A clear leader in global asset management

Transcription

1 A clear leader in global asset management Gottex Fund Management Holdings Limited Interim Report June 2010

2 2 Gottex Fund Management Holdings Limited Gottex Fund Management Holdings Limited A leader in the alternative asset management industry Overview 03 Business and Financial Highlights 04 Chairman s Statement Financials Unaudited Interim Condensed Consolidated Financial Statements 06 Review Report on the Interim Condensed Consolidated Financial Statements 07 Unaudited Interim Condensed Consolidated Income Statement 08 Unaudited Interim Condensed Consolidated Statement of Comprehensive Income 09 Unaudited Interim Condensed Consolidated Statement of Financial Position 10 Unaudited Interim Condensed Consolidated Statement of Cash Flows 11 Unaudited Interim Condensed Consolidated Statement of Changes in Equity 12 Notes to the Unaudited Interim Condensed Consolidated Financial Statements Gottex Fund Management Holdings is a leading provider of alternative investment solutions and advisory services. Founded in 1992, Gottex had USD 7.3 billion in total fee-earning assets as at. Gottex offers a variety of investment products and related services. It employs 111 people, including over 30 investment professionals, in offices located across three continents. This allows the firm to combine in-depth local knowledge of financial markets and investors with the strength of a global presence and infrastructure. Where we are New York Boston Guernsey London Luxembourg Hong Kong Dubai Lausanne Zurich

3 Overview Financials Interim Report June Interim Report June 2010 Business Highlights Financial Highlights USD 7.3 billion in total fee-earning assets. Awarded USD 500 million in GFM and GSS mandates in Q2 to fund during Q Flagship market neutral products continue to outperform relevant indices YTD after strong Launched UCITS III fund of hedge funds product. Multi-asset endowment style products approved by US onshore broker dealer platforms ready for distribution in Q Acquired and integrated the Constellar fund of hedge funds and their management team. USD June 2010 December 2009 June 2009 Total fee-earning assets 7.3bn 8.1bn 8.2bn USD Six months to Six months to June 2010 December 2009 Six months to June 2009 Gross revenues 33m 37m 46m Management fees 30m 34m 44m Performance fees 0.2m 1m Operating (loss)/profit (1m) 1m 9m (Loss)/profit after tax (2m) (1m) 9m (Loss)/earnings per share basic (0.06) (0.03) 0.28 Headcount at period end Strong debt free balance sheet.

4 4 Gottex Fund Management Holdings Limited Message from the Chairman Joachim Gottschalk Chairman and Chief Executive Officer Joachim Gottschalk Chairman and Chief Executive Officer We believe we are taking the appropriate measures to address the remaining short term challenges of the financial crises, whilst positioning the company to benefit from the next wave of industry growth that we expect in the coming years. The first half of 2010 proved to be a difficult environment in the global capital markets due to high volatility combined with a broad based decline in the second quarter. This had a delaying effect on asset raising in our industry as well as the return of incentive fees. On the other hand, we have seen positive developments such as the continuing outperformance relative to our peers of our fl agship market neutral products, sector driven client activity and the launch of our UCITS product. We believe we are taking the appropriate measures to address the short term challenges whilst positioning the Group to benefi t from the next wave of industry growth we expect in the coming years. Key to our success is retaining and incentivising the most talented people working for our company. We remain positive about our longer term future. Overview The third public interim report of Gottex Fund Management Holdings Limited 1 covers a period that saw a slowdown in the decline of assets under management across the alternative fund of funds industry. Gottex s total fee-earning assets decreased to USD 7.3 billion by from USD 8.2 billion a year earlier. The reduction in assets and lower management fees combined with a lack of performance fees, led to total gross revenues for the fi rst half of 2010 of USD 32.9 million compared to USD 46.1 million 12 months earlier and a consolidated loss of USD 2.4 million (USD 1.6 million excluding non-controlling interest) after taxes and share based awards. Adding back these non-cash share based awards result in a cash operating profi t of USD 2.3 million for H We would like to reiterate that Gottex benefi ts from a strong balance sheet with no debt. Despite a challenging market environment, Gottex remains cash fl ow positive. Review of the first six months The rally which started in March 2009 continued during the fi rst quarter, albeit with interruptions, but a broad based correction took place in Q2 2010, initiated by the European sovereign debt crises and worries about a double dip US recession as well as China s growth prospects. As a result, equity indices retreated by more than 10% over the second quarter whilst hedge funds had to give up some of their gains but substantially less so than equities. To illustrate, the HFRI Fund Weighted Composite Index decreased by 0.21% during the fi rst half of the year. After strong performance in 2009, Gottex s flagship market neutral strategies ended the fi rst half in positive territory, thereby outperforming the main fund of funds benchmarks, most of which fi nished H in negative territory. Unfortunately, the Q2 market retreat and consequential impact on our performance has meant that at the end of June the fl agship market neutral strategies still needed to generate between 5.3% and 9.9% of additional positive returns before reaching their respective high water marks. With regard to our other products, we are pleased that our multi-asset endowment strategies outperformed their benchmark 2 considerably during the first half and have been approved by leading US onshore broker dealer platforms for distribution in Q The deleveraging process of our AB funds continues, in a sector which is still very illiquid. In addition, we launched our UCITS fund of hedge funds product in July. We have opted for a clean UCITS product as we believe eliminating a mismatch of long duration hedge fund returns and shorter liquidity of UCITS funds via wrappers or derivative structures could potentially lead to issues down the road. Our total fee-earning assets amounted to USD 7.3 billion as at the end of June 2010 and consisted of USD 6.8 billion in assets under management ( AuM ) and USD 450 million of GSS assets. The decrease in our AuM from USD 7.8 billion at the end of December 2009 was largely comprised of negative movements of USD 620 million in foreign exchange, fund performance and the return of cash to investors in the run-off share classes, which as at amounted to USD 250 million. At the start of the year we had anticipated that institutional allocations would accelerate on the back of strong hedge fund performance in 2009, but we believe the uncertainties during the second quarter has caused institutional investors to further delay their investment decisions. Consequently our asset raising efforts have been impacted, even though there are certainly pockets of

5 Overview Financials Interim Report June activity in the institutional market place. The retail investor sector was very quiet during the period. Consequently, we raised USD 360 million of new assets in H1 2010, which was below our own expectations, whilst client redemptions amounted to USD 610 million. It is important to note that we were awarded a combined USD 500 million of GFM and GSS mandates in the second quarter, which we expect to be funded during Q Gottex s customer base remains predominantly institutional representing over 90% of our AuM. According to a recent survey by a leading asset consultant, Gottex is the largest non-us based fund of hedge funds manager with respect to pension fund assets and one of the top 10 globally. GSS, our solutions and managed account business, is in advanced discussions with external clients both in the US and Europe and has recently won a substantial risk reporting mandate, which we expect to commence in Q There are some further positive developments taking place at GSS about which we hope to inform you in the coming months. GSS assets at the end of June stood at USD 450 million vs USD 90 million at June Finally, our aim to integrate teams and fi rms with complementary skills sets was demonstrated by the integration of the more directional Constellar fund of funds and their management team as of February The integration of the Constellar funds has broadened Gottex s product offering in the US and Asia. Going forward The uncertainty in global fi nancial markets continues to impact institutional asset fl ows into the fund of funds industry, even though substantial sector specifi c mandates occur from time to time. On the retail side, activity has been muted and we do not expect a meaningful rebound until 2011 when there will be greater availability of liquid onshore products and clarity concerning regulatory developments. This dip in asset raising as well as the delay in return of performance fees will naturally have an impact on net revenues for the year. At the same time there are positive developments: we recently won USD 500 million in mandates, have a promising pipeline, client redemptions are reducing towards the end of this year and our fl agship market neutral strategies are getting closer to their high water marks (ranging from 4.5% to 9.3% at the end of July). Furthermore, we have made progress with our new initiatives, namely the multi-asset endowment products have been accepted and introduced to US onshore distribution platforms and our recently launched UCITS product is in the process of being passported into the major European markets. We also believe that the competitive landscape in the fund of fund industry has improved, notably in Europe. Sentiment towards hedge funds is improving as investors see that recovery to high water marks in hedge funds is happening at a much quicker pace than in equity markets. In addition, we appear closer to clarity on regulatory developments in our sector, which will provide more comfort to institutional and retail investors alike. Gottex, being a public company with a global footprint, is confident that it can adapt to whatever requirements are presented by new regulatory directives and as such will have a competitive advantage vis-a-vis smaller firms. Overall, Gottex s management strongly believes that our industry in the medium term will experience a new growth phase from which in particular larger, well resourced companies will benefit. The extent to which we can capitalise on such opportunities as well as achieve the return of performance fees and asset growth is closely linked to our ability to attract, retain and incentivise highly qualified staff. We believe we have very talented staff in our company who are coordinating their efforts and focusing on growing the business during these challenging times. Management recognises that a competitive compensation scheme is a key factor in achieving our goals, particularly at a time where the recruitment market is becoming increasingly tighter. The Board and the Nomination & Compensation Committee believes that it has put in place realistic compensation plans with deferrals ranging from 3 to 4 year periods, that will retain our key staff during this current stage and align them with the interests of our investors. We believe this investment in our people, even though it has lead to higher staff costs, will retain the institutional platform that our clients expect and demand, and which our business requires to be able to capitalise on the growth expected from our industry. At the same time, I would like to highlight that year on year base compensation has reduced as a result of lower staff levels. General and administrative costs, after adjusting for foreign exchange gains and losses, have reduced by 11.3% for the six month period vs the same period last year. Marketing and representation costs have also reduced by 30% in the same period, mainly due to changes in travel policies put in place. Included in the results for the half year, is a loss of USD 1.6 million relating to the investment in the GFMH ABL Fund Limited (refer to note 7). The Group will fully focus on investment performance, as that ultimately drives the longer term success of an investment management business and remove distractions that are not critical to this mission. Our key goals for the next 12 months are the return of performance fees, raising assets for our core business, generating consistent asset flow for our UCITS and multi-asset initiatives and leveraging off our GSS capabilities with external clients. In addition, we will pursue operational efficiencies, streamline and upgrade processes and manage our cost base in line with client requirements, asset development and growth expectations. Outlook Even though we still face short term challenges we also see clear signs of recovery with the rate of redemptions falling, a developing pipeline, and the launch of promising new products adapted to the changing regulatory environment. Achieving the return to the high water marks of our main market neutral products and consequently performance fees is crucial to the fi nancial performance of the Company. We remain positive about the long term growth outlook for the industry. Gottex, its management team and its staff are committed to building and growing the Group. Joachim Gottschalk Chairman and Chief Executive Offi cer 1 Gottex, GFMH or the Company and together with its subsidiaries, the Group 2 A composite of MSCI AC World Index, Russell 2000 Index and CitWorld GBI.

6 6 Gottex Fund Management Holdings Limited Review Report on the Interim Condensed Consolidated Financial Statements Ernst & Young Ltd Route de Chancy 59 P.O. Box CH-1213 Geneva Phone Fax Geneva, 7 September 2010 Gottex Fund Management Holdings Limited Review report on the interim condensed consolidated financial statements Introduction We have reviewed the accompanying interim condensed consolidated financial statements of Gottex Fund Management Holdings Limited and its subsidiaries (the Group ) as of, comprising of the interim condensed consolidated statement of financial position as of and the related interim condensed consolidated statements of income, comprehensive income, changes in equity and cash flows for the six-month period then ended and notes to the interim condensed consolidated financial statements (pages 7 to 18). The Directors are responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting ( IAS 34 ). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34. Ernst & Young Ltd Mark Hawkins Licensed audit expert (Auditor in charge) John Alton Member of the Swiss Institute of Certified Accountants and Tax Consultants

7 Overview Financials Interim Report June Unaudited 1 Interim Condensed Consolidated Income Statement for the six months ended Note Revenue 2,3 32,904 46,066 Referral fee expense 4 (5,614) (9,666) Gross profit 27,290 36,400 Operating costs 5, 6 (28,424) (27,246) Operating (loss) / profit (1,134) 9,154 Finance income Finance costs (1) - Net loss on financial assets 7 (1,735) (177) Share of post tax losses from associate (27) (61) (Loss) / profit before taxation (2,881) 9,027 Income tax credit / (expense) (157) (Loss) / profit for the period (2,416) 8,870 Attributable to: Equity holders of the parent company (1,595) 7,980 Non-controlling interest (821) 890 (Loss) / profit for the period (2,416) 8,870 The result for the 6 months ended is derived from continuing operations. The result for the 6 months ended included a net loss of USD 18,000 which relates to discontinued operations (see note 15). Earnings per share Basic, for (loss) / profit for the period attributable to ordinary equity holders of the parent company Diluted, for (loss) / profit for the period attributable to ordinary equity holders of the parent company 9 (USD 0.06) USD (USD 0.05) USD 0.27 Adjusted basic, for (loss) / profit for the period attributable to ordinary equity holders of the parent company Adjusted diluted, for (loss) / profit for the period attributable to ordinary equity holders of the parent company 9 (USD 0.03) USD (USD 0.02) USD Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

8 8 Gottex Fund Management Holdings Limited Unaudited 1 Interim Condensed Consolidated Statement of Comprehensive Income for the six months ended (Loss) / profit for the period (2,416) 8,870 Exchange differences arising on translation of foreign operations (201) 581 Other comprehensive (loss) / income for the period, net of tax (201) 581 Total comprehensive (loss) / income for the period, net of tax (2,617) 9,451 Attributable to: Equity holders of the parent company (1,777) 8,474 Non-controlling interest (840) 977 (2,617) 9,451 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

9 Overview Financials Interim Report June Unaudited 1 Interim Condensed Consolidated Statement of Financial Position at Note At At 31 December 2009 Non-current assets Intangible assets 735 1,129 Financial investments 7 15,294 18,334 Investment in associate Property, plant and equipment 1,228 1,567 Other receivables 11 2,674 1,554 Deferred tax asset 1, ,355 23,640 Current assets Trade debtors 11 14,044 14,339 Other receivables 11 6,301 7,107 Tax assets 99 4 Cash and cash equivalents 41,246 42,102 61,690 63,552 Total assets 83,045 87,192 Share capital 13 25,987 25,917 Treasury shares (18,267) (27,768) Other reserves 21,623 22,906 Retained earnings 11,506 21,592 Equity attributable to equity holders of the parent company 40,849 42,647 Non-controlling interest 12,424 13,664 Total equity 53,273 56,311 Non-current liabilities Accruals 12 1,880 9 Provisions Deferred tax liabilities 5 5 1, Current liabilities Trade creditors 12 10,290 10,365 Other payables 12 13,058 14,841 Current tax liabilities 4,500 5,622 27,848 30,828 Total liabilities 29,772 30,881 Total equity and liabilities 83,045 87,192 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

10 10 Gottex Fund Management Holdings Limited Unaudited 1 Interim Condensed Consolidated Statement of Cash Flows for the six months ended Note Operating activities (Loss) / profit before taxation (2,881) 9,027 Adjustments for: Amortisation of intangibles Depreciation of property, plant and equipment Loss on disposal of property, plant and equipment - 15 Share based payments 14 3,417 4,514 Decrease in receivables 1,055 11,886 Decrease in payables (1,768) (15,486) Income taxes paid (1,148) (3,333) Recovery of tax from prior years Finance income (16) (111) Finance costs 1 - Net loss on financial assets 1, Share of post tax losses from associate Net cash inflow from operating activities 1,461 8,875 Investing activities Interest received Proceeds from sale of property, plant and equipment 1 1 Proceeds from sale of investments 1,208 1,349 Purchase of intangible assets (120) (300) Purchase of investments - (38) Loans advanced to Gottex funds 11 (1,120) - Purchase of property, plant and equipment (195) (204) Acquisition of subsidiary, net of cash acquired 15-2 Proceeds from disposal of subsidiary Net cash from investing activities Financing activities Interest paid (1) - Dividends paid to equity holders 10 (3,323) (16,634) Dividends paid to non-controlling interest (365) (2,082) Cash paid to GFMH ABL Fund Limited non-controlling holders (150) (650) Purchase of Company shares by the Employee Benefit Trust 14 - (6,504) Amounts owed to key management personnel 1,276 (2,024) Net cash used in financing activities (2,563) (27,894) Net decrease in cash and cash equivalents in the period (762) (18,098) Opening cash and cash equivalents 42,102 45,390 Effect of foreign exchange rates (94) 552 Closing cash and cash equivalents 41,246 27,844 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

11 Overview Financials Interim Report June Unaudited 1 Interim Condensed Consolidated Statement of Changes in Equity for the six months ended Share based Treasury Translation payment shares reserve reserve Pooling and other Total other reserves reserves Attributable to eq- Retained earnings Share uity holders of the Non-controlling capital parent company interest Total equity Balance at 1 January ,564 (22,374) (4,664) 10,069 14,206 19,611 26,683 49,484 15,406 64,890 Profit for the period ,980 7, ,870 Other comprehensive income Total comprehensive income for the period ,980 8, ,451 Purchase of treasury shares - (6,504) (6,504) - (6,504) Recognition of share based payments ,073-4,073-4, ,514 Reclassification due to vesting of equity awards (1,139) (1,139) Dividends (16,634) (16,634) (2,082) (18,716) Cash paid to GFMH ABL Fund Limited non-controlling interest holders (650) (650) Balance at 25,564 (28,517) (4,170) 13,003 14,206 23,039 18,807 38,893 14,092 52,985 Balance at 1 January ,917 (27,768) (4,387) 13,087 14,206 22,906 21,592 42,647 13,664 56,311 Profit for the period (1,595) (1,595) (821) (2,416) Other comprehensive income - - (182) - - (182) - (182) (19) (201) Total comprehensive income for the period - - (182) - - (182) (1,595) (1,777) (840) (2,617) Issue of shares (219) - Recognition of share based payments ,083-3,083-3, ,417 Reclassification due to vesting of equity awards - 9,501 - (4,184) - (4,184) (5,317) Dividends (3,323) (3,323) (365) (3,688) Cash paid to GFMH ABL Fund Limited non-controlling interest holders (150) (150) Balance at 25,987 (18,267) (4,569) 11,986 14,206 21,623 11,506 40,849 12,424 53,273 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

12 12 Gottex Fund Management Holdings Limited Notes to the Unaudited 1 Interim Condensed Consolidated Financial Statements Corporate information Gottex Fund Management Holdings Limited ( GFMH ) is a company registered in Guernsey and listed on the SIX Swiss Exchange. The unaudited interim condensed consolidated fi nancial statements for the six months ended comprise GFMH and its subsidiaries (together referred to as the Group). The Group acts as an investment manager and advisor for fund of hedge funds activity, direct investment and advisory services to a predominantly institutional investor base worldwide. These unaudited interim condensed consolidated fi nancial statements were authorised for issue by the Board of Directors on 7 September Basis of preparation and accounting policies Basis of preparation The unaudited interim condensed consolidated fi nancial statements for the six months ended have been prepared in accordance with IAS 34 Interim Financial Reporting. The unaudited interim condensed consolidated fi nancial statements do not include all the information and disclosures required in the annual fi nancial statements, and should be read in conjunction with the Group s annual fi nancial statements as at 31 December The unaudited interim condensed consolidated fi nancial statements are presented in US Dollars, rounded to the nearest thousand, except where otherwise indicated. Changes in accounting policies The accounting policies adopted in the preparation of these unaudited interim condensed consolidated fi nancial statements are consistent with those followed in the preparation of the Group s annual fi nancial statements for the year ended 31 December The Group adopted the following standards, interpretations and amendments thereto as at 1 January 2010 and this has not resulted in any changes to the fi nancial position or performance of the Group nor resulted in any additional disclosures to these unaudited interim condensed consolidated fi nancial statements, other than described below. Standard or interpretation Title Impact on Group IAS 39 amended Eligible Hedged Items No material impact IFRIC 17 Distributions of Non-cash Assets to Owners No material impact IFRIC 18 Transfers of assets from Customers No material impact IFRS 2 (amended) Group Cash settled Share-based Payment transactions No material impact Improvements to IFRSs (April 2009) No material impact At the date of these unaudited interim condensed consolidated fi nancial statements, the following Standards and Interpretations which have not been applied in these fi nancial statements were in issue but not yet effective for these fi nancial statements. As a result these Standards and Interpretations do not impact these unaudited interim condensed consolidated fi nancial statements. Standard or interpretation Title Effective Date IFRS 9 Financial Instruments Annual periods beginning on or after 1 January 2013 IAS 24 Related Party Disclosures Annual periods beginning on or after 1 January 2011 IAS 32 Financial Instruments: Presentation classification Annual periods beginning on or after of rights issues 1 February 2010 IFRIC 14 Amendments prepayments of a minimum funding requirement Annual periods beginning on or after 1 January 2011 IFRIC 19 Extinguishing Liabilities with Equity Instruments Annual periods beginning on or after 1 July 2010 Improvements to IFRS (May 2010) Annual periods beginning on or after 1 July 2010 Expected Impact on Group No material impact No material impact No material impact No material impact No material impact No material impact 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

13 Overview Financials Interim Report June Segmental analysis of results Revenue from investment management services and assets under management can be and are categorised by strategy, fund type and asset class. In addition the Gottex structured products group ( GSP ) undertakes negotiation and structuring of competitive leverage and liquidity contracts with leverage and liquidity providers, as well as the structuring of investment products. Although gross revenue is reviewed in detail by revenue source, internal fi nancial reporting and performance monitoring and measurement is not further segregated below this revenue level for use in the business. The chief decision maker, which is considered to be the executive management committee, reviews the costs, profi t, assets and liabilities on a Group basis. Accordingly, all signifi cant decisions are based upon the analysis of the Group as one segment. Therefore the Directors concluded that there is one operating segment within the meaning of IFRS 8 Segment Reporting and the fi nancial results of this segment are equivalent to the fi nancial statements of the Group as a whole. 3. Revenue Management fees 30,257 44,122 Performance fees Advisory fees 748 1,071 Structure and leverage fees GSS Fees Total revenue 32,904 46, Referral fee expense Referral fee expenses comprise third party commissions for client introductions and ongoing client service, and some specifi c rebates to customers of the underlying Gottex funds. Management fees 5,614 9,666 5,614 9, Operating costs Note Personnel expenses 6 21,457 20,804 General and administrative expenses 6,151 5,270 Marketing and representation services 816 1,172 28,424 27, Personnel expenses The aggregate remuneration of employees (including executive directors) was: Note Wages and salaries 16,096 14,761 Social security expenses 1, Net pension cost Share based payments 14 3,417 4,514 Sundry personnel expenses ,457 20,804

14 14 Gottex Fund Management Holdings Limited Notes to the Unaudited 1 Interim Condensed Consolidated Financial Statements 7. Net (loss) / gain on financial investments The net (loss) / gain on fi nancial assets designated at fair value through profi t or loss can be analysed as follows: GFMH ABL Fund Limited (1,602) (287) Market Neutral Fund GVA ABL Fund (99) (153) Tiger Fund (57) 40 Other funds 6 (29) (1,735) (177) These fi nancial investments consist principally of investments in Gottex fund of funds, some of which are listed on the Irish Stock Exchange, mainly in market neutral and asset based funds, and investments held by GFMH ABL Fund Limited ( GFMH ABL ). The fair value is determined in the same manner as in the year ended 31 December 2009 and prior years, by management based on the net asset value of the Group s investments, as communicated by the managers or independent administrators of the investment funds. In the six months to, GFMH ABL redeemed part of its outstanding shares in equal proportions for all shareholders. The Company and the non-controlling shareholders of GFMH ABL received USD 150,000 each. 8. Income tax (credit) / expense Current tax current year (177) 2,032 Current tax prior year 141 (971) (36) 1,061 Deferred tax current year (338) (904) Deferred tax prior year (91) - (429) (904) (465) 157 Effective Group tax rate (before 2009 prior year recovery) % The effective tax rate of the group for the six months to has been distorted by the occurrence of varying trading profi ts and losses within the various tax regimes of the Group. 9. Earnings per share Basic earnings per share is calculated by dividing net profi t for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by dividing the net profi t attributable to ordinary equity holders of the parent by the weighted average number of ordinary share outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. Net (loss) / profit attributable to ordinary equity holders of the parent for basic earnings per share and diluted earnings per share (1,595) 7,980 Revaluation of investments in respect of GFMH ABL Prior year recovery of tax - (879) Adjusted net (loss) / profit attributable to ordinary equity holders of the parent for diluted earnings per share (794) 7,245 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

15 Overview Financials Interim Report June Earnings per share (cont d) Number 000 Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share 28,162 28,192 Adjustments for dilutive potential ordinary shares 1,560 1,632 Weighted average number of ordinary shares (excluding treasury shares) for diluted earnings per share 29,722 29,824 Potential ordinary shares comprise the expected dilutive effect of those equity awards described in note 14. Basic (loss) / earnings per share (0.06) 0.28 Adjustments for dilutive potential ordinary shares 0.01 (0.01) Diluted (loss) / earnings per share (0.05) 0.27 Basic (loss) / earnings per share (0.06) 0.28 Revaluation of investments in respect of GFMH ABL Prior year recovery of tax - (0.03) Adjusted basic (loss) / earnings per share (0.03) 0.26 Diluted (loss) / earnings per share (0.05) 0.27 Revaluation of investments in respect of GFMH ABL Prior year recovery of tax - (0.04) Adjusted diluted (loss) / earnings per share (0.02) 0.24 * The Group has presented an adjusted (loss) / earnings per share for the period ended and in order to show a fi gure that Management believe is more representative of the results of the periods. The adjusted earnings per share have been calculated by adding back the share of profi t attributable to the Group in respect of the revaluation of the investment held in GFMH ABL and by deducting a recovery of tax in 2009 relating to prior periods. The investment in GFMH ABL was made in 2008 in order to preserve certain lender concentration limits within the ABL Funds and therefore Management do not consider the share of losses from this investment to be part of the core operations of the Group. 10. Dividends Amounts recognised as dividends to equity holders of the parent company in the period are as follows: Approved and paid during the period 3,323 16,634 Dividend per share - USD In the six months to the Company paid a dividend to its shareholders of USD 3,503,000 (2009: USD 18,051,000). USD 180,000 (2009: USD 1,417,000) was received by the Employee Benefi t Trust, and this amount has been eliminated on consolidation.

16 16 Gottex Fund Management Holdings Limited Notes to the Unaudited 1 Interim Condensed Consolidated Financial Statements 11. Trade and other receivables At At 31 December 2009 Current debtors Trade debtors 14,044 14,339 Amount due from related parties Other debtors 3,056 3,590 Prepayments and accrued income 2,654 3,267 20,345 21,446 Non-current receivables Loans and receivables 2,674 1,554 Total trade and other receivables 23,019 23,000 The Group has made loans to funds for which it acts as investment manager and during the 6 months to, GFM Sarl made a further loan to a fund of USD 1.1 million, for which it acts as investment manager. At the carrying value of these loans was USD 3.7 million, of which USD 2.7 million was held within loans and receivables in non-current receivables and USD 1.0 million was held within other debtors in trade and other receivables. 12. Trade and other payables current and non-current At At 31 December 2009 Current liabilities Trade creditors 10,290 10,365 Amount due to related parties 1, Other tax and social security 1,418 1,641 Other creditors 1,669 2,261 Accruals 8,190 10,624 23,349 25,206 Non-current liabilities Accruals 1,880 9 Total trade and other payables 25,229 25,215 The balance due to related parties represents amounts redeemed from funds by certain key personnel but which will be reinvested in funds on their behalf by the Group during the remainder of the year. 13. Capital At At 31 December 2009 Number of Nominal Value Number of Nominal Value Allotted and fully paid capital Shares CHF 000 Shares CHF 000 Ordinary CHF1.00 each 30,539,419 30,539 30,462,224 30,462 The Company has a call option to purchase the remaining shares in GUS, for a fi xed ratio of shares in the Company, and the shareholders of GUS have a put option to sell their shares to the Company in return for a fi xed ratio of shares in the Company. There is not expected or intended to be any net transfer of value on the exercise of either option and therefore neither option is considered to have any underlying value. On 8 April 2010 a shareholder of GUS partially exercised his put option to sell a proportion of his shares in GUS to the Company in exchange for a fi xed ratio of shares in the Company. Accordingly, on 24 June 2010, the Company issued 77,195 shares to the shareholder. There was no net transfer of value between the Company and the shareholder, but the non-controlling interest percentage was adjusted accordingly. 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

17 Overview Financials Interim Report June Share based payments The movement in equity for share based payments was: Note At 1 January 13,087 10,069 Recognised in the income statement 6 3,417 4,514 Less amount included in Non-controlling interest (334) (441) Reclassification / utilisation during the period (4,184) (1,139) At 30 June 11,986 13,003 In the six months ended the charge for share based payments related to the following types of awards: Share awards 2,190 3,398 Share options 930 1,116 The LTIP plan 297-3,417 4,514 Share Awards Since listing in 2007 the Company has made awards of shares to employees under various share award schemes. The fair value of each award was estimated by reference to the share price at the date of grant, with an appropriate adjustment for expected dividends foregone, where appropriate. The only vesting condition is that the participant is in the employment of the Group for the vesting period. (a) The Restricted award plan These share awards were, in the main, issued in November 2007, to vest over a four year period in equal portions, with one quarter vesting on each anniversary of the date of award and therefore the final vesting date is expected to be in (b) The Bonus award plan The Group made share awards in January 2009 which formed part of the annual bonus awards to employees for the year ended 31 December The share awards vest over a two year period in equal portions, vesting evenly on each anniversary of the date of award and this award will be fully vested in January The Group recognise that, as part of the bonus award for the year ended 31 December 2010, further share awards are expected to be awarded. Although such share awards will not be legally granted until 2011, the Directors have recognised a constructive obligation to the employees for these options and have expensed the estimated fair value of these awards over a performance period commencing 1 January 2010 as employees have begun rendering services from that date. (c) The Additional award plan In 2009 the Company made share awards to certain employees of the Group. The share awards vest over a four year period in equal portions, with one quarter vesting on each anniversary of the date of award and the fi rst vesting date was in January (d) 2007 equity award An equity award of one per cent, which vests evenly over a period of four years from the date of grant, was made to an employee on 1 January The admission of the Company to the SIX in 2007 triggered the acceleration of the vesting schedule whereby the fi rst 25 per cent vested at the date of listing, the second 25 per cent vested at the fi rst anniversary of the date of listing and the remaining award vests evenly over the remaining two years ie the remaining awards are expected to vest in 2010.

18 18 Gottex Fund Management Holdings Limited Notes to the Unaudited 1 Interim Condensed Consolidated Financial Statements 14. Share based payments (cont d) Share options Under the terms of the GFMH Employee Share Option Plan, certain employees have been granted options over the Company s shares. The share options generally vest over three years from the date of grant and the only vesting condition is that the participant is in the employment of the Group for this period. The fair value of the share options was determined using a Black-Scholes model. The LTIP plan During the 6 months to, the Group made 369,962 share awards to certain employees of the Group. The fair value of these awards was estimated by professional external valuers using a Monte Carlo model. The number of share awards that may fi nally vest is dependent on two performance criteria: (i) the absolute share price increase in the underlying share over the three year vesting period and (ii) the share price increase of the underlying share relative to the average share price increase of a defi ned peer group over the three year vesting period. The maximum number of awards that may vest is 300 per cent of the original number of awards. Of these awards, 62% were made to key management personnel of the Group. Employee Benefit Trust ( EBT ) In October 2007, the Company established an EBT in order to benefi t all employees of the Group companies. The trustee of the EBT is RBC cees Trustee Limited. For the period ended, the EBT has been consolidated within these unaudited interim condensed consolidated fi nancial statements. At, the EBT held 2,202,219 shares in GFMH which had a fair market value of USD 13.3 million (the price per share at 30 June 2010 was USD 6.04). At 31 December 2009, the EBT held 2,676,505 shares in GFMH which had a fair market value of USD 20.2 million (the price per share at 31 December 2009 was USD 7.6). 15. Acquisition and disposal of subsidiary - comparative period On 4 May 2009, the Group acquired a controlling interest, which included all of the voting rights, in SJC Capital Partners, L.L.C ( SJC ). The purchase cash consideration was USD 100 dollars and the associated transaction costs which were charged directly to the consolidated income statement, in line with the requirements of IFRS 3 revised, were USD 0.3 million. Goodwill of USD 543,000 was recognised on acquisition. Post acquisition losses of USD 18,000 were consolidated within the Group results for the 6 months ended and post acquisition losses of USD 951,000 were consolidated within the Group results for the year ended 31 December On 31 December 2009, the Group disposed of its interest in SJC in full. USD 550,000 was received in cash on 31 December 2009 and a further receipt of USD 550,000 was accrued in the consolidated statement of fi nancial position at 31 December The profi t on disposal of SJC was USD 513,000 and the total result from discontinued operations for the year to 31 December 2009 was a loss of USD 438,000. During the 6 months ended, cash of USD 550,000 was received in relation to the outstanding debtor at 31 December 2009 and this has been presented as an inflow in the consolidated statement of cash flows within Investing activities. 16. Contingent Liabilities Arbitration The Group is currently in arbitration with two third party marketing agents. On 25 August 2009, the arbitral tribunal made a partial award in favour of these claimants. The arbitration process remains ongoing and it is not yet possible to quantify the likely outcome. On this basis management have made no further provision other than amounts for legal costs. Management continue to believe that the exposure is unlikely to be more than the claimants initial indication of USD 1 million. 1 Reviewed by Ernst & Young Ltd, refer to Review Report on page 6.

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20 Gottex Fund Management Principal Offi ces Guernsey Gottex Fund Management Holdings Limited Ogier House, St Julian s Avenue St. Peter Port, Guernsey, GY1 1WA Tel Fax Switzerland Gottex Fund Management Sàrl Avenue de Rhodanie Lausanne Tel: Fax: Other Offi ces United Kingdom Gottex Asset Management (UK) Limited 5 Savile Row London, W1S 3PD Tel: Fax: United States of America Boston Gottex Fund Management Limited 28 State Street, 40 th Floor Boston, MA, Tel: Fax: New York Gottex Fund Management Limited 780 Third Avenue, 32 nd Floor New York, NY Tel: Fax: Hong Kong Gottex Fund Management (Hong Kong) Limited Suite 2602, 26 th Floor, Henley Building 5 Queen s Road Central, Hong Kong Tel: Fax: United Arab Emirates Gottex Fund Management Sàrl - Middle East Dubai International Financial Centre The Gate Building, 12 th Floor PO Box , Dubai Tel Fax Regulated by the DFSA Switzerland Gottex Fund Management Sàrl Dreikönigstrasse 31a 8002 Zürich Tel: Fax: Luxembourg Gottex Partners Sàrl 12 Rue Guillaume Kroll L 1882 Luxembourg Tel Fax