HOLDING & INVESTMENT COMPANIES OVERVIEW

Transcription

1 HOLDING & INVESTMENT COMPANIES OVERVIEW y 30th 20 Tom Simonts tom.simonts@kbcsecurities.be

2 Table of contents Financial calendars... 3 Valuation matrix & Recommendation overview... 4 Dividend data... 5 Valuation graphs... 6 Average holding discount... 7 Sector performance... 8 Track record... 9 Favourite list... Cascade structured holdings The Albert Frère structure GBL Pargesa The UCB structure Tubize The Solvay structure The KBC structure KBC Ancora The Boël structure The structure The Heineken structure Private Equity & Privak companies Quest for Growth KBC Biotech Diversified holding companies & van Haaren BIP Investment Partners HAL Trust... Luxempart... Punch International... Reinet Investments... RHJ International p. 2

3 Financial calendars Financial calendar Date Company Event 28-- Trading update 1Q 30-- GBL Results 1H 3-- Results 1H 6-- Quest For Grow th NAV update 7-- BIP NAV update -- Results 1H 19-- RHJ International Trading update 1Q 25-- Results 1H 25-- Analyst Meeting 27-- Results 1H 27-- Punch International Results 1H 27-- Results 1H 30-- Luxempart Results 1H 31-- Results 1H 31-- Results 1H 31-- Results 1H 31-- Hal Trust Results 1H 31-- KBC Biotech Results 1H 31-- Results 1H 1-- KBC Ancora Results FY 3-- Quest For Grow th NAV update 8-- BIP NAV update 9-- Trading update 3Q 16-- RHJ International Div: 0 (FY) 21-- RHJ International General Assembly 23-- Roadshow 25-- Trading update 3Q 1-- Quest For Grow th NAV update 9-- BIP NAV update 16-- BIP Trading update 3Q 25-- KBC Ancora General Assembly 28-- Quest For Grow th Results 3Q 28-- Div: 2.81 (IN) 29-- Quest For Grow th Analyst Meeting 31-- Div: 2.81 (IN) 1-- KBC Ancora Div: 0 (FI) 3-- Quest For Grow th NAV update 5-- GBL Results 3Q 8-- BIP NAV update 9-- Results 3Q -- Trading update 3Q 15-- Trading update 3Q 16-- Hal Trust Trading update 3Q 18-- Results 1H 30-- KBC Biotech Results 3Q 30-- RHJ International Results 1H 3-- Quest For Grow th NAV update 8-- BIP NAV update Quest For Grow th NAV update Hal Trust NAV update Quest For Grow th Results FY Quest For Grow th Analyst Meeting Quest For Grow th General Assembly Hal Trust Results FY GBL General Assembly Tubize General Assembly Hal Trust Trading update 1Q Hal Trust General Assembly Recent news flow Date Company Title 28 Equity suprises in 1Q/11 27 Helping to keep CMA CGM afloat? 23 Quest for Grow th Profitable in 1H despite 0.62m 2Q loss 16 Sale of Microtherm neutral to NAV 15 BIP 1H produces.6m comprehensive profit Strengthens Sipef stake to 22.59% 06 DEME secures 0m w orth of contracts 06 HAL Trust Pearle Europe and Grandvision pair up Closing of Go Voyages disposal Ex-dividend prompts TP adjustment Quest for Grow th e NAV declines as markets recede 30 HAL Trust ASPA's troubles squash HAL s merger plan 29 RHJI FY/ results preview 28 Reacquires 13.2% stake in CBS Finance 28 DG Infra Yield expands 's fishing pond 26 HAL Trust Livit taps HAL s successful retailing model 22 RHJI Kleinw ort buys KBC AM Dublin for 23.7m 22 GBL Internal transfer reduces Lafarge voting rights 18 HAL Trust Payment of stock and cash dividend 14 HAL Trust 77.5% opt for stock dividend 14 GBL Bond placement closed early at 350m BIP NAV update holds no surprises Luxempart 1: stock split effective today Quest for Grow th CoreOptics deal boost NAV BIP Iris takes DI's capital to 18.3m GBL Launches 250m bond 04 RHJI Masco to convert Asahi Tec's C Stocks 04 Sodiaal drafts Entremont deal 03 Pargesa Low ers Imerys stake to 25.61% 31 KBC Biotech 1Q trading update 31 Reinet FY/ results 28 Sale of ANP produces 1m capital gain 26 Feedback AGM: cautiously moving forw ard 21 Feedback analyst meeting 21 Quest for Grow th 2.5m CoreOptics gain boost NAV 20 Positive equity and DPS surprise in FY/ 20 Luxempart 1Q update unveils PNE Wind stake 19 HAL Trust 1Q trading update 18 Go Voyages disposal add 0.5 p.s to NAV 18 RHJI Closing of landmark KB deal; TP upped 18 1Q trading update 17 Upbeat 1Q trading update 14 Punch International 1Q trading update 12 1Q trading update 11 Punch International Rating low ered due to sour PGX deal Buoyant PE activity supports 1Q NAV PGX acquisition cancelled Punch International Build-up of high-yield portfolio in 1Q 1Q trading update confirms valuation model TP & rating change ahead of 1Q report Adjusting rating from Buy to Accumulate TP and rating upgrade ahead of 1Q report Tubize 1Q trading update 06 Pargesa Profitable again in 1Q 06 Quest for Grow th TP and rating increase & il NAV update GBL 1Q results in line, boosts Pernod stake Shouldering IC's SMS deal w ith 11.3m 03 KBC Ancora Publication of 3Q/ results p. 3

4 Valuation overview Recommendation overview Company Last price Adjusted equity value Current discount Target equity value Target discount Target price Upside potential Rating % % % BUY KBC Ancora % % % % % HOLD BIP Invest Partners % % % BUY % % % ACCUMULATE % % % ACCUMULATE GBL % % % ACCUMULATE % % % ACCUMULATE HAL Trust % % % ACCUMULATE % % % ACCUMULATE % % % ACCUMULATE KBC Biotech % % - Luxempart % % % ACCUMULATE % % % ACCUMULATE Pargesa % % % ACCUMULATE Punch International % % % SELL Quest for Growth % % % BUY Reinet Investments % % - RHJI % % % BUY % % % ACCUMULATE % % % ACCUMULATE % % % ACCUMULATE Tubize % % % BUY Average 25.5% 28.8% - Average (mono holdings) 21.4% 30.9% - Average (excl. mono holdings) 26.2% 27.1% * The current discount is the discount of the current stock price versus the adjusted equity value. * The target equity value corrects the adjusted equity value with KBCS target prices to better reflect the portfolio s underlying potential. * The target discount is the discount of the current stock price versus the target equity value. * The upside potential is the difference between the current stock price and the target price. * The implied discount is the difference between the target price and the target equity value. Valuation Matrix 70% 60% Tubize 50% 40% Upside potential 30% % Pargesa GBL RHJI BIP Luxempart Invest Partners Quest for Growth 0% HAL Trust KBC Biotech -% Punch International - 0% % 30% 40% 50% 60% Current discount p. 4

5 Dividend data Dividend table Overview BIP Inv. Partners Gbl Hal Trust KBC Ancora KBC Biotech Luxempart Pargesa Holding Punch Quest For Growth Reinet Investments RHJI Tubize Financiere Average yield 99(A) 00(A) 01(A) 02(A) 03(A) 04(A) (A) 06(A) (A) (A) (A) (E) 11(E) 12(E) % 1.4% 1.7% 2.9% 3.1% 2.5% 2.0% 1.8% 2.1% 3.8% 2.8% 2.9% 3.0% 3.2% % 1.4% 1.8% 2.8% 2.5% 2.0% 1.6% 1.2% 1.3% 3.2% 2.4% 2.5% 2.7% 2.8% % 1.4% 2.9% 2.5% 3.0% 3.7% 3.5% 2.9% 3.3% 3.2% 3.3% 3.5% % 4.9% 5.3% 5.8% 5.8% 4.1% 3.4% 2.7% 2.5% 4.2% 3.9% 3.9% 4.1% 4.3% % 2.7% 4.0% 3.2% 2.7% 2.2% 1.9% 1.7% 1.8% 4.2% 3.2% 3.6% 3.8% 4.0% % 2.4% 2.3% 3.7% 3.3% 2.7% 2.1% 2.1% 2.4% 4.0% 3.7% 4.4% 4.7% 5.0% % 2.8% 4.4% 3.7% 5.6% 4.4% 7.9% 8.7% 9.1% 7.6% 6.6% 6.5% 6.6% 6.8% % 6.5% 6.1% 6.1% 6.1% 6.0% 6.0% 4.6% 3.9% 3.9% 4.0% 3.5% 3.5% 3.5% % 1.0% 1.3% 1.4% 1.6% 1.8% 1.6% 2.2% 1.9% 2.9% 2.3% 2.5% 3.0% 3.2% % 1.9% 1.4% 1.3% 1.0% 0.9% 1.5% 2.5% 2.1% 2.0% 2.1% 2.2% % 4.9% 5.6% 4.2% 4.2% 4.4% 0.0% 0.0% 0.0% 3.1% 3.2% % 1.3% 2.3% 4.3% 3.6% 2.6% 2.5% 2.7% 2.3% 3.5% 2.9% 3.1% 3.4% 3.7% % 2.8% 2.6% 3.1% 3.2% 2.3% 1.6% 1.4% 1.5% 2.2% 2.2% 2.4% 2.6% 2.8% % 2.4% 2.4% 3.4% 2.8% 2.5% 1.9% 1.7% 2.1% 3.7% 3.0% 4.0% 4.2% 4.4% % 1.1% % 54.8% 8.0% 21.2% 0.6% % 2.6% 2.5% 3.3% 3.1% 2.3% 1.9% 1.7% 1.9% 3.4% 2.6% 2.8% 3.0% 3.2% % 5.6% 5.3% 5.7% 4.9% 3.9% 3.1% 2.9% 3.5% 6.5% 5.3% 4.9% 5.1% 5.3% % 0.8% 1.1% 2.1% 1.5% 1.2% 1.2% 1.3% % 0.9% 0.9% 1.7% 1.7% 1.3% 1.1% 0.9% 1.5% 3.7% 2.0% 2.4% 2.4% 2.5% 2.5% 5.8% 2.7% 3.5% 3.4% 2.8% 2.9% 3.5% 2.5% 3.6% 3.0% 3.1% 3.5% 3.6% CAGR gross dividend FY - FY12 (incl. interim dividends) KBC Ancora -26.8% 6.5% BIP Inv. Partners -.6% -8.3% -3.4% Hal Trust -1.6% KBC Biotech 0.0% Tubize Financiere 1.2% 2.3% 3.1% Pargesa Holding 3.1% 3.4% 3.4% 4.4% 4.5% 5.7% 5.8% Gbl 6.2% Luxempart 6.7% 9.1% -30% -25% - -15% -% -5% 0% 5% % 15% Gross dividend yield 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 5.8% 5.4% 5.2% 4.6% 4.7% 4.5% 4.4% 4.4% 4.3% 4.2% 4.1% 3.8% 3.8% 3.8% 3.7% 3.8% 3.6% 3.6% 3.5% 3.4% 3.4% 3.4% 3.3% 3.2% 3.1% 3.0% 3.1% 3.1% 3.0% 3.1% 2.9% 2.9% 2.8% 2.7% 2.6% 2.7% 2.5% 2.5% 2.4% 2.4% 2.2% 2.2% 2.1% 2.1% 98(A) 99(A) 00(A) 01(A) 02(A) 03(A) 04(A) (A) 06(A) (A) (A) (A) (E) 11(E) 12(E) 13(E) 14(E) Average regular dvd yield (sector) Belgium BEL-20 Euronext 0 1.2% 2.0% 30.0% Regular dividend growth Tubize Financiere 2.4% 2.4% 2.5% 2.5% 2.8% 25.0% 20.0% 24.4% 19.6% 21.9% 17.8% Luxempart BIP Inv. Partners Hal Trust 2.9% 3.1% 3.2% 3.5% 15.0%.0% 11.3% 12.2% 13.9% 3.6% 3.9% 5.0% 5.6% 5.4% 5.1% 5.2% 5.3% 5.3% 5.3% Pargesa Holding 4.0% Gbl 4.4% 4.9% 6.5% 0% 1% 2% 3% 4% 5% 6% 7% 0.0% -5.0% -2.7% 98(A) 99(A) 00(A) 01(A) 02(A) 03(A) 04(A) (A) 06(A) (A) (A) (A) (E) 11(E) 12(E) 13(E) 14(E) -0.4% p. 5

6 Valuation graphs 0% % 30% 40% 50% 0% % 30% 40% 50% KBC Ancora 43.9% Quest for Growth 44.5% 38.0% KBC Ancora 43.9% 37.0% 38.7% Luxempart 36.6% 37.0% RHJI 36.3% Luxempart 37.0% BIP Invest Partners 35.5% BIP Invest Partners 36.4% 32.6% RHJI 36.3% Tubize 30.0% 35.4% Pargesa 27.3% 34.5% GBL 26.5% GBL 30.5% 26.3% Pargesa 30.3% 25.8% 27.7% 24.9% 25.8% 23.5% 25.0% 21.8% 23.5% HAL Trust 16.3% 21.8% KBC Biotech 14.9% HAL Trust 20.8% 13.2% 17.6% 11.2% KBC Biotech 14.9% Reinet Investments 9.9% 11.2% Punch International 9.2% Reinet Investments 9.9% 2.3% Current discount Punch International 9.2% Target discount 0% 5% % 15% 25% 30% 35% 40% - -% 0% % 30% 40% 50% 60% 70% 34.55% Tubize 63.4% 31.29% Quest for Growth 31.0% 30.98% Pargesa 27.4% 29.47% RHJI 24.8% Luxempart 28.57% GBL 18.9% 27.60% 18.1% BIP Invest Partners 27.46% 16.9% Quest for Growth 27.27% 15.9% 25.23% BIP Invest Partners 14.0% 21.68% 13.9% Punch International 20.89% Luxempart 13.3% RHJI 20.53% 9.2% Tubize 19.77% 8.7% HAL Trust 19.13% 3.7% 18.26% HAL Trust 2.1% GBL 17.36% 0.6% 15.48% 0.0% 14.63% -5.0% Pargesa 11.14% Implied discount in KBCS TP -7.0% Upside potential p. 6

7 Average holding discount Historical holding discount The holding discount is calculated as the average of all individual discounts of the companies that are covered in this overview, excluding mono-holdings. ket capitalisation and/or free float percentages do not affect the outcome, as all discounts are equally weighted. Unlike our method for determining our target prices (where we use target prices of companies that are covered by KBC Securities analysts instead of stock market prices), the holding discount is calculated by using the discount to the adjusted (marked-to-market) equity value of the company in question. The historic discount series since 2001 is constructed entirely from our own calculations. The goal of the holding discount is to obtain a graphic depiction of investors willingness to invest in holdings and investment companies, which is translated into a rising or declining average discount to adjusted equity value. The long-term average of the historical discount can then be used to position the current discount more accurately. Typically, overall discount levels tend to increase in bear markets, while a decrease is expected in a bull market. The companies from which we calculate our mono-holding discount are Tubize,,, and KBC Ancora. The broad holding discount is based on data from, BIP,,, GBL,, HAL Trust,, Pargesa,,, Reinet Investments, Quest, RHJ International, Punch International,, KBC Biotech and Luxempart. We note that in the calculation of the mono-holding discount, we have excluded KBC Ancora as from 20 uary 20 as we aim to avoid producing a sharp distortion on the historic discount graph. In effect, including KBC Ancora s exploded discount in the wake of KBC s plunging stock price would render the whole series useless. Holding discount (-2YR) Mono-holding discount (-2YR) 43% 43% 28% 28% 40% 40% 26% 26% 24% 24% 37% 37% 22% 22% 34% 34% 31% 31% 18% 18% 16% 16% 28% 28% 14% 14% 25% 25% 12% 12% 22% Feb Feb 22% % Feb Feb % Holding discount (-2YR) Average holding discount Mono-holding discount (-2YR) Average mono-holding discount Holding discount (-8YR) Mono-holding discount (-8YR) 50% 50% 31% 31% 45% 45% 28% 28% 40% 40% 25% 25% 35% 35% 22% 22% 30% 30% 19% 19% 25% 25% 16% 16% 15% 15% 13% 13% % Feb % % Feb % Holding discount (-8YR) Average holding discount Mono-holding discount (-8YR) Average mono-holding discount p. 7

8 Sector performance Stock price performance overview Absolute return (%) Relative return (%, versus Euronext 0) Last price -1M -6M -1Y YTD -1M -6M -1Y YTD % 5.7% 8.1% 1.3% -1.7% 5.7% -3.7% 4.9% KBC Ancora % -4.7% 1.2% -0.3% 5.9% -4.8% 98.4% 3.3% % -0.1% 21.6% 0.0% -5.8% -0.1% 9.8% 3.6% BIP Invest Partners % 9.9% 4.2% 8.7% -1.3% 9.8% -7.6% 12.3% % 0.4% 11.2% 4.7% -2.1% 0.4% -0.6% 8.2% % -7.0% 8.3% -6.8% -1.4% -7.1% -3.5% -3.2% GBL % -9.8% 7.4% -9.6% -1.0% -9.9% -4.4% -6.0% % 2.9% 8.7% 4.3% -2.8% 2.9% -3.1% 7.9% % 11.0% 26.3% 11.2% -1.7%.9% 14.5% 14.8% KBC Biotech % -33.7% -26.4% -29.9% -1.6% -33.8% -38.2% -26.3% Luxempart % 1.6% 2.1% 2.1% -7.5% 1.5% -9.7% 5.7% HAL Trust % 13.6% 32.2% 16.5% 3.1% 13.6% 20.4% 20.1% % -0.3% 24.8% 3.8% -4.5% -0.4% 13.0% 7.4% % 2.0% 2.4% -1.1% -0.3% 1.9% -9.5% 2.5% Pargesa % -19.0% -3.5% -20.3% -3.9% -19.1% -15.3% -16.7% Punch International % -18.5% -36.7% -0.3% -5.8% -18.5% -48.5% 3.2% Quest for Growth % -7.3% 0.0% -9.7% -6.7% -7.3% -11.8% -6.1% Reinet Investments % 6.3% - 8.3% -2.9% 6.3% 11.9% RHJI % 9.1% 43.3% 21.5% 0.7% 9.0% 31.5% 25.1% % 2.2%.3% -2.3% -1.0% 2.1% -1.5% 1.2% % 8.4% 16.5% 7.9% -2.6% 8.4% 4.7% 11.4% % 27.4% 56.4% 35.5% -7.2% 27.3% 44.6% 39.0% Tubize % -22.6% 22.2% -15.6% -4.1% -22.7%.4% -12.1% AVERAGE (total) 3.0% -1.0% 15.9% 1.3% -2.4% -1.0% 4.1% 4.9% AVERAGE (ex. mono-holdings) 2.6% -1.0% 8.6% 1.2% -2.9% -1.0% -3.2% 4.8% EURONEXT TOP 0 INDEX % 0.1% 11.8% -3.6% BEL 20 INDEX % 1.3% 17.8% 1.0% ESTX 50 Pr % -0.9% 3.7% -7.2% -60% -40% - 0% 40% 60% 80% -4% -2% 0% 2% 4% 6% 8% % 12% 14% 58.4% KBC Ancora 11.3% RHJI 42.6% HAL Trust 8.6% HAL Trust 37.0% RHJI 6.2% 28.9% 5.1% Reinet Investments 28.6% GBL 4.5% 28.6% 4.5% KBC Biotech 27.9% BIP Invest Partners 4.2% Tubize GBL BIP Invest Partners 20.9% 18.8% 15.9% 15.8% 12.6% 11.2%.7%.3% 3.6% 3.0% KBC Biotech Reinet Investments Pargesa Tubize 4.1% 3.8% 3.8% 3.8% 3.4% 2.9% 2.7% 2.6% 1.6% 1.4% 1.0% Luxempart 2.9% -0.3% Quest for Growth 0.0% Punch International -0.3% 0.0% Quest for Growth -1.2% Pargesa -4.9% -1.7% Punch International -37.7% Total return YTD Luxempart -2.0% Return -1m p. 8

9 Track record Generating alpha In an effort to determine whether or not investing in holding and investment companies produces above average returns, we have created an index of our coverage universe and recalculated back to Comparing the total return of this holding index with the total return of Belgium s benchmark BEL20 index reveals a clear outperformance by holding companies. This capacity to generate alpha confirms that holdings and investment companies are in fact excellent money managers who, through their ability to shift assets into the most promising sectors at all times, are able to produce above-average shareholder value on an annual basis. We have also included some other graphs. 60% 49.0% 50.6% 30% 40% 38.1% 34.8% 26.8% 28.1% 24.7% 29.9% 28.4% 15.6% % 0% - -40% -60% -3.4% -4.5% -6.9% 6.0% -9.2% -4.8% -24.1% -22.0% -1.8% 3.7% -43.8% -35.8% -1.7% 4.9% 99(A) 00(A) 01(A) 02(A) 03(A) 04(A) (A) 06(A) (A) (A) (A) (E) BEL20 total return index Sector total return 0% -% - -30% Q Q Q Q Q Q Holding Companies Belgium BEL-20 Fixed Euro STOXX Q Q Comparing CAGRs The graph on the left-hand side below depicts the CAGR of quarterly returns of the holding index as compared to the DJ Euro Stoxx and BEL20-index. The base date is 3Q2002, which marked the ending of the bursting of the dot com bubble. These data, too, confirm that the sector is capable of creating substantial alpha throughout the full cycle % % CAGR q/q: 0.9% CAGR q/q: +2.9% 200 0% 150 CAGR q/q: 0.9% % Holding Companies Euro STOXX Belgium BEL-20 Fixed % Q Q Q Q Q Q4 20 Holding Companies Euro STOXX Belgium BEL-20 Fixed 20 Q Private Equity versus Benchmark indices Below is a rebased overview of the performance of the main Euronext benchmark indices versus the DJ Stoxx Private Equity index, which measures the stock price performance of the 20 largest private equity companies in Europe (Wendel,, Ratos, 3i, Eurazeo,, Candover, Electra Private Equity, etc.) Feb DJ Stoxx Private Equity 20 index Euronext 0 index Euronext 150 index DJ Stoxx Private Equity 20 index Euronext 0 index Euronext 150 index p. 9

10 Favourite list Despite KBC Securities does not use a relative valuation system, our Favourite list should nevertheless be regarded as such. In terms of timing, we don t regularly alter the constitution of our selection as we try to aim for value instead of being a trader. Obviously, we tend to favour large discounts, while not losing sight out of the potential for unlocking hidden value, investment track records, portfolio consitution, stability of the portfolio s valuation, investment profile, etc. Top pick list Profile Entry price Entry date Current price Upside potential % change (TR) Δ rel. to DJ Stoxx 50 Defensive % 38.3% 24.5% Cyclical % 4.6% 0.8% Tubize Momentum Feb % -20.5% -20.2% RHJ International Agressive % 33.5% 38.4% Investment cases Directly and indireclty held cash of appr. 1bn allows for cherry picking in a distressed, cash-hungry market Long-term average annual return of 12.4% underlines management competence push into managing external assets leverages on the existing business model combines a conservatively valued portfolio with a high div yield, making it a safety and opportunity play Outlook for worldwide dredging market and DEME is an uncertainty only in the long run AvH's financial pillar is thriving despite financial crisis We expect AvH to up its dividend 5% y/y up until FY14, based on a slowdown in current earnings An experienced management team and a well-balanced portfolio significantly reduce the company's risk profile Tubize UCB's Cimzia sees a good launch in the US for RA and Crohn's both in Europe and especially in the US market UCB's Epratuzumab for systemic lupus erythematosus showed good mid-stage results; ready for phase III testing UCB's restructuring/divestment efforts and the focus on core projects is boosting short-term profitability Tubize has 30% upside potential (25% implied discount to NAV) and enjoys a positive leverage effect RHJ International RHJI's will use its 170m war chest (post-kleinwort and KBC AM Dublin) to acquire financial services comps RHJI succesfully closed Kleinwort Benson, giving it a strong platform out of which it can expand further RHJI after supporting most of its private investments is in the process of shedding its industrial assets RHJI's heavily exaggerated 40% discount reflects uncertainty about the exit value of its industial portfolio Past transactions Entry price { ) Entry date Exit price { ) Exit date Total return (%) Δ rel. to DJ Stoxx 50 GBL // // % 5.5% /12/ //20-9.7% 13.4% RHJI /12/ /04/ % -20.1% /12/ // % 25.8% BIP Invest. Partners /12/ //20 3.0% -14.3% Quest for Growth /12/ // % 19.8% Luxempart 2 17// /12/20 5.2% 4.1% // /02/20 4.1% 5.0% GBL // /06/ % 14.6% p.

11 The PRIVAK status The PRIVAK status was created by a Royal ree of 18 il 1997 and is part of a wider raft of measures taken by the Belgian government to boost investment in venture capital. PRIVAKs were initially required to apply for a listing on the Belgian stock exchange, but in 2003, the regulator granted them the option to remain private, which means that their shareholder structures can be reserved exclusively for private investors. The PRIVAK is obliged to pay out at least 80% of the profits that stem from the realized capital gains of its accounting year. ONLY TWO BELGIAN PRIVAKS Quest for Growth and KBC Biotech are currently the only two public PRIVAKs in Belgium. It is unsure that other public PRIVAKs are currently being set up. The first company to be awarded the PRIVAK status was Quest for Growth, which received the status in Quest for Growth is focused on investing money in technology and high growth companies and has a clear-cut policy for investments in listed stocks. The KBC Private Equity Fund Biotech (KBC Biotech) was the second PRIVAK to be launched and was approved in KBC Biotech has invested exclusively in biotechnology companies. Its investments in listed stakes are mainly done on the Nasdaq stock exchange. OVERSEEN BY THE CBFA Companies with PRIVAK status are monitored by the CBFA, the Belgian market regulator. The name PRIVAK is derived from 'Private Equity' and 'Bevak' (closed-end investment company). In essence, a PRIVAK is a Belgian closed-end investment company that provides a framework for private investors to invest directly in admissible financial instruments issued by unlisted companies and growth companies. INVESTMENT CRITERIA PRIVAKs are subject to very strict investment criteria and are subject to some constraints concerning dividend payments. 1. At least 50% of the portfolio must be invested in equity. 2. At least 70% of the portfolio must be invested in so-called qualified investments, which are investments in nonquoted companies, companies that are quoted in a growth market or investments in private equity funds with a similar investment profile to the PRIVAK. 3. Investments in companies quoted on a growth market must be limited to 50% of the above-mentioned qualified investments. 4. PRIVAKs may invest no more than of total assets in a single company and must restrict the investments per company per year to a maximum of 6.2m. FISCAL BENEFITS PRIVAKs are granted substantial tax benefits, over and above the exemption from capital gains tax normally granted to Belgian investment vehicles. A PRIVAK's dividends are exempt from withholding tax if at least 80% of the profits stem from realized capital gains and if the company complies with all of the investment criteria. The part of the dividend resulting from capital gains will be exempt from withholding tax, while the remaining part of the dividend will be subject to a withholding tax of 15%. p. 74

12 Description Quest for Growth is a Belgian investment company focused on listed and unlisted growth companies with the objective of converting capital gains into tax-free income through the Privakstructure. Investment cases Quest's investors benefit from Belgium's Privak statute, thanks to which the gross dividend is net of taxes Quest has a dynamically managed portfolio of listed stocks, leaving it vulnerable to the market's momentum Quest's unlisted investments have been subject to writedowns against a background of a frozen M&A market Our rating is entirely based on valuation grounds, as the stock is trading at relatively high discount levels Analyst opinion Stock price: 4.26 Target price: 5.50 Potential: 22.55% Rating: BUY Company specifics ket cap: 50m Currency: EUR Avg. daily value: 0.02m Avg. 3M volume: 4,864 % chg 1M: -1.18% % chg 1Y: 0% 52-week hi/lo: 4.95 / 3.95 BB-code: QFG BB Reuters-code: QUFG.BR Web: Shareholder structure # shs % shs value ( m) Dexia Isnurance 1,393, % 5.85 Laxey Partners 1,413, % 5.94 KBC Asset Mgt 513,7 4.36% 2.16 Free float 8,467, % Corporate calendar NAV update (A) NAV update (A) NAV update (A) Results 3Q (A) Analyst Meeting (A) NAV update (A) Dividend data % % % % 54.8% (A) 99(A) 00(A) 01(A) 02(A) 03(A) 04(A) (A) 06(A) (A) (A) (A) (E) 11(E) 12(E) 13(E) Regular dividend Interim dividend 20.0%.0% 0.0% 8.4% 8.0% 21.2% 0.6% 98(A) 99(A) 00(A) 01(A) 02(A) 03(A) 04(A) (A) 06(A) (A) (A) (A) (E) Regular dividend yield Interim dividend yield Volume and performance data 9,000 8,000 7,000 6,000 15% % 5,000 5% 4,000 3,000 2,000 0% -5% 1,000 -% % Feb Traded volumes Monthly performance rel. to BEL20-index p. 75

13 News flow : Profitable in 1H despite 0.62m loss in 2Q Quest in the period between 1 il and 30 e 2Q booked its first quarterly loss since 1Q: the negative result amounted to 0.62m ( 0. per share) and compares with a 1H loss of 5.37m ( 0.46 per share) and a 2H loss of 12.71m ( 1. per share). Due to a profitable 1Q, the company was nevertheless able to write its 6-month result in black ink so that 1H profit came in at 1.46m. Corresponding ROE (since YE) stood at 1.7% (non-annualised), which is down versus an exceptionally strong 26.8% in FY, but up versus an equally weak -41.8% in FY. Equity per share at end-1h climbed to 7.37 per share, versus 7.25 at YE (+1.5% year-to-date), while the stock dropped to 4.25 (-8.6% year-to-date). The discount consequently increased to 42.3% (versus 35.9% at YE). The 1H profit is explained almost entirely by Quest s decision to sell its stake in CoreOptics, producing a 2.5m capital gain. Awaiting formal closing, Quest continues to include the stake in its Private Equity portfolio. The gain was counterbalanced by Movetis, which after floating in 4Q suffered from a serious drop in its stock price, hence saddled Quest with a 1.2m unrealised loss. Quest in 1H announced that it invested 1m in Anteryon, which is the world leader in Wafer optics technology and which produces camera modules for mobile phones. Nor the quarterly profit nor the NAV figure came as a surprise as both had already been made public via the company s monthly updates. The general picture in 1H is that the listed segment wasn t able to repeat gains realised in the past 15 months and that the quality of the Private Equity portfolio (not including Clear2Pay, CoreOptics and Movetis) remains difficult to assess. While these explain a large part of the discount (> 40%), we find neither of both worrisome. In fact, Quest fared well as the 6-month NAV performance remained positive, a performance that even when doped by the CoreOptics sale - compares favourably with a 14.5% year-to-date drop of the EuroStoxx50 index. We estimate adjusted equity value per share at 7.49 with a 42.6% discount. This level is high, going by comparable companies valuations, the transparency of its listed investment portfolio, the lack of debt on its balance sheet and its ability to defend its equity base with success. Going forward and following divestment of key PE assets, Quest has but a few options to create value via exits (IPO or trade sale) in the near- and medium term. In all, the upside potential from current trading levels amounts to 27%, even when our TP already implies a 26.5% to adjusted equity value. --20: e NAV declines as markets recede NAV at end-e declined to 7.36 per share, versus 7.48 at end- (-1.6% m/m, +1.5% YTD). The stock hovered steady at 4.25 (-0% m/m, -8.6% YTD), due to which the discount decreased a tad to 42.3% (end-: 43.2%). Quest made a relatively limited number of changes to its listed portfolio, mainly upping stakes in existing portfolio companies Econocom and Imtech. Quest lowered positions in TKH Group, LEM Holding and Pfeiffer Vacuum Technology and added one new investment to the ranks: Phoenix Solar. Combined, the listed portfolio totals 51.4m and accounts for 59.4% of NAV. Listed assets break down in Software & Services (14.0%), Technology & Hardware (6.4%), Pharma & Biotech (5.7%), Healthcare Equipment (2.7%), Electrical & Engineering (18.2%) and Materials & Others (7.1%). Quoted/unquoted assets (i.e. Movetis) account for 5.3% of NAV. The value of the direct Private Equity stakes barely altered, although we noted that the valuation of Kiadis Pharma has increased to 2.3m, versus a previous 2m. Quest made no mention of the underlying reason for the valuation adjustment. Our SOTP model no longer lists the CoreOptics stake (as this is in the process of being sold). The valuation of the 3rd Party funds remained level with end- reading as well, safe for adjustment related to using end-of-ch data instead of YE data for a number of funds. The direct and indirect PE portfolios are valued at a respective 16.4m and 8.6m. Combined, PE stakes account for 25.0m, or 28.9% of adjusted equity. We estimate net cash at 8.4m (.7% of NAV), which includes the valuation of options and other items on the balance sheet and the cash-equivalent of the CoreOptics stake. Based on Friday s close, we estimate adjusted equity value p.s. at We note that despite a broad number of past writedowns in the PE portfolio in the past and the fact that it has few options to create value via exits, the stock s valuation is very undemanding: Quest s NAV performance relative to its stock price and its benchmark indices has held up quite well; the discount currently hovers a tad below 44%. The upside from current trading levels amounts to 32%, even when our TP already implies a 25% to adjusted equity value : CoreOptics deal boosts NAV, Anteryon joins ranks NAV at end- declined to 7.48 per share, versus 7.56 at end-il (1-1.1% m/m, +3.2% YTD). The stock mimicked the movement and declined to 4.25 (-5.6% m/m, -8.6% YTD), due to which the discount increased even further to 43.2% (end-il; 40.48%). Quest made quite a number of changes to its listed portfolio, mainly upping stakes in existing portfolio companies: Unit 4 Agresso, TKH Group, Teva Pharma, Arcadis, Faiveley, SMA Solar and Centroctec. Quest lowered positions in INIT and added new investments to the ranks as well: Econocom, Parrot ad Accel Group. It disposed entirely of its stake in Seloger.com (Tandberg was tendered to Cisco s takeover offer). Combined, the listed portfolio totals 52.4m and accounts for 59.3% of NAV. Listed assets break down in Software & Services (14.3%), Technology & Hardware (6.9%), Pharma & Biotech (5.9%), Healthcare Equipment (2.7%), Electrical & Engineering (16.4%) and Materials & Others (6.9%). Quoted/unquoted assets (i.e. Movetis) account for 6.3% of NAV. The value of the direct Private Equity stakes wasn t subject to adjustments. Our SOTP model no longer lists the CoreOptics stake (as this is in the process of being sold), but includes Dutch micro-optics firm Anteryon, in which Quest yesterday invested 1m alongside Qualcomm. Anteryon designs and produces micro-optics and refractive-optics, enabling wafer-based production and integration of optics for miniature camera and laser projection modules. It was spun out of electronics firm Philips in The fresh capital will be used on Anteryon s WaferOptics optical module production technology and the company s Asia production facility expansion. The valuation of the 3rd Party funds remained level with end-il reading as well, while Quest answered a 0.12m capital call from Capricorn Cleantech Fund. The direct and indirect PE portfolios are valued at a respective 16.1m and 8.4m. Combined, PE stakes account for 24.5m, or 27.8% of adjusted equity. We estimate net cash at 9.5m (.7% of NAV), which includes the valuation of options and other items on the balance sheet. We currently estimate adjusted equity value p.s. at We note that despite a broad number of past writedowns in the PE portfolio in the past and the fact that it has few options to create value via exits (IPO or trade sale), the stock s valuation is very undemanding: Quest s NAV performance relative to its stock price and its benchmark indices has held up quite well; the discount currently hovers a tad below 44%. The upside potential from current trading levels amounts to 28% : 2.5m CoreOptics gain increases stock s appeal Quest for Growth sold its stake in CoreOptics to Nasdaq-listed Cisco Systems Inc, the worldwide leader in networking for the Internet. QfG has invested in CoreOptics since 2006 and participated in various financing rounds. The sale is expected to have a 0.21 per share positive impact of approximately 2.5m on last published NAV. Clearly, we regard the sale as a very positive item for Quest; an array of writedowns on the carrying value of the unlisted stakes (in 20 and 20) put question marks behind Quest s ability in creating value out of the unlisted portfolio. The monetization of CoreOptics thus reduces the impairment risk. After the transaction, the unlisted portfolio accounts for 25.4%, which includes 3rd Party Funds (9.1%) and Clear2Pay (5.9%). The balance (.4m) consists almost entirely of Pharma & Biotech investments, with the biggest ones being Kiadis (2.2%), Sphere Medical (1.9%), Syntaxin (1.9%) and TCLand (1.7%). Despite disposing of scant financial details and bearing in mind that the valuation of these assets always depends on progress in bringing the pipeline to fruition, we believe the downside risk on the unlisted portfolio to be low. We estimate adjusted equity value per share at We remind that we increased our TP to 5.5 a couple of weeks ago, based on the fact that the undervaluation in terms of Please press here to request a full historical news flow overview of the company p. 76

14 Sum-of-the-parts model Description Sector/m arket BB Shares held Recent Last price Crncy % of NAV V aluation change ( ) Quoted companies Software & Services 14.51% ECONOCOM Euronext Brussels ECONB BB 71,170 2, % 0.80 INIT Deutsche Börse IXX GY 95, % 1.35 NEMETSCHEK Deutsche Börse NEM GR 135, % 3.42 TRANSICS Euronext Brussels TRAN BB 250, % 1.24 UNIT 4 AGRESSO Euronext Amsterdam UNIT4 NA 195, % 3.29 VIZRT Deutsche Börse VIZ GR 326, % 0.79 WIRECARD Deutsche Börse WDI GR 250, % 2.06 Technology Hardware 6.68% 5.96 EVS BROADCAST Euronext Brussels EVS BB 55, % 2. LEM HOLDING Zwitserland LEHN SW 7, CHF 2.28% 2.03 PARROT Euronext Paris PARRO FP 30, % 0.44 TKH GROUP Euronext Amsterdam TWEKA NA 93,6-20, % 1.40 Pharma & Biotech.81% 9.64 ABLYNX Euronext Brussels ABLX BB 115, % 0.83 MOVETIS Pharma & Biotech MOVE BB 523, % 5.18 ROCHE HOLDINGS SWX Swiss Exchange ROG VX 20, CHF 2.25% 2.00 TEVA PHARMACEUTICAL Nasdaq TEVA US 45, USD 1.82% 1.62 Health Care Equipment & Svs 2.76% 2.47 UNITED DRUG Dublin UGD ID 1,018, % 2.47 Electrical & Engineering 18.59% ANDRITZ Vienna ANDR AV 70, % 3.36 ARCADIS Euronext Amsterdam ARCAD NA 240, % 3.56 FAIVELEY Euronext Paris LEY FP 25, % 1.45 IMTECH Euronext Brussels IM NA 8,5 26, % 2.33 PFEIFFER VACUUM TECHNO Deutsche Börse 40,000-5, % 2.41 PHOENIX SOLAR Deutsche Börse PS4 GY 25,000 25, % 0.84 SMA SOLAR Deutsche Börse S92 GY 15, % 1.47 VESTAS WIND SYSTEMS Copenhagen VWS DC 30, DKK 1.30% 1.15 Materials 6.34% 5.65 CENTROTEC Deutsche Börse CEV GY 1, % 1.52 GEBERIT SWX Swiss Exchange GEBN VX 12, % 1.51 UMICORE Euronext Brussels UMI BB 0, % 2.62 Other sectors 0.97% 0.87 ACCELL GROUP Euronext Amsterdam ACCEL NA 25, % 0.87 Loan notes 1.83% 1.63 Private Equity investments Asset type Invested Committed 28.00% ACTIVE CIRCLE Software & Services equity % 0.40 ANTERYON Semiconductors equity % 1.00 CLEAR2PAY Software & Services equity % 5.36 IDEA Pharma & Biotech equity % 0.52 KIADIS Pharma & Biotech equity % 2.30 MAGWELL Software & Services equity % 0.43 PROSONIX Pharma & Biotech equity % 1.29 SPHERE MEDICAL HOLDING Pharma & Biotech equity % 1.77 SYNTAXIN Pharma & Biotech equity % 1.79 TCLAND equity % 1.50 THIRD PARTY INV FUNDS Funds % 8.60 Portfolio 90.49% Net cash (incl. others & options) 9.51% 8.48 Adjusted equity value 0.00% Number of shares (outstanding) 11,789,255 Treasury shares (for remuneration purposes, resale, collateral,...) ,3 Treasury shares (available for cancellation) 0.00% 0 Number of shares (for per share calculation) 11,789,255 Quest for Growth last price 4.20 Adjusted equity value p.s Current discount 44.46% Target prices Target equity value Target equity value p.s Discount to target equity value 44.46% KBCS has a BUY recommendation and a 5.5 target price. The upside potential versus a stock price of 4.2 equals 30.95%. The implied discount of our 5.5 target price vs. the target equity value is 27.27%. p. 77

15 Graphical portfolio breakdown Pharma & Biotech 9% echnology Hardware 12% Healthcare Equipment 5% Electrical & Engineering 35% magwell 3% prosonix 8% sphere medical holding 11% syntaxin 11% tcland 9% active circle 2% Software & Services 26% Materials & others 13% kiadis 14% idea 3% clear2pay 33% anteryon 6% uoted/unquoted 6% PE & fund Investments 28% Net cash 11% Total commited 26% Quoted 55% Total invested 74% Historical NAV overview 13 60% % 40% 30% % % NAV (LHS) Stock price (LHS) Hist. discount (RHS) Discount (RHS) p. 78

16 Financial data Income statement ( m) Sales & operating income Result from operating activities Result from financing activities Result from extraordinary activities Share of result of associates Income taxes Discontinued activities Minorities Share of the group Adjusted net result Balance sheet ( m) Intangible assets & goodwill Tangible assets Participations acc. for under equity method Other financial assets Cash & cash equivalents Other assets TOTAL ASSETS Equity attributable to holders of the parent Minorities Financial debt Other liabilities TOTAL LIABILITIES net debt Cash flow statement ( m) Cash flow from operating activities Cash flow from investing activities Dividends paid (consolidated) Other cash flow from financing Fx and changes to consolidation scope Change in cash & equivalents Per share data Year-end share price ( ) Year-end market cap ( m) Weighted average # shares Weighted average # shares,diluted Basic EPS ( ) Diluted EPS ( ) NBV ( ) Adjusted equity value ( ) Premium (-) / Discount to (vs.ye stock price) Gross dividend Gross dividend yield Ratios Return on Equity (avg) Total return Pay-out ratio (adjusted net result) P/E P/NBV Statutory data ( m) Result from operating activities Result from financing activities Result from extraordinary activities Income taxes PROFIT/LOSS FOR THE PERIOD Dividends paid (statutory) Financial assets Other assets Capital and reserves Provisions and deferred taxation Liabilities TOTAL ASSETS 04/ / / / ,416,000 9,459,3 9,459,3 11,789,255 11,789,255 11,789,255 5,416,000 9,459,3 9,459,3 11,789,255 11,789,255 11,789, % 18.61% 19.48% 14.89% 14.89% 35.86% % 7.77% 19.40% 0.60% 0.00% 0.00% 04/ % 7.0% 22.4% 0.5% -71.9% 21.2% 9.7% 21.1% 34.5% -15.5% -62.5% 47.6% 0.0% 99.9% 0.0% 96.7% 0.0% 0.0% / p. 79