Circ re.Change of Investment Managers

Hygea VCT plc ("the Company" or "Fund")

In the 2006 Annual Report and Accounts, the Company informed
shareholders that the Board has been conducting a further review of
its cost base with a view to recommending additional cost-cutting
measures.

The objective of the review was to identify changes which could be
implemented without either hampering the integrity of the Fund or the
quality of the monitoring and mentoring advice given to investee
companies within the Fund's portfolio.

The review has now been concluded and, with the full support of
Octopus Investments Limited ("Octopus Investments"), the Company has
today posted a circular to shareholders containing a Notice of
Extraordinary General Meeting proposing that the following changes
are made to the way in which the Fund is managed:

Octopus Investments

Subject to shareholders' approval, the current investment manager  of
the Fund, Octopus  Investments has  agreed to  enter into  a deed  of
variation in respect  of the current  investment agreement ("Deed  of
Variation") and to cease to be the Fund's investment manager (without
any payment in lieu of notice), and will instead continue to  provide
certain services in respect of the Fund's requirements, including the
execution  of  dealing  orders  for  its  AIM  holdings  through  its
established CREST  facilities,  communication  channels  and  dealing
connections, and non-audit accounting services,  at an annual fee  of
£20,000 plus VAT. It will also provide administration services  which
will be provided at cost.

The Board

It is proposed that the Board  will become the fund manager in  place
of Octopus Investments.  The Board's intention  is to engage  Octopus
Investments in those limited functions stated above, with which it is
accustomed to working.  In addition, the Board proposes to appoint  a
committee of the Board which will provide additional services, as set
out below.

Commercial Advisory Committee

The  Board  shall  appoint  a  committee,  the  Commercial   Advisory
Committee  ("the  Committee"),  which  shall  be  comprised  of   the
Directors. Where  appropriate, the  Committee shall  engage  external
advisers to assist with the  management of portfolio companies  where
it  has  identified  tasks  which  are  best  delegated  to  selected
individuals  who  can  demonstrate   specific  industry  or   company
experience  and  expertise,  from  which  a  portfolio  company  will
benefit. This management  approach is  already being  adopted with  a
number of  the  portfolio companies  and  has shown  that  the  Board
benefits from being more  efficiently informed on commercial  matters
relating to portfolio companies. The Board considers this approach to
be important in  its application  of a  "company development"  model.
Such external  advisers  shall  be entitled  to  participate  in  the
performance incentive fee  discussed below at  the discretion of  the
Committee (for  itself and  its advisers)  but shall  not usually  be
entitled to  any  other remuneration  from  the Company,  other  than
reimbursement of expenses.

Portfolio companies will have  a member or  members of the  Committee
allocated to them  based on  the Committee's assessment  of both  the
company's investment potential and also its needs in order to realise
that potential.

The Committee members will not  receive any additional fees from  the
Company for their time  and commitment devoted  to the Committee  but
are likely to  receive fees  from portfolio companies  in respect  of
work  carried   out,  including   attending  board   meetings  as   a
representative of  the Company.  The  remuneration from  the  Company
payable to the  Committee members will  be wholly performance  based,
which will  operate in  place  of the  existing performance  fee,  as
follows:

*          The existing performance fee, which was adopted on the
  Fund's launch, was 20% in aggregate of increased net asset value
  (over £1.00 per share) of the Fund exceeding an accumulating hurdle
  rate of 7% per annum.

*          The Board considers that it would be in the best interests
  of shareholders to link the measure of performance to dividends and
  other distributions paid to shareholders rather than the existing
  net asset value-based formula described above. The Board proposes,
  therefore, that if the Committee structure is adopted by the Fund
  that (1) the hurdle is abolished; and, (2) the 20% performance fee
  is to take effect only once returns to shareholders by way of
  dividends and capital distributions exceed the sum of 80p per share
  - 80p (which shall include dividends previously made) has been
  selected as representing the net sum subscribed per share, based on
  a gross subscription of 100p less 20p income tax deemed by the
  Board to have been rebated to investors by HM Revenue & Customs at
  the time of subscription. Until cumulative distributions exceed
  80p, no payments will be due under the performance incentive fee.
  If, for example, cumulative distributions total 85p,   the
  Committee will receive, for itself and its advisers, a performance
  fee of 1p.


The Board estimates that by implementing the proposals set out  above
("Proposals") the current annual  running costs of  the Fund will  be
reduced to less than 3% of the Fund's net asset value at 31  December
2006 while at  the same time  providing the Fund  with access to  the
resources and  expertise  to derive  maximum  value from  the  Fund's
portfolio of investments.

Each of the Proposals constitutes a related party transaction under
the Listing Rules, Therefore, in order to put them into effect, the
Company is required to obtain shareholder approval at an EGM, which
has been scheduled for 30 July 2007 at 2:00 p.m.

A copy of the circular is available for inspection at the Company's
registered office at 8 Angel Court, London EC2R 7HP.

ENDS

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