risk factors involved in investing in
the Company and nor are the risks set out in any order of priority.

1.          PLUS Markets
        The  Company's proposed admission to the PLUS-quoted Market is entirely at the discretion  of  PLUS
        Markets. The Ordinary Shares are not presently listed or traded on any stock exchange. Any  changes
        to  the  market  trading environment, in particular the PLUS Rules could for  example,  affect  the
        ability of the Company to maintain a trading facility on the PLUS-quoted market.

2.          Investment in PLUS-quoted securities
        An  investment in shares traded on PLUS is perceived to involve a higher degree of risk and  to  be
        less  liquid than investment in companies whose shares are traded on AIM or listed on the  Official
        List. An investment in Ordinary Shares may be difficult to realise. Prospective investors should be
        aware  that the value of an investment in the Company may go down as well as up and that the market
        price  of  the  Ordinary Shares may not reflect the underlying value of the Company. Investors  may
        therefore realise less than, or lose all of, their investment.
3.          Share price volatility and liquidity
        The share price of quoted companies can be highly volatile and shareholdings illiquid. The price at
        which  the Ordinary Shares are quoted and the price which investors may realise for their  Ordinary
        Shares  will be influenced by a large number of factors, some of which are specific to the  Company
        and  its  operations and some of which may affect quoted companies generally. These  factors  could
        include  the  performance of the Company, large purchases or sales of Ordinary Shares,  legislative
        changes and general economic, political or regulatory conditions.

4.          Taxation
        This  Document  has  been  prepared in accordance with current UK  tax  legislation,  practice  and
        concession  and  interpretation thereof. Any change in the Company's  tax  status  or  in  taxation
        legislation could affect the Company's ability to provide returns to Shareholders or alter post tax
        returns to Shareholders. Statements in this Document concerning the taxation of holders of Ordinary
        Shares  are  based on current tax law and practice which is subject to change. The taxation  of  an
        investment in the Company depends on the individual circumstances of investors.
5.          Dependence on key personnel
        The  Company's  future success is substantially dependent on the continued services and  continuing
        contributions  of  its  Directors and senior employees. The loss of the  services  of  any  of  the
        Company's  executive officers or other key employees could have a material adverse  effect  on  the
        Company's business.
        The  Company's  future  success will also depend on its ability to attract  and  retain  additional
        suitably  qualified and experienced employees. There can be no guarantee that the Company  will  be
        able  to  continue to attract and retain such employees, and failure to do so could have a material
        adverse  effect on the financial condition, results or operations of the Company. In addition,  the
        future  success of the Company may be dependent on the Company's ability to integrate new teams  of
        professionals.  There can be no guarantee that the Company will be able to recruit  such  teams  or
        effect  such  integration. Failure to do so could have a material adverse effect on  the  financial
        condition, results or operations of the Company.

6.          Dependence on availability of capital
        The  Company's  business  is  dependent upon the availability of adequate  funding  and  regulatory
        capital  under applicable regulatory requirements. Although the Company expects to have  sufficient
        capital  to  satisfy  all  of  its capital requirements, there can be no  assurance  that  any,  or
        sufficient,  funding  or regulatory capital will continue to be available to  the  Company  in  the
        future on terms that are acceptable to it.

7.          Dependence on Stock Market conditions
        The  Company's business is highly dependent on stock market conditions. Any decline  in  the  stock
        market  could  have a material adverse effect on the financial condition, results or operations  of
        the Company. The success of the Company depends largely upon the expertise of the current Directors
        and  their  ability  to  identify suitable investment opportunities  and  implement  the  Company's
        strategy.   Share  market  conditions may affect the ultimate value of the  Company's  share  price
        regardless  of  future operating performance, and the market price of the Ordinary Shares  may  not
        reflect the underlying value of the assets of the Company;

8.          Risk of damage to reputation and negative publicity
        The  Company's  ability  to retain existing management contracts and to  attract  new  business  is
        dependent  on  the  maintenance  of its reputation. The Company is  vulnerable  to  adverse  market
        perception  as  it  operates in an industry where a high level of integrity  and  client  trust  is
        paramount.  Any  perceived,  actual or alleged mismanagement,  fraud  or  failure  to  satisfy  the
        Company's  responsibilities,  or  the negative publicity resulting  from  such  activities  or  the
        allegation  by a third party of such activities (whether well founded or not) associated  with  the
        Company, could have a material adverse effect on the financial condition, results or operations  of
        the  Company.  In addition, following downturns in the equity markets and the resulting  heightened
        consumer  and  media  interest in the financial services industry, any negative publicity  (whether
        well  founded  or  not) associated with the business or operations of the Company could  result  in
        reputational damage and could have a material adverse effect on the financial condition, results or
        operations of the Company.

9.          Inadequacy of systems and controls
        The  Company's  ability  to maintain operational and financial controls and  provide  high  quality
        service to clients depends, in part, on the efficient and uninterrupted operation of its management
        information  systems, including its computer systems. There can be no assurance that these  systems
        will  function  as  required. Further, there can be no guarantee that as the Company  increases  in
        size,  its  systems,  including its information technology systems, will be  able  to  be  upgraded
        appropriately  or  in a timely manner, so as to function as required by the greater  demands  of  a
        larger  business. Any damage to, failure of or inability to upgrade appropriately,  its  management
        information systems, could result in interruptions to the Company's financial controls  and  client
        services.  Such  interruption  could have a material adverse effect  on  the  financial  condition,
        results or operations of the Company.

10.         Dependence on third party service providers
        The  Company  is reliant upon third party service providers for certain aspects of its  businesses.
        Any  interruption or deterioration in the performance of these third party service providers  could
        impair the timing and quality of the Company's services. In addition, if the contracts with any  of
        these  third party service providers are terminated, the Company may not find alternative outsource
        providers  on  a timely basis or on equivalent terms. The occurrence of any of these  events  could
        impact upon the Company's reputation and have a material adverse effect on the financial condition,
        results or operations of the Company.

11.         Risk of loss of business continuity
        The  Company's business operations, information systems and processes are vulnerable to  damage  or
        interruption from fires, power loss, telecommunication failures, bomb threats, explosions or  other
        forms  of  terrorist activity and other natural and man-made disasters. These systems may  also  be
        subject to sabotage, vandalism, theft and other similar misconduct. The same is true of third party
        service providers on which the Company depends. The Company has in place business continuity  plans
        covering  current business requirements, which have been tested and are considered by the Board  to
        be  adequate. However, if the disaster recovery plans are found to be inadequate, there could be an
        adverse impact on the Company's financial condition, results or operations.
12.         Competition risks
        The Company operates in a highly competitive market. Some of the Company's competitors have greater
        financial  and  other resources than the Company and, as a result, may be in a better  position  to
        compete  for future business opportunities. Larger competitors are able to advertise their services
        on  a  regional  or national basis. This competition could have a material adverse  effect  on  the
        Company's  financial condition, results or operations as well as the Company's ability  to  attract
        and  retain highly skilled individuals. There can be no assurance that the Company can, or will  be
        able to, compete effectively.

13.         Litigation
        Legal  proceedings  may  arise  from time to time in the course of the  Company's  businesses.  The
        Directors  cannot  preclude  that  litigation may be brought against  the  Company  and  that  such
        litigation  could have a material adverse effect on the financial condition, results or  operations
        of the Company. The Company's businesses may be materially adversely affected if the Company and/or
        its  employees  or agents are found not to have met the appropriate standard of care  or  exercised
        their  discretion  or  authority in a prudent or appropriate manner  in  accordance  with  accepted
        standards.  Although the Company maintains professional indemnity insurance against such  risks  of
        its  employees or agents, there is no guarantee that any insurance in place will cover all, or  any
        part, of any liability incurred by the Company in any such circumstances.

14.         Employee misconduct
        The  Company  runs  the risk that employee misconduct could occur. Misconduct  by  employees  could
        include  binding the Company to transactions that exceed authorised limits or present  unacceptable
        risks, or hiding unauthorised or unsuccessful transactions from the Company, which, in either case,
        may result in unknown or unmanaged risks or losses. Employee misconduct could also involve improper
        use   of  confidential  information,  which  could  result  in  regulatory  sanctions  and  serious
        reputational harm. It is not always possible to deter employee misconduct and the precautions which
        the  Company  takes to prevent and detect this activity (including an ongoing training  and  review
        processes  and  authorising only certain personnel to carry out certain actions on  behalf  of  the
        Company) may not be effective in all cases. In addition, as the Company grows, such precautions may
        need  to be updated and/or expanded to increase their effectiveness. Failure to do so, or to do  so
        in  a timely fashion, may lead to such precautions becoming ineffective, or less effective, against
        the  risks against which it is intended they mitigate. The Company maintains professional indemnity
        insurance,  but there can be no guarantee that any loss suffered by the Company would be adequately
        covered by such insurance, particularly in the event of employee misconduct.

15.         Regulatory Risk
        The regulatory regime applicable to the Company is under regular review and future changes made  by
        a  regulatory body could impose a greater burden upon the Company in terms of additional compliance

16.         Investment Performance
        The  marketplace  will continually assess the Company's investment performance  and  the  Company's
        ability  to  attract  investment  into the funds that it manages and  the  avoidance  of  excessive
        redemption levels will be a product of this continuous assessment. Failure to provide adequate  and
        consistent  returns on the funds managed by the Company could lead to increased redemptions  and  a
        loss  of  reputation  in the marketplace. This risk may adversely affect the  value  of  the  funds
        managed by the Company and hence the value of the Company itself.
17.         Dividends
        Dividends  may only be paid out of the profits of the Enlarged Group.  Therefore there  can  be  no
        assurance as to the payment, level or frequency of future dividends.


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

"Active Capital"                        Active Capital Trust plc
"Acquisition"                           the  acquisition  by  Bluehone Holdings of the  entire  issued  and
                                        unissued share capital of Bluehone in accordance with the terms  of
                                        the Acquisition Agreement
"Acquisition Agreement"                 the  agreement dated 15 October 2009 between Bluehone Holdings  and
                                        the  shareholders  of  Bluehone under which Bluehone  Holdings  has
                                        agreed, subject to certain conditions, to acquire the entire issued
                                        share capital of Bluehone
"Admission" or "Re-Admission"           admission of the Issued Share Capital to trading on the PLUS-quoted
"AIM"                                   the AIM market of the London Stock Exchange
"Bluehone"                              Bluehone Limited, a company incorporated in England and Wales  with
                                        registered number 5194420
"Bluehone Investors"                    Bluehone Investors LLP, a limited liability partnership established
                                        under the Limited Liability Partnerships Act 2000
"Bluehone VCTs"                         Bluehone AiM VCT plc and Bluehone AiM VCT2 plc
"Board"                                 the  board of Directors of the Company as constituted from time  to
 "City Code"                            the City Code on Takeovers and Mergers
 "Company" or "Bluehone Holdings"       Bluehone Holdings plc, a company incorporated in England and  Wales
                                        with  registered number 05455923 and formerly known as  Investments
                                        West Midlands Plc
 "CREST"                                the  Relevant  System  (as defined in the  CREST  Regulations)  for
                                        paperless  settlement of share transfers and the holding of  shares
                                        in uncertified form which is administered by Euroclear UK & Ireland
"Directors"                             Directors of the Company
"Elderstreet"                           Elderstreet Investments Limited, a company incorporated in  England
                                        and Wales with registered number 01825358
 "Evolve"                               Evolve  Capital  Plc, a company incorporated in England  and  Wales
                                        with registered number 06383902
"Evolve Agreement"                      the  agreement dated 15 October 2009 between Bluehone Holdings  and
                                        Evolve  pursuant to which Bluehone Holdings and Evolve have agreed,
                                        subject to certain conditions, to acquire shares in each other
"Evolve Consideration Shares"           the 23,615,411 New Ordinary Shares issued to Evolve on Admission
"Evolve Ordinary Shares"                ordinary shares of 1p each in Evolve
"FCAM"                                  F&C Asset Management Plc
"FinnCap"                               J M Finn Capital Markets Limited
"FSA"                                   the Financial Services Authority
"FTSE 100 Index"                        the  index  tracking the 100 companies listed on the  London  Stock
                                        Exchange  which have the highest market capitalisation and  satisfy
                                        the relevant qualifying criteria
"FTSE AIM Index"                        the  index consisting of all companies traded on AIM which meet the
                                        index's requirements for liquidity and free float
"FTSE All Share Index"                  the  capitalisation-weighted index, comprising around 800  of  more
                                        than 2,000 companies traded on the London Stock Exchange
"FTSE Small Cap Index"                  the  index  comprising companies outside the FTSE 350 Index  (which
                                        index includes the 350 largest companies in the UK)
"General Meeting"                       the General Meeting of the Company held on 9 November 2009
"Group"                                 the Company, Bluehone and Bluehone Investors
"Issued Share Capital"                  the Ordinary Shares in issue on Admission
"London Stock Exchange"                 the London Stock Exchange PLC
"Ordinary Shares"                       ordinary shares of 2p each in the capital of the Company
"Panel"                                 the Panel on Takeovers and Mergers
"PLUS Markets"                          PLUS  Markets  plc, a recognised investment exchange under  section
                                        290 of the FSMA, which is a subsidiary of PLUS Markets Group plc
"PLUS-quoted Market" or "PLUS"          the primary market for unlisted securities operated by PLUS Markets
"Shareholders"                          persons  registered as the holders of any part of the share capital
                                        of the Company
"UK"                                    the United Kingdom of Great Britain and Northern Ireland
"Vendor Concert Party"                  William  Brown, Robert Mitchell and Stuart Rollason, all  of  48/54
                                        Moorgate, London EC2R 6EJ
"Venture Capital Trust" or "VCT"        a  Venture  Capital Trust for the purposes of Part 6 of the  Income
                                        Tax Act 2007

The Directors of Bluehone Holdings plc are responsible for the contents of this announcement.

Contact Information

  • Bluehone Holdings Plc