Launch Presentation

1

• Launch Presentation
• February 2008

Issued by Flight Partners Limited, 6 Barton
Street, London, SW1P 3NG Authorised and
regulated by the Financial Services Authority,
FSA registration number 472627
2
Contents

• Disclaimer
• Summary
• Flight Partners Recovery Fund
• Flight Partners - Manager
• RCapital Investment Adviser
• Examples
• The Offer

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Disclaimer

• This document is delivered to the recipient
  solely for the purpose of evaluating a possible
  investment in the Fund and does not constitute a
  public offer and may not be used or copied to any
  other person.
• Information in this presentation is for
  reference purposes only and should not be
  construed as a solicitation to invest. Potential
  Investors should refer to the Offering Memorandum
  prior to investing in the Fund. Investment in the
  Fund carries a certain level of risk and is only
  suitable for persons capable of appreciating the
  nature of such risks.
• The recipient should not treat the contents of
  this document as advice relating to legal,
  taxation, investment or any other matters and the
  recipient is recommended to consult their own
  professional advisers concerning the consequences
  of their acquiring, holding or disposing of
  shares in the Fund. In the United Kingdom
  investors are recommended to consult an
  investment adviser authorised and regulated by
  the Financial Services Authority.
• The Fund is not regulated by the Financial
  Services Authority. Investment in the Fund
  carries the risk of loss of all capital invested.

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Flight Partners Recovery FundSummary

• The Flight Partners Recovery Fund offers the
  opportunity to profit from current credit market
  conditions by providing secured loan finance to
  companies with turnaround potential which are in
  financial and/or business difficulties, and by
  acquiring accompanying equity stakes in these
  companies at nominal cost. The Fund has been
  structured with the intent of providing
  relatively low risk but high return potential.
  Returns or any particular level of return cannot
  be guaranteed.
• Risk Profile
• All monies are invested through the advance of
  loan facilities secured against both the assets
  of investee companies and the equity stakes in
  investee companies granted to RCapital (the
  Adviser) as their success fee remuneration.
• The Adviser, RCapital has an experienced
  management team with a proven track record no
  turnaround loan they have made has ever
  defaulted.
• Return
• The income returns from the loans (from a mixture
  of interest, commitment, redemption and other
  fees) will be equivalent to at least a rate of
  interest of Bank base rate 6, with a minimum
  return of 10 p.a.
• The equity made available to the Fund in investee
  companies at nominal cost could add substantially
  to total returns.

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Flight Partners Recovery Fund

• The Fund will invest by way of loans in smaller
  and medium size companies with turnaround,
  recovery opportunities.
• The income returns, from a mixture of interest,
  commitment, redemption and other fees, will be
  equivalent to an average rate of interest of at
  least 6 over bank base rate (with a minimum of
  10 p.a.).
• Loans will be secured against the assets of these
  companies and against a charge over RCapitals
  equity participations. The Fund will also
  receive 30 of the equity made available in each
  investee company as a term of the provision of
  the loan finance.
• The small to medium sized turnaround territory
  has in the opinion of RCapital been less
  competitive and has usually delivered higher
  total returns than larger turnarounds.
• The Fund will not invest in sectors judged to be
  problematical, such as Insurance,
  Pharmaceuticals, Gambling and Software.
  Periodically, these parameters will be reviewed
  by the Board.

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Flight Partners Recovery Fund

• The Fund will aim to invest in a minimum of 10
  different businesses on a rolling basis, with a
  maximum exposure to any one company of 25 of the
  Funds net asset value.
• The Fund will have the ability to gear up to an
  amount equal to one third of the net asset value
  a major bank has indicated its willingness, in
  principle, to provide such overdraft facilities.
• The Fund is a closed end, Guernsey-based company
  it will be up to 30m in size, and aims to
  optimise after-tax returns for investors.
• It will be listed on the Channel Islands Stock
  Exchange.

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Flight Partners Recovery Fund

• On behalf of the Manager, RCapital will provide
  the advice on deals, manage transactions,
  organise the financial and operational
  restructuring and the subsequent realisation of
  the equity interests.
• During the term of the Fund, RCapital will be
  obliged to make available to the Fund all
  investment opportunities it recommends which
  conform to the Funds investment parameters.
• In addition to the security provided by fixed and
  floating charges over the assets of investee
  companies, the Fund will also have a charge over
  RCapitals participation in the equity in
  investee companies as additional security against
  any potential default of principal or income on
  the loans made to investee companies.
• It is expected that the loan facilities will
  normally be repaid within a year.
• The Fund will be entitled to 30 of the equity
  made available in investee companies as a term of
  providing loan finance.
• RCapitals remuneration is on a success basis
  only by way of 70 of the equity in investee
  companies, subject to the Fund having a charge
  over this to make good any potential default of
  principal or income on its loans to investee
  companies.

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Flight PartnersManager

• Flight Partners is an FSA registered and
  authorised company established by experienced
  financial professionals.
• Howard Flight, chairman, has over 30 years fund
  management experience and was the co-founder and
  joint managing director of Guinness Flight. He is
  currently a director of fund management groups
  managing over 30bn of assets.
• Mark Warde-Norbury worked for Flemings for 14
  years and is the founder and chairman of St.
  Helens Capital, a successful AIM and PLUS
  corporate financier and broker.
• Permjot Valia, formerly with PricewaterhouseCooper
  s and Ernst Young, has been a business angel
  for several years and has a demonstrable track
  record in identifying profitable unlisted
  investment opportunities.

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RCapitalInvestment Adviser Track Record

• RCapital is an established, London-based boutique
  specialising in the financial and operational
  restructuring and turnaround of distressed
  companies, using a formula that has given a high
  level of security for investors.
• Over the last four years, RCapital has invested a
  total of 16.83m in 14 Companies, in the form of
  secured loan facilities with equity kickers.
  11.79m of the loan facilities have since been
  repaid, with the balance not yet due for
  repayment.
• The loans have, typically, earned returns
  equivalent to a rate of interest of at least 10
  p.a. and there have been no defaults of principal
  or interest.
• The equity interests in four of the fourteen
  companies in which RCapital has invested have
  been realised. 30 of these proceeds amounted to
  1.3m.
• The average loan note holding period has been 12
  months and the average equity disposal period has
  been 24 months.

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RCapitalInvestment Adviser

• RCapital expects to realise all the outstanding
  equity interests in the other companies in the
  next two years. The value of 30 of these
  outstanding equity kickers has been currently
  estimated at 7.2m (and should be realised for
  more than this, in due course).
• From the fourteen transactions in which RCapital
  has invested as principal-
• The interest due has been received on all
  investments
• 11.79m of loan notes have been repaid within 24
  months
• The 5.64m of outstanding loan notes are expected
  to be repaid within the next two years.
• 30 of the equity kickers attaching to the
  fourteen companies (realised and unrealised) has
  an aggregate value of 8.5m.
• This equates to a rate of return of 26 p.a.,
  taking a 10 p.a. rate of interest on the loans.
• There is no guarantee that the investments of the
  Fund will perform in a similar manner.

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RCapitals Background

• RCapital was formed in 2004 by Jamie Constable
  and Peter Ward since its formation
  RCapital has built a successful track record in
  the turnaround industry. Summaries of three
  typical transactions they have carried
  out are described on pages 16, 17 18.
• Jamie Constable qualified as an accountant with
  Touche Ross in  1987 and worked as a consultant
  on turnaround situations  in the recession of the
  late 1980's and early 1990's. The considerable
  experience  gained in this period and
  subsequently has made Jamie one of the foremost
  restructuring specialists in the small and middle
  sized company market.
• Peter Ward worked previously as a banker
  specialising in company restructuring and gained
  his working knowledge of special loan situations
  with NatWest. Whilst at the bank, he met Jamie
  Constable through transactions they worked on
  together.  Peter left the Bank to work with Jamie
  in 2001. Using his specialist knowledge of debt
  restructuring, Peters experience complements
  Jamies skill sets.

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How does RCapital operate?

• Invests in amounts normally between 0.5m and
  5m, by way of secured loan notes with attaching
  equity kickers, in distressed companies which
  they diagnose they can turn around successfully
  through both financial and operational
  restructuring.
• Undertakes a full assessment of the value of
  investee companies operations and assets to
  provide adequate security for the loan facilities
  .
• Injects funds by way of loan facilities, secured
  by fixed and floating charges over the assets of
  the businesses in which they invest.
• Takes voting control of the distressed companies
  in which they invest in order to be able to make
  the necessary management and operational changes
  and, in due course, to effect profitable sales of
  these companies.
• Provides consultancy services to investee
  companies, for which RCapital may charge on a
  cost basis, including legal and accountancy
  services.
• Obtains new bank facilities to repay the loan
  facilities when the problems faced by investee
  companies have been resolved.
• Procures attractive disposal opportunities for
  the equity interests acquired at values which
  they judge to be in the best interests of
  shareholders through trade sales or IPOs.

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How do companies get into financial difficulties?

• Tightening of Credit markets relevant in the
  present climate
• Over leveraged buyouts
• Under performing management teams
• Loss of key Management/employees
• Shareholder/Management disputes
• Shrinking or mature markets
• Business overhead set up for fast growth but
  growth has not been delivered

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What makes RCapital different?

• Proven Track record in the distressed/recovery
  market
• Strategy and tactics honed from experience
• Ability to see restructuring solutions for
  otherwise insolvent situations
• Ability to take on complex and messy situations
• Deal size normally ranges from 500k to 5m a
  less competitive territory in RCapitals opinion
  than the larger company turnaround market
• Network to source investee company opportunities
• Ability to move quickly
• Ability to work with existing or new management
  teams to achieve recovery
• Network to dispose of equity kicker stakes
  sales values achieved have ranged from 0.5m to
  20m

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A selection of Recovery companies in which
RCapital has invested successfully
16
Example 1Retail Merchandising  

• Situation arose where company shareholders were
  in dispute.
• Initial loan facility of 500k made available
  fully secured over the company's assets as a
  first charge. Actual monies lent 50,000. 
• Received 100 equity but with management having
  an option to buy back 50. 
• Loan repaid within 9 months.
• Company sold 2½ years later, with total return
  on disposal of equity interest of 1.8m.

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Example 2 Motor Accessories wholesaler

• Situation arose out of shrinking market and high
  fixed overhead costs.
• Purchase of 18m of bank debt fully secured over
  the assets of the business with 100 of the
  equity capital, for 6.5m. 
• Restructured the company and at the same time
  purchased another company with no extra funding. 
• Refinanced the 6.5m loan with a traditional
  lender 3 months later.
• Sold the equity 14 months later for 1.5m.

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Example 3 Recruitment

• Situation arose due to company growing too fast
  and rapidly running out of working capital.
• Initial loan facility of 200k fully secured over
  the company's assets as a first charge
• 55 of the equity received with management team
  holding 45 
• Loan fully repaid within 6 months 
• Company sold just over two years later for 2.5m
• RCapitals total equity return 1.375m.

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The offer

• The Managers will receive a management fee of 2
  p.a. of the assets under management, and a
  performance fee of 20 of the realised returns in
  excess of 15 p.a.
• Performance fees will only be payable when
  realised returns to date equivalent to 15 p.a.
  have been achieved, calculated on a non-compound
  basis.
• The Funds legal advisers are Ogier (Guernsey)
  and Farrer Co LLP (London).
• The Fund may raise additional finance in the
  future through a C Class issue, if the flow of
  deals justifies increasing its size
• The Fund is otherwise closed for seven years.
• Flight and Partners may also propose to
  shareholders an AIM listing, or the Board may
  wind the Fund up.
• At the end of the 7 year period, investors may
  roll over the Fund for a fixed period or opt for
  an AIM listing as alternatives to redemption.
• Cornerstone investors, including RCapital, have
  indicated they will invest at least 10m in the
  Fund, which is the minimum size for the Fund to
  proceed.
• Minimum subscriptions are 50,000.
• The closing date for subscriptions is 29th
  February, 2008.