Interim Management Statement

Baronsmead VCT3 plc                              

                         Interim Management Statement                          

For the three month period from 1 July 2010 to 30 September 2010.

Headlines-

4.7%                  Net Asset Value (NAV) per share increased by 4.7% in  
                      the quarter following good valuation growth from      
                      strong trading across the portfolio.                  
                                                                            
8.1%                  Increase in the value of the AIM and Listed           
                      investments.                                          

Performance Summary

Capital return               As at       As at       Movement                  
                             30 Sep 2010 30 Jun 2010                           
                                                                               
Total net assets             £62.69m     £62.00m                               
                                                                               
Net asset value per share    102.87p     98.24p*     4.7%                      
                                                                               
Share price                  89.00p      89.00p      0.0%                      
                                                                               
Discount to NAV              (13.5%)     (9.4%)                                
                                                                               
                             3 month (%) 1 year (%)  5 years    Since launch   
                                                     (%)        (%)            
                                                                               
Net asset valuetotal return  4.7         10.6        23.5       73.9           
(1)                                                                            
                                                                               
Share pricetotal return(2)   3.4         7.6         26.7       50.2           
                                                                               
FTSE All-sharetotal return(3 13.6        12.5        24.7       31.3           
)                                                                              
                                                                               

* Adjusted for 3.0p interim dividend for comparative purposes. Actual NAV was
101.24p.

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 

There was strong trading across the portfolio during the quarter and the number
of portfolio companies reporting steady or better trading performance was at
93%, its highest level since quarterly measuring of their progress on this
basis came into being in 2004. In particular, there were significant increases
in the valuation of the Company's investments in Reed & Mackay (business travel
services) and Crew Clothing (multi-channel clothing retailer) resulting from
strong trading. Relatively few portfolio companies are exposed to the UK public
sector however the valuation of the Company's investment in Carnell (motorway
maintenance and technical services to the UK Highways Agencies) has been
reduced.

The value of the Company's investments in AIM and listed companies increased by
approximately 8% during the as investor sentiment and the earnings growth of
smaller listed companies improved.

Top ten Investments 

Position    Position at                                      Percentage    
at                                                           of NAV        
            30 Jun 2010   Company                                          
30 Sep 2010                                                  as at 30 Sep  
                                                             2010          
                                                                           
1           2            Reed & Mackay Limited                          6.8
                                                                           
2           1            Nexus Vehicle Holdings Limited                 6.7
                                                                           
3           3            Crew Clothing Company Limited                  4.0
                                                                           
4           5            CableCom Networking Holdings                   3.5
                         Limited                                           
                                                                           
5           4            Quantix Limited                                3.2
                                                                           
6           10           Kafevend Holdings Limited                      2.8
                                                                           
7           6            Fisher Outdoor Leisure Holdings                2.8
                         Limited                                           
                                                                           
8           9            Independent Living Services Limited            2.8
                                                                           
9           7            CSC (World) Limited                            2.7
                                                                           
10          -            IDOX plc                                       2.0
                                                                           
Total                                                                  37.3

Analysis of Total Assets

                         Percentage of total      Percentage of total      
                         assets                   assets                   
                                                                           
                         30 Sep 2010              30 Jun 2010              
                                                                           
Unquoted investments                           50                        47
                                                                           
AIM, Listed & Collective                       22                        21
Investments                                                                
                                                                           
Interest Bearing                    24                       28            
Securities                                                                 
                                                                           
Net current assets                  4                         4            
                                                                           
Total cash portfolio                           28                        32
                                                                           
Total Assets                                  100                       100

Analysis of Investment Portfolio by Sector

(excluding cash and interest bearing securities)

                        Percentage of total       Percentage of total      
                        investments at 30 Sep     investments at 30 Jun    
                        2010                      2010                     
                                                                           
Business Services                              36                        38
                                                                           
Consumer Markets                               18                        17
                                                                           
Financial Services                              6                         5
                                                                           
Healthcare & Education                         10                        10
                                                                           
IT & Media                                     30                        30
                                                                           
Total                                         100                       100

Investment Activity

Two AIM traded investments totalling £0.8m were completed in one existing,
Electric Word plc, and one new company, Netcall plc. Investment totalling £0.5m
was made into the existing collective investment vehicle, Wood Street Microcap
Investment Fund. A further unquoted investment was made into Independent Living
Services Limited an existing portfolio company,

Investments made

Company                                 Date             Cost (£'000)
                                                                     
Electric Word plc                       Jul 2010                  111
                                                                     
Independent Living Services Limited     Jul 2010                   89
                                                                     
Netcall plc                             Jul/Aug 2010              712
                                                                     
Wood Street Microcap Investment Fund    Aug 2010                  500
                                                                     
Total investments                                               1,412

Realisations

Two AIM investments were realised in full, WIN and Vero Software.  Both were
sold to trade buyers and are further examples illustrating that good value does
reside in smaller companies, which in recent times have been lowly rated.

Company                       Date            Cost (£  Proceeds  Multiple
                                                '000)   (£'000)          
                                                                         
Brainjuicer Group plc         Sep 2010             50        85       1.7
                                                                         
Mission Marketing Group (The) Sep 2010            190        14       0.1
plc                                                                      
                                                                         
Vero Software plc             July 2010           300       244       0.8
                                                                         
WIN plc                       Aug 2010            413       675       1.6
                                                                         
Total realisations                                953     1,018          
                                                                         

Net Asset Value

The NAV per share at 31 October 2010 was 104.10p representing an increase
of 1.2% since the quarter end driven largely by an increase in the value of the
AIM portfolio.

Events after the period end

Other than as discussed in this statement the Board is not aware of any
significant events or transactions which have occurred between 30 September
2010 and the date of publication of this statement which would have a material
impact on the financial position of the Company.

Fundraising

Having raised £7.56m in February / March 2010, the Company has sufficient cash
resources to fund all of its operations for at least the next 12 months.  As a
result, at this stage, there are no plans to raise further funds through
issuing new shares during the current tax year.  As many of the Company's
shareholders are also shareholders in the other Baronsmead VCTs they will be
informed on any offers for subscription that those VCTs may make available to
either their existing shareholders or more widely during the course of the
current tax year.

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]