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
January to 31 March 2011.

Investment highlights

  * Net assets per share increase by 7.9%, outperforming the FTSE Smaller
    Companies ex Investment Trusts index by 7.6%.
   
  * Portfolio companies continue to deliver strong operating performances.
   
  * Continued rotation from mature fairly valued investments into new
    attractively priced opportunities.
   
Financial highlights

  * Net assets of 97.64p per share.
   
  * Discount narrows significantly to 18.2%.
   
  * Portfolio valuation remains highly attractive - price to cash flow rating
    of 7.1x.
   
Investment Managers' Review

  * The period saw a further improvement in net assets per share of 7.9%,
    taking the cumulative increase over the twelve months ended 31 March 2011
    to 40.9%. The Company's NAV growth has outperformed the smaller companies
    index by 25.7% over this period and is now ahead of the smaller companies
    market over one, three and five years.
   
  * Performance was driven by the continued strong performance of top portfolio
    holdings. Mecom, E2V and Lupus rallied 47%, 27% and 24% respectively
    following solid final results, positive outlook statements and continued
    upgrades to consensus earnings forecasts. These three holdings accounted
    for c.7.8% of the increase in NAV in the period. Performance of other
    holdings was also strong, especially RPC following the completion of the
    Superfos acquisition and a subsequently positive trading statement together
    with further upgrades.
   
  * The only materially negative contribution came from Lavendon, which fell
    following the cessation of bid talks in mid January. The Manager was
    strongly opposed to the cash offer proposed by TVH and Ashtead, which we
    believe materially undervalued the business, and worked extensively with
    other shareholders to prevent it. Lavendon subsequently released final
    results in March, which demonstrated strong degearing and communicated
    several self help initiatives which should improve the operational and
    financial performance of the business.
   
  * Our principal engagement activity in the period involved discussions with
    portfolio companies concerning their dividend policies and payout ratios.
    We continue to believe that dividend growth will be a significant
    contributor to re-rating of smaller companies. In addition we continued to
    lobby successfully for increased research coverage of a number of portfolio
    companies which "fell off the radar screen" of the sell-side during the
    market turbulence of the last two years.
   
Portfolio Review

  * The portfolio remains highly focused with 18 holdings, a slight reduction
    from the prior period as toe-hold investments have been exited where we
    believe there is scope to deploy further capital or where we believe better
    risk rewarded returns exist elsewhere. The top 10 holdings accounted for
    82.8% of net assets, broadly in line with our 80% target. At the end of the
    period the portfolio was 4.5% in cash.
   
  * Purchases over the period included selective increases in existing
    portfolio holdings, predominately RPC's rights issue and Wilmington, as
    well as a new investment in Kewill Systems. Kewill is a business well known
    to SVGIM with a management team which has generated consistent returns for
    shareholders over the past eight years. Its valuation is undemanding and
    there are multiple opportunities for accelerating returns going forward.
   
  * Sales over the period involved continued exits of mature holdings and
    recycling capital to more attractive risk-reward opportunities. The
    remaining stub holding in Redstone, an unsuccessful legacy investment, was
    fully exited. Following exceptionally strong performance the largest
    position, E2V, was reduced in order to maintain a sensible rebalance within
    the portfolio.
   
  * Despite the strong NAV performance over the period, from a valuation
    perspective the portfolio remains very attractive. Our key financial metric
    (calculated as operating cash flow less maintenance capital expenditures to
    enterprise value), remains at c.15%, still materially above what we would
    consider the long term average. On more conventional measures the median
    consensus forecast PE of 10.4x, PE Growth ratio of 0.65x and price to cash
    flow of 7.1x also imply an attractive combination of attractively rated
    cash generative growth. The look-through gearing of the underlying
    portfolio remains modest at 1.2x debt to EBITDA, a slight reduction on
    prior period as the underlying portfolio companies degear.
   
Outlook

  * Now some two years from the trough of the equity markets, earnings momentum
    is starting to decelerate and profit warnings have increased, particularly
    driven by high street retailers. Macro concerns remain to the fore and
    inflationary concerns are rising. As is always the case, the strong
    businesses with strong management teams will continue to prosper over the
    medium to long term and in some cases, the current market conditions can
    provide as many opportunities as risks.
   
  * We remain wary of investing in companies which have already returned to
    peak operating margins or where the possibility of disappointing turnover
    growth may have increased. Our analysis of the portfolio suggests that none
    of our holdings are generating peak sales or margins, which bodes well for
    further gradual earnings recovery.
   
  * The 15% earnings growth and 3% dividend yield offered by the FTSE Small Cap
    Index indicates potential forward returns of some 18%, excluding any change
    in ratings, which are at the low end of historic trends. We therefore
    remain confident that Smaller Companies will continue to offer attractive
    absolute and relative returns for the medium term.
   
  * 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, although a recent dearth of
    secondary fundraisings has led to market purchases being our primary entry
    mechanism. Poor levels of liquidity require patience to build target
    weights without losing pricing discipline, and we are continually seeking
    block transactions. The attractive valuation characteristics of and
    potential returns from the existing portfolio continues to provide 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.
   
  * With corporate sector balance sheets forecast to be the least geared since
    1996, and falling to a 20 year low by 2012, we continue to anticipate M&A
    activity to rise throughout 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. We remain cautiously
    optimistic of further growth in the Company's Net Asset Value.
   
Summary

(as at 31 March 2011)

Net assets              £74.96m
                               
NAV per share            97.64p
                               
Net cash                  5.09%

Top 10 Investments

Company name (as at 31 March 2011)            % of 
                                           invested
                                          portfolio
                                                   
STRATEGIC RECOVERY FUND II                    15.55
                                                   
E2V TECHNOLOGIES ORD GBP 0.05                 11.66
                                                   
RPC GROUP ORD GBP0.05                         11.00
                                                   
LUPUS CAPITAL ORD GBP0.05                     10.10
                                                   
KCOM GROUP ORD GBP0.10                         9.87
                                                   
MECOM GROUP ORD GBP0.6085888                   8.24
                                                   
LAVENDON GROUP ORD GBP0.01                     7.45
                                                   
4IMPRINT GROUP ORD GBX38.461538                6.87
                                                   
ALLOCATE SOFTWARE ORD GBP0.05                  3.95
                                                   
WILMINGTON GROUP ORD GBP0.05                   3.58

Sector analysis            % of portfolio
                                         
Unlisted                            16.67
                                         
Manufacturing                       20.47
                                         
Telecoms                             9.37
                                         
Technology                          18.82
                                         
Retail                               2.67
                                         
Media                               18.77
                                         
Support services                     8.14
                                         
Financial general                    0.00
                                         
Leisure                              0.00
                                         
Net cash                             5.09

Size analysis              % of portfolio
                                         
(market cap)                             
                                         
<£100 million                       36.16
                                         
£100 - £300 million                 31.12
                                         
£300 - £500 million                 27.63
                                         
Greater than £500                    0.00
million                                  
                                         
Net cash                             5.09

The Directors are not aware of any significant events or transactions which
have occurred between 31 March 2011 and the date of publication of this
statement which have had a material impact on the financial position of the
Company.

For further information please contact:

Adam Steiner

SVG Advisers Limited

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

Company website: www.strategicequitycapital.com