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JZ Capital Partners LSE:JZCP London Ordinary Share GG00B403HK58 ORD NPV
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -2.00p -0.42% 479.00p 474.00p 484.00p 481.00p 479.00p 481.00p 3,200 15:15:58
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Equity Investment Instruments 23.1 8.6 10.3 43.1 401.92

JZ Capital Ptnrs Ltd Half-year Report

08/11/2017 7:00am

UK Regulatory (RNS & others)


 
TIDMJZCP TIDMJZCC TIDMJZCN 
 
JZ CAPITAL PARTNERS LIMITED (the "Company" or "JZCP") 
(a closed-end investment company incorporated with limited liability under the 
                laws of Guernsey with registered number 48761) 
 
                INTERIM RESULTS FOR THE SIX-MONTH PERIODED 
                                31 AUGUST 2017 
 
      (Classified Regulated Information, under DTR 6 Annex 1 section 1.1) 
 
8 November 2017 
 
JZ Capital Partners, the London listed fund that invests in US and European 
micro-cap companies and US real estate, announces its interim results for the 
six-month period ended 31 August 2017. 
 
Results and Portfolio Highlights 
 
·      NAV of $829.4 million (FYE 28/02/17: $848.8 million) 
 
·      NAV per share of $9.88 (FYE 28/02/17: $10.12) 
 
·      Total investments of $56.3 million, including: Felix Storch, Jordan 
Health Products, Peaceable Street Capital and properties in Brooklyn, New York 
and South Florida. 
 
·      Realisation proceeds of $27.7 million, primarily through the sale of 
Fidor Bank and the recapitalisation of Jordan Health Products. 
 
·      As of 31 August 2017, the portfolio comprised: 
 
  o  US micro-cap: 21 businesses including four 'verticals' and 12 
co-investments, across nine industries. 
 
  o  European micro-cap: 15 companies across five industries and six countries. 
 
  o  US real estate: 59 properties across five major assemblages in New York 
and South Florida all in various stages of (re)/development. 
 
·      JZCP made three significant post-period realisations (October and 
November 2017), all at or above net asset value: Nielsen-Kellerman, K2 Towers 
and Factor Energia. 
 
Operational Highlights 
 
·      In May 2017, JZCP received shareholder approval for initiatives designed 
to maximise shareholder returns, including the discontinuation of the Company's 
current dividend policy and inception of a new strategy to allow for the 
repurchase of shares. 
 
·      In April 2017, JZCP increased its loan facility with Guggenheim Partners 
from approximately $100 million to $150 million, in order to bridge certain 
planned realisations. 
 
David Zalaznick, JZCP's Founder and Investment Adviser, said: "It has been a 
steady six months for the Company. Whilst the underlying assets in our US, 
European and real estate portfolios continued to perform well, the overall NAV 
was impacted by pre-development real estate costs at the US real estate 
portfolio. 
 
However, we remain positive about our future prospects and have made a 
promising start to the second half of the year, with three significant 
realisations, all at or above NAV. 
 
Looking forward, the Company remains focused 
on returning further value from the portfolio and investing opportunistically 
in high-quality assets in the US and Europe." 
 
David Macfarlane, Chairman of JZCP, said: "The Board remains confident in and 
continues to support the Investment Manager's focus on growing the Company's 
NAV and following shareholder approval during the first half of the year, we 
look forward to initiating a share repurchase programme as market conditions 
permit. We carry great momentum into the second half of the year, as the 
Company builds towards a more secure, long-term future." 
 
Presentation details: 
 
There will be an audiocast presentation for investors and analysts at 2pm UK 
(GMT) / 9am US (EDT) on 8 November 2017. The presentation can be accessed via 
http://bit.ly/2lTkDSG and by dialing +44 (0)330 336 9105 (UK) or +1 
323-794-2423 (US) with the participant access code 2568566. 
 
A playback facility will be available two hours after the conference call 
concludes. This facility may be accessed via the following dial in details, 
using the same participant access code as above: +44 (0)207 984 7568 (UK) or +1 
719-457-0820 (US). 
 
For further information: 
 
Ed Berry / Kit Dunford                                                    +44 
(0) 20 3727 1046 / 1143 
FTI Consulting 
 
David Zalaznick                                                              +1 
212 485 9410 
Jordan/Zalaznick Advisers, Inc. 
 
Rebecca Booth                                                              +44 
(0) 1481 745 189 
JZ Capital Partners 
 
About JZ Capital Partners 
 
JZ Capital Partners ("JZCP") is one of the oldest closed-end investment 
companies listed on the London Stock Exchange. It seeks to provide shareholders 
with a return by investing selectively in US and European microcap companies 
and US real estate. JZCP receives investment advice from Jordan/Zalaznick 
Advisers, Inc. ("JZAI") which is led by David Zalaznick and Jay Jordan. They 
have worked together for more than 35 years and are supported by teams of 
investment professionals in New York, Chicago, London and Madrid. JZAI's 
experts work with the existing management of micro-cap companies to help build 
better businesses, create value and deliver strong returns for investors. For 
more information please visit www.jzcp.com. 
 
Chairman's Statement 
 
I am pleased to report the results of JZ Capital Partners ("JZCP" or the 
"Company") for the six-month period ended 31 August 2017. 
 
Performance 
 
The Company's performance over the last six months has been set against a 
backdrop of short-term political and economic uncertainty, driven by US policy 
and Brexit nervousness, and separatist fears across the EU. 
 
Despite this, the US economy remains in a solid and robust expansion that is 
now the third longest in US history. The expansion gathered pace in the second 
quarter of 2017, with GDP growing 3.1% from April to June, driven primarily by 
household spending and firmer investment by business1. In Europe, economic 
growth has continued to gain momentum, supported by favourable monetary 
conditions, a weaker euro and better than expected export growth. 
 
Within this market environment, it has been a steady six months for the 
Company, with the underlying assets in our US, European and real estate 
portfolios continuing to perform satisfactorily. For the six-month period ended 
31 August 2017, JZCP's net asset value ("NAV") per share declined 2.4% from 
$10.12 to $9.88; primarily due to operating and debt service expenses at the US 
real estate portfolio, offsetting the positive performance of the US and 
European micro-cap portfolio. 
 
Strategy 
 
The Investment Adviser continues to pursue its value-added investment strategy 
in the US and European micro-cap sectors and the US real estate market, 
providing investors with access to a diversified and balanced portfolio of 
alternative investment opportunities. 
 
Portfolio update 
 
It has been an active investment period for the Company, putting $56.3 million2 
to work across the US micro-cap and real estate portfolios - whilst realising 
$27.7 million3, primarily through the sale of Fidor Bank, an internet-based 
bank licensed in Germany, and the recapitalisation of Jordan Health Products, a 
build-up of healthcare equipment sales, service and installation companies. 
 
At the end of the period, the Company's portfolio consisted of 21 US micro-cap 
businesses, including four 'verticals' and 12 co-investments, across nine 
industries, 15 European micro-cap companies across five industries and six 
countries, and five major real estate assemblages (59 properties in total) 
located across Brooklyn, New York and South Florida. The portfolio continues to 
become more balanced by asset type and geography. 
 
US and European Micro-cap 
 
The Board is pleased with the resilient performance of the US micro-cap 
portfolio during the period, which has seen a net valuation increase of 4 cents 
per share, primarily due to net accrued income of 8 cents and increased 
earnings at our Healthcare Revenue Cycle Management vertical (2 cents). 
 
The US micro-cap portfolio was valued at 8.2x EBITDA, after applying an average 
26% marketability discount to public comparables. The Company paid 4.8x EBITDA 
on average for US micro-cap acquisitions made during the period, consistent 
with the Investment Adviser's value-oriented investment strategy. 
 
The European micro-cap sector remains a strategically important segment of the 
business. JZCP invests  in  the European micro-cap sector through its 75% 
ownership of the EuroMicrocap Fund 2010, L.P. ("EMC")4 and its approximately 
18.8% ownership of JZI Fund III, L.P. ("Fund III"). This was demonstrated 
during the period when JZCP acquired stakes in two new businesses via its 
ownership in Fund III: Treee, Italy's first nationwide recycler of electric and 
electronic goods, and Eliantus, a build-up of solar plants in Spain. 
 
As of 31 August 2017, EMC held two investments in Spain: Factor Energia and 
Oro. Fund III held nine investments: three in Spain, two in Scandinavia, two in 
Italy and one each in the UK and Luxembourg. JZCP held direct loans to a 
further four companies in Spain: Ombuds, Docout, Xacom and Toro Finance. 
 
Real Estate 
 
The Company's long-term partnership with Redsky Capital continues to lead to 
attractive investment opportunities in Brooklyn, New York, and South Florida. 
During the period, JZCP made investments of $23.2 million in properties in 
Brooklyn, New York, and South Florida. The portfolio experienced a valuation 
decrease of 17 cents per share, primarily due to operating expenses and debt 
service at the property level. 
 
As of August 2017, JZCP has approximately $366 million invested in five major 
real estate assemblages (59 properties in total) with an approximate valuation 
of $477 million. All properties are currently in various stages of development 
and re-development. 
 
Realisations 
 
The Company generated realisations totalling $27.7 million during the period, 
primarily through the sale of Fidor Bank ("Fidor") and the recapitalisation of 
Jordan Health Products. The Company received its first tranche of proceeds 
totalling $12.5 million from the sale of Fidor, and is expected to receive 
total gross proceeds of approximately $25 million from the sale. 
 
The Board is delighted with three significant post-period realisations (October 
2017), all approximately at or above net asset value: Nielsen-Kellerman, K2 
Towers and Factor Energia. JZCP received proceeds of $8.6 million from the sale 
of NK and expects to receive total cash proceeds of $27.1 million from the sale 
of K2, with further proceeds of approximately $4.2 million being rolled into a 
new vehicle which is being used to fund a new portfolio of cell tower assets 
with the same management partners. JZCP expects to have received total gross 
proceeds (before carry) of approximately EUR69.7 million ($82.3 million) from the 
sale of Factor Energia. 
 
Outlook 
 
I am encouraged by the level of realisation activity, post-period, which we 
expect will continue to feed through to positive NAV growth in the year ahead. 
 
The Board continues to believe that generating positive NAV growth is the most 
effective driver to narrow the Company's persistent discount to NAV. In 
addition, the Board continues to evaluate its option of exercising the share 
buy-back programme, following shareholder approval during the first half of the 
year. The timing and level of the buyback is dependent on a range of factors, 
including the Company's liquidity from realisations, market conditions and 
whether or not it would be accretive to shareholder value. Subject to that, 
however, the Board expects to dedicate a portion of funds from realisations to 
a share buyback programme in 2018. 
 
The Company's robust balance sheet and access to a wide range of quality 
investment opportunities means we are well positioned for the year ahead. 
 
David Macfarlane 
Chairman 
7 November 2017 
 
1 Bureau of Economic Analysis, US Department of Commerce - 28 September 2017. 
 
2 Total investments in the period, as quoted in the Chairman's Statement and 
Investment Advisers' report have been adjusted to exclude short-term direct 
loans to investee companies ($6.6 million) which were advanced and repaid in 
the period. 
 
3 Total realisations in the period, as quoted in the Chairman's Statement and 
Investment Advisers' report have been adjusted to exclude short-term direct 
loans to investee companies ($7.1 million) which were advanced and repaid in 
the period and to include Escrow receipts ($1.2 million). 
 
4 EuroMicrocap Fund 2010, L.P. and EuroMicrocap Fund-C, L.P. are defined 
throughout the Condensed Interim Report and Financial Statements as "EMC", both 
L.P.s are held by the same limited partners and in the same ownership 
percentages. 
 
Investment Adviser's Report 
 
Dear Fellow Shareholders, 
 
We are very pleased to report three significant post-period realisations, all 
approximately at or above net asset value: Nielsen-Kellerman Co., K2 Towers and 
Factor Energia for which more details are provided later in this report. 
 
JZCP's NAV per share fell 2.4% during the period, from $10.12 at 28 February 
2017 to $9.88 at 31 August 2017, primarily due to pre-development real estate 
costs. Unless otherwise stated, figures included in this report refer to the 
six-month period ended 31 August 2017. 
 
During the period, JZCP invested a total of $56.3 million, including 
investments in Felix Storch, Jordan Health Products, Peaceable Street Capital 
and properties in Brooklyn, New York and South Florida. We realised 
$27.7 million primarily through the sale of Fidor Bank and the recapitalisation 
of Jordan Health Products. 
 
As of 31 August 2017, our US micro-cap portfolio consisted of 21 businesses, 
which includes four 'verticals' and 12 co- investments, across nine industries; 
this portfolio was valued at 8.2x EBITDA, after applying an average 26% 
marketability discount to public comparables. The average underlying leverage 
senior to JZCP's position in our US micro-cap portfolio is 3.5x EBITDA. 
Consistent with our value-oriented investment strategy, we have acquired our 
current US micro-cap portfolio at an average 6.1x EBITDA; we paid 4.8x EBITDA 
on average for US micro-cap acquisitions made during the period. 
 
Our European micro-cap portfolio consisted of 15 companies across five 
industries and six countries. The European micro-cap portfolio has low leverage 
senior to JZCP's position, of under 2.0x EBITDA. 
 
As of the same date, our US real estate portfolio consisted of 59 properties 
and can be grouped primarily into five major "assemblages", located in the 
Williamsburg, Greenpoint and Downtown/Fulton Mall neighbourhoods of Brooklyn, 
New York, and the Wynwood and Design District neighbourhoods of Miami, Florida. 
Our assemblages are comprised of adjacent or concentrated groupings of 
properties that can be developed, financed and/or sold together at a higher 
valuation than on a stand-alone basis. 
 
Net Asset Value ("NAV") 
 
JZCP's NAV per share fell 2.4% during the period, from $10.12 at 28 February 
2017 to $9.88 at 31 August 2017. 
 
NAV per Ordinary share as of 28 February 2017                                        $10.12 
 
Change in NAV due to capital gains and accrued income 
 
+ US Micro-cap                                                                       0.04 
 
+ European Micro-cap                                                                 0.02 
 
- Real estate                                                                      (0.17) 
 
- Other investments                                                                (0.07) 
 
Other increases/(decreases) in NAV 
 
- Change in CULS fair value                                                        (0.01) 
 
- Finance costs                                                                    (0.10) 
 
+ Net foreign exchange effect 1                                                      0.15 
 
- Expenses and taxation                                                            (0.10) 
 
NAV per Ordinary share as of 31 August 2017                                           $9.88 
 
1 Net foreign exchange gains includes 20 cents relating to translation of 
investments, foreign exchange losses of 3 cents on the translation of the CULS 
and foreign exchange losses of 2 cents as recorded in the Statement of 
Comprehensive Income. 
 
The US micro-cap portfolio performed steadily, delivering a net increase of 4 
cents, primarily due to net accrued income of 8 cents and increased earnings at 
our Healthcare Revenue Cycle Management vertical (2 cents). Also contributing 
to the positive portfolio performance were increases at our Logistics vertical 
(1 cent) and at Jordan Health Products (1 cent). We also received 1 cent of 
escrow payments during the period. 
 
Offsetting these increases were declines at our Industrial Services Solutions 
("ISS") vertical (8 cents) and Nationwide, our school photography business (1 
cent). 
 
The European micro-cap portfolio continued its positive trajectory, posting a 
net increase of 2 cents, primarily due to accrued income of 5 cents and a 
positive carried interest adjustment of 3 cents, offset by a write-down of 
Factor Energia, our energy supply business in Spain, of 6 cents. 
 
The real estate portfolio experienced a net decrease of 17 cents, primarily due 
to operating expenses and debt service at the property level. 
 
Returns 
 
The chart below summarises cumulative total shareholder returns and total NAV 
returns for the most recent six-month, one-year, three-year, four-year and 
five-year periods. 
 
                              31.8.2017  28.2.2017  31.8.2016  31.8.2014   31.8.2012 
 
Share price (in GBP)              GBP5.16      GBP5.38      GBP4.53      GBP4.34       GBP3.50 
 
NAV per share (in USD)            $9.88     $10.12     $10.40     $10.11       $9.38 
 
NAV to market price                 33%        34%        43%        29%         41% 
discount 
 
                                           6 month 
 
                                            return     1 year     3 year      5 year 
                                                       return     return      return 
 
Dividends paid (in USD)                          -     $0.155      $0.79      $1.385 
 
Total Shareholders'                          -4.2%      16.6%      32.9%       80.8% 
return1 
 
Total NAV return per                         -2.4%      -3.6%       5.7%       21.2% 
share1 
 
1 Total returns are cumulative and assume that dividends were reinvested. 
 
Portfolio Summary 
 
Our portfolio is well-diversified by asset type and geography, with 36 US and 
European micro-cap investments across nine industries and five primary real 
estate "assemblages" (59 total properties) located in Brooklyn, New York and 
South Florida. The portfolio continues to become more diversified 
geographically across Western Europe with investments in Spain, Italy, 
Luxembourg, Scandinavia and the UK. 
 
Below is a summary of JZCP's assets and liabilities at 31 August 2017 as 
compared to 28 February 2017. An explanation of the changes in the portfolio 
follows: 
 
                                                                  31.8.2017     28.2.2017 
 
                                                                    US$'000       US$'000 
 
US micro-cap portfolio                                              439,745       423,137 
 
European micro-cap                                                  166,244       154,277 
portfolio 
 
Real estate portfolio                                               477,384       468,599 
 
Other investments                                                    16,145        23,167 
 
Total private                                                     1,099,518     1,069,180 
investments 
 
Cash                                                                 35,766        29,063 
 
Total listed investments and cash                                 1,135,284     1,098,243 
 
Other assets                                                            544           520 
 
Total assets                                                      1,135,828     1,098,763 
 
Zero Dividend Preference (2022) shares                               57,278        53,935 
 
Convertible Unsecured Loan Stock                                     60,089        57,063 
 
Loans payable                                                       149,137        97,396 
 
Other payables                                                       39,902        41,525 
 
Total liabilities                                                   306,406       249,919 
 
Net Asset Value                                                     829,422       848,844 
 
As previously announced, in April 2017 JZCP increased its loan facility with 
Guggenheim Partners from approximately $100 million to $150 million. The 
purpose of this increase in borrowings is to provide additional liquidity to 
JZCP in order to bridge certain planned realisations. The entire $150 million 
facility may be repaid, in whole or in part, at any time, without any 
prepayment penalties. 
 
US micro-cap portfolio 
 
As you know from previous reports, our US portfolio is grouped into industry 
'verticals' and co-investments. Our 'verticals' strategy focuses on 
consolidating businesses under industry executives who can add value via 
organic growth and cross company synergies. Our co-investments strategy allows 
for greater diversification of our portfolio by investing in larger companies 
alongside well known private equity groups. 
 
New US investments - verticals 
 
Vertical                            Number of Acquisitions             JZCP Investment ($ 
                                                                                millions) 
 
Technical Solutions and                                  1                            1.3 
Services 
 
Total                                                    1                            1.3 
 
New US investments - co-investments 
 
Portfolio Company                            New/Follow-on    JZCP Investment ($ millions) 
 
Peaceable Street Capital                         Follow-on                             3.0 
 
New Vitality                                     Follow-on                             0.1 
 
Felix Storch                                           New                            12.0 
 
Jordan Health Products1                          Follow-on                             4.5 
 
Total                                                                                 19.6 
 
 
1Jordan Health Products is classified as an "Other" US Micro-cap investment in 
the Investment Portfolio. 
 
European micro-cap portfolio 
 
JZCP invests in the European micro-cap sector through its 75% ownership of EMC 
and its 18.8% ownership of JZI Fund III, L.P. ("Fund III"). JZAI has offices in 
London and Madrid and an outstanding team with over fifteen years of experience 
investing together in European micro-cap deals. 
 
As of 31 August 2017, EMC held two investments in Spain: Factor Energia and 
Oro. Fund III held nine investments: three in Spain, two in Scandinavia, two in 
Italy and one each in the UK and Luxembourg. JZCP held direct loans to a 
further four companies in Spain: Ombuds, Docout, Xacom and Toro Finance. 
 
In November 2017 (post-period), JZCP sold its interest in Factor Energia for 
expected total gross proceeds (before carry) of approximately EUR69.7 million 
($82.3 million) (including deferred payments and interim distributions received 
over the course of the investment), which represents an approximate gross 
multiple of invested capital of 9.2x and an approximate gross IRR of 42.3% in 
euro-denominated terms. See below for further information. 
 
Recent events 
 
During the period, JZCP acquired stakes in two new businesses  via its 
ownership  in Fund III: Treee, Italy's first nationwide recycler of electric 
and electronic goods, and Eliantus, a build-up of solar plants in Spain. 
 
JZCP also made follow-on investments in My Lender, a consumer lending business 
in Finland, and Alianzas en Aceros, a steel transformation company in Spain, 
both of which are owned by Fund III. 
 
In March 2017, JZCP received its first tranche of proceeds totalling $12.5 
million from the sale of portfolio company Fidor Bank to Groupe BPCE, the 
second largest banking group in France. The transaction had closed in December 
2016. JZCP invested a total of $13.8 million and is expected to receive total 
gross proceeds of approximately $25 million from the sale. 
 
In July 2017, JZCP received proceeds totalling $1.5 million from the 
refinancing of Petrocorner, a build-up of petrol stations in Spain, and a 
distribution on loan notes from Collingwood, a niche motor insurance business 
in the UK. 
 
Real Estate Portfolio 
 
As of 31 August 2017, JZCP had approximately $366 million invested in a 
portfolio of retail, office and residential properties in Brooklyn, New York, 
and South Florida which is valued at $477 million as of that date. We have made 
these investments alongside our long-term real estate partner, RedSky Capital, 
a team with significant experience in the sector. 
 
Since we began investing with RedSky in April 2012, we have acquired a total of 
59 properties, all currently in various stages of development and 
re-development. 
 
The real estate portfolio had a net decrease of 17 cents, primarily due to 
operating expenses and debt service at the property level. 
 
New real estate investments 
 
                                                              JZCP Investment ($ millions) 
 
Follow-ons & expenses                                                                 23.2 
 
                                                                                      23.2 
 
 
Other Investments 
 
Our asset management business in the US, Spruceview Capital Partners, addresses 
the growing demand from corporate pensions, endowments, family offices and 
foundations for fiduciary management services through an Outsourced Chief 
Investment Officer ("OCIO") model. Spruceview has a robust pipeline of 
opportunities and continues to provide investment oversight to a European 
private credit fund-of-funds tailored to the clients of an international 
multi-family office as well as to the pension fund of a Canadian subsidiary of 
an international confectionary company. Spruceview recently increased its 
assets under management as the Canadian pension fund incorporated the assets of 
another recently acquired business. 
 
As previously reported, Richard Sabo, former Chief Investment Officer of Global 
Pension and Retirement Plans at JPMorgan and a member of that firm's executive 
committee, is leading a team of 12 senior investment, business development, 
legal and operations professionals. 
 
Realisations 
 
Investment                          Type        Portfolio         Proceeds ($ millions) 
 
Jordan Health Products    Dividend Recap              US                            7.6 
 
Petrocorner &               Distribution         European                           1.7 
Collingwood 
 
Fidor                               Sale         European                          12.5 
 
Bright Spruce Fund           Liquidation            Other                           4.6 
 
Escrow                                                 US                           1.2 
 
Other                                         Real Estate                           0.1 
 
                                                                                   27.7 
 
As previously mentioned, JZCP made three significant post-period realisations 
(October and November 2017), all at or above net asset value: Nielsen-Kellerman 
Co. ("NK"), K2 Towers ("K2") and Factor Energia ("Factor"). 
 
Nielsen-Kellerman 
 
JZCP received proceeds of $8.6 million from the sale of NK, a designer, 
manufacturer and distributer of rugged, waterproof environmental and sports 
performance instruments for active lifestyles and technical applications. 
 
NK's sale represents a 3.3x realised gross multiple on invested capital and a 
19.2% realized gross IRR. JZCP first invested in NK in March 2010. 
 
K2 Towers 
 
JZCP expects to receive total proceeds of $31.3 million from the sale of K2 to 
one of the largest publicly traded cell tower companies, representing an 
overall gross multiple of invested capital of 1.5x and a gross internal rate of 
return of 17.6% in just over two years. Approximately $4.2 million of these 
proceeds are being re-invested into a new vehicle which is being used to fund a 
new portfolio of cell tower assets with the same management partners. This 
transaction provides liquidity to JZCP at an attractive valuation while 
continuing to build a great cell tower portfolio with further upside. 
 
Factor Energia 
 
Finally, JZCP realised, at approximately net asset value, its majority equity 
interest in Factor held through EMC. 
 
Post-sale, Factor will be majority owned by an affiliate of a major North 
American public pension fund. As part of this transaction, Fund III, in which 
JZCP is an approximately 18.8% limited partner, has agreed to invest EUR20 
million alongside the majority owner and Factor management, representing 
approximately 25% of the business' fully diluted equity ownership. 
 
JZCP invested a total of approximately EUR7.6 million ($9.6 million) in Factor 
and is expected to receive total gross proceeds, (before carry) of 
approximately EUR69.7 million ($82.3 million) from the sale (including deferred 
payments and interim distributions received over the course of the investment), 
representing an approximate gross multiple of invested capital of 9.2x and an 
approximate gross IRR of 42.3% in euro-denominated terms. 
 
Outlook 
 
We are very pleased with how the second half of the year has started, with 
three outstanding post-period realisations (NK, K2 and Factor). All of these 
transactions validate JZCP's solid, if not conservative, net asset value. 
 
Heading into the year-end, we remain committed to pursuing our value-added 
investment strategy and are pleased with the current composition of JZCP's 
portfolio, which we believe is well-balanced by geography and asset type. 
 
We anticipate further exciting realisations over the next six months, which 
will in turn provide more liquidity for us to invest in our growing pipeline of 
attractive investment opportunities, repay debt and buy back our stock. 
 
As always, we thank you for your continued support in our investment strategy. 
Please feel free to contact us with any ideas that might be beneficial to JZCP. 
 
Yours faithfully, 
Jordan/Zalaznick Advisers, Inc. 
7 November 2017 
 
Investment Portfolio 
 
                                                  Historical        Carrying 
                                                                       Value 
 
                                                        Book       31 August Percentage of 
 
                                                        cost            2017     Portfolio 
 
                                                     US$'000         US$'000             % 
 
US Micro-cap portfolio 
 
US Micro-cap (Verticals) 
 
Industrial Services Solutions(4) 
 
INDUSTRIAL SERVICES SOLUTIONS ("ISS") 
A combination of twenty five acquired 
businesses in the industrial maintenance, 
repair and service industry 
 
Total Industrial Services Solutions valuation         33,257          78,851           7.2 
 
Healthcare Revenue Cycle Management (4) 
 
BHS HOSPITAL SERVICES                                                                  0.0 
Provider of outsourced revenue cycle 
management solutions to hospitals.  BHS 
Hospital Services, Inc., which owns Bolder 
Outreach Services (formerly known as Monti 
Eligibility & Denial Solutions), Receivables 
Outsourcing, Inc. and Avectus Healthcare 
Solutions, LLC is a subsidiary of Bolder 
Healthcare Solutions, LLC 
 
BHS PHYSICIAN SERVICES                                                                 0.0 
Provider of outsourced revenue cycle 
management solutions to physician groups. 
BHS Physician Services, Inc., which owns 
Bodhi Tree Group and PPM Information 
Solutions, Inc. is a subsidiary of Bolder 
Healthcare Solutions, LLC 
 
Total Healthcare Revenue Cycle Management             30,327          71,238           6.5 
valuation 
 
 Technical Solutions and Services(4) 
 
ARGUS GROUP HOLDINGS 
Sells, rents and services safety and testing 
equipment to a variety of industries. Argus 
Group Holdings is a subsidiary of Testing 
Services Holdings 
 
Total Testing Services Vertical valuation             12,854          11,951           1.1 
 
Water Services(4) 
 
TWH INFRASTRUCTURE INDUSTRIES, INC. 
Environmental infrastructure company that 
provides technology to facilitate repair of 
underground pipes and other infrastructure. 
TWH Infrastructure Industries, Inc., which 
owns LMK Enterprises, Perma-Liner Industries 
and APMCS is a subsidiary of Triwater 
Holdings 
 
TWH WATER TREATMENT INDUSTRIES, INC. 
Provider of water treatment supplies and 
services. TWH Water Treatment Industries, 
Inc., which owns Nashville Chemical & 
Equipment and Klenzoid Canada Company/Eldon 
Water, Inc., is a subsidiary of Triwater 
Holdings 
 
TWH FILTRATION INDUSTRIES, INC. 
Supplier of parts and filters for 
point-of-use filtration systems, which owns 
Paragon Water Systems, is a subsidiary of 
Triwater Holdings 
 
Total Water Services Vertical valuation               24,730          33,203           3.0 
 
Total US Micro-cap (Verticals)                       101,168         195,243          17.8 
 
US Micro-cap (Co-investments) 
 
FELIX STORCH, INC.                                    12,000          12,408           1.1 
Supplier of specialty, professional, 
commercial, and medical refrigerators and 
freezers, and cooking appliances 
 
GEORGE INDUSTRIES                                     12,639          12,639           1.1 
Manufacturer of highly engineered, complex 
and high tolerance products for the 
aerospace, transportation, military and other 
industrial markets 
 
IGLOO PRODUCTS CORP(4)                                 6,040           6,040           0.5 
Designer, manufacturer and marketer of 
coolers and outdoor products 
 
ILLUMINATION INVESTMENTS, LLC(4)                       4,920           1,930           0.2 
Designer and manufacturer of LED lights and 
lighting systems 
 
K2 TOWERS, LLC                                        20,900          19,461           1.8 
Acquirer of wireless communication towers 
 
NEW VITALITY HOLDINGS, INC.(4)                         3,622           3,994           0.4 
Direct-to-consumer provider of nutritional 
supplements and personal care products. 
 
ORIZON(4)                                             15,843          15,843           1.4 
Manufacturer of high precision machine parts 
and tools for aerospace and defence 
industries 
 
PEACEABLE STREET CAPITAL, LLC                         28,041          27,673           2.5 
 Specialty finance platform focused on 
commercial real estate 
 
SALTER LABS, INC.(4)                                  16,762          21,474           2.0 
Developer and manufacturer of respiratory 
medical products and equipment for the 
homecare, hospital, and sleep disorder 
markets 
 
SUZO HAPP GROUP(4)                                     2,572          11,700           1.1 
Designer, manufacturer and distributor of 
components for the global gaming, amusement 
and industrial markets 
 
TIERPOINT, LLC(4)                                     44,313          46,813           4.3 
Provider of cloud computing and collocation 
data centre services 
 
VITALYST(4)                                            9,020           8,192           0.7 
Provider of outsourced IT support and 
training services 
 
Total US Micro-cap (Co-investments)                  176,672         188,167          17.1 
 
US Micro-cap (Other) 
 
HEALTHCARE PRODUCTS HOLDINGS, INC.(1),(3)             17,636               -             - 
 
Designer and manufacturer of motorised 
vehicles 
 
JORDAN HEALTH PRODUCTS, LLC                           28,405          29,729           2.7 
Provider of new and professionally 
refurbished healthcare equipment 
 
NATIONWIDE STUDIOS, INC.                              23,074           9,860           0.9 
Processer of digital photos for preschoolers 
 
NIELSEN-KELLERMAN                                      2,644           6,967           0.6 
Designer and manufacturer of weather, wind 
and timing measurement instruments and 
devices. Nielsen-Kellerman is a subsidiary of 
Sensors Solutions Holdings 
 
PRIORITY EXPRESS, LLC                                 13,200           9,779           0.9 
Provider of same day express courier services 
to various companies located in north-eastern 
USA. Priority Express is a subsidiary of US 
Logistics, LLC 
 
Total US Micro-cap (Other)                            84,959          56,335           5.1 
 
Total US Micro-cap portfolio                         362,799         439,745          40.0 
 
European Micro-cap portfolio 
 
EUROMICROCAP FUND 2010, L.P.                           4,685          11,672           1.1 
At 31 August 2017, held the proceeds pending 
distribution from the sale of Fidor Bank 
 
EUROMICROCAP FUND-C, L.P.                             14,387          64,313           5.9 
At 31 August 2017, was invested in two 
companies in the European micro-cap sector: 
Factor Energia and Oro Direct 
 
JZI Fund III, L.P.                                    30,046          37,240           3.4 
At 31 August 2017, was invested in nine 
companies in the European micro-cap sector: 
Petrocorner, Fincontinuo, S.A.C, Collingwood, 
My Lender, Alianzas en Aceros, ERSI, Treee 
and Eliantus 
 
Direct Investments 
 
DOCOUT, SL                                             2,777           3,723           0.3 
Provider of digitalisation, document 
processing and storage services 
 
GRUPO OMBUDS                                          17,155          24,401           2.2 
Provider of personal security and asset 
protection 
 
TORO FINANCE                                          21,619          21,178           1.9 
Provides short term receivables finance to 
the suppliers of major Spanish companies 
 
XACOM COMUNICACIONES SL                                2,055           3,717           0.3 
Supplier of telecom products and technologies 
 
Total European Micro-cap portfolio                    92,724         166,244          15.1 
 
Real Estate 
 
JZCP REALTY FUND(2)                                  366,528         477,384          43.4 
 Facilitates JZCP's investment in US real 
estate 
 
Total Real Estate portfolio                          366,528         477,384          43.4 
 
Other investments 
 
BRIGHT SPRUCE FUND, L.P.                                 877             100             - 
Fund investing in marketable equity, fixed 
income and alternative asset classes 
 
BSM ENGENHARIA S.A.                                    6,115             459           0.1 
Brazilian-based provider of supply chain 
logistics, infrastructure services and 
equipment rental 
 
INDUSTRIAL PERFORMANCE SOLUTIONS(4)                      331             450             - 
Acquirer of companies providing mission 
critical inspection services for a variety of 
industries 
 
JZ INTERNATIONAL, LLC(3)                                   -             750           0.1 
 Fund of European LBO investments 
 
MODJ, LLC(4)                                             208             293             - 
  Acquirer of speciality retail companies 
located in the centre of shopping malls 
 
SPRUCEVIEW CAPITAL, LLC                               24,010          14,093           1.3 
Asset management company focusing primarily 
on managing  endowments and pension funds 
 
Total Other investments                               31,541          16,145           1.5 
 
Total - portfolio                                    853,592       1,099,518         100.0 
 
(1) Original book cost incurred by JZEP/JZCP adjusted for subsequent 
transactions. The book cost represents cash outflows and excludes PIK 
investments. 
 
(2) JZCP owns 100% of the shares and voting rights of JZCP Realty Fund, Ltd. 
 
(3) Legacy Investments. Legacy investments are excluded from the calculation of 
capital and income incentive fees. 
 
(4) Co-investment with Fund A, a Related Party (Note 20). 
 
Unaudited Statement of Comprehensive Income 
For the Period from 1 March 2017 to 31 August 2017 
 
                                 Six month period from 1 March      Six month period from 1 March 
                                    2017 to 31 August 2017              2016 to 31 August 2016 
 
                                 Revenue    Capital                 Revenue     Capital 
 
                                  return     return       Total      return      return         Total 
 
                          Note   US$'000    US$'000     US$'000     US$'000     US$'000       US$'000 
 
Income 
 
Net (loss)/gain on          6          -   (12,258)    (12,258)           -      38,903        38,903 
investments at fair value 
through profit or loss 
 
(Loss)/gain on financial               -    (3,026)     (3,026)           -       2,569         2,569 
liabilities at fair value 
through profit or loss 
 
Net write back of           7          -          -           -           -         183           183 
impairments on loans and 
receivables 
 
Realisations from          22          -      1,173       1,173           -       5,315         5,315 
investments held in 
escrow accounts 
 
Net foreign currency                   -    (2,609)     (2,609)           -       1,944         1,944 
exchange (loss)/gains 
 
Investment income           8     13,787          -      13,787      14,343           -        14,343 
 
Bank and deposit interest             30          -          30          28           -            28 
 
                                  13,817   (16,720)     (2,903)                  48,914        63,285 
                                                                     14,371 
 
Expenses 
 
Investment Adviser's base  10    (8,458)          -     (8,458)     (8,724)           -       (8,724) 
fee 
 
Investment Adviser's       10          -      1,812       1,812           -    (11,197)      (11,197) 
incentive fee 
 
Administrative expenses          (1,565)          -     (1,565)     (1,292)           -       (1,292) 
 
Directors' remuneration            (209)          -       (209)       (200)           -         (200) 
 
                                (10,232)      1,812     (8,420)    (10,216)    (11,197)      (21,413) 
 
Operating (loss)/profit            3,585   (14,908)    (11,323)       4,155      37,717        41,872 
 
Finance costs               9          -    (8,332)     (8,332)           -     (8,024)       (8,024) 
 
(Loss)/profit before               3,585   (23,240)    (19,655)       4,155      29,693        33,848 
taxation 
 
Withholding taxes          11        233          -         233           -           -             - 
 
(Loss)/profit for the              3,818   (23,240)    (19,422)       4,155      29,693        33,848 
period 
 
Weighted average number    21                        83,907,516                           83,907,516 
of Ordinary shares in 
issue during period 
 
Basic earnings per         21      4.55c   (27.70)c    (23.15)c       4.95c      35.39c        40.34c 
Ordinary share 
 
Diluted earnings per       21      4.55c   (27.70)c    (23.15)c       4.60c      31.88c        36.48c 
Ordinary share 
 
 
All items in the above statement are derived from continuing operations. 
 
The (loss)/profit for the period is attributable to the Ordinary shareholders 
of the Company. 
 
The format of the Unaudited Statement of Comprehensive Income follows the 
recommendations of the AIC Statement of Recommended Practice. 
 
The "Total" column of this statement represents the Company's Statement of 
Comprehensive Income, prepared in accordance with IFRS. 
 
There was no comprehensive income other than the (loss)/profit for the period. 
 
The accompanying notes form an integral part of the condensed interim financial 
statements. 
 
Statement of Financial Position 
As at 31 August 2017 
 
                                                               31 August    28 February 
 
                                                                    2017           2017 
 
                                                    Note         US$'000        US$'000 
 
                                                               Unaudited        Audited 
 
Assets 
 
Investments at fair value through profit or loss     12        1,099,518      1,069,180 
 
Cash at bank                                                      35,766         29,063 
 
Other receivables                                    13              544            520 
 
Total assets                                                   1,135,828      1,098,763 
 
Liabilities 
 
Convertible Unsecured Loan Stock                     14           60,089         57,063 
 
Zero Dividend Preference (2022) shares               15           57,278         53,935 
 
Loans payable                                        16          149,137         97,396 
 
Investment Adviser's incentive fee                   10           35,481         37,293 
 
Investment Adviser's base fee                        10            2,264          2,026 
 
Other payables                                       17            2,157          2,206 
 
Total liabilities                                                306,406        249,919 
 
Equity 
 
Stated capital                                                   265,685        265,685 
 
Other reserve                                                    353,528        353,528 
 
Capital reserve                                                  150,631        173,871 
 
Revenue reserve                                                   59,578         55,760 
 
Total equity                                                     829,422        848,844 
 
Total liabilities and equity                                   1,135,828      1,098,763 
 
Number of Ordinary shares in issue at period end     18       83,907,516     83,907,516 
 
Net asset value per Ordinary share                                 $9.88         $10.12 
 
These unaudited condensed interim financial statements were approved by the 
Board of Directors and authorised for issue on 7 November 2017. They were 
signed on its behalf by: 
 
David Macfarlane 
Chairman 
 
Patrick Firth 
Director 
 
The accompanying notes form an integral part of the condensed interim financial 
statements. 
 
Unaudited Statement of Changes in Equity 
For the period from 1 March 2017 to 31 August 2017 
 
                                   Stated      Other      Capital Reserve       Revenue 
 
                                  Capital    Reserve   Realised   Unrealised    Reserve      Total 
 
                         Note     US$'000    US$'000    US$'000      US$'000    US$'000    US$'000 
 
Balance as at                     265,685    353,528     28,034      145,837     55,760    848,844 
1 March 2017 
 
(Loss)/profit for the                   -          -    (4,604)     (18,636)      3,818   (19,422) 
period 
 
Balance at 31 August              265,685    353,528     23,430      127,201     59,578    829,422 
2017 
 
Comparative for the period from 1 March 2016 to 31 August 2016 
 
                                   Stated      Other      Capital Reserve       Revenue 
 
                                  Capital    Reserve   Realised   Unrealised    Reserve      Total 
 
                         Note     US$'000    US$'000    US$'000      US$'000    US$'000    US$'000 
 
Balance at 1 March                265,685    353,528     59,560       97,226     75,740    851,739 
2016 
 
Profit for the period                   -          -     19,468       10,225      4,155     33,848 
 
Prior period finance                    -          -   (45,752)       45,752          -          - 
costs now realised 
 
Dividends paid            24            -          -          -            -   (12,586)   (12,586) 
 
Balance at 31 August              265,685    353,528     33,276      153,203     67,309    873,001 
2016 
 
The accompanying notes form an integral part of the condensed interim financial 
statements. 
 
Unaudited Statement of Cash Flows 
For the Period from 1 March 2017 to 31 August 2017 
 
                                                                Six Month        Six Month 
 
                                                             Period Ended     Period Ended 
 
                                                                31 August        31 August 
                                                                     2017             2016 
 
                                                      Note        US$'000          US$'000 
 
Operating activities 
 
Net cash outflow from operating activities             23         (6,980)          (7,011) 
 
Cash outflow for investments (direct investments and   12        (62,893)         (94,039) 
capital calls) 
 
Cash inflow from repayment and disposal of             12          33,643          118,670 
investments 
 
Net cash (outflow)/inflow before financing activities            (36,230)           17,620 
 
Financing activities 
 
Proceeds from loan facilities                          16          50,000            9,512 
 
Loan issue costs paid                                  16         (1,840)                - 
 
Finance costs paid                                                (5,557)          (5,108) 
 
Redemption of Zero Dividend Preference (2016) shares   15               -         (47,863) 
 
Dividends paid to Shareholders                         24               -         (12,586) 
 
Net cash inflow/(outflow) from financing activities                42,603         (56,045) 
 
Increase/(decrease) in cash at bank                                 6,373         (38,425) 
 
Reconciliation of net cash flow to movements in cash at bank 
 
Cash and cash equivalents at 1 March                               29,063           91,937 
 
Increase/(decrease) in cash at bank                                 6,373         (38,425) 
 
Unrealised foreign exchange movements on cash at bank                 330              313 
 
Cash and cash equivalents at period end                            35,766           53,825 
 
The accompanying notes form an integral part of the condensed interim financial 
statements. 
 
Notes to the Financial Statements 
 
1.    General Information 
 
JZ Capital Partners Limited ("JZCP" or the "Company") is a Guernsey domiciled 
closed-ended investment company which was incorporated in Guernsey on 14 April 
2008 under the Companies (Guernsey) Law, 1994. The Company is now subject to 
the Companies (Guernsey) Law, 2008. The Company is classed as an authorised 
fund under the Protection of Investors (Bailiwick of Guernsey) Law 1987. The 
Company's Capital consists of Ordinary shares, Zero Dividend Preference ("ZDP") 
shares and Convertible Unsecured Loan Stock ("CULS"). The Company's shares 
trade on the London Stock Exchange's Specialist Fund Segment. 
 
The Company's Investment Policy is to target predominantly private investments, 
seeking to back management teams to deliver on attractive investment 
propositions. In executing its strategy, the Company takes a long term view. 
The Company seeks to invest directly in its target investments, although it may 
also invest through other collective investment vehicles. The Company may also 
invest in listed investments, whether arising on the listing of its private 
investments or directly. The Investment Adviser is able to invest globally but 
with a particular focus on opportunities in the United States and Europe. 
 
The Company is currently mainly focused on investing in the following areas: 
 
(a)   small or micro-cap buyouts in the form of debt and equity and preferred 
stock in both the US and Europe; and 
 
(b)   real estate interests 
 
The Investment Adviser takes a dynamic approach to asset allocation and, though 
it doesn't expect to, in the event that the Company were to invest 100% of 
gross assets in one area, the Company will, nevertheless, always seek to 
maintain a broad spread of investment risk. Exposures are monitored and managed 
by the Investment Adviser under the supervision of the Board. 
 
The Company has no direct employees. For its services the Investment Adviser 
receives a management fee and is also entitled to performance related fees 
(Note 10). The Company has no ownership interest in the Investment Adviser. 
During the period under review the Company was administered by Northern Trust 
International Fund Administration Services (Guernsey) Limited. 
 
The unaudited condensed interim financial statements (the "interim financial 
statements") are presented in US$'000 except where otherwise indicated. 
 
2.    Significant Accounting Policies 
 
The accounting policies adopted in the preparation of these interim financial 
statements have been consistently applied during the period, unless otherwise 
stated. 
 
Statement of Compliance 
 
The interim financial statements of the Company for the period 1 March 2017 to 
31 August 2017 have been prepared in accordance with IAS 34, "Interim Financial 
Reporting" as adopted in the European Union, together with applicable legal and 
regulatory requirements of the Companies (Guernsey) Law, 2008 and the Listing 
Rules of the London Stock Exchange's Specialist Fund Segment. The interim 
financial statements do not include all the information and disclosure required 
in the annual financial statements and should be read in conjunction with the 
annual report and audited financial statements at 28 February 2017. 
 
Basis of Preparation 
 
The interim financial statements have been prepared under the historical cost 
basis, modified by the revaluation of financial instruments designated at fair 
value through profit or loss ("FVTPL") upon initial recognition. The principal 
accounting policies adopted in the preparation of these interim financial 
statements are consistent with the accounting policies stated in Note 2 of the 
annual financial statements for the year ended 28 February 2017. The 
preparation of these interim financial statements are in conformity with IAS 
34, "Interim Financial Reporting" as adopted in the European Union, requires 
the Company to make estimates and assumptions that affect the reported amounts 
of assets and liabilities at the date of the condensed interim financial 
statements and the reported amounts of revenues and expenses during the 
reporting period.  Actual results could materially differ from those estimates. 
 
Standards, amendments and interpretations that are not effective and are not 
expected to have a material impact on the financial position or performance of 
the Company 
 
IFRS 9 replaces IAS 39 - Financial Instruments: Recognition and Measurement. 
 
IFRS 9 introduces a new approach to the classification of financial assets, 
which is driven by the business model in which the asset is held and their cash 
flow characteristics. A new business model was introduced which does allow 
certain financial assets to be categorised as "fair value through other 
comprehensive income" in certain circumstances. The requirements for financial 
liabilities are mostly carried forward unchanged from IAS 39. However, some 
changes were made to the fair value option for financial liabilities to address 
the issue of own credit risk. 
 
The new model introduces a single impairment model being applied to all 
financial instruments, as well as an "expected credit loss" model for the 
measurement of financial assets. IFRS 9, also contains a new model for hedge 
accounting that aligns the accounting treatment with the risk management 
activities of an entity, in addition enhanced disclosures will provide better 
information about risk management and the effect of hedge accounting on the 
financial statements. 
 
IFRS 9 carries forward the derecognition requirements of financial assets and 
liabilities from IAS 39. 
 
Effect on the financial statements 
 
The standard is effective on or after 1 January 2018 and will be adopted for 
the year ending 28 February 2019. 
 
The Company's financial instruments consist of equity instruments and debt 
instruments. The Company's financial assets under equity and debt instruments 
will continue to be valued at fair value through profit or loss. Due to the 
cash flow characteristics of such financial instruments, on application of IFRS 
9, they will continue to be classified as fair value through the profit or 
loss. 
 
Although early adoption is permitted the Company has established that the 
impact will be minimal. In addition, the Company does not apply hedge 
accounting and the valuation model is consistent with the Company's current 
methodology. It is anticipated that this application of IFRS 9 will not change 
the measurement and presentation of the current financial instruments. 
 
There are certain other current standards, amendments and interpretations that 
are not relevant to the Company's operations. 
 
3.    Estimates and Judgements 
 
Estimates 
 
The following are the key judgements and other key sources of estimation 
uncertainty at the end of the reporting period, that have a significant risk of 
causing a material adjustment to the carrying amounts of assets and liabilities 
within the financial year: 
 
Fair Value of Investments at Fair Value Through Profit or Loss ("FVTPL") 
 
Investments are classified as FVTPL, and valued accordingly, as disclosed in 
Note 2 of the annual financial statements for the year ended 28 February 2017. 
The key source of estimation uncertainty is on the valuation of unquoted 
equities, equity- related securities and real estate investments. 
 
In reaching its valuation of the unquoted equities, equity-related securities 
and real estate investments, the key judgements and estimates the Board has to 
make are those relating to the multiples, discount factors and real estate 
valuation factors (Note 5) used in the valuation models. 
 
Judgements 
 
Investment in Associates 
 
The Board will evaluate whether investee companies meet the definition of an 
Associate. An Associate is an entity over which the Company has significant 
influence. Significant influence is the power to participate in the financial 
and operating policy decisions of the investee, but is not control or joint 
control over those policies. Full details are disclosed in Note 3 of the annual 
financial statements for the year ended 28 February 2017. 
 
Assessment as an Investment Entity 
 
Entities that are judged to meet the definition of an investment entity within 
IFRS 10 are required to measure their subsidiaries at fair value through profit 
or loss rather than consolidate them. The criteria which define an investment 
entity are as follows: 
 
·       An entity that obtains funds from one or more investors for the purpose 
of providing those investors with investment services; 
 
·       An entity that commits to its investors that its business purpose is to 
invest funds solely for returns from capital appreciation, investment income or 
both; and 
 
·       An entity that measures and evaluates the performance of substantially 
all of its investments on a fair value basis. 
 
The Company has a wide range of investors, being listed on the London Stock 
Exchange the Company obtains funding from a diverse group of external 
shareholders. Through its Investment Adviser's expertise it enables investors 
to access private equity, real estate and similar investments. 
 
The Company's objective is consistent with that of an investment entity. The 
Company has clearly defined exit strategies for each of its investment classes, 
these strategies are again consistent with an investment entity. 
 
In determining the fair value of unlisted investments JZCP follows the 
principles of IPEVCA valuation guidelines. The Valuation Guidelines have been 
prepared with the goal that Fair Value measurements derived when using these 
Valuation Guidelines are compliant with IFRS. The Board of JZCP evaluates the 
performance of unlisted investments quarterly on a fair value basis. Listed 
investments are recorded at Fair Value in accordance with IFRS being the last 
traded market price where this price falls within the bid-ask spread. 
 
The Board has also concluded that the Company meets the additional 
characteristics of an investment entity, in that it has more than one 
investment; the investments are predominantly in the form of equities and 
similar securities and it has more than one investor. 
 
Going Concern 
 
A fundamental principle of the preparation of financial statements in 
accordance with IFRS is the judgement that an entity will continue in existence 
as a going concern for a period of at least 12 months from signing of the 
financial statements, which contemplates continuity of operations and the 
realisation of assets and settlement of liabilities occurring in the ordinary 
course of business. 
 
The Directors consider the Company has adequate financial resources, in view of 
its holding in cash and cash equivalents and the income streams deriving from 
its investments and believe that the Company is well placed to manage its 
business risks successfully to continue in operational existence and meet its 
obligations as when they fall due for a period of at least 12 months from 
signing of the financial statements and that it is appropriate to prepare the 
financial statements on the going concern basis. 
 
4.    Segment Information 
 
The Investment Manager is responsible for allocating resources available to the 
Company in accordance with the overall business strategies as set out in the 
Investment Guidelines of the Company. The Company is organised into the 
following segments: 
 
·       Portfolio of US micro-cap investments 
 
·       Portfolio of European micro-cap investments 
 
·       Portfolio of Real estate investments 
 
·       Portfolio of Other investments 
 
The investment objective of each segment is to achieve consistent medium-term 
returns from the investments in each segment while safeguarding capital by 
investing in a diversified portfolio. 
 
Segmental operating profit/(loss) 
For the period from 1 March 2017 to 31 August 2017 
 
                                             US     European       Real          Other 
 
                                      Micro-Cap    Micro-Cap     Estate    Investments       Total 
 
                                       US$ '000     US$ '000   US$ '000       US$ '000    US$ '000 
 
  Interest revenue                        9,836        3,916          -             35      13,787 
 
  Total segmental revenue                 9,836        3,916          -             35      13,787 
 
  Realisations from investments held      1,173            -          -              -       1,173 
  in Escrow 
 
  Net (loss)/gain on investments        (6,974)       14,356   (14,235)        (5,405)    (12,258) 
  at FVTPL 
 
  Investment Adviser's base             (3,305)      (1,177)    (3,558)          (137)     (8,177) 
  fee 
 
  Investment Adviser's capital          (1,117)        (914)      2,847            996       1,812 
  incentive fee(1) 
 
Total segmental operating (loss)/         (387)       16,181   (14,946)        (4,511)     (3,663) 
profit 
 
For the period from 1 March 2016 to 31 August 2016 
 
                                                US      European         Real          Other 
 
                                         Micro-Cap     Micro-Cap       Estate    Investments        Total 
 
                                          US$ '000      US$ '000     US$ '000       US$ '000     US$ '000 
 
   Interest revenue                         11,450         2,643          199             43       14,335 
 
   Total segmental                          11,450         2,643          199             43       14,335 
   revenue 
 
   Realisations from investments held        5,315             -            -              -        5,315 
   in Escrow 
 
   Net gain on investments at FVTPL          2,482         8,042       22,628          3,326       36,478 
 
   Write back of Impairments on loans            -             -            -            183          183 
   and receivables 
 
   Investment Adviser's base fee           (3,065)       (1,286)      (3,081)          (433)      (7,865) 
 
   Investment Adviser's capital            (5,499)         (176)      (4,526)          (483)     (10,684) 
   incentive fee(1) 
 
Total segmental operating profit            10,683         9,223       15,220          2,636       37,762 
 
Certain income and expenditure is not considered part of the performance of an 
individual segment. This includes net foreign exchange gains, interest on cash, 
finance costs, management fees, custodian and administration fees, directors' 
fees and other general expenses. 
 
(1) The capital incentive fee is allocated across segments where a realised or 
unrealised gain or loss has occurred. Segments with realised or unrealised 
losses are allocated a credit pro rata to the size of the loss and segments 
with realised or unrealised gains are allocated a charge pro rata to the size 
of the gain. 
 
The following table provides a reconciliation between total segmental operating 
(loss)/profit and operating (loss)/profit: 
 
                                                                     Period ended     Period ended 
 
                                                                        31.8.2017        31.8.2016 
 
                                                                         US$ '000         US$ '000 
 
Total segmental operating (loss)/profit                                   (3,663)           37,762 
 
(Loss)/gain on financial liabilities at fair value through                (3,026)            2,569 
profit or loss 
 
Net foreign exchange (loss)/gain                                          (2,609)            1,944 
 
Interest on cash                                                               30               28 
 
Expenses not attributable to segments                                     (1,774)          (1,492) 
 
Fees payable to investment adviser based on non-segmental assets            (281)          (1,372) 
 
Net gains and interest on treasury gilts and corporate                          -            2,433 
bonds 
 
Operating (loss)/profit                                                  (11,323)           41,872 
 
The following table provides a reconciliation between total segmental revenue 
and Company revenue: 
 
                                                                      31.8.2017   31.8.2016 
 
                                                                       US$ '000    US$ '000 
 
Total segmental                                                          13,787      14,335 
revenue 
 
Non-segmental revenue 
 
Bank and deposit                                                             30          28 
interest 
 
Interest on treasury gilts and corporate                                      -           8 
bonds 
 
Total revenue                                                            13,817      14,371 
 
Segmental Net Assets 
 
At 31 August 2017 
 
                                                US       European         Real           Other 
 
                                         Micro-Cap      Micro-Cap       Estate     Investments         Total 
 
                                          US$ '000       US$ '000     US$ '000        US$ '000      US$ '000 
 
   Segmental assets 
 
   Investments at fair value               439,745        166,244      477,384          16,145     1,099,518 
   through profit or loss 
 
   Other receivables                             -              -          495               -           495 
 
   Total segmental assets                  439,745        166,244      477,879          16,145     1,100,013 
 
   Segmental liabilities 
 
   Payables and accrued expenses          (20,877)            684     (23,124)           3,012      (40,305) 
 
   Total segmental liabilities            (20,877)            684     (23,124)           3,012      (40,305) 
 
Total segmental net assets                 418,868        166,928      454,755          19,157     1,059,708 
 
At 28 February 2017 
 
                                                US       European         Real           Other 
 
                                         Micro-Cap      Micro-Cap       Estate     Investments        Total 
 
                                          US$ '000       US$ '000     US$ '000        US$ '000     US$ '000 
 
   Segmental assets 
 
   Investments at fair value               423,137        154,277      468,599          23,167    1,069,180 
   through profit or loss 
 
   Other receivables                             -              -          495               -          495 
 
   Total segmental assets                  423,137        154,277      469,094          23,167    1,069,675 
 
   Segmental liabilities 
 
   Payables and accrued expenses          (19,666)          1,646     (25,796)           3,398     (40,418) 
 
   Total segmental liabilities            (19,666)          1,646     (25,796)           3,398     (40,418) 
 
Total segmental net assets                 403,471        155,923      443,298          26,565    1,029,257 
 
Other receivables and prepayments are not considered to be part of individual 
segment assets. Certain liabilities are not considered to be part of the net 
assets of an individual segment. These include custodian and administration 
fees payable, directors' fees payable and other payables and accrued expenses. 
 
The following table provides a reconciliation between total segmental assets 
and total assets and total segmental liabilities and total liabilities: 
 
                                                                       31.8.2017   28.2.2017 
 
                                                                        US$ '000    US$ '000 
 
Total segmental assets                                                 1,100,013   1,069,675 
 
Non segmental assets 
 
Cash at bank                                                              35,766      29,063 
 
Other receivables                                                                         25 
                                                                              49 
 
Total assets                                                           1,135,828   1,098,763 
 
Total segmental liabilities                                             (40,305)    (40,418) 
 
Non segmental liabilities 
 
Zero Dividend Preference (2022) shares                                  (57,278)    (53,935) 
 
Convertible Unsecured Loan Stock                                        (60,089)    (57,063) 
 
Loans payable                                                          (149,137)    (97,396) 
 
Other payables                                                                       (1,107) 
                                                                             403 
 
Total liabilities                                                      (306,406)   (249,919) 
 
Total net assets                                                         829,422     848,844 
 
5.    Fair Value of Financial Instruments 
 
The Company classifies fair value measurements of its financial instruments at 
fair value through profit or loss ("FVTPL") using a fair value hierarchy that 
reflects the significance of the inputs used in making the measurements. The 
financial assets valued at FVTPL are analysed in a fair value hierarchy based 
on the following levels: 
 
Level 1 
 
Quoted prices (unadjusted) in active markets for identical assets or 
liabilities. 
 
Level 2 
 
Those involving inputs other than quoted prices included within level 1 that 
are observable for the asset or liability, either directly (that is, as prices) 
or indirectly (that is, derived from prices). For example, investments which 
are valued based on quotes from brokers (intermediary market participants) are 
generally indicative of Level 2 when the quotes are executable and do not 
contain any waiver notices indicating that they are not necessarily tradeable. 
Another example would be derivatives such as interest rate swaps or forward 
currency contracts where inputs are mostly observable and therefore may also 
fall into Level 2. At the period end, the Company had assessed it held no 
assets or liabilities valued at FVTPL that were using inputs that would be 
classified as level 2 within the valuation method. 
 
Level 3 
 
Those involving inputs for the asset or liability that are not based on 
observable market data (that is, unobservable inputs). Investments in JZCP's 
portfolio valued using unobservable inputs such as multiples, capitalisation 
rates, discount rates (see Note 5) fall within Level 3. 
 
Differentiating between Level 2 and Level 3 fair value measurements i.e., 
assessing whether inputs are observable and whether the unobservable inputs are 
significant, may require judgement and a careful analysis of the inputs used to 
measure fair value including consideration of factors specific to the asset or 
liability. 
 
The following table shows financial instruments recognised at fair value, 
analysed between those whose fair value is based on: 
 
Financial assets at 31 August 2017 
 
                                               Level 1     Level 2     Level 3       Total 
 
                                              US$ '000    US$ '000    US$ '000    US$ '000 
 
US micro-cap portfolio                               -           -     439,745     439,745 
 
European micro-cap portfolio                         -           -     166,244     166,244 
 
Real estate portfolio                                -           -     477,384     477,384 
 
Other investments                                    -           -      16,145      16,145 
 
                                                     -           -   1,099,518   1,099,518 
 
Financial assets at 28 February 2017 
 
                                               Level 1     Level 2     Level 3       Total 
 
                                              US$ '000    US$ '000    US$ '000    US$ '000 
 
US micro-cap portfolio                               -           -     423,137     423,137 
 
European micro-cap portfolio                         -           -     154,277     154,277 
 
Real estate portfolio                                -           -     468,599     468,599 
 
Other investments                                    -           -      23,167      23,167 
 
                                                     -           -   1,069,180   1,069,180 
 
Financial liabilities designated at fair value through profit or loss at 
inception 
 
Financial liabilities at 31 August 2017 
 
                                                    Level 1    Level 2   Level 3      Total 
 
                                                   US$ '000   US$ '000       US$   US$ '000 
                                                                            '000 
 
Convertible Subordinated Unsecured Loan Stock        60,089          -         -     60,089 
 
                                                     60,089          -         -     60,089 
 
Financial liabilities at 28 February 2017 
 
                                                    Level 1    Level 2   Level 3      Total 
 
                                                   US$ '000   US$ '000       US$   US$ '000 
                                                                            '000 
 
Convertible Subordinated Unsecured Loan Stock        57,063          -         -     57,063 
 
                                                     57,063          -         -     57,063 
 
Transfers between levels 
 
There were no transfers between the levels of hierarchy of financial assets and 
liabilities recognised at fair value through profit or loss within the period 
ended 31 August 2017 and the year ended 28 February 2017. 
 
Valuation  techniques 
 
In valuing investments in accordance with International Financial Reporting 
Standards, the Directors follow a number of general principles as detailed in 
the International Private Equity and Venture Capital Association ("IPEVCA") 
guidelines. 
 
When fair values of listed equity and debt securities at the reporting date are 
based on quoted market prices or binding dealer price quotations (bid prices 
for long positions), without any deduction for transaction costs, the 
instruments are included within Level 1 of the hierarchy. 
 
Investments for which there are no active markets are valued according to one 
of the following methods: 
 
Real estate 
 
JZCP makes its Real Estate investments through a wholly-owned subsidiary, which 
in turn owns interests in various residential, commercial, and development real 
estate properties. The net asset value of the subsidiary is used for the 
measurement of fair value. The underlying fair value of JZCP's Real Estate 
holdings, however, is represented by the properties themselves. The Company's 
Investment Adviser and Board review the fair value methods and measurement of 
the underlying properties on a quarterly basis. Where available, the Company 
will use third party appraisals on the subject property, to assist the  fair 
value measurement of the underlying property. Third-party appraisals are 
prepared in accordance with the Appraisal and Valuation Standards (6th edition) 
issued by the Royal Institution of Chartered Surveyors. Fair value techniques 
used in the underlying valuations are: 
 
-      Use of comparable market values per square foot of properties in recent 
transactions in the vicinity in which the property is located, and in similar 
condition, of the relevant property, multiplied by the property's square 
footage. 
 
-      Discounted Cash Flow ("DCF") analysis, using the relevant rental stream, 
less expenses, for future periods, discounted at a Market Capitalisation ("MC") 
rate, or interest rate. 
 
-      Relevant rental stream less expenses divided by the MC rate; this method 
approximates the enterprise value construct used for non-real estate assets. 
 
For each of the above techniques third party debt is deducted to arrive at fair 
value. 
 
Due to the inherent uncertainties of real estate valuation, the values 
reflected in the financial statements may differ significantly from the values 
that would be determined by negotiation between parties in a sales transaction 
and those differences could be material. 
 
Unquoted preferred shares, micro-cap loans, unquoted equities and equity 
related securities 
 
Unquoted preferred shares, micro-cap loans, unquoted equities and equity 
related securities investments are classified in the Statement of Financial 
Position as Investments at fair value through profit or loss. These investments 
are typically valued by reference to their enterprise value, which is generally 
calculated by applying an appropriate multiple to the last twelve months' 
earnings before interest, tax, depreciation and amortisation ("EBITDA"). In 
determining the multiple, the Directors consider inter alia, where practical, 
the multiples used in recent transactions in comparable unquoted companies, 
previous valuation multiples used and where appropriate, multiples of 
comparable publicly traded companies. In accordance with IPEVCA guidelines, a 
marketability discount is applied which reflects the discount that in the 
opinion of the Directors, market participants would apply in a transaction in 
the investment in question. 
 
In respect of unquoted preferred shares and micro-cap loans, the Company values 
these investments by reference to the attributable enterprise value as the exit 
strategy in respect to these investments would be a one tranche disposal 
together with the equity component. The fair value of the investment is 
determined by reference to the attributable enterprise value (this is generally 
calculated by a multiple of EBITDA reduced by senior debt and a marketability 
discount) covering the aggregate of the unquoted equity, unquoted preferred 
shares and debt instruments invested in the underlying company. The increase of 
the fair value of the aggregate investment is reflected through the unquoted 
equity component of the investment and a decrease in the fair value is 
reflected across all financial instruments invested in an underlying company. 
 
New Investments 
 
The fair value of a new investment, classified at Level 3, is deemed to 
approximate to cost for the first year the investment is held, unless there is 
an event or evidence which indicates a requirement for an adjustment. 
 
Quantitative information of significant unobservable inputs and sensitivity 
analysis to significant changes in unobservable inputs within Level 3 hierarchy 
 
The significant unobservable inputs used in fair value measurement categorised 
within Level 3 of the fair value hierarchy together with a quantitative 
sensitivity as at 31 August 2017 and 28 February 2017 are shown below: 
 
                   Value                                            Range 
                                                                (weighted 
               31.8.2017        Valuation       Unobservable     average)     Sensitivity         Effect on Fair Value 
 
                 US$'000        Technique              input                       used 1                      US$'000 
 
US micro-cap                       EBITDA     Average EBITDA       6.0x -    -0.5x / 0.5x 
investments      439,745         Multiple        Multiple of        18.7x                     (42,312)          41,098 
                                                       Peers       (8.2x) 
 
                                                 Discount to    10% - 35%        5% / -5% 
                                                     Average        (26%)                     (55,207)          56,756 
                                                    Multiple 
 
European                           EBITDA     Average EBITDA       6.0x -    -0.5x / 0.5x 
micro-cap        166,244         Multiple        Multiple of        10.0x                       (5,17)           5,447 
investments                                            Peers       (7.2x) 
 
                                                 Discount to     0% - 38%        5% / -5% 
                                                     Average        (18%)                      (4,575)           4,575 
                                                    Multiple 
 
Real estate                    Comparable       Market Value       $286 -         -5% /5% 
portfolio 2      477,384            Sales    Per Square Foot       $3,106                     (14,398)          15,496 
                                                                per sq ft 
 
                             Model/Income      Discount Rate      6.2% to         +25bps / 
                                 Approach                            7.5%           -25bps     (1,234)           1,520 
 
                                Cap Rate/     Capitalisation      4% - 5%         +25bps / 
                                   Income               Rate                        -25bps     (8,609)           9,632 
                                 Approach 
 
 
 
 
                   Value                                          Range 
                                                              (weighted 
               28.2.2017       Valuation      Unobservable     average)    Sensitivity      Effect on Fair Value 
 
                 US$'000       Technique             input                      used 1                   US$'000 
 
US micro-cap                      EBITDA    Average EBITDA       6.0x -        -0.5x / 
investments      423,137        Multiple       Multiple of        18.7x           0.5x    (37,665)        36,186 
                                                     Peers       (8.3x) 
 
                                               Discount to    10% - 35%       5% / -5% 
                                                   Average        (26%)                   (50,801)        49,462 
                                                  Multiple 
 
European                          EBITDA    Average EBITDA       6.2x -        -0.5x / 
micro-cap        154,277        Multiple       Multiple of        11.3x           0.5x     (3,511)         3,511 
investments                                          Peers       (8.6x) 
 
                                               Discount to          41%       5% / -5% 
                                                   Average     discount                    (4,512)         4,492 
                                                  Multiple        - 63% 
                                                                premium 
                                                                    (5% 
                                                               premium) 
 
Real estate                   Comparable      Market Value       $286 -       -5% / 5% 
portfolio 2      468,599           Sales        Per Square       $3,106                   (13,706)        14,786 
                                                      Foot    per sq ft 
 
                            Model/Income     Discount Rate      6.25% -       +25bps / 
                                Approach                          6.75%         -25bps     (1,228)         1,515 
 
                               Cap Rate/    Capitalisation      4% - 5%       +25bps / 
                                  Income              Rate                      -25bps     (8,357)         9,349 
                                Approach 
 
1 The sensitivity analysis refers to a percentage amount added or deducted from 
the average input and the effect this has on the fair value. 
 
2 The Fair Value of JZCP's investment in financial interests in real estate, is 
measured as JZCP's percentage interest in the value of the underlying 
properties. The Directors consider the discount rate used, applied to the DCF, 
when valuing the properties as the most significant unobservable input 
affecting the measurement of fair value. 
 
The following table shows a reconciliation of all movements in the fair value 
of financial instruments categorised within Level 3 between the beginning and 
the end of the reporting period. 
 
Period ended 31 August 2017 
 
                                                 US      European        Real           Other 
 
                                          Micro-Cap     Micro-Cap      Estate     Investments         Total 
 
                                           US$ '000      US$ '000    US$ '000        US$ '000      US$ '000 
 
At 1 March 2017                             423,137       154,277     468,599          23,167     1,069,180 
 
Investments in year including capital        22,243        14,480      23,170           3,000        62,893 
calls 
 
Payment in kind ("PIK")                         131             -           -               -           131 
 
Proceeds from investments realised          (7,623)      (21,227)       (150)         (4,643)      (33,643) 
 
Net gain on investments                     (6,974)        14,356    (14,235)         (5,405)      (12,258) 
 
Movement in accrued interest                  8,831         4,358           -              26        13,215 
 
At 31 August 2017                           439,745                   477,384          16,145     1,099,518 
                                                          166,244 
 
Year ended 28 February 2017 
 
                                                 US      European        Real           Other 
 
                                          Micro-Cap     Micro-Cap      Estate     Investments        Total 
 
                                           US$ '000      US$ '000    US$ '000        US$ '000     US$ '000 
 
At 1 March 2016                             386,173       168,797     366,158          63,570      984,698 
 
Investments in year including capital        62,778         2,739      89,506           4,500      159,523 
calls 
 
Payment in kind ("PIK")                      17,793             -           -             118       17,911 
 
Proceeds from investments realised         (46,996)      (21,906)     (8,301)        (45,484)    (122,687) 
 
Net gain/(loss) on investments                5,263         1,102      21,236           (784)       26,817 
 
Transfer (from)/to segment                  (1,245)             -           -           1,245            - 
 
Movement in accrued interest                  (629)         3,545           -               2        2,918 
 
At 28 February                              423,137       154,277     468,599          23,167    1,069,180 
2017 
 
Fair value of Zero Dividend Preference ("ZDP") shares 
 
The fair value of the ZDP shares is deemed to be their quoted market price. As 
at 31 August 2017 the ask price for the ZDP (2022) shares was GBP4.24 (28 
February 2017: GBP4.22 per share) the total fair value of the ZDP shares was 
$65,057,000 (28 February 2017: $65,532,000) which is $7,779,000 (28 February 
2017: $8,597,000) higher than the liability recorded in the Statement of 
Financial Position. 
 
ZDP shares are recorded at amortised cost and would fall in to the Level 1 
hierarchy if valued at FVTPL. 
 
6.    Net (loss)/gain on Investments at Fair Value Through Profit or Loss 
 
                                                                    Period ended   Period ended 
 
                                                                       31.8.2017      31.8.2016 
 
                                                                        US$ '000       US$ '000 
 
(Loss)/gains on investments held in investment portfolio at 
period end 
 
Net unrealised (loss)/gain in period                                    (12,355)         26,339 
 
Unrealised gains in prior periods now                                          -         10,192 
realised 
 
Net movement in unrealised (losses)/gains in the                        (12,355)         36,531 
period 
 
Net gains on investments realised in 
period 
 
Proceeds from investments realised                                        33,643        118,444 
 
Cost of investments realised                                            (33,546)      (105,880) 
 
Unrealised gains in prior periods now                                          -       (10,192) 
realised 
 
Total net gain in the period on investments realised in                       97          2,372 
period 
 
Net (loss)/gain on investments in the                                   (12,258)         38,903 
period 
 
7.    Net Write Back of Impairments on Loans and Receivables 
 
                                                                        Period         Period 
                                                                         ended          ended 
 
                                                                     31.8.2017      31.8.2016 
 
                                                                      US$ '000       US$ '000 
 
Net unrealised impairments on loans and receivables                          -             13 
 
Proceeds from loans repaid                                                   -            226 
 
Cost of loans                                                                -           (56) 
repaid 
 
Realised gains on repayment of investments                                   -            170 
classified on loans and receivables 
 
Net write back of impairments on loans and                                   -            183 
receivables 
 
8.    Investment Income 
 
                                                                      Period ended     Period ended 
 
                                                                         31.8.2017        31.8.2016 
 
                                                                          US$ '000         US$ '000 
 
Income from investments classified as                                       13,787           14,300 
FVTPL 
 
Income from investments classified as loans and                                  -               43 
receivables 
 
                                                                            13,787           14,343 
 
Income for the period ended 31 August 2017 
 
                                        Preferred    Loan note Interest       Other 
 
                            Dividends    Interest         PIK       Cash   Interest      Total 
 
                             US$ '000    US$ '000    US$ '000   US$ '000   US$ '000   US$ '000 
 
US micro-cap portfolio              -       8,921         131        784          -      9,836 
 
European micro-cap                  -           -       3,037        879          -      3,916 
portfolio 
 
Other                               -          35           -          -          -         35 
investments 
 
                                    -       8,956       3,168      1,663          -     13,787 
 
Income for the period ended 31 August 2016 
 
                                          Preferred     Loan note Interest          Other 
 
                             Dividends     Interest          PIK        Cash     Interest        Total 
 
                              US$ '000     US$ '000     US$ '000    US$ '000     US$ '000     US$ '000 
 
US micro-cap portfolio               -        8,584        1,043       1,735           88       11,450 
 
European micro-cap                   -            -        1,889         754            -        2,643 
portfolio 
 
Real estate                          -            -            -           -          199          199 
 
Other                                -            -           43           -            -           43 
investments 
 
Treasury gilts and                   -            -            -           -            8            8 
corporate bonds 
 
                                     -        8,584        2,975       2,489          295       14,343 
 
9.    Finance Costs 
 
                                                             Period ended    Period ended 
 
                                                                31.8.2017       31.8.2016 
 
                                                                 US$ '000        US$ '000 
 
CULS interest paid (Note 14)                                        1,454           1,676 
 
Zero Dividend Preference shares (Note                               1,427           2,625 
15) 
 
Loan - Guggenheim (Note 16)                                         5,451           3,711 
 
Margin loan                                                             -              12 
 
                                                                    8,332           8,024 
 
10.   Fees Payable to the Investment Adviser 
 
Investment Advisory and Performance fees 
 
The Company entered into the amended and restated investment advisory and 
management agreement with Jordan/Zalaznick Advisers, Inc. (the "Investment 
Adviser") on 23 December 2010 (the "Advisory Agreement"). 
 
Pursuant to the Advisory Agreement, the Investment Adviser is entitled to a 
base management fee and to an incentive fee. The base management fee is an 
amount equal to 1.5 per cent per annum of the average total assets under 
management of the Company less those assets identified by the Company as being 
excluded from the base management fee, under the terms of the agreement. The 
base management fee is payable quarterly in arrears; the agreement provides 
that payments in advance on account of the base management fee will be made. 
 
For the six-month period ended 31 August 2017, total investment advisory and 
management expenses, based on the average total assets of the Company, were 
included in the Statement of Comprehensive Income of US$8,458,000 (period ended 
31 August 2016: US$8,724,000). Of this amount US$2,264,000 (28 February 2017: 
US$2,026,000) was due and payable at the period end. 
 
The incentive fee has two parts. The first part is calculated by reference to 
the net investment income of the Company ("Income Incentive fee") and is 
payable quarterly in arrears provided that the net investment income for the 
quarter exceeds 2 per cent of the average of the net asset value of the Company 
for that quarter (the "hurdle") (8 per cent. annualised). The fee is an amount 
equal to (a) 100 per cent of that proportion of the net investment income for 
the quarter as exceeds the hurdle, up to an amount equal to a hurdle of 2.5%, 
and (b) 20 per cent of the net investment income of the Company above a hurdle 
of 2.5% in any quarter. Investments categorised as legacy investments and other 
assets identified by the Company as being excluded are excluded from the 
calculation of the fee. A true-up calculation is also prepared at the end of 
each financial year to determine if further fees are payable to the Investment 
Adviser or if any amounts are recoverable from future income incentive fees. 
 
For the periods ended 31 August 2017 and 31 August 2016 there was no income 
incentive fee payable to the Investment Adviser. 
 
The second part of the incentive fee is calculated by reference to the net 
realised capital gains ("Capital Gains Incentive fee") of the Company and is 
equal to: (a) 20 per cent. of the realised capital gains of the Company for 
each financial year less all realised capital losses of the Company for the 
year less (b) the aggregate of all previous capital gains incentive fees paid 
by the Company to the Investment Adviser. The capital gains incentive is 
payable in arrears within 90 days of the fiscal year end. Investments 
categorised as legacy investments and assets of the Euro Microcap Fund 2010, 
L.P., EuroMicrocap Fund-C, L.P. and JZI Fund III, L.P. are excluded from the 
calculation of the fee. 
 
For the purpose of calculating incentive fees cumulative preferred dividends 
received on the disposal of an investment are treated as a capital return 
rather than a receipt of income. 
 
At 31 August 2017 and 28 February 2017, due to accumulative realised capital 
losses in prior periods, there was no provision for an incentive fee based on 
realised gains. At 31 August 2017, for the purpose of the capital gains 
incentive fee ("CGIF") calculation JZCP had cumulative net realised capital 
losses of $8,079,000 
(28 February 2017: $9,572,000), an amount which the Investment Adviser must 
cover through realised gains before being able to earn an incentive fee going 
forward. 
 
The Company also provides for a CGIF based on unrealised gains, calculated on 
the same basis as that of the fee on realised gains/losses. For the period 
ended 31 August 2017, a provision of $35,481,000 
(28 February 2017: $37,293,000) has been included. 
 
                              Provision At   Provision At     Paid during   Movement in 
                                                                   period provision for 
                                                                             the period 
 
                                 31.8.2017      28.2.2017       31.8.2017     31.8.2017 
 
                                  US$ '000       US$ '000        US$ '000      US$ '000 
 
CGIF                                35,481         37,293             n/a       (1,812) 
 
                                                                                (1,812) 
 
                              Provision At   Provision At     Paid during   Movement in 
                                                                   period provision for 
                                                                             the period 
 
                                 31.8.2016      29.2.2016       31.8.2016     31.8.2016 
 
                                  US$ '000       US$ '000        US$ '000      US$ '000 
 
CGIF                                36,086         24,889             n/a        11,197 
 
                                                                                 11,197 
 
The Advisory Agreement may be terminated by the Company or the Investment 
Adviser upon not less than two and one-half years' (i.e. 913 days') prior 
notice (or such lesser period as may be agreed by the Company and Investment 
Adviser). 
 
11.   Taxation 
 
The Company has been granted Guernsey tax exempt status in accordance with The 
Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989 (as amended) in exchange 
for a GBP1,200 annual fee (31 August 2016: GBP1,200). 
 
During the period ended 31 August 2017, the Company was refunded $233,000 
relating to tax withheld in the prior year. 
 
12.   Investments 
 
Categories of financial instruments 
 
                                                      Listed    Unlisted        Carrying 
                                                                                   Value 
 
                                                   31.8.2017   31.8.2017       31.8.2017 
 
                                                    US$ '000    US$ '000        US$ '000 
 
Fair value through profit or                               -   1,099,518       1,099,518 
loss (FVTPL) 
 
                                                           -   1,099,518       1,099,518 
 
                                                      Listed    Unlisted           Total 
 
                                                   31.8.2017   31.8.2017       31.8.2017 
 
                                                    US$ '000    US$ '000        US$ '000 
 
Book cost at 1 March 2017                                  -     897,856         897,856 
 
Investments in year including capital                      -      62,893          62,893 
calls 
 
Payment in kind ("PIK")                                    -         131             131 
 
Proceeds from investments                                  -    (33,643)        (33,643) 
realised 
 
Net realised gains                                         -          97              97 
 
Book cost at 31 August 2017                                -     927,334         927,334 
 
Unrealised gains at 31                                     -     145,113         145,113 
August 2017 
 
Accrued interest at 31                                     -      27,071          27,071 
August 2017 
 
Carrying value at 31 August                                -   1,099,518       1,099,518 
2017 
 
                                                      Listed    Unlisted        Carrying 
                                                                                   Value 
 
                                                   28.2.2017   28.2.2017       28.2.2017 
 
                                                    US$ '000    US$ '000        US$ '000 
 
Fair value through profit or                               -   1,069,180       1,069,180 
loss (FVTPL) 
 
                                                           -   1,069,180       1,069,180 
 
                                                      Listed    Unlisted           Total 
 
                                                   28.2.2017   28.2.2017       28.2.2017 
 
                                                    US$ '000    US$ '000        US$ '000 
 
Book cost at 1 March 2017                             61,971     832,007         893,978 
 
Investments in year including capital                      -     159,523         159,523 
calls 
 
Payment in kind ("PIK")                                    -      17,911          17,911 
 
Proceeds from investments                           (60,523)   (125,801)       (186,324) 
realised 
 
Net realised (loss)/gain                             (1,448)      14,216          12,768 
 
Book cost at 28 February                                   -     897,856         897,856 
2017 
 
Unrealised gains at 28 February 2017                       -     157,468         157,468 
 
Accrued interest at 28 February 2017                       -      13,856          13,856 
 
Carrying value at 28                                       -   1,069,180       1,069,180 
February 2017 
 
The above book cost is the cost to JZCP equating to the transfer value as at 1 
July 2008 upon the liquidation of JZEP and adjusted for subsequent 
transactions. 
 
The cost of PIK investments is deemed to be interest not received in cash but 
settled by the issue of further securities when that interest has been 
recognised in the Statement of Comprehensive Income. 
 
13.   Other Receivables 
 
                                                                 31.8.2017   28.2.2017 
 
                                                                  US$ '000    US$ '000 
 
Accrued interest due from JZCP Realty                                  495         495 
Fund 
 
Other receivables and                                                   49          25 
prepayments 
 
                                                                       544         520 
 
14.   Convertible Subordinated Unsecured Loan Stock ("CULS") 
 
On 30 July 2014, JZCP issued GBP38,861,140 6% CULS. Holders of CULS may convert 
the whole or part (being an integral multiple of GBP10 in nominal amount) of 
their CULS into Ordinary Shares. Conversion Rights may be exercised at any time 
during the period from 30 September 2014 to 10 business days prior to the 
Maturity date being the 30 July 2021. The initial conversion price is GBP6.0373 
per Ordinary Share, which shall be subject to adjustment to deal with certain 
events which would otherwise dilute the conversion of the CULS. These events 
include consolidation of Ordinary Shares, dividend payments made by the 
Company, issues of shares, rights, share related securities and other 
securities by the Company and other events as detailed in the Prospectus. 
 
CULS bear interest on their nominal amount at the rate of 6.00 per cent. per 
annum, payable semi-annually in arrears. During the six-month period ended 31 
August 2017: $1,454,000 (31 August 2016: $1,676,000) of interest was paid to 
holders of CULS and is shown as a finance cost in the Statement of 
Comprehensive Income. 
 
                                                                  31.8.2017   28.2.2017 
 
                                                                   US$ '000    US$ '000 
 
Fair Value of CULS at 1 March                                        57,063      59,573 
 
Unrealised movement in fair value of CULS                               967       4,332 
 
Unrealised currency gain to the Company on translation during         2,059     (6,842) 
the period 
 
Fair Value of CULS based on offer                                    60,089      57,063 
price 
 
15.   Zero Dividend Preference ("ZDP") shares 
 
ZDP (2016) shares were issued on 22 June 2009 at a price of 215.80 pence and 
provided a pre-determined final capital entitlement of 369.84 pence on 22 June 
2016. The shares had a gross redemption yield of 8%. 
 
On 1 October 2015, the Company rolled over 11,907,720 existing ZDP (2016) 
shares in to new ZDP shares with a 2022 maturity date. The new ZDP (2022) 
shares have a gross redemption yield of 4.75% and a total redemption value of GBP 
57,598,000 (approximately $75,400,000 using the period end exchange rate). The 
remaining 8,799,421 ZDP (2016) shares were redeemed on 22 June 2016 the total 
redemption value being GBP32,870,000 ($48,342,000) or 373.54 pence per share. The 
redemption value included a 1% premium ($479,000) agreed as part of the terms 
of the rollover. 
 
ZDP shares are designed to provide a pre-determined final capital entitlement 
which ranks behind the Company's creditors but in priority to the capital 
entitlements of the Ordinary shares. The ZDP shares carry no entitlement to 
income and the whole of their return will therefore take the form of capital. 
In certain circumstances, ZDP shares carry the right to vote at general 
meetings of the Company as detailed in the Company's Memorandum of Articles and 
Incorporation.  Issue costs are deducted from the cost of the liability and 
allocated to the Statement of Comprehensive Income over the life of the ZDP 
shares. 
 
ZDP (2022) Shares 
 
                                                                 31.8.2017    28.2.2017 
 
                                                                  US$ '000     US$ '000 
 
ZDP shares issued 1 October 2015 
 
Amortised cost at 1 March 2016                                      53,935       57,400 
 
Finance costs allocated to Statement of Comprehensive Income         1,427        2,853 
 
Unrealised currency loss/(gain) to the Company on translation        1,916      (6,318) 
 
Amortised cost at period end                                        57,278       53,935 
 
Total number of ZDP shares in issue                             11,907,720   11,907,720 
 
ZDP (2016) Shares 
 
                                                                  31.8.2017     28.2.2017 
 
                                                                   US$ '000      US$ '000 
 
ZDP shares issued 22 June 
2009 
 
Amortised cost at 1 March                                                 -        44,217 
 
Finance costs allocated to Statement of Comprehensive Income              -         1,180 
 
Redeemed 22 June 2016                                                     -      (47,863) 
 
Realised currency loss in period on redemption                            -         2,466 
 
Amortised cost at period end                                              -             - 
 
Total number of ZDP shares in issue                                       -             - 
 
16.   Loans Payable 
 
                                                                 31.8.2017    28.2.2017 
 
                                                                  US$ '000     US$ '000 
 
Guggenheim Partners Limited                                        149,137       97,396 
 
                                                                   149,137       97,396 
 
Guggenheim Partners Limited 
 
On 12 June 2015, JZCP entered into a loan agreement with Guggenheim Partners 
Limited. The agreement was structured so that part of the proceeds (EUR18 
million) were received and will be repaid in Euros and the remainder of the 
facility was received in US dollar ($80 million). 
 
The loan matures on 12 June 2021 (6 year term) and interest is payable at 5.75% 
+ LIBOR(1). There is an interest rate floor that stipulates LIBOR will not be 
lower than 1%. 
 
At 31 August 2017, investments valued at $954,107,000 (28 February 2017: 
$918,140,000) were held as collateral on the loan. A covenant in the loan 
agreement states the fair value of the collateral must be 4x the loan value and 
the cost of collateral must be at least 57.5% of total assets. The Company is 
also required to hold a minimum cash balance of $15 million plus 50% of 
interest on any new debt. At 31 August 2017 and 28 February 2017, the Company 
was in full compliance with covenant terms. 
 
During April 2017, JZCP increased its credit facility with Guggenheim Partners 
by $50 million. The purpose of this increase in borrowings is to provide 
additional liquidity to JZCP in order to bridge certain planned realisations. 
The entire facility may be repaid, in whole or in part, with no penalty. 
 
                                                                      31.8.2017    28.2.2017 
 
                                                                       US$ '000     US$ '000 
 
Amortised cost (US$ drawdown) - 1 March                                  78,572       77,916 
 
Amortised cost (Euro drawdown) - 1 March                                 18,824       19,095 
 
Proceeds - April 2017 (US$ further drawdown)                             50,000            - 
 
Issue costs paid                                                        (1,840)            - 
 
Interest paid                                                           (4,103)      (6,723) 
 
Unrealised currency loss/(gain) on translation of Euro drawdown           2,233        (437) 
 
Finance costs charged to Statement of Comprehensive                       5,451        7,545 
Income 
 
Amortised cost at period end                                            149,137       97,396 
 
Amortised cost (US$ drawdown)                                           128,020       78,572 
 
Amortised cost (Euro drawdown)                                           21,117       18,824 
 
                                                                        149,137       97,396 
 
(1) LIBOR rates applied are the US dollar 3 month rate ($80 million) and the 
Euro 3-month rate (EUR18 million). 
 
The carrying value of the loans approximates to fair value. 
 
17.   Other Payables 
 
                                                                   31.8.2017   28.2.2017 
 
                                                                    US$ '000    US$ '000 
 
Provision for tax on dividends received not withheld at                1,401       1,401 
source 
 
Other expenses                                                           222         224 
 
Legal fees                                                               217         250 
 
Directors' remuneration                                                   70          68 
 
ZDP issue costs                                                          247         263 
 
                                                                       2,157       2,206 
 
18.   Ordinary shares - Issued Capital 
 
                                                                    31.8.2017    28.2.2017 
 
                                                                    Number of    Number of 
                                                                       shares       shares 
 
Total Ordinary shares in issue                                     83,907,516   83,907,516 
 
The Company's shares trade on the London Stock Exchange's Specialist Fund 
Segment. 
 
During the period, the Company received shareholder approval for a new 
strategy, allowing the Company to purchase its Ordinary Shares when 
opportunities in the market permit, and as the Company's cash resources allow. 
No Ordinary shares were purchased by the Company during the period ended 31 
August 2017. 
 
19.   Commitments 
 
At 31 August 2017 and 28 February 2017, JZCP had the following financial 
commitments outstanding in relation to fund investments: 
 
                                                   Expected date   31.8.2017   28.2.2017 
 
                                                         of Call    US$ '000    US$ '000 
 
JZI Fund III GP, L.P. EUR47,690,000 (28.2.2017: EUR     Over 3 years      56,700      56,410 
53,087,000) 
 
Spruceview Capital Partners, LLC                    Over 2 years       5,836       8,836 
 
Orizon                                                  < 1 year       4,158       4,158 
 
Suzo Happ Group                                        > 3 years       4,491       4,491 
 
BSM Engenharia S.A.                                    > 3 years       2,085       2,085 
 
Igloo Products Corp                                    > 3 years         771         771 
 
                                                                      74,041      76,751 
 
20.   Related Party Transactions 
 
JZCP invests in European micro-cap companies via the EuroMicrocap Fund 2010, 
L.P. ("EMC 2010"), EuroMicrocap Fund-C, L.P. ("EMCC") and JZI Fund III, L.P. 
("Fund III"). EMC 2010, EMC-C and Fund III are managed by an affiliate of JZAI, 
JZCP's investment manager. JZAI was founded by David Zalaznick and John ("Jay") 
Jordan. At 31 August 2017, JZCP's investments in EMC 2010 were valued at 
$11,672,000 
(28 February 2017: $21,433,000), EMCC at $64,313,000 (28 February 2017: 
$61,482,000) and Fund III at $37,240,000 (28 February 2017: $26,779,000). 
 
JZCP invests in Spruceview Capital Partners, LLC on a 50:50 basis with Jay 
Jordan and David Zalaznick (or their respective affiliates). The total amount 
committed by JZCP to this investment at 31 August 2017 was $30,000,000 with 
$5,836,000 (28 February 2017: $8,836,000) of commitments outstanding. 
 
JZCP has co-invested with Fund A, Fund A Parallel I, II and III Limited 
Partnerships in a number of US micro-cap buyouts. These Limited Partnerships 
are managed by an affiliate of JZAI. JZCP invested in a ratio of 82%/18% with 
the Fund A entities. At 31 August 2017, the total value of JZCP's investment in 
these co-investments was $312,875,000 (28 February 2017: $326,290,000). Fund A, 
Fund A Parallel I, II and III Limited Partnerships are no longer making 
platform investments alongside JZCP. 
 
JZAI a US based company, provides advisory services to the Board of Directors 
of the Company in exchange for management fees, paid quarterly. Fees paid by 
the Company to the Investment Adviser are detailed in Note 10. 
 
JZCP is able to invest up to $75 million in "New JI Platform Companies". The 
platform companies are being established to invest primarily in buyouts and 
build-ups of companies and in growth company platforms in the US micro cap 
market, primarily healthcare equipment companies. At 31 August 2017, JZCP had 
invested $36.0 million (28 February 2017: $31.5 million) and during the period 
received a partial redemption of $7.6 million in Jordan Health Products, LLC. 
JZCP co-invests 50/50 in the platform companies with other investors ("JI 
members"). David Zalaznick and an affiliated entity of Jay Jordan own 
approximately 33.7% of the JI members ownership interests. 
 
21.   Basic and Diluted Earnings per share 
 
Basic earnings per share are calculated by dividing the earnings for the period 
by the weighted average number of Ordinary shares outstanding during the 
period. 
 
For the period ended 31 August 2017 the weighted average number of Ordinary 
shares outstanding during the period was 83,907,516 (31 August 2016: 
83,907,516). 
 
The diluted earnings per share are calculated by considering adjustments 
required to the earnings and weighted average number of shares for the effects 
of potential dilutive Ordinary shares. The weighted average of the number of 
Ordinary shares is adjusted assuming the conversion of the CULS ("If-converted 
method"). Conversion is assumed even though at 31 August 2017 and 31 August 
2016 the exercise price of the CULS is higher than the market price of the 
Company's Ordinary shares and are therefore deemed 'out of the money'. Earnings 
are adjusted to remove the fair value (loss) or gain on CULS ($3,026,000) (31 
August 2016: $2,569,000) and finance cost attributable to CULS $1,454,000 (31 
August 2016: $1,676,000). At 31 August 2017 the effect of the potential 
conversion of the CULS to Ordinary shares on the Total Return was anti-dilutive 
to the earnings per share and therefore the comparative dilutive earnings per 
share equates to the comparative basic earnings per share. 
 
22.   Contingent Assets 
 
Amounts held in escrow accounts 
 
When investments have been disposed of by the Company, proceeds may reflect 
contractual terms requiring that a percentage is held in an escrow account 
pending resolution of any indemnifiable claims that may arise. At 
31 August 2017 and 28 February 2017, the Company has assessed that the 
likelihood of the recovery of these escrow accounts cannot be determined and 
has therefore recognised the escrow accounts as a contingent asset. 
 
As at 31 August 2017 and 28 February 2017, the Company had the following 
contingent assets held in escrow accounts which had not been recognised as 
assets of the Company: 
 
                                                                       Amount in Escrow 
 
                                                                        31.8.2017  28.2.2017 
 
                                                                          US$'000    US$'000 
 
ETX Holdings, Inc.                                                                        77 
                                                                                - 
 
                                                                                -         77 
 
During the period ended 31 August 2017 $1,173,000 (31 August 2016: $5,315,000) 
was realised relating to the escrow accounts of the Company. Of the amount 
realised during the period, $1,096,000 had not been recognised in the Company's 
escrow accounts at 28 February 2017. 
 
23.   Notes to the Unaudited Statement of Cash Flows 
 
Reconciliation of the (loss)/profit for the period to net cash from operating 
activities 
 
                                                                           Period      Period 
                                                                            ended       ended 
 
                                                                        31.8.2017   31.8.2016 
 
                                                                         US$ '000    US$ '000 
 
(Loss)/profit for the period                                             (19,422)      33,848 
 
Increase in other receivables                                                (24)        (12) 
 
Decrease in other payables                                                   (49)       (459) 
 
(Decrease)/increase in amount owed to Investment                          (1,574)      11,394 
Adviser 
 
Net unrealised loss/(gain) on                                              12,355    (26,352) 
investments 
 
Unrealised loss/(gain) on financial liabilities at fair value               3,026     (2,569) 
through profit or loss 
 
Unrealised currency loss/(gain) on ZDP                                      1,916     (3,546) 
shares 
 
Adjustment for other net unrealised foreign currency exchange loss          1,903         153 
 
Increase in accrued interest on investments, accumulated preferred       (13,346)    (11,799) 
dividends and PIK 
 
Realised gain on investments                                                 (97)    (12,734) 
 
Finance costs                                                               8,332       8,024 
 
Payment for Real Estate deposits                                                -     (5,425) 
 
Realised currency loss on redemption of ZDP shares                              -       2,466 
 
Net cash outflow from operating                                           (6,980)     (7,011) 
activities 
 
24.   Dividends Paid and Proposed 
 
During the period the Company received shareholder approval to discontinue the 
Company's dividend policy of distributing approximately 3% of the Company's net 
assets in the form of dividends. No dividends were paid or declared in the 
six-month period ended 31 August 2017. 
 
For the year ended 29 February 2016, a second interim dividend of 15 cents 
(total $12,586,000) was paid by the Company on 10 June 2016. 
 
25.   US GAAP reconciliation 
 
These interim financial statements are prepared in accordance with IFRS, which 
in certain respects differ from the accounting principles generally accepted in 
the United States ("US GAAP"). It is the opinion of the Directors that these 
differences are not material and therefore no reconciliation between IFRS, as 
adopted by the EU, and US GAAP has been presented. 
 
26.   Subsequent Events 
 
Post period end, the Company made three significant realisations, all 
approximately at or above net asset value: Nielsen-Kellerman (proceeds: $8.6 
million), K2 Towers (expected proceeds $31.3 million) and Factor Energia. JZCP 
is expected to receive total gross proceeds (before carry) of approximately 
$82.3 million from the sale of Factor Energia (including deferred payments and 
interim distributions received over the course of the investment). 
 
These interim financial statements were approved by the Board on 7 November 
2017. Events subsequent to the period end (31 August 2017) have been evaluated 
until this date. 
 
Board of Directors 
 
David Macfarlane (Chairman)1 
 
Mr Macfarlane was appointed to the Board of JZCP in April 2008 as Chairman and 
a non-executive Director. Until 2002 he was a Senior Corporate Partner at 
Ashurst. He was a non-executive director of the Platinum Investment Trust Plc 
from 2002 until January 2007. 
 
Patrick Firth2 
 
Mr Firth was appointed to the Board of JZCP in April 2008. He is also a 
director of a number of offshore funds and management companies, including DW 
Catalyst Fund (formerly "BH Credit Catalysts Limited"), ICG-Longbow Senior 
Secured UK Property Debt Investments Limited, Riverstone Energy Limited and 
NextEnergy Solar Fund Limited. He is Chairman of GLI Finance Limited. He is a 
member of the Institute of Chartered Accountants in England and Wales and The 
Chartered Institute for Securities and Investment. He is a resident of 
Guernsey. 
 
James Jordan 
 
Mr Jordan is a private investor who was appointed to the Board of JZCP in 2008. 
He is a director of the First Eagle family of mutual funds, and of Alpha 
Andromeda Investment Trust Company, S.A. Until 30 June 2005, he was the 
managing director of Arnhold and S. Bleichroeder Advisers, LLC, a privately 
owned investment bank and asset management firm; and until 25 July 2013, he was 
a non-executive director of Leucadia National Corporation. He is a Trustee and 
Vice Chairman of the World Monuments Fund, and serves as an Overseer of the 
Gennadius Library of the American School of Classical Studies in Athens, and as 
a Director of Pro Natura de Yucatan. 
 
Tanja Tibaldi 
 
Ms Tibaldi was appointed to the Board of JZCP in April 2008. She was on the 
board of JZ Equity Partners Plc from January 2005 until the company's 
liquidation on 1 July 2008. She was managing director at Fairway Investment 
Partners, a Swiss asset management company where she was responsible for the 
Group's marketing and co-managed two fund of funds. Previously she was an 
executive at the Swiss Stock Exchange and currently serves on the board of 
several private companies. 
 
Christopher Waldron 
 
Mr Waldron was appointed to the Board of JZCP in 2013. He has more than 30 
years' experience as an asset manager and is a director of a number of listed 
companies, including Crystal Amber Fund Limited. He is Chairman of UK Mortgages 
Limited and Ranger Direct Lending Fund PLC. He was Chief Executive of the 
Edmond de Rothschild companies in Guernsey until 2013, when he stepped down to 
concentrate on non-executive work and investment consultancy. He is a member of 
the States of Guernsey's Investment and Bond Management Sub-Committee and a 
Fellow of the Chartered Institute for Securities and Investment. Mr Waldron is 
a Guernsey resident. 
 
1 Chairman of the nominations committee of which all Directors are members. 
 
2 Chairman of the audit committee of which all Directors are members. 
 
Directors' Responsibilities 
 
Statement of Directors' Responsibilities 
 
The Directors are responsible for preparing condensed interim financial 
statements which give a true and fair view of the state of affairs of the 
Company for that period and which are in accordance with applicable laws and 
interim financial reporting standards. In preparing those Condensed Interim 
Report and Financial Statements (the "interim financial statements") the 
Directors are required to: 
 
·       select suitable accounting policies and apply them consistently; 
 
·       present information including accounting policies, in a manner that 
provides  relevant, reliable, comparable and understandable information; 
 
·       make judgements and estimates that are reasonable and prudent; 
 
·       prepare the interim financial statements on the going concern basis, 
unless it is inappropriate to presume that the Company will continue in 
business; and 
 
·       provide additional disclosures when compliance with the specific 
requirements of IFRS is insufficient to enable users to understand the impact 
of particular transactions, other events and conditions on the Company's 
financial position and financial performance. 
 
The Directors confirm that they have complied with these requirements in 
preparing the interim financial statements. 
 
The  interim  financial  statements  have  been  prepared  in  accordance 
with  IAS  34,"Interim  Financial  Reporting"  as adopted by the European 
Union. 
 
Each of the Directors confirms to the best of each person's knowledge and 
belief that: 
 
·       this set of interim financial statements has been prepared in 
accordance with IAS 34, "Interim Financial Reporting" as adopted by the 
European Union; 
 
·       the interim financial statements includes information detailed in the 
Chairman's Statement and Investment Adviser's Report and Notes to the interim 
financial statements which provides a fair review of the information required 
by: 
 
(i)         DTR 4.2.7R of the Disclosure and Transparency Rules, being an 
indication of important events that have occurred for the period from 1 March 
2017 to 31 August 2017 and their impact on the condensed set of interim 
consolidated financial statements; and a description of the principal risks and 
uncertainties for the remaining six months of the year; and 
 
(ii)         DTR 4.2.8R of the Disclosure and Transparency Rules, being related 
party transactions that have taken place in the period from 1 March 2017 to 31 
August 2017 and that have materially affected the financial position or 
performance of the Company during that period. 
 
Going concern and principal risks and uncertainties 
 
As an investment fund, the Company's principal risks are those that are 
associated with its investment portfolio. Given the nature of the portfolio, 
the principal risks are associated with the financial and operating performance 
of the underlying investments. 
 
The Directors do not consider that the principal risks and uncertainties have 
changed since the publication of the annual report and accounts for the year 
ended 28 February 2017 (as explained in the annual report). The Directors 
continue to monitor the risks to the Company. These risks include the Company's 
exposure to Euro and Sterling currencies and the impact of austerity measures 
being adopted in countries within which the Company invests. 
 
The Directors consider the Company has adequate financial resources, in view of 
its holding in cash and cash equivalents and liquid investments, and the income 
streams deriving from its investments and believe that the Company is well 
placed to manage its business risks successfully to continue in operational 
existence for the foreseeable future and that it is appropriate to prepare the 
interim financial statements on the going concern basis. 
 
Approved by the Board of Directors and agreed on behalf of the Board on 7 
November 2017. 
 
David Macfarlane 
Chairman 
 
Patrick Firth 
Director 
 
Independent Review Report to JZ Capital Partners Limited 
 
Introduction 
 
We have been engaged by JZ Capital Partners Limited (the "Company") to review 
the Unaudited Condensed Interim Financial Statements for the six months ended 
31 August, 2017 which comprise the unaudited Statement of Comprehensive Income, 
the Statement of Financial Position, the unaudited Statement of Changes in 
Equity, the unaudited Statement of Cash Flows and the related notes 1 to 26. We 
have read the other information contained in the half-yearly Financial Report 
and considered whether it contains any apparent misstatements or material 
inconsistencies with the information in the Unaudited Condensed Interim 
Financial Statements. 
 
This report is made solely to the Company in accordance with guidance contained 
in ISRE 2410 (UK and Ireland) "Review of Interim Financial Information 
Performed by the Independent Auditor of the  Entity" issued by the Auditing 
Practices Board. To the fullest extent permitted by law, we do not accept or 
assume responsibility to anyone other than the Company, for our work, for this 
report, or for the conclusions we have formed. 
 
Directors' Responsibilities 
 
The half-yearly Financial Report is the responsibility of, and has been 
approved by, the Directors.  The Directors are responsible for preparing the 
half-yearly Financial Report in accordance with the Disclosure and Transparency 
Rules of the United Kingdom's Financial Conduct Authority. 
 
As disclosed in Note 2, the Annual Financial Statements of the Company are 
prepared in accordance with International Financial Reporting Standards as 
adopted by the European Union. The Unaudited Condensed Interim Financial 
Statements have been prepared in accordance with International Accounting 
Standard 34, "Interim Financial Reporting", as adopted by the European Union. 
 
Our Responsibility 
 
Our responsibility is to express to the Company a conclusion on the Unaudited 
Condensed Interim Financial Statements based on our review. 
 
Scope of Review 
 
We conducted our review in accordance with International Standard  on  Review 
Engagements  (UK  and Ireland) 2410, "Review of Interim  Financial 
Information  Performed  by  the  Independent  Auditor  of  the Entity" issued 
by the Auditing Practices Board for use in the United Kingdom. A review of 
Interim Financial Information consists of making enquiries, 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 
(UK) 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 Unaudited Condensed Interim Financial Statements for the six 
months ended 31 August, 2017 are not prepared, in all material respects, in 
accordance with International Accounting Standard 34 as adopted by the European 
Union and the Disclosure and Transparency Rules of the United Kingdom's 
Financial Conduct Authority. 
 
Ernst & Young LLP 
 
Guernsey 
 
Channel Islands 
 
7 November 2017 
 
Notes 
 
1.   The condensed interim report and financial statements are published on 
websites maintained by the Investment Adviser. 
 
2.   The maintenance and integrity of these websites are the responsibility of 
the Investment Adviser; the work carried out by the Auditors does not involve 
consideration of these matters and, accordingly, the Auditor accepts no 
responsibility for any changes that may have occurred to the Financial 
Statements since they were initially presented on the website. 
 
3.   Legislation in Guernsey governing the preparation and dissemination of 
Financial Statements may differ from legislation in other jurisdictions. 
 
Company Advisers 
 
Investment Adviser 
 
The Investment Adviser to JZ Capital Partners Limited ("JZCP") is Jordan/ 
Zalaznick Advisers, Inc. ("JZAI") a company beneficially owned by John (Jay) W 
Jordan II and David W Zalaznick. The company was formed for the purpose of 
advising the Board of JZCP on investments in leveraged securities, primarily 
related to private equity transactions. JZAI has offices in New York and 
Chicago. 
 
Jordan/Zalaznick Advisers, Inc. 
9 West, 57th Street 
New York NY 10019 
 
Registered Office 
PO Box 255 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey GY1 3QL 
 
JZ Capital Partners Limited is registered in Guernsey Number 48761 
LEI: 549300TZCK08Q16HHU44 
 
 
Administrator, Registrar and Secretary 
Northern Trust International Fund Administration (Guernsey) Limited 
PO Box 255 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey GY1 3QL 
 
UK Transfer and Paying Agent 
Equiniti Limited 
Aspect House 
Spencer Road 
Lancing 
West Sussex BN99 6DA 
 
Independent Auditor 
Ernst & Young LLP 
PO Box 9 
Royal Chambers 
St Julian's Avenue 
St Peter Port 
Guernsey GY1 4AF 
 
Financial Adviser and Broker 
JP Morgan Cazenove Limited 
20 Moorgate 
London EC2R 6DA 
 
US Bankers 
HSBC Bank USA NA 
452 Fifth Avenue 
New York NY 10018 
 
(Also provides custodian services to JZ Capital Partners Limited under the 
terms of a Custody Agreement). 
 
Guernsey Bankers 
Northern Trust (Guernsey) Limited 
PO Box 71 
Trafalgar Court 
Les Banques 
St Peter Port 
Guernsey GY1 3DA 
 
UK Solicitors 
Ashurst LLP 
Broadwalk House 
5 Appold Street 
London EC2A 2HA 
 
US Lawyers 
Monge Law Firm, PLLC 
333 West Trade Street 
Charlotte, NC 28202 
 
Mayer Brown LLP 
214 North Tryon Street 
Suite 3800 
Charlotte NC 28202 
 
Winston & Strawn LLP 
35 West Wacker Drive 
Chicago IL 60601-9703 
 
Guernsey Lawyers 
Mourant Ozannes 
PO Box 186 
1 Le Marchant Street 
St Peter Port 
Guernsey GY1 4HP 
 
 
Useful Information for Shareholders 
 
Listing 
 
JZCP Ordinary, Zero Dividend Preference ("ZDP") shares and Convertible 
Unsecured Loan Stock ("CULS") are listed on the Official List of the Financial 
Services Authority of the UK, and are admitted to trading on the London Stock 
Exchange Specialist Fund Segment for listed securities. 
 
The price of the Ordinary shares are shown in the Financial Times under 
"Conventional Private Equity" and can also be found at https://markets.ft.com 
along with the prices of the ZDP shares and CULS . 
 
ISIN/SEDOL numbers 
 
                                Ticker Symbol              ISIN Code           Sedol Number 
 
Ordinary shares                          JZCP           GG00B403HK58                B403HK5 
 
ZDP (2022) shares                        JZCZ           GG00BZ0RY036                 Z0RY03 
 
CULS                                     JZCC           GG00BP46PR08                BP46PR0 
 
Alternative Performance Measures 
 
In accordance with ESMA Guidelines on Alternative Performance Measures ("APMs") 
the Board has considered what APMs are included in the annual report and 
financial statements which require further clarification. An APM is defined as 
a financial measure of historical or future financial performance, financial 
position, or cash flows, other than a financial measure defined or specified in 
the applicable financial reporting framework. APMs included in the interim 
financial statements, which are unaudited and outside the scope of IFRS, are 
deemed to be as follows: 
 
Total NAV Return 
 
The Total NAV Return measures how the net asset value (NAV) per share has 
performed over a period of time, taking into account both capital returns and 
dividends paid to shareholders. JZCP quotes NAV total return as a percentage 
change from the start of the period (six months) and also three-month, 
one-year, three-year, four year, five-year and seven year periods. It assumes 
that dividends paid to shareholders are reinvested back into the Company 
therefore future NAV gains are not diminished by the paying of dividends. JZCP 
also produces an adjusted Total NAV Return which excludes the effect of the 
dilution per share caused by the issue of shares at a discount to NAV, the 
result of the adjusted Total NAV return is to provide a measurement of how the 
Company's Investment portfolio contributed to NAV growth adjusted for the 
Company's expenses and finance costs. The Total NAV Return for the six-month 
period ended 31 August 2017 was -2.4% (31 August 2016: 3.9%) which includes 
dividends paid of nil cents (31 August 2016: 15 cents). 
 
Total Shareholder Return 
 
A measure showing how the share price has performed over a period of time, 
taking into account both capital returns and dividends paid to shareholders. 
JZCP quotes shareholder price total return as a percentage change from the 
start of the period (six months) and also three-month, one year, three-year, 
four year, five-year and seven-year periods. It assumes that dividends paid to 
shareholders are reinvested in the shares at the time the shares are quoted ex 
dividend. The Shareholder Return for the six-month period ended 31 August 2017 
was -4.2% (31 August 2016: 17.3%) which includes dividends paid (Sterling 
equivalent) of nil (2016: 10.4 pence). 
 
NAV to market price discount 
 
The NAV per share is the value of all the company's assets, less any 
liabilities it has, divided by the number of shares. However, because JZCP 
shares are traded on the London Stock Exchange's Specialist Fund Market, the 
share price may be higher or lower than the NAV. The difference is known as a 
discount or premium. JZCP's discount is calculated by expressing the difference 
between the period end dollar equivalent share price and the period end NAV per 
share as a percentage of the NAV per share. 
 
At 31 August 2017, JZCP's Ordinary shares traded at GBP5.16 (31 August 2016: GBP 
4.53) or $6.64 (2016: $5.93) being the dollar equivalent using the year end 
exchange rate of GBP1: $1.288 (31 August 2016 GBP1: $1.31). The shares traded at a 
33% (31 August 2016: 43%) discount to the NAV per share of $9.88 (2016: 
$10.40). 
 
Dividend Yield 
 
The Company no longer considers the Dividend Yield an Alternative Performance 
Measure. During the period ended 31 August 2017, the Company received 
shareholder approval to discontinue the Company's dividend policy of 
distributing approximately 3% of the Company's net assets in the form of 
dividends. No dividends were paid or declared in the six-month period ended 31 
August 2017. 
 
Non-Mainstream Pooled Investments 
 
From 1 January 2014, the FCA rules relating to the restrictions on the retail 
distribution of unregulated collective investment schemes and close substitutes 
came into effect. JZCP's Ordinary shares qualify as an 'excluded security' 
under these rules and will therefore be excluded from the FCA's restrictions 
which apply to non-mainstream investment products. Therefore Ordinary shares 
issued by JZ Capital Partners can continue to be recommended by financial 
advisors as an investment for UK retail investors. 
 
Financial Diary 
 
Results for the year ended 28 February 2018  May 2018 (date to be confirmed) 
 
Annual General Meeting                       June/July 2018 (date to be confirmed) 
 
Interim report for the six months ended 31   October/November 2018 (date to be confirmed) 
August 2018 
 
JZCP will be issuing an Interim Management Statement for the quarters ending 30 
November 2017 and 31 May 2018. These Statements will be sent to the market via 
RNS within six weeks from the end of the appropriate quarter, and will be 
posted on JZCP's website at the same time, or soon thereafter. 
 
Payment of Dividends 
 
In the event of a cash dividend being paid, the dividend will be sent by cheque 
to the first-named shareholder on the register of members at their registered 
address, together with a tax voucher. At shareholders' request, where they have 
elected to receive dividend proceeds in Sterling, the dividend may instead be 
paid direct into the shareholder's bank account through the Bankers' Automated 
Clearing System. Payments will be paid in US dollars unless the shareholder 
elects to receive the dividend in Sterling. Existing elections can be changed 
by contacting the Company's Transfer and Paying Agent, Equiniti Limited on +44 
(0) 121 415 7047. 
 
Share Dealing 
 
Investors wishing to buy or sell shares in the Company may do so through a 
stockbroker. Most banks also offer this service. 
 
Internet Address 
 
The Company: www.jzcp.com 
 
Foreign Account Tax Compliance Act 
 
The Company is registered (with a Global Intermediary Identification Number 
CAVBUD.999999.SL.831) under The Foreign Account Tax Compliance Act ("FATCA"). 
 
Share Register Enquiries 
 
The Company's UK Transfer and Paying Agent, Equiniti Limited, maintains the 
share registers. In event of queries regarding your holding, please contact the 
Registrar on 0871 384 2265, calls to this number cost 8p per minute from a BT 
landline, other providers' costs may vary. Lines are open 8.30 a.m. to 5.30 
p.m., Monday to Friday, If calling from overseas +44 (0) 121 415 7047 or access 
their website at www.equiniti.com. Changes of name or address must be notified 
in writing to the Transfer and Paying Agent. 
 
Nominee Share Code 
 
Where notification has been provided in advance, the Company will arrange for 
copies of shareholder communications to be provided to the operators of nominee 
accounts. Nominee investors may attend general meetings and speak at meetings 
when invited to do so by the Chairman. 
 
Documents Available for Inspection 
 
The following documents will be available at the registered office of the 
Company during usual business hours on any weekday until the date of the Annual 
General Meeting and at the place of the meeting for a period of fifteen minutes 
prior to and during the meeting: 
 
(a)   the Register of Directors' Interests in the stated capital of the 
Company; 
 
(b)   the Articles of Incorporation of the Company; and 
 
(c)   the terms of appointment of the Directors. 
 
Warning to Shareholders - Boiler Room Scams 
 
In recent years, many companies have become aware that their shareholders have 
been targeted by unauthorised overseas- based brokers selling what turn out to 
be non-existent or high risk shares, or expressing a wish to buy their shares. 
If you are offered, for example, unsolicited investment advice, discounted JZCP 
shares or a premium price for the JZCP shares you own, you should take these 
steps before handing over any money: 
 
·       Make sure you get the correct name of the person or organisation 
 
·       Check that they are properly authorised by the FCA before getting 
involved by visiting http://www.fca.org.uk/firms/systems- 
 
·       reporting/register 
 
·       Report the matter to the FCA by calling 0800 111 6768 
 
·       If the calls persist, hang up 
 
·       More detailed information on this can be found on the Money Advice 
Service website www.moneyadviceservice.org.uk 
 
US Investors 
 
General 
 
The Company's Articles contain provisions allowing the Directors to decline to 
register a person as a holder of any class of ordinary shares or other 
securities of the Company or to require the transfer of those securities 
(including by way of a disposal effected by the Company itself) if they believe 
that the person: 
 
(a)   is a "US person" (as defined in Regulation S under the US Securities Act 
of 1933, as amended) and not a "qualified purchaser" (as defined in the US 
Investment Company Act of 1940, as amended, and the related rules thereunder); 
 
(b)   is a "Benefit Plan Investor" (as described under "Prohibition on Benefit 
Plan Investors and Restrictions on Non-ERISA Plans" below); or 
 
(c)   is, or is related to, a citizen or resident of the United States, a US 
partnership, a US corporation or a certain type of estate or trust and that 
ownership of any class of ordinary shares or any other equity securities of the 
Company by the person would materially increase the risk that the Company could 
be or become a "controlled foreign corporation" (as described under "US Tax 
Matters" below). 
 
In addition, the Directors may require any holder of any class of ordinary 
shares or other securities of the Company to show to their satisfaction whether 
or not the holder is a person described in paragraphs (A), (B) or (C) above. 
 
US Securities Laws 
 
The Company (a) is not subject to the reporting requirements of the US 
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and does not 
intend to become subject to such reporting requirements and (b) is not 
registered as an investment company under the US Investment Company Act of 
1940, as amended (the "1940 Act"), and investors in the Company are not 
entitled to the protections provided by the 1940 Act. 
 
Prohibition on Benefit Plan Investors and Restrictions on Non-ERISA Plans 
 
Investment in the Company by "Benefit Plan Investors" is prohibited so that the 
assets of the Company will not be deemed to constitute "plan assets" of a 
"Benefit Plan Investor". The term "Benefit Plan Investor" shall have the 
meaning contained in Section 3(42) of the US Employee Retirement Income 
Security Act of 1974, as amended ("ERISA"), and includes (a) an "employee 
benefit plan" as defined in Section 3(3) of ERISA that is subject to Part 4 of 
Title I of ERISA; (b) a "plan" described in Section 4975(e)(1) of the US 
Internal Revenue Code of 1986, as amended (the "Code"), that is subject to 
Section 4975 of the Code; and (c) an entity whose underlying assets include 
"plan assets" by reason of an employee benefit plan's or a plan's investment in 
such entity. For purposes of the foregoing, a "Benefit Plan Investor" does not 
include a governmental plan (as defined in Section 3(32) of ERISA), a non-US 
plan (as defined in Section 4(b)(4) of ERISA) or a church plan (as defined in 
Section 3(33) of ERISA) that has not elected to be subject to ERISA. 
 
Each purchaser and subsequent transferee of any class of ordinary shares (or 
any other class of equity interest in the Company) will be required to 
represent, warrant and covenant, or will be deemed to have represented, 
warranted and covenanted, that it is not, and is not acting on behalf of or 
with the assets of, a Benefit Plan Investor to acquire such ordinary shares (or 
any other class of equity interest in the Company). 
 
Under the Articles, the directors have the power to require the sale or 
transfer of the Company's securities in order to avoid the assets of the 
Company being treated as "plan assets" for the purposes of ERISA. 
 
The fiduciary provisions of pension codes applicable to governmental plans, 
non-US plans or other employee benefit plans or retirement arrangements that 
are not  subject to ERISA (collectively, "Non-ERISA  Plans") may impose 
limitations on investment in the Company. Fiduciaries of Non-ERISA Plans, in 
consultation with their advisors, should consider, to the extent applicable, 
the impact of such fiduciary rules and regulations on an investment in the 
Company. 
 
Among other considerations, the fiduciary of a Non-ERISA Plan should take into 
account the composition of the Non-ERISA Plan's portfolio with respect to 
diversification; the cash flow needs of the Non-ERISA Plan and the effects 
thereon of the illiquidity of the investment; the economic terms of the Non- 
ERISA Plan's investment in the Company; the Non-ERISA Plan's funding 
objectives; the tax effects of the investment and the tax and other risks 
associated with the investment; the fact that the investors in the Company are 
expected to consist of a diverse group of investors (including taxable, 
tax-exempt, domestic and foreign entities) and the fact that the management of 
the Company will not take the particular objectives of any investors or class 
of investors into account. 
 
Non-ERISA Plan fiduciaries should also take into account the fact that, while 
the Company's board of directors and its investment advisor will have certain 
general fiduciary duties to the Company, the board and the investment advisor 
will not have any direct fiduciary relationship with or duty to any investor, 
either with respect to its investment in Shares or with respect to the 
management and investment of the assets of the Company. Similarly, it is 
intended that the assets of the Company will not be considered plan assets of 
any Non-ERISA Plan or be subject to any fiduciary or investment restrictions 
that may exist under pension codes specifically applicable to such Non-ERISA 
Plans. Each Non-ERISA Plan will be required to acknowledge and agree in 
connection with its investment in any securities to the foregoing status of the 
Company, the board and the investment advisor that there is no rule, regulation 
or requirement applicable to such investor that is inconsistent with the 
foregoing description of the Company, the board and the investment advisor. 
 
Each purchaser or transferee that is a Non-ERISA Plan will be deemed to have 
represented, warranted and covenanted as follows: 
 
(a)   The Non-ERISA Plan is not a Benefit Plan Investor; 
 
(b)   The decision to commit assets of the Non-ERISA Plan for investment in the 
Company was made by fiduciaries independent of the Company, the Board, the 
Investment Advisor and any of their respective agents, representatives or 
affiliates, which fiduciaries (i) are duly authorised to make such investment 
decision and have not relied on any advice or recommendations of the Company, 
the Board, the Investment Advisor or any of their respective agents, 
representatives or affiliates and (ii) in consultation with their advisers, 
have carefully considered the impact of any applicable federal, state or local 
law on an investment in the Company; 
 
(c)   None of the Company, the Board, the Investment Advisor or any of their 
respective agents, representatives or affiliates has exercised any 
discretionary authority or control with respect to the Non-ERISA Plan's 
investment in the Company, nor has the Company, the Board, the Investment 
Advisor or any of their respective agents, representatives or affiliates 
rendered individualised investment advice to the Non-ERISA Plan based upon the 
Non-ERISA Plan's investment policies or strategies, overall portfolio 
composition or diversification with respect to its commitment to invest in the 
Company and the investment program thereunder; and 
 
(d)   It acknowledges and agrees that it is intended that the Company will not 
hold plan assets of the Non-ERISA Plan and that none of the Company, the Board, 
the Investment Advisor or any of their respective agents, representatives or 
affiliates will be acting as a fiduciary to the Non-ERISA Plan under any 
applicable federal, state or local law governing the Non-ERISA Plan, with 
respect to either (i) the Non-ERISA Plan's purchase or retention of its 
investment in the Company or (ii) the management or operation of the business 
or assets of the Company. It also confirms that there is no rule, regulation, 
or requirement applicable to such purchaser or transferee that is inconsistent 
with the foregoing description of the Company, the Board and the Investment 
Advisor. 
 
US Tax Matters 
 
This discussion does not constitute tax advice and is not intended to be a 
substitute for tax advice and planning. Prospective holders of the Company's 
securities must consult their own tax advisers concerning the US federal, state 
and local income tax and estate tax consequences in their particular situations 
of the acquisition, ownership and disposition of any of the Company's 
securities, as well as any consequences under the laws of any other taxing 
jurisdiction. 
 
The Company's directors are entitled to decline to register a person as, or to 
require such person to cease to be, a holder of any class of ordinary shares or 
other equity securities of the Company if they believe that: such person is, or 
is related to, a citizen or resident of the United States, a US partnership, a 
US corporation or a certain type of estate or trust and that ownership of any 
class of ordinary shares or any other equity securities of the Company by such 
person would materially increase the risk that the Company could be or become a 
"controlled foreign corporation" within the meaning of the Code (a "CFC"). 
 
In general, a foreign corporation is treated as a CFC only if its "US 
shareholders" collectively own more than 50% of the total combined voting power 
or total value of the corporation's stock. A "US shareholder" means any US 
person who owns, directly or indirectly through foreign entities, or is 
considered to own (by application of certain constructive ownership rules), 10% 
or more of the total combined voting power of all classes of stock of a foreign 
corporation, such as the Company. 
 
There is a risk that the Company will decline to register a person as, or will 
require such person to cease to be, a holder of the Company's securities if the 
Company could be or become a CFC. The Company's treatment as a CFC could have 
adverse tax consequences for US taxpayers. 
 
The Company has been advised that it is NOT a passive foreign investment 
company ("PFIC") for the fiscal years ended February 2016 and 2015. An analysis 
for the financial year ended February 2017 is currently being undertaken. A 
classification as a PFIC would likely have an adverse tax consequences for US 
taxpayers. 
 
The taxation of a US taxpayer's investment in the Company's securities is 
highly complex. Prospective holders of the Company's securities must consult 
their own tax advisers concerning the US federal, state and local income tax 
and estate tax consequences in their particular situations of the acquisition, 
ownership and disposition of any of the Company's securities, as well as any 
consequences under the laws of any other taxing jurisdiction. 
 
Investment Adviser's ADV Form 
 
Shareholders and state securities authorities wishing to view the Investment 
Adviser's ADV form can do so by following the link below: 
 
https://adviserinfo.sec.gov/IAPD/IAPDFirmSummary.aspx?ORG_PK=160932 
 
 
 
END 
 

(END) Dow Jones Newswires

November 08, 2017 02:00 ET (07:00 GMT)

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