Proposals for management change

The Board of Private Equity Investor PLC (the “Company”) announces that it proposes to simplify the management arrangements for the Company and to cancel the unsecured convertible loan notes issued by the Company and owned by Chamelle Limited (the “Loan Notes”). Subject to shareholder approval, the Company will repurchase the Loan Notes from Chamelle Limited for a consideration of £1.295 million. As disclosed in the Company’s latest Report and Accounts, each of Tim Childs, Andrew de Candole, Barbara Thomas and Keith Young is interested in the share capital of Chamelle Limited. The Board understands that Chamelle Limited has separately agreed to pay Value Catalyst Fund Limited £250,000 as a contribution towards their costs. Value Catalyst Fund Limited is managed by Laxey Partners Limited, which is interested in 27.27% of the Company’s ordinary shares.

Following repurchase of the Loan Notes, Tim Childs, Andrew de Candole and Keith Young will step down from the Board. There are no costs payable by the Company in connection with them stepping down. It is proposed that they will be replaced by David Quysner, Colin Kingsnorth and Rory Macnamara. Peter Dicks will continue on as Chairman and Barbara Thomas has agreed to remain on the Board. The Company will continue as a self-managed investment trust, with a currently unchanged investment policy.

The Board intends to write to shareholders seeking their support for these changes at the forthcoming annual general meeting in October 2004 immediately following which and subject to the approval of shareholders the changes outlined above will be implemented.

New Board Members

Mr David Quysner has over 30 years experience in venture capital in the USA and the UK and is Chairman of Abingworth Management, the venture fund management company. He is also Chairman of Finsbury Technology Trust plc and Quester VCT 3 plc and a Director of a number of other companies.

Mr Colin Kingsnorth has, since October 1999, been Director and Fund Manager of Laxey Partners Limited (“Laxey”). Mr. Kingsnorth co-founded Regent Fund Management (UK) Ltd in March 1995 and served as Fund Manager and Chief Executive Officer until January 1999, when he left Regent to work on the establishment of Laxey. Prior to this, Mr. Kingsnorth joined Buchanan Partners Limited, where he managed emerging market funds from 1991. Mr. Kingsnorth holds a BSc in Economics and is an associate member of the Institute of Investment Management and Research. Laxey Partners Limited is the investment manager of funds, including Value Catalyst Fund Limited, which own 27.27% of the Company.

Mr Rory Macnamara qualified as a chartered accountant with Price Waterhouse and worked in merchant banking with Morgan Grenfell for 17 years (during which time it was acquired by Deutsche Bank AG). He was a Director in Corporate Finance, Head of Mergers and Acquisitions and Vice Chairman of Morgan Grenfell & Co Limited. In 1999, he joined Lehman Brothers, where he was a Managing Director in UK Investment Banking until 2001. He is currently Chairman of Izodia PLC and a director of Invercharron Limited, Fenford Limited and Raven Mount PLC.

Requisition of Extraordinary General Meeting

Value Catalyst Fund Limited has agreed to procure that the requisition which the Company announced on 28 July 2004 is withdrawn.

Peter Dicks, Chairman, said:

“The Board is grateful to Tim Childs, Keith Young and Andrew de Candole for their role in the successful establishment of the Company and thanks them for their endeavours on the Company’s behalf over the past four years.

“I am delighted that, with Barbara Thomas agreeing to remain as a director, we maintain continuity of management as well as benefiting from the wealth of experience that Barbara and the new Board members bring.

“The Board believes that there are significant benefits from the proposals namely that:

• the Company’s capital structure is simplified with the removal of the Loan Notes; and
• there will be cost savings in the operation of the business reflecting the change from active management to a monitoring approach.

“We believe the prospects for the Company remain excellent and given time for the portfolio to mature, its investment objectives will be achieved.”

For further information please contact:

• Peter Dicks: 020 7224 5354
  Chairman, Private Equity Investor PLC
• Julian Cazalet/Angus Gordon Lennox: 020 7588 2828
  Cazenove & Co. Ltd
• Rupert Young: 020 7404 5959
  Brunswick Group LLP

Cazenove & Co. Ltd (“Cazenove”) and Insinger de Beaufort (“Insinger”), which are regulated and authorised by The Financial Services Authority Limited, are acting exclusively for Private Equity Investor PLC and will not be responsible to any other person for providing protections afforded to customers of Cazenove or Insinger or for advising any other person.