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HARGREAVE HALE

Hargreave Hale AIM VCTs

This presentation is designed for regulated financial advisors and not retail clients

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This presentation has been prepared and issued by Hargreave Hale Limited in respect of a current offer for subscription of new ordinary shares (the "Securities") of Hargreave Hale AIM VCT 1 plc for information purposes. Although the presentation relates to the Hargreave Hale AIM VCT 1 plc offer, it also includes information on Hargreave Hale AIM VCT 2 plc. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL, ISSUE, PURCHASE OR SUBSCRIBE FOR (OR ANY SOLICITATION OF ANY OFFER TO PURCHASE OR SUBSCRIBE FOR) THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION. This presentation is an advertisement and not a prospectus and no reliance may be placed for any purposes whatsoever on the information contained herein or on its completeness. This presentation is designed for regulated financial advisors and not retail clients. Investors should not subscribe for or purchase any Securities referred to in this presentation except on the basis of the information in the prospectus (including the section on risk factors) that has been produced in connection with the offering of the Securities and any supplement thereto. All investments are subject to risk. The value of the Securities may go down as well as up. Throughout this presentation there are many references to past performance, including information about the VCT shares, assets and dividends as well as other investments such as the Marlborough Special Situations unit trust, investors should be aware that past performance is not a reliable indicator of future returns. Potential investors are advised to seek expert financial advice before making any investment decision. This document also contains information on the tax benefits of investing in VCTs. The value of these benefits depends on the individual circumstances of the investor and may be subject to future changes. Both VCTs invest in the Marlborough Special Situations Fund. The Investment Manager will invest up to 75% of the net proceeds of any issue

• f new shares of both Companies into the Marlborough Special Situations Fund subject to a maximum of 20% of the gross assets of each
• Company. Performance figures for the Marlborough Special Situations Fund are available in the appendix.

Hargreave Hale Limited is authorised and regulated by the Financial Conduct Authority, no 209741.

Important Notice

Hargreave Hale: Now Part of CGWM

* As at 30 September 2017 following CGWM acquisition of Hargreave Hale Ltd

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assets under management, administration and management contract, shown by service:

3.8 4.2 4.9 5.8 14.5 3.7 3.5 3.3 3.4 3.6 3.3 3.6 3.8 4.8 6.8 5 10 15 20 25 30 2013 2014 2015 2016 2017 Discretionary Advisory Execution Only

26,000

Over private clients, intermediaries, corporates and charities looked after across four offices UK | Guernsey | Isle of Man | Jersey

£24 billion*

More than

Centralised and disciplined investment process

• ffering multi-currency portfolios

Our services include: Discretionary portfolio management Advisory portfolio management Fund management Wealth planning

583*

staff which includes 194* client-facing professional advisers

Broking services

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Hargreave Hale Fund Management

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• Fund management team led by Giles Hargreave.
• 14 fund managers and analysts with over 250 years experience
• Advise 7 unit trusts for Marlborough Fund Managers and two Hargreave Hale AIM VCTs
• 19 years managing investment in UK small and Micro Cap companies
• 13 years managing VCTs
• Diverse set of UK long-only equity mandates
• Long term investors
• Capacity to provide extensive support to companies at every stage of the growth journey:
• Private company growth capital
• Public company growth capital
• Secondary market activity

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Investment Team

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Giles Hargreave – Co-manager of the Hargreave Hale AIM VCTs

In addition to the AIM VCTs, Giles has been the investment adviser to the Marlborough Special Situations Fund since

• 1998. He is also the investment adviser to the Marlborough UK Micro Cap Growth Fund (with Guy Feld)

and the Marlborough Nano-Cap Growth Fund (with Guy Feld and David Walton). Giles heads up Hargreave Hale’s investment committee and chairs the weekly meetings in which the team reviews existing and potential investments.

Oliver Bedford – Co-manager of the Hargreave Hale AIM VCTs

Oliver graduated from Durham University in 1995 with a degree in Chemistry . He served in the British Army for 9 years before joining Hargreave Hale in 2004. Oliver co-manages the VCT's investment portfolios with Giles and supports the

• ther unit trusts through the investment committee. Oliver is a Director of Hargreave Hale AIM VCT 1 plc and Hargreave

Hale AIM VCT 2 plc.

Sid Chand Lall Richard Hallett Will Searle David Walton Eustace Santa Barbara Joshua Northrop Shane De Bruhn- Smith Will Rosier Guy Feld George Finlay

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Small Cap Investing

IMA UK Smaller Companies Performance

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Sources: IMA,Trustnet & Bloomberg 3 January 2018

• 10.0%

40.0% 90.0% 140.0% 190.0% 240.0%

Marlborough Special Situations IMA UK Smaller Companies Average FTSE Small Cap Index Excluding IT Total Return FTSE All Share Index Total Return FTSE 100 Index Total Return

1 Year 5 Year 10 Year

73.8% 84.5% 148.9% 178.8% 292.6%

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Finance Bill 2017: What Changed?

Qualifying Investments

• State Aid lifetime limit unchanged at £12m (£20m for knowledge intensive companies).
• State Aid annual limit unchanged at £5m (£10m for knowledge intensive companies).
• Age limit

1 unchanged at 7 years of from first commercial sale (10 years for knowledge intensive).

• New principles based approach to encourage ‘higher risk’ investments and prevent use of capital preservation

schemes.

• Qualifying Investment Test increased from 70% to 80%

2.

• New requirement to invest 30% of proceeds

3.

• No grandfathering rights.
• No secured loans.
• Lending must be made at commercial rates, debt interest cannot used to return equity capital to investors.
• 1. This rule does not apply if the company have raised state aided money within the first 7 years.
• 2. For accounting period starting on or after 6 April 2019.
• 3. Within first full financial year post fundraise, with effect from 6 April 2018.

There were no changes to the rules relating to the non-qualifying investments. 7

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20 40 60 80 100 120 31/10/2014 31/10/2015 31/10/2016 31/10/2017

VCT 1 VCT 2

Finance Act 2015: Impact

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• Investment strategy. No changes, continued focus on growth and capital
• Qualifying investments. Greater focus on earlier stage companies
• Non-qualifying investments. Official list only, greater emphasis on mid-large caps with more liquidity

VCT 1 & 2 value invested vs no. of investments Average qualifying company revenue

Sources: HH & Bloomberg

0.0 4.0 8.0 12.0 16.0 20.0 24.0 0.0 4.0 8.0 12.0 16.0 2013 2014 2015 2016 2017

No of Investments Value invested £m

Value Invested No of investments

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Why Merge?

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• Harmonised legislation across both portfolios for 5 years.
• Significant overlap in two portfolios.
• Simplified fund structure will create significant operational benefits:



50% reduction in fund administration burden.



Continue to scale without adding to support team.



Allows FM to allocate more time to portfolio management.

• Cost synergies will allow VCT to recover merger costs within 12 months.
• Improved shareholder communication.

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What are we looking for?

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A good company can be defined by many things

• Strong and experienced management team
• Intellectual property
• High cash generation
• Customer profile
• Competitive position
• Strong business model
• Strong balance sheet
• Revenue visibility
• Pricing power

We like AIM because it is:

• Home to 1000+ companies including many global leaders, innovators and highly profitable companies
• Large & difficult to cover
• Under-researched and inefficient
• Unpopular & misunderstood

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Qualifying Investments

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• AIM listed companies. Large, mature and diversified portfolio of qualifying companies listed on AIM. The majority
• f the qualifying portfolio is/will be listed on AIM.
• Private companies. Flexible investment strategy allows the VCT to make qualifying investments in private
• companies. Investments are initially held at book cost and then fair value.
• Sourced from a variety of channels. These include a wide network of sell side brokers, industry veterans,

company management or entrepreneurs.

• Meetings with senior management. On site or at our offices.
• In house analysis. Study financial statements and analyst notes, test models and assumptions to establish value or

growth potential. Document meeting notes to cover fundamentals, valuation and potential risks. The Hargreave Hale AIM VCTs are sector agnostic, opportunistic and highly diversified.

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Non-Qualifying Investments

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• Direct Equities. Opportunistic use of best ideas from across the fund management team. Focus on growth at a

reasonable price. Looking to generate alpha within UK mid-large caps. Flexible allocation allows adjustments to equity risk to reflect market outlook.

• Marlborough Special Situations Funds (MSSF). Used to flex UK small cap exposure and reduce cash drag

through liquid investment.

• Cash & Fixed Income. Used as a defensive asset class to reduce portfolio risk/volatility, increase liquidity and

provide income and capital growth. Allocations can vary from nil to 40%.

VCT 1 Non-qual performance (pence per share) Non-Qualifying metrics

Sources: HH & Bloomberg

As at 31 Dec 2017 VCT 1 VCT 2

% of NAV (inc MSSF) 26.4% 34.4% % of NAV (exc MSSF) 18.8% 20.6% Average Market Cap £16.5bn £17.6bn Average Revenue £35.4bn £37.3bn Average PBT £2.6bn £2.7bn

(1.8) (1.3) (0.8) (0.3) 0.2 0.7 1.2 1.7

01/10/2014 01/10/2015 01/10/2016 01/10/2017

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Risk Management

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• Investment size reflects risk/reward. Typically bigger weightings to profitable / near profitable companies with

more stable business models and higher revenue visibility.

• Diversified portfolio. 86 qualifying investments with soft limit of 5% of NAV in any single direct equity. 27 non-

qualifying investments.

• Actively manage portfolio to control volatility. Can reduce allocation to equity risk during times of market stress

through disposals from within non-qualifying portfolio.

• Monitor portfolio liquidity. This ensures the portfolios can service the share buy back policy and raise significant

cash if necessary

• Quarterly risk report. Risk metrics include portfolio risk, liquidity and volatility

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Liquidity & Volatility

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VCT 1: (£67,143,707) 5 Day Liquidity

Top 10: £4,111,426 (6.1%) Remaining Qualifying Investments: £4,51,581 (6.0%) Non Qualifying Investments: £10,325,709 (15.34) Fixed Income: £0 (0%) Marlborough Special Situations: £5,095,786 (7.6%) Cash: £8,961,761 (13.3%) Total: £32,546,263 (48.6%) VCT 2: (£57,068,430)

5 Day Liquidity

Top 10: £1,733,200 (3.0%) Remaining Qualifying Investments: £2,482,504 (4.4%) Non Qualifying Investments: £10,670,987 (18.7%) Fixed Income: £155,540 (0.3%) Marlborough Special Situations: £7,929,225 (13.9%) Cash: £7,465,902 (13.1%) Total: £30,437,358 (53.3%)

Volatility (31 Dec 2017) 3 Y Vol 5Y Vol Marlborough Special Situations 12.51% 11.08% FTSE AIM ALL SHARE TR 9.64% 10.59% FTSE 100 TR 10.10% 10.31% Hargreave Hale AIM VCT 1 8.83% 9.61% Hargreave Hale AIM VCT 2 8.92% 9.11% Invesco Perpetual High Income 8.48% 8.44%

*the 5 day liquidity value for each holding is calculated by taking 25% of the daily average trading volume and multiplying by 5 and then by the share price at the time of the calculation. i.e. assuming we occupied 25% of the daily trading volume, this is how much we could liquidate over five days. NOTE: in the case where 25% of the 5 day liquidity value exceeds the size of the investment, we assume we would be able to liquidate the entire investment.

Sources: HH & Bloomberg

6.00% 8.00% 10.00% 12.00%

Invesco Perpetual High Income Hargreave Hale AIM VCT 2 Hargreave Hale AIM VCT 1 FTSE 100 TR FTSE AIM ALL SHARE TR Marlborough Special Situations

5 Year Annualised Volatility

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36.6% 1.4% 13.6% 34.1% 5.9% 4.2% 4.2% Information Technology Industrials Health Care Consumer Discretionary Materials Consumer Staples Telecommunication Services Financials

New Investments: 12 months to 31 December 2017.

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• 22 new qualifying investments, including 4 investments into private companies
• Total new investment of £13.9m.
• Current value £20.9m equates to an average return of 50.0% on those investments made within the past 12 months.
• 16/22 new qualifying investments were into companies already known to the fund management team.

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Deal Flow

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Sources: Hargreave Hale, Broker Forecasts & Bloomberg as of 31 December 2017

Investments making a profit/flat

Qualifying Investment Type Description Rev £m PBT £m Year End Invested £000 Value £000 Gain/Loss

Zoo Digital Placing Digital media developer and solutions provider 26.0 0.2 Mar-18 1,002 5,590 458% Fusion Antibodies IPO Antibody developer for therapeutic drug and diagnostics applications 3.1 0.0 Mar-18 346 877 154% Faron Placing Biopharmaceutical company developing novel tratements for medical conditions 0.4 (16.0) Dec-17 119 290 143% Angle Placing Diagnostics company focused on the Parsortix technology platform 1.1 (7.9) Apr-18 200 309 54% Gousto Private Online pre portioned recipe kits 28.0 (5.8) Dec-17 2,000 2,968 48% FairFX Placing International payment services provider 13.7 0.3 Dec-17 589 792 34% Velocity Composites IPO Manufactures advanced carbon fibre and ancillary material kits for use in the production of aircraft 20.5 0.5 Dec-17 664 804 21% Hardide Placing Provider of surface engineering technology 3.2 (1.2) Sep-18 156 170 9% Cloudcall Placing Cloud software and integrated communications company 6.9

• 2.4

Dec-17 582 582

• -%

Laundrapp Private Dry Cleaning & Laundry delivery app 6.4 (3.3) Dec-17 1,000 1,000

• -%

Honest Brew Private Online craft beer distributor 2.1 (0.4) Dec-17 1,000 1,000

• -%

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Investments making a loss

Qualifying Investment Type Description Rev £m PBT £m Year End Invested £000 Value £000 Gain/Loss

Surface Transforms Placing Manufacturer of carbon ceramic brake discs for the automotive industry 0.8 (2.3) May-18 200 197 (2%) Eagle Eye Placing Leader in digital promotions and coupon marketing solutions 15.9 (3.6) Jun-18 852 837 (2%) Faron Placing Online platform for live video gaming and tournament hosting 0.4 (16.0) Dec-17 938 914 (3%) Escape Hunt Placing Owns and operates escape rooms 1.5

• Dec-17

1,236 1,200 (3%) DP Poland Placing Dominos Pizza Poland - sub-franchise of the pizza delivery brand 11.0 (2.0) Dec-17 501 477 (5%) Mirriad IPO Developer of native in-video advertising 0.8 (9.0) Dec-17 701 667 (5%) Maxcyte (Reg s) Placing Cell transfection systems 15.6 (10.1) Dec-17 283 244 (14%) Gfinity Placing Online platform for live video gaming and tournament hosting 3.5 (1.5) Jun-18 180 154 (15%) Beeks Financial IPO Infrastructure as a service (IAAS) provider for low latency financial markets

• 946

795 (16%) Portr Private Airport luggage delivery service

• 301

211 (30%) Imaginatik Placing Innovation, software and consultancy firm 4.0 (0.8) Mar-18 114 57 (50%)

Deal Flow

Sources: Hargreave Hale, Broker Forecasts & Bloomberg as of 31 December 2017

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Hargreave Hale AIM VCT 1

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Current Net Asset Value: 83.36p (31 Dec 2017) Current no of Qualifying Investments: 77 HMRC Investment Test (30 Nov 17): 91.7% % in Top 10: 22.8% Average QI Revenue: £76.3m Average QI Net Cash: £6.9m Average QI Market Cap: £203m % NAV in Profitable Companies, MFM Special Sits, FI & Cash: 89.7%

Asset Allocation Sector Split

Consumer Discretionary 28.5% Energy 0.9% Health Care 26.6% Industrials 8.8% Information Technology 31.3% Materials 3.9% Financials 0.0% Top 10 Qual, 23% Other Qual, 38% Non-qual Equity, 19% Fixed Income, 0% MSSF, 8% Net Cash, 13%

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Hargreave Hale AIM VCT 2

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Current Net Asset Value: 121.21p (31 Dec 2017) Current no of Qualifying Investments: 70 HMRC Investment Test (30 Nov 17): 94.4% % in Top 10: 21.2% Average QI Revenue: £22.7m Average QI Net Cash: £3.2m Average QI Market Cap: £103m % NAV in Profitable Companies, MFM Special Sits, FI & Cash: 92.8%

Asset Allocation Sector Split

Consumer Discretionary 23.4% Energy 0.0% Health Care 18.7% Industrials 4.7% Information Technology 46.5% Materials 4.3% Financials 0.0% Top 10 Qual, 21.1% Other Qual, 31.2% Non-qual Equity, 20.5% Fixed Income, 0.3% MSSF, 13.9% Cash, 13.1%

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Dividend Policy & Distributions

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The VCTs aim to pay a 5% distribution yield (based on year end NAV), although the ability to pay dividends will be subject to, inter alia, the performance of the funds, their available reserves and cash resources. In those years where performance is particularly strong, the Directors may consider a higher dividend payment. Conversely in poorer years, the Directors may opt to reduce or declare that no dividends will be paid at all.

Financial year Dividends Paid Year End NAV Yield Cumulative Total VCT 1 VCT 2 VCT 1 VCT 2 VCT 1 VCT 2 2006 5p

• 4.70%
• 5.00p
• 2007

5p

• 4.80%
• 10.00p
• 2008

5p 4p 7.60% 4.10% 15.00p 4.00p 2009 2p 5p 3.10% 5.20% 17.00p 9.00p 2010 4p 5p 6.40% 4.90% 21.00p 14.00p 2011 4p 5p 6.50% 4.60% 25.00p 19.00p 2012 3.25p 5p 5.30% 5.20% 28.25p 24.00p 2013 3.75p 5p 5.20% 5.20% 32.00p 29.00p 2014 4.25p 6p 5.30% 5.20% 33.75p 35.00p 2015 4.00p 6p 5.30% 5.20% 40.25p 41.00p 2016 4.00p 6p 5.27% 5.29% 44.25p 47.00p 2017 1.75p 6p 5.46% 46.00p 53.00p 2018 2p 55.00p

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Share Buy Back Policy

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Looking After Our Shareholders: VCTs need effective share buy back policies to:  Support liquidity in the secondary market  Give shareholders a credible and fair exit route  Improves shareholder returns  Reduce barriers to investment Hargreave Hale AIM VCTs buy back policies  Buy back at 5% since 6 April 2012  Operates 4 days per week and has never been suspended  Policy is non-binding and subject to the Director’s discretion.  3 yr av. share price discounts of 5.6% in VCT 1 & 6.0% in VCT 2

• 100,000

200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 Jan-17 Mar-17 May-17 Jul-17 Sep-17 Nov-17

VCT 1 & VCT 2 Share Buy Backs

VCT 1 VCT 2

(12.0%) (10.0%) (8.0%) (6.0%) (4.0%) (2.0%) 0.0%

Discount to NAV

VCT 1 VCT 2

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Performance

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Good performance in tough markets Since launch, both of the Hargreave Hale AIM VCTs have delivered good performance in some tough markets. Investors should note that past performance is not a reliable indicator of future results.

Launch Date Company NAV GBP Dividends Paid GBP Total Return GBP Return excl. Tax Relief Return incl. Tax Relief FTSE All- Share FTSE AIM All-Share 2004 Hargreave Hale AIM VCT 1 (Ordinary Shares) 8,336 4,600 12,936 29.4% 115.6% 166.3% 11.1% 2006 Hargreave Hale AIM VCT 2 (Ordinary Shares) 12,121 5,500 17,621 76.2% 151.7% 86.0% 2.9%

The table above outlines returns as at 31 December 2017 to shareholders of the Companies. The returns, which assume an initial investment of £10,000 are net of fees and assume a gross price paid of 100 pence per share in the financial year in which the relevant share class was launched. When establishing the return net of tax relief, the calculation assumes a net cost to shareholders of 60 pence per share for shares in Hargreave Hale AIM VCT 1 and 70 pence per share for shares in Hargreave Hale AIM VCT 2, which results from the maximum relief being claimed.

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Performance

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Rolling returns over 1, 3 and 5 years to 31 December 2017 (with/without 30% income tax relief)

Company 1 Y 3 Y 5 Y 5 Y with tax relief 5Y ARR* Hargreave Hale AIM VCT 1 (O Shares) 14.38% 22.40% 62.24% 131.8% 18.3%* Hargreave Hale AIM VCT 2 (O Shares) 21.78% 27.70% 64.51% 135.0% 18.6%* FTSE 100 Total Return 11.95% 31.54% 57.24% 9.5% FTSE AIM All-Share Total Return 25.97% 55.91% 57.88% 9.6% Sources: Hargreave Hale, Bloomberg 31 December 2017 5Y ARR* is an 5 year annual rate of return inclusive of 30% income tax relief

Discrete returns for 12 month periods ending 31 December 2017 (without 30% income tax relief)

Company 12/16 to 12/17 12/15 to 12/16 12/14 to 12/15 12/13 to 12/14 12/12 to 12/13 Hargreave Hale AIM VCT 1 (O Shares) 14.38% 2.43% 5.90% 3.73% 29.98% Hargreave Hale AIM VCT 2 (O Shares) 21.78% 2.59% 4.27% 7.54% 22.60% FTSE AIM All-Share Total Return 25.97% 16.07% 6.63%

• 16.53%

21.33% Sources: Hargreave Hale, Bloomberg 31 December 2017

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For further information please contact:

• Phone: 0207 523 4837 (calls may be recorded)
• Email: aimvct@hargreave.com
• Visit: www.hargreaveaimvcts.com

Further Information