Gottex Fund Management Holdings Limited Interim Report June 2009

Transcription

1 Gottex Fund Management Holdings Limited Interim Report June 2009

2 Gottex Fund Management Holdings Limited A leader in the alternative asset management industry Overview 03 Business and Financial Highlights 04 Chairman s Statement Financials Unaudited Interim Condensed Consolidated Financial Statements 06 Review Report on the Interim Condensed Consolidated Financial Statements 07 Unaudited Interim Condensed Consolidated Income Statement 08 Unaudited Interim Condensed Consolidated Statement of Comprehensive Income 09 Unaudited Interim Condensed Consolidated Statement of Financial Position 10 Unaudited Interim Condensed Consolidated Statement of Cash Flows 11 Unaudited Interim Condensed Consolidated Statement of Changes in Equity 12 Notes to the Unaudited Interim Condensed Consolidated Financial Statements Gottex Fund Management Holdings is a leading provider of alternative investment solutions and advisory services. Founded in 1992, Gottex has USD 8.2 billion in total fee-earning assets as at. Gottex offers a variety of investment products and related services. It employs 118 people, including over 30 investment professionals, in offices located across three continents. This allows the firm to combine in-depth local knowledge of financial markets and investors with the strength of a global presence and infrastructure. New York Boston London Luxembourg Guernsey Lausanne Zurich Dubai Hong Kong 2 Gottex Fund Management Holdings Limited Interim Report June 2009

3 Overview Financials Interim Report June 2009 Business Highlights USD 8.2 billion in total fee-earning assets consisting of USD 8.1 billion in assets under management and USD 90 million of Gottex Solution Services assets. Awarded a substantial investment and advisory mandate commencing July Reopened and restructured all market neutral, directional and portable alpha products. Established Gottex Solution Services in February 2009 which successfully launched its managed account platform and attracted its fi rst client assets in June Financial Highlights USD June 2009 December 2008 June 2008 Total Fee-earning Assets 8.2bn 9.6bn 15.6bn USD Six months to Six months to June 2009 December 2008 Six months to June 2008 Gross revenues 46m 75m 93m Management fees 44m 69m 85m Performance fees 2m Profit after tax 9m 12m 34m Earnings per share basic Headcount at period end Acquired controlling interest in SJC Capital, a direct lending investment manager. Completed CHF 7 million share repurchase programme. Strong debt free balance sheet with USD 27.8 million in cash reserves. Gottex Fund Management Holdings Limited Interim Report June

4 Chairman s Statement Joachim Gottschalk Chairman and Chief Executive Officer With liquidity and positive performance returning to the hedge fund industry, there are defi nite signs that the industry is starting to recover. The first half of 2009 saw the successful completion of the plans we announced at the beginning of the year which were designed to address the challenges caused by last year s turmoil. Looking ahead, we are confident that Gottex will benefit from the investment opportunities in the market as well as from the upcoming consolidation in the alternatives industry. We are positive about our future. Overview The second public interim report of Gottex Fund Management Holdings Limited 1 covers a period that saw a sharp decline in the assets under management across the entire hedge fund industry followed by tentative signs of recovery. Gottex saw its total fee-earning assets decrease to USD 8.2 billion by from USD 15.6 billion a year earlier. The fall in assets, combined with a lack of performance fees, led to total gross revenues for the first half of 2009 of USD 46.1 million compared to USD 93.1 million 12 months earlier, and profits after tax of USD 8.9 million. We would like to reiterate that Gottex benefi ts from a strong balance sheet with no debt and cash reserves of USD 27.8 million. Despite challenging circumstances, Gottex remains a cash generative business and is well-positioned to benefi t from the impending industry consolidation. Review of the first six months In January 2009 the Company announced a range of plans and measures to address the issues which arose from the events of 2008 and capitalise on the opportunities offered by the market dislocation for our clients as well as our shareholders. I am pleased to inform you that we have successfully completed these initiatives. Well in excess of 70% of our institutional investors remained invested in our reopened and restructured market neutral, directional and portable alpha products. The restructuring included adapting liquidity terms to market behavior, the introduction of variable leverage and competitive management fees. We focused on our core business by streamlining certain smaller funds but at the same time introduced several targeted new initiatives to benefit from developing market opportunities. During the first quarter Gottex Solutions Services ( GSS ) was launched. GSS offers advanced solutions for hedge fund investing with features such as a managed account platform, integrated risk reporting as well as middle and back office services. In May 2009 we acquired a controlling interest in SJC Capital, a direct lending fund manager, which expands our offering in the asset based lending sector. Furthermore, in August we launched a multi-asset endowment product, investing in all major asset classes including long equity, long fixed income, hedge funds, private equity, real estate and commodities. 1 Gottex, GFMH or the Company and together with its subsidiaries, the Group Finally, we are on course to reduce our core operational cost run rate by approximately 30%, excluding our new corporate initiatives like 4 Gottex Fund Management Holdings Limited Interim Report June 2009

5 Overview Financials GSS and SJC. In addition, the Gottex Employee Benefi t Trust ( EBT ) has completed the CHF 7 million share purchase programme. Markets across several asset classes rallied from their March lows as credit markets began to show signs of thawing. Since then markets have become more uncertain as investors have questioned the sustainability of the real economic activity with the debate focused on what type of recovery will be seen. Even though credit has become more liquid and spreads have tightened considerably, credit availability is still constrained. The hedge fund industry, on the other hand, is now much better placed as the majority of the industry s structural and technical issues have been worked through. Gottex s market neutral and portable alpha funds have posted strong positive performance figures year to date and have outperformed their relevant benchmarks. Our total fee-earning assets amounted to USD 8.2 billion as at the end of June 2009 and consisted of USD 8.1 billion in assets under management ( AuM ) and USD 90 million of GSS assets. The reopening and restructuring of the market neutral, directional and portable alpha funds negatively impacted our AuM which decreased from USD 9.6 billion at 31 December 2008 to USD 8.1 billion at. This was driven primarily by net client fl ows which accounted for a reduction of USD 1.04 billion. Foreign exchange and rebalancing factors caused a USD 0.54 billion decrease and net performance added USD 0.01 billion. As a result of the restructurings the run-off portfolios amounted to USD 1.1 billion as at. It is important to note that the ongoing institutionalisation of our customer base has continued, with institutional investors now representing 87% of our AuM and private banks and retail investors making up the remainder. From a geographical perspective, European investors account for 54% of our assets, 32% of our investors are located in North America whilst the balance comes from Asia and the Middle East. During the fi rst half of the year, clients were extremely reluctant to make investment allocation decisions but recently there have been tentative signs of renewed investment interest in alternatives. As an example, in July we were awarded a several hundred million dollar mandate, which combined investment management with GSS risk and middle offi ce services. We believe that client investment activity in the hedge fund industry will pick up in the second half of this year, and gain momentum as we go into Going forward In the longer term, our aim is to evolve into a leading institutional multi-asset manager with a core in alternative investments and fundof-funds. This view is supported by several key market trends, chief amongst which are that alternative investments will continue to form a material part of institutional investment portfolios, and that larger clients will increasingly expect tailored and complementary products and services rather than standardised one-size-fi ts-all offerings. In addition, regulatory developments will put increasing demands and costs on asset managers and institutions will gravitate towards larger, well-capitalised players. In the fi rst half of this year we have taken further steps towards this goal, including the acquisition of SJC, the set up of GSS and the launch of the multi-asset endowment fund. As the industry continues to consolidate Gottex plans to be a more active participant in this process. We intend to integrate investment teams and skill sets to broaden our product range which will enable us to provide a more comprehensive, diversifi ed offering to our institutional investors. Looking at the near term, we will continue to focus on our core market neutral and portable alpha products which have seen promising returns year to date. We believe they are well positioned to take advantage of the opportunities created by last year s market dislocations. In the asset-based sector Gottex will remain focused on capital recovery but we believe that in the future a direct approach combined with managed accounts is better suited to the asset based lending and investing space than a pure fund of fund approach. With regards to GSS, Gottex will continue to build on its increasing traction exemplifi ed by its fi rst clients both on its managed account platform as well as for its integrated risk reporting and middle offi ce services. The drive behind GSS links in with our view that large corporate and state pension funds are increasingly looking for combined offerings of investment products and outsourced solution services. They are seeking a partner who provides tailored solutions that complement their in-house capabilities both in terms of products and services. Our staff I would like to reiterate the importance of the contribution of our entire workforce during the demanding period over the last 18 months. The entire team is confi dent that we will continue building Gottex into a major institution in the alternative investment community. It will be crucial to Gottex s future success to maintain a committed, incentivised employee base of high quality professionals who are aligned with the interests of all our stakeholders. I would like to extend my thanks to all members of staff for their outstanding efforts and look forward to the future. Outlook The market outlook has improved markedly over the last six months, with liquidity returning to the market place and many hedge fund strategies showing impressive investment performance. We see the first signs that institutions are returning to the sector and expect this movement to gather momentum going into We have identified various positive trends in the market place and we will continue to broaden and adapt our offering to fully capitalise on these opportunities. We are positive about the long term growth outlook for Gottex, but we only expect to see asset growth later in the year as our new initiatives will take some time to take effect. Joachim Gottschalk Chairman and Chief Executive Offi cer Gottex Fund Management Holdings Limited Interim Report June

6 Unaudited Interim Condensed Consolidated Financial Statements Review Report on the Interim Condensed Consolidated Financial Statements Ernst & Young Ltd Route de Chancy 59 P.O. Box CH-1213 Geneva Phone Fax Geneva, 28 August 2009 Gottex Fund Management Holdings Limited Review report on the interim condensed consolidated financial statements Introduction We have reviewed the accompanying interim condensed consolidated financial statements of Gottex Fund Management Holdings Limited and its subsidiaries (the Group ) as of, comprising of the interim condensed consolidated statement of financial position as of and the related interim condensed consolidated statements of income, comprehensive income, changes in equity and cash flows for the six-month period then ended and notes to the interim condensed consolidated financial statements (pages 7 to 18). The Directors are responsible for the preparation and presentation of these interim condensed consolidated financial statements in accordance with International Financial Reporting Standard IAS 34 Interim Financial Reporting ( IAS 34 ). Our responsibility is to express a conclusion on these interim condensed consolidated financial statements based on our review. Scope of Review We conducted our review in accordance with International Standard on Review Engagements 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Conclusion Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed consolidated financial statements are not prepared, in all material respects, in accordance with IAS 34. Ernst & Young Ltd Mark Hawkins Licensed audit expert (Auditor in charge) John Alton Member of the Swiss Institute of Certified Accountants and Tax Consultants 6 Gottex Fund Management Holdings Limited Interim Report June 2009

7 Unaudited Interim Condensed Consolidated Income Statement for the six months ended Overview Financials Note Revenue 2, 3 46,066 93,080 Referral fee expense 4 (9,666) (19,947) Gross profit 36,400 73,133 Operating costs 5, 6 (27,246) (35,036) Operating profit 9,154 38,097 Finance income Finance costs - (403) Net loss on financial investments 7 (177) (184) Share of post tax losses from associate (61) (12) Profit before taxation 9,027 38,139 Income tax expense 8 (157) (4,391) Profit for the period 8,870 33,748 Attributable to: Equity holders of the parent company 7,980 30,357 Minority interest 890 3,391 Profit for the period 8,870 33,748 The results for both periods are derived from continuing operations. Earnings per share Basic, for profit for the period attributable to ordinary equity holders of the parent company Diluted, for profit for the period attributable to ordinary equity holders of the parent company 9 USD 0.28 USD USD 0.27 USD 1.00 Gottex Fund Management Holdings Limited Interim Report June

8 Unaudited Interim Condensed Consolidated Financial Statements Unaudited Interim Condensed Consolidated Statement of Comprehensive Income for the six months ended Profit for the period 8,870 33,748 Exchange difference arising on translation of foreign operations Other comprehensive income for the period, net of tax Total comprehensive income for the period, net of tax 9,451 33,860 Attributable to: Equity holders of the parent company 8,474 30,458 Minority interests 977 3,402 9,451 33,860 8 Gottex Fund Management Holdings Limited Interim Report June 2009

9 Overview Financials Unaudited Interim Condensed Consolidated Statement of Financial Position at Note At At 31 December 2008 Non-current assets Goodwill Intangible assets 1,240 1,540 Financial investments 7 18,779 20,267 Investment in associate Property, plant and equipment 1,961 2,298 Other receivables 3,565 3,565 Deferred tax asset 1, ,255 27,994 Current assets Trade debtors 11 19,795 27,167 Other receivables 11 6,247 10,341 Tax assets 304 2,047 Cash and cash equivalents 27,844 45,390 54,190 84,945 Total assets 81, ,939 Share capital 13 25,564 25,564 Treasury shares (28,517) (22,374) Other reserves 23,039 19,611 Retained earnings 18,807 26,683 Equity attributable to equity holders of the parent company 38,893 49,484 Minority interest 14,092 15,406 Total equity 52,985 64,890 Non-current liabilities Accruals 734 1,520 Provisions ,559 Current liabilities Trade creditors 12 10,805 15,664 Other payables 12 10,482 21,378 Current tax liabilities 6,400 9,448 27,687 46,490 Total liabilities 28,460 48,049 Total equity and liabilities 81, ,939 Gottex Fund Management Holdings Limited Interim Report June

10 Unaudited Interim Condensed Consolidated Financial Statements Unaudited Interim Condensed Consolidated Statement of Cash Flows for the six months ended Note Operating activities Profit before taxation 9,027 38,139 Adjustments for: Amortisation of intangible assets Depreciation of property, plant and equipment Loss on disposal of property, plant and equipment 15 - Share based payments 4,514 5,673 Decrease in receivables 11,886 7,078 Decrease in payables (15,486) (9,481) Income taxes paid (3,333) (7,016) Recovery of tax from prior years Finance income (111) (641) Finance costs Net loss on financial investments Share of post tax losses from associate Net cash inflow from operating activities 8,875 35,724 Investing activities Interest received Proceeds from sale of property, plant and equipment 1 - Proceeds from sale of financial investments 1,349 - Purchase of intangible assets (300) (653) Purchase of financial investments (38) (2,096) Purchase of property, plant and equipment (204) (1,148) Acquisition of subsidiary, net of cash acquired 2 - Net cash from / (used) in investing activities 921 (3,256) Financing activities Interest paid - (1) Dividends paid to equity holders (16,634) (13,229) Dividends paid to minority interest (2,082) (1,465) Cash paid to GFMH ABL Fund Limited minority interest holders on redemption of shares 7 (650) - Purchase of Company shares by the Employee Benefit Trust 14 (6,504) (2,836) Amounts owed to key management personnel (2,024) (7,036) Net cash used in financing activities (27,894) (24,567) Net (decrease) / increase in cash and cash equivalents in the period (18,098) 7,901 Opening cash and cash equivalents 45,390 66,501 Effect of foreign exchange rates 552 (271) Closing cash and cash equivalents 27,844 74, Gottex Fund Management Holdings Limited Interim Report June 2009

11 Overview Financials Unaudited Interim Condensed Consolidated Statement of Changes in Equity for the six months ended Share based payment reserve Pooling and other reserves Retained earnings/ Attributable to equity holders of the parent Minority company interest Share Share Treasury Translation Total other (accumulated Total capital premium shares reserve reserves losses) equity Balance at 1 January ,564 1,703,148 (20,271) 44 1,737 (1,688,942) (1,687,161) (7,559) 13,721 4,073 17,794 Total comprehensive income for the period ,357 30,458 3,402 33,860 Contribution from equity holder ,882 1,882-1,882 Transfer from share premium - (1,703,148) ,703,148 1,703, Purchase of treasury shares - - (2,836) (2,836) - (2,836) Recognition of share based payments ,106-5,106-5, ,673 Dividends (13,229) (13,229) (1,465) (14,694) Balance at 25,564 - (23,107) 145 6,843 14,206 21,194 11,451 35,102 6,577 41,679 Balance at 1 January ,564 - (22,374) (4,664) 10,069 14,206 19,611 26,683 49,484 15,406 64,890 Total comprehensive income for the period ,980 8, ,451 Purchase of treasury shares - - (6,504) (6,504) - (6,504) Recognition of share based payments ,073-4,073-4, ,514 Reclassification due to vesting of equity awards (1,139) - (1,139) Dividends (16,634) (16,634) (2,082) (18,716) Cash paid to GFMH ABL Fund Limited minority interest holders (650) (650) on redemption of shares Balance at 25,564 - (28,517) (4,170) 13,003 14,206 23,039 18,807 38,893 14,092 52,985 Gottex Fund Management Holdings Limited Interim Report June

12 Unaudited Interim Condensed Consolidated Financial Statements Notes to the Unaudited Interim Condensed Consolidated Financial Statements Corporate information Gottex Fund Management Holdings Limited ( GFMH ) is a company registered in Guernsey and listed on the SIX Swiss Exchange. The unaudited interim condensed consolidated financial statements for the six months ended comprise GFMH and its subsidiaries (together referred to as the Group). The Group acts as an investment manager and advisor for fund of hedge fund activity, direct investment and advisory services to a predominantly institutional investor base worldwide. These unaudited interim condensed consolidated fi nancial statements were authorised for issue by the Board of Directors on 28 August Basis of preparation and accounting policies Basis of preparation The unaudited interim condensed consolidated fi nancial statements for the six months ended have been prepared in accordance with IAS 34 Interim Financial Reporting. The unaudited interim condensed consolidated fi nancial statements do not include all the information and disclosures required in the annual fi nancial statements, and should be read in conjunction with the Group s annual fi nancial statements as at 31 December The unaudited interim condensed consolidated fi nancial statements are presented in US Dollars, rounded to the nearest thousand, except where otherwise indicated. Changes in accounting policies The accounting policies adopted in the preparation of these unaudited interim condensed consolidated fi nancial statements are consistent with those followed in the preparation of the Group s annual fi nancial statements for the year ended 31 December Within the operating activities in the Unaudited Interim Condensed Consolidated Statement of Cash Flows for the six months to, USD 4.7 million has been reclassifi ed from Decrease in payables to Income taxes paid. No other items in these unaudited interim condensed consolidated fi nancial statements have been impacted. The Group adopted the following standards, interpretations and amendments thereto as at 1 January 2009 and this has not resulted in any changes to the fi nancial position or performance of the Group nor resulted in any additional disclosures to these unaudited interim condensed consolidated fi nancial statements, other than described below. Standard or interpretation Title Impact on Group IAS 1 revised Presentation of Financial Statements No material impact IAS 23 revised Borrowing Costs No material impact IAS 27 revised Consolidated and Separate Financial Statements (early adopted) No material impact IAS 1 amended & IAS 32 Puttable Financial Instruments and Obligations Arising on Liquidation No material Impact amended IFRS 1 amended First-time Adoption of International Financial Reporting Standards No material impact IFRS 2 amended Share-based Payments No material impact IFRS 3 revised Business Combinations (early adopted) See note 16 IFRS 7 Improving Disclosures about Financial Instruments Disclosure only IFRS 8 Operating Segments See note 2 IFRIC 13 Customer Loyalty Programmes No material impact IFRIC 15 Agreements for the Construction of Real Estate No material impact IFRIC 16 Hedges of a Net Investment in a Foreign Operation No material impact Amendments from the Annual Improvement Process No material impact IAS 39 amended & IFRIC 9 amended Embedded Derivatives No material impact At the date of these unaudited interim condensed consolidated fi nancial statements, the following Standards and Interpretations which have not been applied in these fi nancial statements were in issue but not yet effective for these fi nancial statements. As a result these Standards and Interpretations do not impact these unaudited interim condensed consolidated fi nancial statements. 12 Gottex Fund Management Holdings Limited Interim Report June 2009

13 Overview Financials 1. Basis of preparation and accounting policies (cont d) Changes in accounting policies (cont d) Standard or interpretation Title Effective Date IAS 39 amended Eligible Hedged Items Annual periods beginning on or after 1 July 2009 IFRIC 17 Distributions of Non-cash Assets to Owners Annual periods beginning on or after 1 July 2009 IFRIC 18 Transfers of Assets from Customers Applied prospectively to assets transferred on or after 1 July 2009 Improvements to IFRSs (April 2009) Annual periods beginning on or after 1 July January 2010 IFRS 2 amended Group Cash settled Share-based Payment Annual periods beginning on or after transactions 1 January 2010 IFRS 1 amended Additional Exemptions for First-time Adopters Annual periods beginning on or after 1 January 2010 Expected Impact on Group No material impact No material impact No material impact No material impact No material impact No impact 2. Segmental analysis of results The Group adopted IFRS 8 Operating Segments at 1 January 2009, which requires an entity to report fi nancial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments. The IFRS requires identifi cation of operating segments on the basis of internal reports that are regularly reviewed by the entity s chief operating decision maker in order to allocate resources to the segment and assess its performance. Revenue from investment management services and assets under management can be and are categorised by strategy, fund type and asset class. In addition the structured products group, GSP, undertakes negotiation and structuring of competitive leverage and liquidity contracts with leverage and liquidity providers, as well as the structuring of investment products. Although gross revenue is reviewed in detail by revenue source, internal financial reporting and performance monitoring and measurement is not further segregated below this revenue level for use in the business. The chief operating decision maker, which is considered to be the Executive Management Committee, reviews the costs, profi t, assets and liabilities on a Group basis. Accordingly, all signifi cant decisions are based upon the analysis of the Group as one segment. Therefore the Directors concluded that there is one operating segment within the meaning of IFRS 8 Operating Segments and the fi nancial results of this segment are equivalent to the fi nancial statements of the Group as a whole. 3. Revenue Management fees 44,122 84,617 Performance fees - 2,101 Advisory fees 1,071 1,789 Structure and leverage fees 873 4,573 Total revenue 46,066 93, Referral fee expense Referral fee expenses comprise third party commissions for client introductions and ongoing client service, and some specifi c rebates to customers of the underlying Gottex funds. Management fees 9,666 19,820 Performance fees ,666 19,947 Gottex Fund Management Holdings Limited Interim Report June

14 Unaudited Interim Condensed Consolidated Financial Statements Notes to the Unaudited Interim Condensed Consolidated Financial Statements 5. Operating costs Note Personnel expenses 6 20,804 25,972 General and administrative expenses 5,270 6,296 Marketing and representation services 1,172 2,768 27,246 35, Personnel expenses The aggregate remuneration of employees (including executive directors) was: Note Wages and salaries 14,761 18,418 Social security expenses 983 1,290 Net pension cost Share based payments 14 4,514 5,673 Sundry personnel expenses ,804 25, Net (loss) / gain on financial investments The net (loss) / gain on fi nancial assets designated at fair value through profi t or loss can be analysed as follows: GFMH ABL Fund Limited (287) - Market Neutral Fund GVA ABL Fund (153) 16 Tiger Fund 40 (145) Other funds (29) (55) (177) (184) These fi nancial investments consist principally of investments in Gottex fund of funds, some of which are listed on the Irish Stock Exchange, mainly in market neutral and asset based funds, and investments held by GFMH ABL Fund Limited ( GFMH ABL ). The fair value is determined in the same manner as in the year ended 31 December 2008 and prior years, by management based on the net asset value of the Group s investments, as communicated by the managers or independent administrators of the investment funds. In the six months to, GFMH ABL redeemed part of its outstanding shares in equal proportions for all shareholders. The Company and the minority shareholders of GFMH ABL received USD 650,000 each. 8. Income tax expense Current tax current year 2,032 5,132 Current tax prior year recovery (971) (16) 1,061 5,116 Deferred tax (904) (725) 157 4,391 Effective Group tax rate (before prior year recovery) % Gottex Fund Management Holdings Limited Interim Report June 2009

15 Overview Financials 9. Earnings per share Basic earnings per share is calculated by dividing net profi t for the period attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by dividing the net profi t attributable to ordinary equity holders of the parent by the weighted average number of ordinary share outstanding during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares. Net profit attributable to ordinary equity holders of the parent for basic earnings per share and diluted earnings per share 7,980 30,357 Number 000 Weighted average number of ordinary shares (excluding treasury shares) for basic earnings per share 28,192 29,425 Adjustments for dilutive potential ordinary shares 1, Weighted average number of ordinary shares (excluding treasury shares) for diluted earnings per share 29,824 30,283 Potential ordinary shares comprise the expected dilutive effect of those share and equity awards described in note Dividends Amounts recognised as dividends to equity holders of the parent company in the period are as follows: Approved and paid during the period 16,634 13,229 Dividend per share - USD In the six months to the Group paid a dividend to its shareholders of USD 18,051,000 (2008: USD 13,538,000). USD 1,417,000 (2008: USD 309,000) was received by the Employee Benefi t Trust, and this amount has been eliminated on consolidation. 11. Trade and other receivables At At 31 December 2008 Current debtors Trade debtors 19,795 27,167 Amount due from related parties Other debtors 2,543 6,483 Prepayments and accrued income 3,450 3,708 Total trade and other receivables 26,042 37,508 Gottex Fund Management Holdings Limited Interim Report June

16 Unaudited Interim Condensed Consolidated Financial Statements Notes to the Unaudited Interim Condensed Consolidated Financial Statements 12. Trade and other payables current and non-current At At 31 December 2008 Current liabilities Trade creditors 10,805 15,664 Amount due to related parties 530 2,409 Other tax and social security 792 1,057 Other creditors Accruals 8,247 17,057 21,287 37,042 Non-current liabilities Accruals 734 1,520 Total trade and other payables 22,021 38, Capital At At 31 December 2008 Allotted and fully paid capital Number of Shares Nominal Value Number of Shares Nominal Value Ordinary CHF1.00 each 30,085,029 25,564 30,085,029 25, Share based payments The movement in equity for share based payments was: Note At 1 January 10,069 1,737 Recognised in the income statement 6 4,514 5,673 Less amount included in Minority interest (441) (567) Reclassification / utilisation during the period (1,139) - At 30 June 13,003 6,843 In the six months ended the charge for share based payments related to the following types of awards: Note Restricted share awards 3,098 3,900 The Share option plan 1,116 1, equity award ,514 5,673 Ongoing plans (a) The 2009 Restricted award plan In March 2009, the Company made awards of 1,903,438 shares to certain employees of the Group. The fair value of these awards was estimated by reference to the share price at the date of grant, with an appropriate adjustment for expected dividends foregone. The share awards vest over a four year period in equal portions, with one quarter vesting on each anniversary of the date of award and the only vesting condition is that the participant is in the employment of the Group for this period. The charge for the six months to was USD 0.8 million. 16 Gottex Fund Management Holdings Limited Interim Report June 2009

17 Overview Financials 14. Share based payments (cont d) b) The Bonus Restricted share awards The Group made awards of 331,406 restricted shares in January 2009 which formed part of the annual bonus awards to employees for the year ended 31 December The fair value of these awards was estimated by reference to the share price at the date of grant. The share awards vest over a two year period in equal portions, vesting evenly on each anniversary of the date of award and the only vesting condition is that the participant is in the employment of the Group for this period. Although these share awards were not legally granted until 2009, the Directors believe that it is appropriate to recognise, and have recognised the expense for these share awards over a performance period commencing 1 January 2008 as employees have begun rendering services from that date. Similarly, further share awards are expected to be awarded in January 2010 in connection with the annual bonus award for the year ended 31 December Although such share awards will not be legally granted until 2010, the Directors have recognised a constructive obligation to the employees for these options and have expensed the estimated fair value of these shares over a performance period commencing 1 January 2009 as employees have begun rendering services from this date. The charge for the six months to was USD 0.4 million. (c) The Restricted award plan Since listing in 2007 the Company has made awards of shares to employees of the Group under the Restricted Award Plan. At the number of share awards outstanding was 296,063. The fair value of each award was estimated by reference to the share price at the date of grant, with an appropriate adjustment for expected dividends foregone. The share awards vest over a four year period in equal portions, with one quarter vesting on each anniversary of the date of award and the only vesting condition is that the participant is in the employment of the group for this period. The charge for the six months to was USD 1.9 million. (d) The Share option plan Under the terms of the GFMH Employee Share Option Plan certain employees have been granted options over the Company s shares. The share options generally vest over three years from the date of grant and the only vesting condition is that the participant is in the employment of the Group for this period. The fair value of the share options has been determined using a Black-Scholes model. At the number of share awards outstanding was 1,003,207. The charge for the six months to was USD 1.1 million. (e) 2007 equity award An equity award of one per cent, which vests evenly over a period of four years from the date of grant, was made to an employee on 1 January The admission of the Company to the SWX in 2007 triggered the acceleration of the vesting schedule whereby the fi rst 25 per cent vested at the date of listing, the second 25 per cent vested at the fi rst anniversary of the date of listing and the remaining award vests evenly over the remaining two years. The fair value of this equity award was valued at USD 4.3 million at date of grant using a valuation model based on EBITDA for the year ended 31 December The charge for the six months to was USD 0.3 million. Employee Benefit Trust ( EBT ) In October 2007, the Company established an EBT in order to benefi t all employees of the Group companies. The trustee of the EBT is RBC cees Trustee Limited. For the period ended, the EBT has been consolidated within these unaudited interim condensed consolidated financial statements. In January 2009 the Group launched a share repurchase programme to ensure that it could meet all outstanding future share and share options awards made to employees. As a result the Employee Benefi t Trust purchased approximately 1.8 million shares on the open market during the six months to, for a total purchase price of USD 6.5 million. At, the EBT held 2,416,525 shares in GFMH which had a fair market value of USD 14.9 million (the price per share at 30 June 2009 was USD 6.2). At 31 December 2008, the EBT held 679,859 shares in GFMH which had a fair market value of USD 1.7 million (the price per share at 31 December 2008 was USD 2.6). Gottex Fund Management Holdings Limited Interim Report June

18 Unaudited Interim Condensed Consolidated Financial Statements Notes to the Unaudited Interim Condensed Consolidated Financial Statements 15. Contribution from equity holder comparative period In the six months to, the EBT received a contribution of USD 1.9 million from Joachim Gottschalk & Associates Limited, a company controlled by Joachim Gottschalk. This contribution was utilised to fund the purchase of shares in GFMH by the EBT for the purpose of benefi ting the employees of the Group. 16. Acquisition of subsidiary On 4 May 2009, the Group acquired a controlling interest, which included all of the voting rights, in SJC Capital Partners, L.L.C ( SJC ). The purchase cash consideration was USD 100 dollars and the associated transaction costs which have been charged directly to the Income Statement, in line with the requirements of IFRS 3 revised, are estimated to be USD 0.3 million. The goodwill arising on the acquisition has been determined on a provisional basis. The fair values of the identifi able assets and liabilities of SJC at 4 May 2009 are considered to be the same as their carrying value at that date. Other receivables 419 Cash and cash equivalents 2 Other payables (964) Net liabilities acquired (543) Goodwill 543 Consideration 1-1 the consideration was USD 100 dollars and was paid in cash The net loss for SJC for the six months period to was USD 504,000 and of this, post acquisition losses of USD 18,000 have been consolidated within the Group results to. The net cash outfl ow in connection with this transaction was USD 0.3 million, being the cash consideration of USD 100 dollars, and the associated costs expensed of USD 0.3 million, which have been charged directly to the Income Statement, in line with the requirements of IFRS 3 revised. 17. Subsequent Events Issues of shares On, the Company passed a resolution to issue 300,000 ordinary shares. These shares were issued on 18 August 2009 and the Company gifted them, out of retained earnings and within the provision of the Company s Articles of Incorporation, to the EBT. Arbitration The Group is currently in arbitration with two third party marketing agents. On 25 August 2009, the arbitral tribunal made a partial award in favour of these claimants, plus legal costs of USD 0.2 million. However, any further liability of the Group is still to be assessed by the arbitrator pending further substantiation by all parties. The possible assessment by the arbitrator is largely uncertain and it is not yet possible to quantify the likely outcome. On this basis management have made no further provision. Management believe that the exposure is unlikely to be more than the claimants initial indication of USD 1 million. 18 Gottex Fund Management Holdings Limited Interim Report June 2009

19 Gottex Fund Management Principal Offi ces Guernsey Gottex Fund Management Holdings Limited Ogier House, St Julian s Avenue St. Peter Port, Guernsey, GY1 1WA Tel Fax Switzerland Gottex Fund Management Sàrl Avenue de Rhodanie Lausanne Tel: Fax: Other Offi ces United Kingdom Gottex Asset Management (UK) Limited 5 Savile Row London, W1S 3PD Tel: Fax: United States of America Boston Gottex Fund Management Limited 28 State Street, 40 th Floor Boston, MA, Tel: Fax: New York Gottex Fund Management Limited 780 Third Avenue, 32 nd Floor New York, NY Tel: Fax: Hong Kong Gottex Fund Management (Hong Kong) Limited Suite 2602, 26 th Floor, Henley Building 5 Queen s Road Central, Hong Kong Tel: Fax: United Arab Emirates Gottex Fund Management (Middle East) Emirates Tower, 41 st Floor (PO Box 31303) Sheikh Zayed Road, Dubai Tel: Fax: Switzerland Gottex Fund Management Sàrl Dreikönigstrasse 31a 8002 Zürich Tel: Fax: Luxembourg Gottex Partners Sàrl 12 Rue Guillaume Kroll L 1882 Luxembourg Tel: Fax: