Interim Management Statement

STRATEGIC EQUITY CAPITAL PLC

This interim management statement, issued in accordance with the UK Listing
Authority's disclosure and transparency rules, relates to the period from 1
July 2012 to 30 September 2012.

Investment highlights

  * Net assets per share increased by 12.7%, outperforming the FTSE Small Cap
    Index by 1.7%.
   
  * Outperformance was driven by strong performance from cyclical companies
    with exposure to recovering overseas economies.
   
  * Smaller companies remained undervalued; market value drivers shifted from
    earnings growth and debt reduction to M&A activity and re-rating.
   
Financial highlights

  * Company net asset value increased to £77.3m or 114.9p per share.
   
  * £3m of cash distributions were received from Strategic Recovery Fund II,
    reducing the unlisted investments weighting from 19.3% to 14.2% of the
    portfolio.
   
  * The cash weighting was increased to 13.1% in order to fund the forthcoming
    tender offer and dividend, and take advantage of any short term setbacks in
    markets or the prices of the manager's active target investments.
   
Investment Manager's Report

Market Review

The third quarter of 2012 saw equity markets perform strongly. The broader UK
market delivered a return of 4.7% and mid and small size companies delivered
8.9% and 11.0% respectively. Eschewing recent volatility, these indices were
strong across all three months. Both cyclical stocks and defensives with
growing earnings performed well.

This performance was at odds with market earnings forecasts for calendar year
2012, which are now negative for the smaller companies sector as a whole.
Profit warnings broadened out from the consumer sector, albeit remaining well
below long term averages. There was little discernible trend across sectors,
with many warnings mainly driven by company specific issues. Trading conditions
appeared to be slightly tougher than anticipated during the summer; however
"tough but manageable" remained the key message from the management of most of
the portfolio companies, and their earnings expectations remained positive.

There was continued M&A activity, albeit affecting fewer companies than in the
second quarter. Most notably Aegis was acquired by Japanese peer Dentsu at a
48% premium to its previous market value. This high level of premium is
unusually high for a FTSE250 company. It served as a useful reminder that many
quoted companies are trading at substantial discounts to the levels at which
trade and financial buyers are prepared to pay for control.

Portfolio Review

The Company's NAV rose by 12.7%, outperforming the 11.0% rise in the Small Cap
Index. The total NAV return for the last 12 months is 29.3%, a cumulative
outperformance of 7.9% compared to the FTSE Smaller Companies Index, which rose
21.4%.

Portfolio turnover increased over the quarter to 30% which is consistent with
our long term investment strategy. Two new investments were made; the position
in Goals was increased significantly post the collapse of a bid approach.
Kewill, Optos and Statpro were exited completely, raising £5.3m. Strong
performers Lavendon and RPC were top sliced. Net cash increased significantly
from £2.0m (3.0% of opening NAV) to £10.1m (13.1% of closing NAV), due to
theses sales and the distributions from SRFII. Due diligence on two other
potential investments is drawing to a close. Post the tender offer and
dividend, we anticipate a cash balance of c.8-9% prior to any purchases.

The majority of portfolio news flow remained positive. The key positive
contributors to performance in the period were Lupus, Lavendon, KCOM, 4imprint
and RPC. Lupus and 4imprint continue to generate strong organic growth, driven
by self-help and key end markets recovering in North America. We believe both
companies still have significant growth potential. Lavendon released positive
interim results and this led to analyst upgrades. KCOM and RPC's returns were
largely due to re-ratings on the back of in line trading updates.

The key negative contributor over the period was E2V, which fell 6% following a
trading statement showing some weakening in its end markets. The company
remains lowly rated compared with highly relevant precedent M&A. Optos' shares
also underperformed, despite an in-line trading statement. The fund exited the
position over the period as we were unable to complete our diligence on the
company.

The underlying cash flow of the portfolio remains strong. Despite a slight
re-rating of the portfolio, the aggregate valuation remains attractive at 13.3%
SVG cash flow yield and a price to cash flow of 8.5x. The average level of
gearing of underlying portfolio companies remains low at 0.5x net debt/EBITDA.
This allows portfolio companies significant scope to raise dividends and/or
undertake accretive M&A. With the cost of debt remaining low, it would not be a
surprise if certain portfolio companies were acquired by financial investors,
willing to lever companies to a higher level than public markets investors feel
comfortable with.

Outlook

UK equities have delivered significant returns in 2012. The outlook for
continued strong medium to long term returns from equities remains good.
Despite a modest recent re-rating, equities remain valued at multiples
significantly below long term averages. Markets appear to be pricing in a
decreasing, but potential likelihood of an earnings collapse. Whilst we do not
anticipate this, it is likely that earnings in aggregate for 2012 will
disappoint original forecasts.

Economic data remains inconsistent. Some sectors and markets, such as US house
building, appear to be on a clear recovery track. Other segments, such as
industrials with high exposure to capital expenditure in the Far East, appear
to be pausing for breath. In individual circumstances, markets have become more
efficient at pricing relative earnings risk.

Looking forward we believe that many companies have reined back their operating
and capital expenditure budgets that were previously targeted at growth
initiatives. 12 month forward earnings growth estimates for the FTSE 100 remain
low, albeit slightly improved at 5.7%; mid and small cap earnings growth remain
higher, estimated at +10.8% and +10.2% . Despite the recent rally the rating of
public equities remains very low compared with history.

We continue to believe early stages of multi-year recovery in profits, ratings
and equity markets. Compared with the last three years, earnings growth and
debt reduction are likely to be replaced by re-rating and corporate activity as
the primary drivers of return in the medium term. Following the disturbed
trading over the summer period, not all companies will be able to make up
profit forecasts by the end of the year. We anticipate a few more warnings
during Q4, which may provide interesting entry points into new investments.

We aim for every portfolio holding to exhibit medium to long term earnings
growth, under valuation and strong cash flow characteristics. Coveted assets,
with few poison pills, should enable the Trust's NAV to benefit from M&A
activity as and when it occurs; it is however, impossible to accurately
predict. In the meantime, the 13.3% SVG free cash flow yield continues to be
very attractive. With secondary fundraisings in short supply, market purchases
remain the primary focus for new investments. We have built up the cash
position to increase flexibility and hopefully benefit from any temporary
disappointments which may befall quality smaller companies.

Summary

(as at 30 September 2012)

Net assets                                 £77.3m
                                                 
NAV per share                              114.9p
                                                 
Net cash %                                   13.1
                                                 
Average discount to NAV                     21.8%

Top 10 Investments

Company name (as at 30 September      % of invested portfolio
2012)                                                        
                                                             
Lupus Capital                                  15.3          
                                                             
Strategic Recovery Fund II                     13.5          
                                                             
Lavendon Group                                  9.5          
                                                             
4imprint Group                                  9.1          
                                                             
KCOM Group                                      8.9          
                                                             
E2V Technologies                                8.9          
                                                             
Allocate Software                               6.4          
                                                             
CVS Group                                       5.4          
                                                             
RPC Group                                       5.3          
                                                             
Mecom Group                                     3.3          

Sector analysis            % of portfolio
                                         
Support services              18.7       
                                         
Manufacturing                 18.3       
                                         
Technology                    16.2       
                                         
Investment companies          14.2       
                                         
Net cash                      13.1       
                                         
Telecoms                       7.8       
                                         
Retail                         6.6       
                                         
Media                          5.1       

Size analysis              % of portfolio
                                         
(market cap)                             
                                         
<£100 million                 24.5       
                                         
£100 - £300 million           34.9       
                                         
£300 - £500 million            8.7       
                                         
Greater than £500             18.8       
million                                  
                                         
Net cash                      13.1       

The Directors are not aware of any significant events or transactions which
have occurred between 30 September 2012 and the date of publication of this
statement which have had a material impact on the financial position of the
Company. The company published a circular to shareholders on 4 October 2012 in
which it set out the terms and conditions of a tender offer for up to 4 per
cent of the Company's issued share capital.

For further information please contact:

Theresa Russell, Marketing

SVG Investment Mangers Limited

Telephone: [phone] or email [e-mail]

Company website: www.strategicequitycapital.com