Interim Management Statement

Baronsmead VCT3 plc                              

                         Interim Management Statement                          

For the three month period from 1 January 2011 to 31 March 2011.

Headlines-

3.2% increase in underlying Net Asset Value per share                               
                                                                           
£1.6 million investment in Valldata Group Limited                          

 

Performance Summary

Capital return                   As at      As at       Movement            
                                 31 Mar     31 Dec                         
                                 2011       2010                           
                                                                           
Total net assets                 £63.44m    £64.64m*                        
                                                                           
Net asset value per share        105.32p    102.10p*    3.2%                
                                                                           
Share price                      93.13p     94.25p     (1.2%)              
                                                                           
Discount to NAV                  (11.6%)    (7.7%)                         

Total return       3 months    1 year (%)     5 year (%)     Since launch   
                   (%)                                       (%)            
                                                                            
Net asset value(1) 3.0         14.7           18.7           85.6           
                                                                          
                                                                            
Share price (2)    3.6         14.4           27.4           64.8           
                                                                            
FTSE All-share (3) 1.0         8.7            20.0           42.4           
                                                                            

*Stated after allowing for 4.5p final dividend for comparative purposes. NAV at
31st December 2010 excluding effect of dividend was 106.60p.

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 the additional benefit of
receiving VCT dividends tax free.   

Investment Performance 

Unquoted valuations have increased by 5.0% in the period bringing an uplift to
the NAV per share and AIM-traded valuations increased by 1.3%. This increase
compares favourably with the FTSE All-Share Index which increased by 1.0%.

  

Top ten Investments 

Position    Position at                                          Percentage
at                                                                   of NAV 
31 Mar 2011 31 Dec 2010  Company                               as at 31 Mar 
                                                                       2011
                                                                           
1           1            Reed & Mackay                                  7.6
                                                                           
2           2            Nexus Vehicle Holdings Ltd                     7.1
                                                                           
3           4            CableCom Networking Holdings Ltd               4.0
                                                                           
4           3            Crew Clothing Company Ltd                      3.9
                                                                           
5           6            Quantix Limited                                3.6
                                                                           
6           5            Kafevend Holdings Ltd                          3.2
                                                                           
7           11           IDOX plc                                       3.1
                                                                           
8           7            Independent Living Services                    3.0
                                                                           
9           9            CSC (World) Limited                            2.9
                                                                           
10          8            Fisher Outdoor Leisure Holdings Ltd            2.8
                                                                           
Total                                                                  41.2

Analysis of Total Assets

                                          Percentage of           Percentage of
                                        total assets at         total assets at
                                            31 Mar 2011             31 Dec 2010
                                                                               
AIM, listed & collective investments                 28                      25
                                                                               
Unquoted investment                                  53                      48
                                                                               
Interest bearing securities                    16                    25        
                                                                               
Cash                                            3                     2        
                                                                               
Total cash portfolio                                 19                      27
                                                                               
Total assets                                        100                     100

Analysis of Investment Portfolio by Sector

(excluding cash and interest bearing securities)

                                        Percentage of   Percentage of total
                                    total investments        investments at
                                                   at                       
                                          31 Mar 2011           31 Dec 2010
                                                                
                                                                           
Business Services                                  37                    36
                                                                           
Consumer Markets                                   19                    18
                                                                           
Financial Services                                  2                     2
                                                                           
Healthcare & Education                             11                    12
                                                                           
IT & Media                                         31                    32
                                                                           
Total                                             100                   100

Investment Activity

During the quarter £1.62m was invested in a new unquoted company, Valldata
Group Limited and further investment was made into three existing portfolio
AIM-traded companies of £0.17m.

Wiltshire based Valldata is the UK's leading provider of outsourced donation
processing and fulfilment services for the UK not-for-profit market. It uses
its advanced technology and IT systems to handle large volumes of transactions
covering paper based donations, donations via telephone and on-line services.

Investmentsmade                          Date                   Cost (£'000)
                                                                            
Company                                                                     
                                                                            
Driver Group plc*                        Jan/Feb 2011                     64
                                                                            
Netcall*                                 Mar 2011                         80
                                                                            
STM Group plc*                           Jan 2011                         22
                                                                            
Valldata Services Ltd                    Jan 2011                      1,616
                                                                            
Wood Street Microcap Investment Fund     Jan 2011                        700
                                                                            
Total Investment                                                       2,482

*Follow on investments

Realisations                                                                   
                                                                               
Company                    Date                   Cost    Proceeds     Multiple
                                                                               
                                               (£'000)     (£'000)            x
                                                                               
Craneware plc              Mar 2011                 72         298          4.2
                                                                               
MLS                        Mar 2011                 42          42          1.0
                                                                               
Reed & Mackay              Mar 2011                182         182          1.0
                                                                               
Total realisations                                 296         522             

Net Asset Valueas at 30 April 2011.

The NAV per share at 30 April 2011 was 106.38p representing an increase
of 1.0% since the quarter end.

Events after the period end

In April 2011 the investment in Reed & Mackay was sold achieving a net profit
of £3.8 million on cash proceeds of £5.0 million. Including previous loan
repayments and interest this represents a return of 4.76 times original cost
and adds considerably to Baronsmead VCT 3's capacity to continue paying
dividends to its shareholders in line with the stated dividend policy.

Fundraising

It is likely that the Company will undertake a further fundraising during the
2011/12 tax year. Further details will be sent to shareholders when the half
yearly accounts to 30 June are published in August 2011.

Investment objective

Baronsmead VCT 3 plc is a tax efficient listed company which aims to achieve
long-term investment returns for private investors.

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.baronsmeadvct3.co.uk

Contact

For further information please contact:

Michael Probin     Investor Relations Manager  
020 7506 5600   [e-mail]