Interim Management Statement

Baronsmead VCT 2 plc                              

                         Interim Management Statement                          

For the period from 1 October 2011 to 31 December 2011.

Headlines-

  * £2.579m new investments - £1.346m unquoted and £1.233m quoted   
                                                                    
  * £4.135m new funds raised in January/February 2012, (£3.938m net  
    of expenses)                                                    
                                                                    

 

Performance Summary

Capital return    As at     As at    Movement                                   
                                                                                
                  31 Dec    30 Sep                                             
                  2011      2011                                                 
                                                                                
Total net assets  £64.26m   £65.00m                                             
                                                                                
Net asset value   94.38p    95.15p   (0.8%)                                     
per share                                                                       
                                                                                
Share price       85.13p    86.25p   (1.3%)                                     
                                                                                
Discount to NAV   (9.8%)    (9.4%)                                              
                                                                                
                  3 month   1 year   5 year   10 year  Since                    
Total return      (%)       (%)      (%)      (%)      launch (%)                               
Net asset value(1)(0.8)     5.6      14.8     88.5     129.4                    
                                                                               
                                                                                
Share price(2)    (1.3)     7.4      19.5     95.7     131.6                    
                                                                                
FTSE All-share(3) 8.4       (3.5)    6.2      59.5     57.4                     
                                                                                

Key:

(1) NAV total return = NAV + reinvested dividends; Source: ISIS EP LLP

(2) Share price total return = Mid to mid share price + reinvested dividends;
Source: AIC

(3) FTSE All-share = FTSE All-share Index + reinvested dividends; Source: AIC

These total returns are stated before the inclusion of VCT tax
reliefs which are designed to mitigate the higher risks and costs associated
with investing in smaller companies and the constraints of the VCT legislation.
The tax reliefs given at the time of subscription have been 20%, 40%
and later 30%, so any adjusted performance measure including this relief will
vary depending on the date of subscription. There is also the additional
benefit of receiving VCT dividends tax free.   

Investment Performance

The unquoted portfolio valuation increased by 1.5% during the quarter while the
AIM portfolio decreased in value by 4.9% over the same period. The net asset
value total return of the company fell 0.8% during the quarter whereas the FTSE
All Share Total Return increased 8.4% over the same period.

Top Ten Investments 

Position    Position                                             Percentage    
at          at                                                       of NAV        
31 Dec      30 Sep        Company                              as at 31 Dec               
2011        2011                                                       2011     
                                                                   
                                                                           
1           1            Nexus Vehicle Holdings Limited                 8.8
                                                                           
2           2            CableCom Networking Holdings                   5.8
                         Limited                                           
                                                                           
3           3            Crew Clothing Holdings Limited                 4.2
                                                                           
4           4            IDOX plc                                       4.1
                                                                           
5           6            Kafévend Holdings Limited                      3.1
                                                                           
6           5            CSC (World) Limited                            3.0
                                                                           
7           8            Fisher Outdoor Leisure Holdings                2.8
                         Limited                                           
                                                                           
8           9            Valldata Group Limited                         2.6
                                                                           
9           7            Staffline Group plc                            2.6
                                                                           
10          10           Inspired Thinking Group Limited                2.1
                                                                           
Total                                                                  39.1

Analysis of Total Assets

                           Percentage of total       Percentage of total    
                           assets                    assets                 
                                                                            
                           31 Dec 2011               30 Sep 2011            
                                                                            
Unquoted investments                              48                      45
                                                                            
AIM, Listed & Collective                          31                      30
Investments                                                                 
                                                                            
Interest Bearing                      20                       24           
Securities                                                                  
                                                                            
Cash                                   1                        1           
                                                                            
Total cash portfolio                              21                      25
                                                                            
Total Assets                                     100                     100




Analysis of Investment Portfolio by Sector

(excluding cash and interest bearing securities)

                                      Percentage of total Percentage of total
                                        investments at 31   investments at 30
                                                 Dec 2011            Sep 2011
                                                                             
Business Services                                      37                  38
                                                                             
Consumer Markets                                       17                  17
                                                                             
Financial Services                                      3                   3
                                                                             
Healthcare & Education                                 11                  10
                                                                             
Technology, media and                                  32                  32
Telecommunications                                                           
                                                                             
Total                                                 100                 100

Investment Activity

A total of £2.579m was invested in the period under review. One new unquoted
investment of £1.346m was made in Independent Community Care Management
Limited. Five investments in AIM traded companies totalling £1.233m were
completed in four new and one existing portfolio company.

Investments made

Company                                 Date             Cost (£'000)
                                                                     
Independent Community Care Management   Oct 11                  1,346
Limited                                                              
                                                                     
FfastFill plc*                          Nov 11                     63
                                                                     
GB Group plc                            Nov 11                    150
                                                                     
Inspired Energy plc                     Nov 11                    200
                                                                     
TLA Worldwide plc                       Nov 11                    620
                                                                     
Paragon Entertainment Limited           Dec 11                    200
                                                                     
Total investments                                               2,579
                                                                     
*Follow on investment                                                



Realisations

Company                          Date          Cost  Proceeds  Multiple
                                             (£'000)   (£'000) of cost†
    
                                                                            
MLS Limited                      Nov 11          20        20       1.0
                                                                           
Total realisations                               20        20         
                                                                           

Fundraising Update

On 12 January 2012 the Company launched an offer for subscription to raise 
£4.135 million, this being the sterling equivalent of just less than €5 million
("the Offer"). The Offer became fully subscribed on 1 February 2012. As a
result, the Company raised £3.938 million after expenses.

Investment objective

Baronsmead VCT 2 plc is a tax efficient listed company which aims to achieve
long-term investment returns for private investors, including tax-free
dividends.

Events after the period end

Other than the events described above, the Board is not aware of any
significant events or transactions which have occurred between 31 December 2011
and the date of publication of this statement which would have a material
impact on the financial position of the Company.

Further information 

Further information regarding the Company, including net asset values published
since the end of the period and quarterly factsheets, can be found at the
Company's website www.baronsmeadvct2.co.uk

Contact

For further information please contact:

Michael Probin   VCT  Investor Relations Director     

020 7506 5600   [e-mail]