Manager Performance Incentive

Baronsmead VCT 2 PLC
12 December 2006


To:              RNS

Date:            12 December 2006

Company:         Baronsmead VCT 2 plc

Subject:         Manager Performance Incentive



The Board of Baronsmead VCT 2 plc (the 'Company') announces that from 1 April
2007, the following amendments to the Manager Performance Incentives will take
effect.

The publication of the Finance Act 2006 has caused the Board to review again the
desired make-up of the portfolio of the Company and to consider how
shareholders' interests can best be served.  It has concluded that a higher
proportion of funds should be invested in qualifying investments, particularly
unquoted.  In order to achieve this, the Manager needs to retain and grow the
best possible management team, in a market where the demand for the top private
equity professionals has become even more competitive.

The Co-Investment Plan introduced in winter 2004 will be extended to allow
executives of the Manager to invest 12%, from the previous 5%, in all of the
Manager-led unquoted investments made by the Company, Baronsmead VCT plc,
Baronsmead VCT 3 plc and Baronsmead VCT 4 plc.  At the same time, the Board has
also agreed a reduction, over a 2 year period, to the performance fee paid to
the Manager from its current level of 20% to 10% of the excess over the hurdle
rate.

The Board has carefully examined the combined effect of the amendments to the
Co-Investment Plan and the performance fee and also engaged Noble & Company
Limited to review the integrity of the models.  The Board believes that these
changes are likely to lead to improved levels of performance of the Company.






For further information contact:



Rhonda Nicoll, F&C Asset Management plc:                        0131 718 1074




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