Interim Management Statement

 
TIDMATI2 
 
AMATI VCT 2 plc (formerly known as Invesco Perpetual AiM VCT plc) 
 
(the "Company") 
 
INTERIM MANAGEMENT STATEMENT 
 
FOR THE 3 MONTHS TO 31 August 2011 
 
To the members of Amati VCT 2 plc 
 
This interim management statement has been prepared solely to provide 
additional information to the shareholders as a body to meet the relevant 
requirements of the UK Listing Authority's Disclosure and Transparency Rules, 
and should not be relied on by any other party or for any other purpose. 
 
This interim management statement considers the future of the fund and, as 
such, forward-looking assertions have been made by the Directors in good faith 
based on the information available to them up to the time of their approval of 
this report. This statement should therefore be treated with due caution due to 
the inherent uncertainties of the effect of both economic and business risk 
factors in considering forward-looking information. 
 
This interim management statement relates to the period from 1 June 2011 to 31 
August 2011 and contains information that covers this period and up to the date 
of publication of this interim management statement. 
 
Our operations 
 
The objective of the Company is to provide a tax free dividend return to 
shareholders primarily through the realisation of capital gains while 
maintaining the capital value of the shares. The Company is managed as a VCT in 
order that shareholders may benefit from the tax reliefs available. 
 
The intention is that substantially all of the funds will be invested in a 
spread of AIM-traded stocks and unquoted companies, with approximately 80% of 
the Company's Qualifying Holdings comprising AIM-traded stocks, subject to 
availability of suitable investment opportunities and market conditions. The 
remaining investments will be split between PLUS Markets' stocks, fully listed 
stocks, AIM-traded non-qualifying stocks or unquoted companies and cash. Amati 
Global Investors (the "Manager" adopts an active investment strategy and seeks 
to moderate risk by careful stock selection and portfolio construction. The 
Manager tends to invest relatively small amounts across a wide range of 
companies, to achieve the appropriate balance between risk and reward for the 
overall portfolio. 
 
Proposed merger with ViCTory VCT PLC 
 
A circular was sent to shareholders on 3 October 2011 to provide information on 
and seek shareholders formal approval for the proposal for a merger with 
ViCTory VCT PLC by way of a scheme of reconstruction of the Company and a 
cancellation of listing of the Company's shares. The circular is also available 
on the Manager's website. 
 
Performance and transactions during the period 
 
During the period, the NAV per share declined by 6.5% against a benchmark (FTSE 
AIM All-Share Total Return Index) fall of 13.3%. The quarter witnessed a 
significant correction in asset prices as Eurozone sovereign debt fears 
resurfaced and the strength of the global economic recovery was brought into 
question. At the beginning of August there was a sudden and savage sell-off in 
equities as investors rushed into safe havens such as gold and US Treasuries. 
The portfolio saw declines in value amongst some of the largest core holdings, 
such as Brooks Macdonald Group, Asian Citrus Holdings and Software Radio 
Technology, despite news from these companies being very positive over the 
period. Brooks Macdonald Group has bounced back up substantially during 
September, following the publication of strong results. Across the market, 
there was widespread selling of equities wherever liquidity could be found. In 
addition businesses perceived as having cyclical or consumer exposure were 
strongly affected, although the portfolio is underweight in these areas. On the 
other hand, some portfolio companies performed well despite the negative 
backdrop, the most significant being Cupid, the holding company for a 
collection of online dating businesses. Cupid announced an acquisition that 
takes the company into Brazil as well as half year results that reported a 189% 
increase in revenues. Like many of the core holdings in the portfolio, Cupid is 
a business that should be able to perform well even in a difficult economic 
environment. Other qualifying holdings such as Cohort and Green Compliance also 
saw share price rises over the period following results announcements. 
 
Restructuring of the portfolio continued during the period in line with the 
approach outlined to shareholders previously. This involved a continued 
reduction in equity holdings of companies capitalised at less than GBP15m, 
replacing these with larger, more mature businesses, whilst continuing to add 
to the non-qualifying portfolio. Amongst qualifying investments, Proteome 
Sciences and Byotrol were sold and the position in Tristel reduced. Three new 
qualifying investments were made: MyCelx Technologies, which has developed an 
innovative water-treatment filtration system for use in the oil industry; 
Manroy, an equipment supplier to the UK and US military, which raised funds to 
acquire a 49% stake in Manroy USA; and Ubisense, a designer of real time 
location systems for manufacturing facilities which enable accurate tracking of 
assets such as tools and vehicles. New additions to the non-qualifying 
portfolio included: African Barrick Gold, to take advantage of the disconnect 
between the gold price and valuation of gold mining stocks; Hargreaves 
Services, a coal business with interests in mining, transport, importing, 
refining and processing; New Britain Palm Oil, a producer of sustainable palm 
oil, which is an increasingly popular ingredient in processed foods; 
Waterlogic, a manufacturer of point-of-use drinking water purification systems 
with a novel "Firewall" UV technology; and XP Power, a designer and 
manufacturer of power control solutions. 
 
                              As at 31 August 2011        As at 31 May 2011 
 
                                 ("unaudited")              ("unaudited") 
 
Total Net Asset Value                GBP12.9m                    GBP13.8m 
("NAV") 
 
Shares in issue                    43,126,171                43,126,171 
 
NAV per share *                      29.6p                      31.7p 
 
* taking account of amounts receivable or chargeable to the VCT's income 
account. 
 
The top ten investments in the Company's portfolio are listed below. 
 
Top ten holdings as at 31 August 2011 
                                                                  Percentage of 
                                                                 the fund's net 
                                                              asset value as at 
                                                                 31 August 2011 
 
Brooks Macdonald Group plc                                                  7.3 
 
Cupid plc                                                                   5.6 
 
Infrared Integrated Systems Limited                                         5.3 
 
Software Radio Technology plc                                               4.7 
 
Staffline Group plc                                                         3.9 
 
Kiotech International plc                                                   3.8 
 
Brainjuicer Group plc                                                       3.6 
 
Futura Medical plc                                                          2.6 
 
Asian Citrus Holdings Limited                                               2.6 
 
Anglo Pacific Group plc                                                     2.5 
 
                                                                           41.9 
 
For further information please contact: 
 
Paul Jourdan or Doug Lawson             Doreen Nic 
0131 243 0411                           0131 243 7215 
Amati Global Investors                  The City Partnership (UK) Limited 
Manager                                 Company Secretary 
 
or email [e-mail]. 
 
18 October 2011 
 
Ends 
 
Detailed monthly updates on portfolio activity and performance are posted on 
the Amati Global Investors website 
(see http://www.amatiglobal.com/avct2_monthly_investment_reports.php). 
Neither the contents of the Company's website nor the contents of any website 
accessible from hyperlinks on the Company's website (or any other website) is 
incorporated into, or forms part of, this announcement. 
 
 
 
END