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 to 30 September 2010.

Investment highlights

  * Net assets per share increase by 20.4%, outperforming smaller companies
    index by 8.4%.
   
  * Portfolio continues to deliver strong operating performance.
   
  * Continued rotation from mature fairly valued investments into new
    attractively priced opportunities.
   
Financial highlights

  * Net assets of 80.3p per share.
   
  * Discount remains broadly unchanged at 24.4%.
   
  * Portfolio valuation remains highly attractive - price to cashflow rating
    7.9x and SVG cash flow yield of more than 15%.
   
Investment Managers Review

The period saw a further improvement in net assets per share of 20.4%, taking
the cumulative increase over the twelve months ended 30 September 2010 to
25.4%. The Company's NAV growth has outperformed the smaller companies index by
28.1% over this period and is now ahead of the smaller companies market over
three years.

Performance was driven by the continued strong performance of top portfolio
holdings. E2V, Gooch & Housego and Mecom rallied in excess of 50% around solid
interim results, positive outlook statements and continued upgrades to
consensus earnings forecasts, and accounted for c.10% points of the increase in
NAV in the period. Performance of other holdings was also strong, with RPC,
KCOM, Pinewood, Spirent and Lupus all rallying by more than 15%.

The only materially negative attribution came from Lavendon, which fell on the
back of an earnings downgrade accompanying its interim results, driven by a
slower than anticipated recovery in its overseas markets. Pleasingly cashflow
was in line. We believe it was oversold and note that it has subsequently
re-rated significantly.

Our principle engagement activity in the period centred around working with two
portfolio companies to ensure appropriate remuneration schemes were in place to
properly incentivise new management teams. We continued to lobby successfully
for increased research coverage of a number of portfolio companies which fell
off the radar screen of investment banks during the market turbulence of the
last two years, and have aided one company with its investor relations
strategy. We believe there is substantial scope for increased dividend payments
at two mature holdings and have communicated this to the Executive teams.

Portfolio Review

The portfolio remains highly focused with 19 holdings, a slight reduction from
the prior period as toe-hold investments were exited where we believe there is
little scope to deploy further capital or where we believe better risk rewarded
returns exist elsewhere. The top 10 holdings accounted for 74.7% of net assets,
broadly in line with our 80% target. At the end of the period the portfolio was
10% in cash in anticipation of a number of new investments. Two new investments
have been made since the period end reducing the cash balance back to more
normal levels.

Purchases over the period involved selective increases in existing portfolio
holdings, including Lupus, Gooch & Housego and KCOM. We participated in the
long anticipated placing of a proportion of the founder family's stake in Gooch
& Housego, which was six times oversubscribed.

Sales over the period involved continued exits of mature holdings and recycling
capital to higher risk-reward opportunities. Intec and Spirent were fully
exited. Both have proven to be highly successful investments, generating in
excess of 2x cash and 26% IRR since the bulk of the purchases were made in late
2006 and early 2007. Their respective theses had played out, and in the case of
Intec, our stub holding was sold following confirmation of a bid approach in
July. The position in Filtronic continued to be sold down as the thesis is
largely complete, and following strong performance, RPC was reduced modestly.
We still believe RPC's rating is undemanding and there is continued scope for
double digit earnings growth and dividend growth. Whilst we believe that there
is more sense of urgency in addressing its own retail challenges, the potential
risk adjusted return has deteriorated at Thorntons and we have reduced the
fund's exposure. The modest "toe hold" position in Western and Oriental was
exited.

Despite the strong NAV performance over the period, from a valuation
perspective the portfolio remains very attractive. Our key financial metric the
SVG Cash Flow Yield (calculated as operating cash flow less maintenance capital
expenditures to enterprise value), remains above 15%, still materially above
what we would consider the long term average. On more conventional measures the
median consensus forecast PE of 12.1X, PE Growth ratio of 0.54X and price to
cashflow of 7.9X also imply an attractive combination of attractively rated
cash generative growth. The look-through gearing of the underlying portfolio
remains modest at 1.3x debt to EBITDA, despite the disposals of Intec and
Spirent which have net cash balance sheets.

Outlook

The recovery in corporate profitability has been driven largely by a cocktail
of aggressive cost cutting combined with better than anticipated snap back in
sales. The sustainability of this pace of profit growth is questionable, with
many companies generating peak operating margins less than two years after the
nadir of the recession. The equity of many of these companies has been
aggressively re-rated and we feel some correction or period of consolidation is
likely in the short term. The drip feed of news on public spending cuts and
fiscal tightening is driving negative sentiment across many swathes of the
market - fairly and unfairly - and the investment community is seeking clarity
on the impact of the cuts.

However, there are still attractively priced quality investment opportunities.
We continue to seek out those reasonably priced smaller companies, which offer
niche products or services, are well managed and nimble, and can continue to
create value for shareholders in excess of that achieved by the market. As an
asset class, we continue to believe that smaller companies relative discount
remains unsustainable given this point in the economic cycle. This combined
with sporadic sell side research and a contracting base of Small Cap investors
continue to allow us to find investment opportunities which we believe will
offer compelling risk adjusted returns.

The prospects for new investments remain good. Since July, the pipeline of
secondary fundraisings has steadily built and the quality is generally
increasing. In addition, the market's pre-occupation with highly rated growth
continues to present us with reasonably priced cash generative companies with
more modest growth prospects, which are materially undervalued and where our
involvement can aid shareholder value growth. The attractive valuation
characteristics and potential returns from the existing portfolio provides a
high threshold for new investments and the focused nature of the portfolio and
long investment horizon allows us to be highly selective in deploying capital
in new opportunities.

M&A has picked up of late as larger trade buyers seek inorganic growth
opportunities, and the premiums achieved are materially higher than the 25-30%
typically seen across the cycle, another indicator of the value among smaller
companies. The M&A trend is likely to strengthen into 2011. The other three
drivers of equity return: earnings growth, re-rating and degearing all remain
favourable among our portfolio companies. The cash flow yield of the portfolio
remains very high, implying continued scope for re-rating. As bank lending
remains scarce and expensive, portfolio companies are still using their cash
flows to pay down debt, leading to a transfer of value to equity holders. We
remain cautiously optimistic of further growth in the Company Net Asset Value.

Continuation vote

At the Annual General Meeting held on 9 November 2010, the Board were pleased
with Shareholder support approving the continuation of the Company with over
75% of votes in favour. Neither the Board nor the Investment Manager are
complacent regarding the outcome of the continuation vote and are mindful of
the challenging targets, in terms of both NAV total return and share price
rating that must be exceeded in order for another continuation resolution to be
put at next year's Annual General Meeting

Summary

(as at 30 September 2010)

Net assets               £61.65m
                               
NAV per share              80.3
                               
Net cash %                 10.6%

Top 10 Investments

Company name (as at 30 September 2010)        % of 
                                           invested
                                          portfolio
                                                   
Strategic Recovery Fund II                    15.2%
                                                   
E2V Technologies                              13.6%
                                                   
KCOM Group                                     9.7%
                                                   
RPC Group                                      9.2%
                                                   
4imprint Group                                 7.5%
                                                   
Mecom                                          7.1%
                                                   
Lavendon                                       5.5%
                                                   
Pinewood Shepperton                            5.4%
                                                   
Statpro Group                                  5.3%
                                                   
Lupus Capital                                  5.0%

Sector analysis            % of portfolio
                                         
Unlisted                            16.0%
                                         
Electronics &                       15.9%
Electricals                              
                                         
Industrials                         13.4%
                                         
Support services                    12.6%
                                         
Media                               11.3%
                                         
Technology                           9.2%
                                         
Telecoms                             8.8%
                                         
Retail                               2.2%
                                         
Net cash                            10.6%

Size analysis              % of portfolio
                                         
(market cap)                             
                                         
<£50 million                        20.0%
                                         
£50 - £100 million                  27.2%
                                         
£100 - £300 million                 42.2%
                                         
Greater than £300                      0%
million                                  
                                         
Net cash                            10.6%

For further information please contact:

Adam Steiner

SVG Investment Managers Limited

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

Company website: www.strategicequitycapital.com