New Investment

Caledonia Investments PLC
03 December 2003

                           CALEDONIA INVESTMENTS PLC


                        Caledonia invests in Marketform


Caledonia Investments plc ('Caledonia') is pleased to announce a new investment
totalling £15m in Marketform Acquisition Company Limited ('MACL'), the holding
company of a privately owned insurance group operating in the Lloyd's market.



Marketform group includes Marketform Managing Agency Ltd, which manages
Syndicate 2468.  This syndicate underwrites medical malpractice and other
specialist liability insurance outside the USA and expects to have underwriting
capacity of over £100m in 2004.  The syndicate's capacity is provided as to over
20% from Marketform group and the balance by other Lloyd's corporate Names.  The
group also manages non-US medical malpractice underwriting for a consortium of
other insurers on a fee and commission basis.  Caledonia's investment will
enable Marketform to take further advantage of the firm underwriting conditions
presently prevailing in this market.



Caledonia's investment will be by way of shares and convertible loan stock and
will represent a minority stake even assuming conversion of the loan stock.  The
balance of the equity is held mainly by Holly Bellingham, Chairman of MACL, who
led a management buy-out of the group in 1989, Simon Turner, Director, and other
group directors and staff.



Caledonia will be represented on the MACL board by John May and Tony Hambro.



Nobles acted as financial adviser to Marketform.



Holly Bellingham, Chairman of Marketform commented:



'We're delighted to have the backing of a long term, supportive shareholder in
Caledonia and believe there are considerable opportunities for further expansion
of the business.'



Tim Ingram, Caledonia's Chief Executive said:



'Marketform has developed an outstanding reputation for excellence in its
specialist fields and we are delighted to be associated with them. '



3 December 2003







Enquiries:

Caledonia                                            Tel: [phone]
Tim Ingram, Chief Executive
John May, Director

College Hill                                         Tel: [phone]
Tony Friend



NOTES TO EDITORS



Caledonia



Caledonia is a long established investment company with international scope
listed on the London Stock Exchange.  Since April 2003 Caledonia has been
classified in the AITC Global Growth sector of investment trusts where its
investment performance puts it in the top decile over 1 year and 5 years and top
quartile over 3 years and 10 years (to 31 October 2003 - the most recent date
for which AITC data is available).  Caledonia's strategy has delivered
outperformance against its benchmark FTSE All-Share Total Return index of 78%
over the five year period to 31 October 2003 and 76% over the ten year period to
31 October 2003.  Its total shareholder return outperformance for the 12 months
to 31 October 2003 was 35%.  Caledonia has a policy of delivering progressive
annual dividends with a 36-year record of unbroken annual dividend increases.
Through holding a diversified portfolio, Caledonia aims to maintain a medium
overall risk position.



At 31 October 2003, Caledonia had an unaudited Net Asset Value of 1192p per
ordinary share, before accruing for the interim dividend.  Based on the share
price as at the end of October 2003 the discount to its Net Asset Value per
share was 22.7%.



Caledonia's strategy is to focus on a portfolio of around 30 to 40 principal
investments, where it has significant and influential stakes with a policy that
at least 50% of the total portfolio should be in quoted securities or other
liquid assets.  New investments will typically be in the range £10 million to
£25 million.  Careful control is exercised over costs, notwithstanding
Caledonia's active and participative management style.  The Board believes that
Caledonia has a long established and valuable reputation for being a supportive
long term investor, which brings a strong deal flow of opportunities not always
available to others.



Caledonia's investments are focused on a selected range of sectors where it has
good in-house knowledge that can add value to management of investee companies.
Where particular expertise is not held in-house, investments may be made through
third party managed funds where Caledonia will often seek a significant stake in
the management company.



Caledonia's selected sectors are: Financial: comprising 31% of total assets,
including holdings in Close Brothers, Rathbone Brothers and ISIS Asset
Management; Leisure and Media: comprising 20% of the total assets, including
holdings in Kerzner International and The Sloane Club; Managed General Funds:
comprising 17% of the total assets including holdings in British Empire
Securities and a fund managed by Aberforth Partners; Industrial and Services:
comprising 14% of the total assets, including investments in Offshore Logistics
and Paladin Resources; Property: comprising 10% of the total assets, including a
holding in Quintain Estates; and Other: comprising 8% of the total assets.   The
percentages of the total assets quoted are as at 31 October 2003.



As an investment trust Caledonia is not subject in the future to liability for
corporation tax on chargeable gains.  As a result, Caledonia believes it will be
able to build greater value for shareholders and be more appealing to retail
shareholders which ultimately should contribute towards a lower discount of
Caledonia share price to Net Asset Value per share.



Shown below is a table# illustrating how the value of £100 invested in Caledonia
over a period of 1 year, 3 years, 5 years and 10 years to 31 October 2003 (the
latest date for which all comparative data is available) compares with an
equivalent theoretical investment in:



(i)                 The Association of Investment Trust Companies ('AITC')
                    Global Growth weighted average index

(ii)                The FTSE All-Share Total Return Index, and

(iii)               UK Savings 25,000*





Period invested to 31 October 2003


                                                              1yr           3yr           5yr          10yr

                                                               £             £             £             £
Caledonia                                                   148.7         125.7         175.6         263.3

AITC Global Growth                                          118.6          74.6         106.0         161.3

FTSE All-Share Index                                        113.6          75.6          97.3         187.6

UK Savings 25,000*                                          102.0         107.8         116.2         145.5





As can be seen in the table above, £100 invested in Caledonia shares would have
generated a significantly higher return over 1 year, 3 years, 5 years and 10
years than alternative investments in either the overall AITC Global Growth
Investment Trust sector, the FTSE All-Share Index or an index representative of
the building society industry.



# Source data prepared by Fundamental Data Limited on behalf of AITC Services
Limited.





* UK Savings 25,000 is an index compiled from an aggregate of 20 bank building
society rates to represent the industry, for a deposit of £25,000 up to 90-day
notice accounts.



Caledonia is a member of the Association of Investment Trust Companies (AITC).



For further information please visit www.caledonia.com







Noble Group ('Nobles')



Nobles is an independent UK investment bank.  It has three operating companies
providing integrated corporate finance/broking, fund management of alternative
investments and operational management of investment vehicles.  Nobles has been
active in the Lloyd's market for over ten years advising companies such as
Wellington, Atrium, Hiscox Select, Bankside, Hardy, The Corporation of Lloyd's,
and Lloyd's Scottish Limited Partnerships.




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            The company news service from the London Stock Exchange          OOVROSRURAA