Montrose Capricorn Finance Fund Suspension Update, 25th March 2009

CAPRICORN FINANCE FUND
UPDATE 25 MARCH 2009

The 2009 year to date has seen continued illiquidity across the credit markets and the private lending market in particular. Performance remains negatively impacted by returns on loans and prices of loans being marked lower to reflect the increase in risk premiums across most asset classes. In addition collateral values are weak which is forcing asset based lending managers to increase provisions for bad or doubtful debts.

The massive government bailouts and fiscal stimulus, amounting to around 50% of US GDP, should gradually improve liquidity in credit markets and lead to increases in loan prices and collateral assets. This should have a positive impact on the Finance Fund in the months ahead.

As previously advised the Capricorn Finance Fund is currently suspended and has redeemed all the underlying funds in order to return capital as soon as possible to investors when received from these funds. We have no further information from the underlying funds as to when the next tranche of capital is to be paid. We will be visiting the US in the next few months to further progress matters.

Montrose Asset Management Ltd