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Aberdeen Growth Opportunities VCT 2 PLC - Aberdeen Asset ...

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Portfolio DevelopmentsThere was one successful realisation from the unlistedportfolio during the year; ID Support Services was soldfor proceeds of £337,000 and £82,000 realising gainsof £133,000 and £32,000 for the Original and S Sharepools respectively. In each case there is a small elementof deferred consideration which may give rise to furtherproceeds for the Company. In addition repayments ofloan stock were received from Homelux Nenplas and LimeInvestments as shown on the table on page 10.During the reporting period six substantial new unlistedinvestments and four new AIM investments have been addedto the portfolio.Conditions in the AIM market were extremely challengingthroughout the year with the FTSE AIM All-share Indexdeclining by 62.4% over the year as first the financial crisisand then the underlying economic conditions affectedmarket sentiment. <strong>Opportunities</strong> to trade the portfoliowere therefore much reduced as were the number of newIPOs in which to invest. The opportunity was taken tosell one holding where we perceived limited future upsidewhich resulted in a loss for the Original Pool and there wasa limited amount of trading in other stocks but gains of£92,000 and £83,000 were generated for the Original Pooland S Share Pool respectively. The AIM quoted businessesin which we are invested are generally continuing to tradeprofitably and in line with expectations and their marketvalues bear little or no relation to their underlying profit andcash generation capability.Investments in the unlisted portfolio are generally tradingwell and their values are not directly affected by theturmoil in the quoted markets and in many cases increasedvaluations have been achieved.OutlookWe anticipate that it will be some time before the numberof IPOs in the AIM market recovers to previous levels andtherefore there will be few opportunities to invest in thatmarket in the coming year. Conversely and while there arestill some difficulties evident in securing appropriate bankfunding for new unlisted investments, we will continueto invest selectively in well managed private companieswhere we perceive excellent growth prospects and thereforemedium term financial gain. One of the issues facing manyinvestors will be the availability of bank debt in the comingyear. We have invested in businesses where the level ofgearing is significantly less than much larger companiesand in some cases without recourse to any bank debt.Consequently, we do not anticipate encountering the samedegree of difficulty as those providing funding to larger morehighly leveraged investments in renewing debt facilities.<strong>Aberdeen</strong> <strong>Growth</strong> <strong>Opportunities</strong> <strong>VCT</strong> 2 <strong>PLC</strong> 9

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