INVESTMENT EXAMPLES: CURRENT INVESTMENTS

Fairpoint (LSE:FRP)
Solutions for indebted consumers

Since Hanover brought in a new management team in mid 2008, Fairpoint has arrested a steep decline and reestablished itself on the profit and share price growth path.

With a focus on strategic vision, granular operating KPIs, and cash generation, the business has consolidated its market leadership position in IVAs and diversified into a suite of other products focused on debt-distressed consumers such Debt Management Plans and Utility Switching. There has been a rapid pay-down of group debt and establishment of a strong platform for growth.

   » Fairpoint Website

Singer Capital Markets (Private)
Brokerage firm

Hanover took a significant stake in this well-capitalised UK small-mid cap brokerage firm, which was acquired by management from the administrators of Kaupthing Singer and Friedlander bank and subsequently integrated the majority of the senior and front-office team of small-cap broker Teathers, formerly owned by Landsbanki.

Matthew Peacock is Chairman.

   » Singer Website

INVESTMENT EXAMPLES: PAST INVESTMENTS

Spirent (LSE:SPT)
Telecoms test and measurement

Hanover was part of a consortium of investors that took control of Spirent's board in late 2006.

The investment strategy was to increase shareholder value through targeted cost cutting program and the return of cash to shareholders through a share buy back scheme.

Performance
Since Hanover's involvement over £130m has been returned to shareholders, and EBIT margins have expanded from 3% to 17%.

Return: 2.1x

TDX: The Debt Exchage (Private)
Financial services intermediary

Hanover was a founder investor in this financial services intermediary focused on debt management.

Through active board involvement Hanover oversaw a period of significant revenue and profit growth before exiting in a sale to a private equity buyer in Q4 2008.

Return: >20x

4imprint (LSE:FOUR)
Branded marketing & promotional products

Hanover built up a 27% stake in 4imprint during 2003, having identified several hidden problems holding back profits.

With the support of other major shareholders, Hanover took control of the board, and installed a new management team to overhaul the US operations.

Performance
In the 24 months after Hanover's involvement EBITA increased 5x, and cash balances 58% above market expectations were delivered.

Return: 2.8x (IRR: 300%)

Elementis (LSE:ELM)
Global leader in Chromium chemicals

Hanover built up a 15% stake in Elementis during early 2005, and took control of the board in June 2005 having identified an opportunity to increase value through:

• Cutting bulk capacity and boosting margins
• Divesting of Rubber division
• Reducing overhead
• Increasing the transparency of reporting

Performance
FY06 PBT of £30m delivered, vs. market expectations of £16m before our involvement. Rerating from 6.2x to 8.0x T+2 EV/EBITDA.

Return: 2.5x (IRR 99%)