an nual r epo r t 2012 - alantra.com

Annual Report2012

PAGE.02. INTRODUCTION

PAGE.08. THE N+1 GROUP

• Who we are . . . . . . . . . . . . . . . . . . . . . 10

• Key Metrics . . . . . . . . . . . . . . . . . . . . . 12

• Structure . . . . . . . . . . . . . . . . . . . . . . . 14

PAGE.16. GROUP PERFORMANCE IN 2012

• 2012 Milestones . . . . . . . . . . . . . . . . . 18

• Performance by Business Division. . . 20

— Investment Banking . . . . . . . . . . . . . 20

— Capital Markets. . . . . . . . . . . . . . . . . 26

— Wealth Advisory . . . . . . . . . . . . . . . . 27

— Asset Management . . . . . . . . . . . . . 28

PAGE.38. CORPORATE SOCIAL RESPONSIBILITY

PAGE.42. FINANCIAL STATEMENTS

PAGE.48. PARTNERS

contents

INTRODUCTION

INTRODUCTION

The hedgehog, the fox and

a company's international expansion

“The fox knows many things but the hedgehog knows one big thing” Archilochus

We cannot know for sure what Archilochuswanted to tell us with his intriguingproposition but, maybe, he meant that, in theend, there are two ways to see life – andbusiness undertakings (which the reader canrest assured is what is going to concern ushere): those that approach it in the samemanner as the hedgehog, believing thatthere is just one correct answer to everyproblem that arises, a central and all-encompassing vision that necessitatesrejection of all other alternatives; and thosethat approach it like foxes, not onlycontemplating many potential answers orpurposes, but rather actually coming tobelieve that some of them, despite beingcontradictory, are mutually compatible. Thehedgehog bases his actions on the conceptof oneness; the fox on that of diversity. Overthe course of their existences goodcompanies combine the mentalities of thefox and the hedgehog. At the beginning theyhave no choice – in order to impose theirpresence on the market – but to cling to asingle and exclusive vision of their businessthat impregnates their culture and collectivelypushes all of their members towards thatvision with unswerving faith. However as thecompany grows and faces complex issues onseveral fronts it is forced to open itselfconstructively to new alternatives andapproaches and to learn to work towardsgoals that conflict with each other and canshake the organisation’s original foundations.In this new era of international expansion, weat N+1 are undergoing the exotic experienceof learning the fox’s skills, albeit without

straying from our core values and principles,such as our independence, partnershipmodel, team spirit and commitment to doingthings well, all of which constitute ourhedgehog heart.

The principles inspiring the group’sinternational expansion model are thefollowing: (i) we are aiming at multi-polarinternational expansion. What this means isthat we are not trying to expand our homemarket business abroad but rather to expandall of the group’s business activitiesinternationally, irrespective of the originalhome market. So, for example, when we setup N+1 Deutschland, with a team of 12highly experienced professionals, it was notso much in order to establish a directfoothold in the burgeoning M&A market inGermany as to turn N+1 Deutschland into anentity with the ability to tap the group’s fullgeographic reach in order to better serviceits German clients. Multi-polar expansion alsomeans something else of significance: it isonly logical to be more active in the capitalmarkets business in London than in anyother market and in time our financialadvisory businesses in Germany and Francewill outsize our Spanish operations; (ii) eachtime we start up a business in a new marketwe do so with local partners, firstly becauseit is vital to possess deep and far-reachingmarket know-how in the mid-market (mid-cap clients and middle market transactions)segment and secondly, and perhaps moreimportantly, because diversity is good for theoverall group. Having to manage culturally

P.5INTRODUCTION

different approaches and viewpoints can bechallenging but adds tremendous value tothe group; (iii) the standard model whenexpanding abroad is to replicate thepartnership model wherever we go. Inorder to attract top talent, professionals withthe ability to self-manage and think forthemselves, we have to offer them thechance to build our undertakings as foundingpartners, hand in hand with N+1. We havealways held that he who takes risk shouldhave equity upside; (iv) we favour theprinciple of strict correlation betweenmanagement autonomy and assumptionof end responsibility. As a result, we try toally with enterprising professionals who arekeen to manage their businesses withsignificant autonomy and who by extensionultimately assume full responsibility for suchmanagement. The group provides theplatform, the management systems and jointbusiness strategy analysis but delegatesmanagement of the business in its localpartners, giving them full managerialautonomy.

The international investment bankingplatform

N+1 International Corporate Advisory is thegroup holding company that encompasses itscorporate finance activities in the sixcountries in which we have a presence today(UK, Germany, Italy, France, Turkey andSpain). It boasts 161 professionals: 97 infinancial advisory and 64 in equities. Thebusiness's strategy and cross-borderactivities are steered by a ManagementCommittee made up of partners from eachcountry which meets twice monthly. We coverseven sectors on a pan-European basis.Each sector coverage team is run by acoordinator. These teams foster the

platform’s cross-border activities in theirrespective sectors. The platform has jointlydeveloped: (i) a corporate intranet thatmanages the group’s marketing know-howand sector acumen; (ii) a corporate financialcontrol system; (iii) an audit system wherebyall the local operations and the platform itselfare audited by Deloitte; (iv) a trainingprogram; and (v) common operatingstandards and rules for resolving conflicts ofinterest.

In 2012 the platform closed 78 transactions,of which 34 mergers and acquisitions withan aggregate value of €3.2 billion, 23corporate debt advisory deals valued at €2.4billion and 21 capital markets transactions,raising a total of €450 million.

The merger between N+1 Brewin andSinger Capital Markets to form N+1Singer

The merger between N+1 Brewin, thegroup’s UK subsidiary, and Singer CapitalMarkets closed in September 2012. Theresulting entity, N+1 Singer, has emerged asthe number two player in the mid-capsegment in the British capital markets. Thecompany currently has 91 professionalsbased in London, Leeds, Newcastle andEdinburgh. The UK platform is corporatebroker to 119 clients, works with more than50 investment institutions and providesresearch coverage of 247 companies.Thanks to the efficiency of the N+1 Singerexecutive team, the merger was completed inrecord time, enabling the full leveraging ofthe platform’s combined resources from early2013. This is evident in the fact that in thefirst six months of this year, N+1 Singer hasraised €475 million in the capital markets forits clients, surpassing the sum of the funds

INTRODUCTION

The international investment banking platform

Tombstone published in March 2013 showing the main transactions closed by the Corporate Finance teams in 2012.

P.7INTRODUCTION

raised by both companies separately in all of2012.

On the other hand, N+1 Equities (Spain andPortugal) recently earned ninth place in aranking of 110 European brokers compiledby The Wall Street Journal.

N+1 Mercapital, a leading player in themid-cap private equity market

The merger of N+1 Private Equity andMercapital closed in early 2013 to form oneof the leading players in the mid-capsegment in the European private equitymarket. The newco, which has 25professionals and manages five investmentvehicles with aggregate assets of €1.1billion, manages a portfolio of 23 investees.This undertaking is similarly coming to lifewith strong international ambitions: the goalis to become the benchmark financial partnerfor Spanish and Latin American companieslooking to expand internationally in LatinAmerica. To this end, N+1 has offices inMadrid, Sao Paulo, Mexico City and Bogota.

2012 earnings performance

The economic and financial crisis continuesto undermine our earnings performance.Despite defending our bottom line year-on-year, posting net attributable profit of €10million, we are still only running at roughlyhalf of our run-rate in the years prior to the

crisis. Aggregate revenue came to €70.4 million (51% of which generatedoutside Spain), while consolidated revenueamounted to €44.3 million (year-on-yeargrowth of 4%). At year-end 2012, the grouphad assets under management totalling€3.33 billion (up 42% year-on-year)between private equity, real estate, energy,alternative equity funds and the assetsassociated with the private banking activitiesperformed by N+1 Syz.

Management

Lastly, as regards the group’s management,progress was made on several fronts in2012: (i) standardisation of the financial-administrative function around a commonSAP-based IT system and a single audit firm,Deloitte; (ii) rollout to all group companies ofa new corporate image and the revamp ofour corporate website (www.nplusone.com);(iii) global development of our customerrelationship management tool (CRM) and adedicated investment banking intranet; and(iv) performance of a workplace climatesurvey in which the entire organisation ratedqualitatively and quantitatively aspects suchas the group’s strategy, communication andHR policies, technical resources and officeinstallations. The result of all of theseinitiatives is a store of business intelligencethat will be of great use in managing ourcompany in the future.

THE N+1 GROUP

BILBAO

MADRID

SÃO PAULO

MEXICO

BOGOTA

WHO WE ARETHE N+1 GROUP

who we are

AN INDEPENDENTPARTNERSHIP

SPECIALISED INFINANCIAL ADVISORY

AND THE DIRECTMANAGEMENT OF REALASSETS

N+1 is a partnership, namelya company whose ownerswork for it on an exclusivebasis, taking ultimateresponsibility for itsperformance.

In our opinion, the partnershipmodel is the idealorganisational model forensuring the firm’sindependence, long-termsustainability as well as thehighest quality client servicestandards.

The firm provides end-to-endinvestment banking servicesto companies and institutionsand stands out for itsinternational reach, sectorspecialisation and strategicfocus on the middle market.

N+1 also offers Europe's topinstitutional investorsresearch and capital marketsbrokerage capabilities.

We also offer wealth advisoryservices to family officesunder a service propositionthat is unique in the Spanishmarketplace.

N+1’s asset managementdivision specialises in themarketing and managementof investment vehicles thatinvest directly in assets suchas renewable energies,properties and specialistequities as well as takingequity interests in privatecompanies.

Assets under management atthe end of May 2013 stoodat €3.46 billion.

BARCELONA

MILAN

LUXEMBOURG FRANKFURT

LONDON

LEEDS

NEWCASTLE

EDINBURGH

PARIS

ISTANBUL

P.11WHO WE ARETHE N+1 GROUP

THAT COMBINES ITSINTERNATIONAL REACHWITH A SOLID LOCALPRESENCE

PREDICATES ITSUNIQUE PROPOSITIONON THE TALENT ANDKNOWLEDGE OF ITSPROFESSIONALS

AND CARRIES OUT ITSBUSINESS ACTIVITIESUNDER REGULATORYSUPERVISION

We can only provide ourservices to the requiredstandards of excellence bycombining solid localfootprints and know-how withinternational reach,prerequisites in today’smarket for correctlyleveraging and providingcapital markets advisory andmanagement services.

The N+1 business model ispredicated solely andexclusively on the hard work,talent and knowledge of itsprofessionals, consistent withour partnership model.

When we do not possess in-house the know-how neededto manage or advise onspecific products or marketswe ally with specialists.

We are debt-free. Thegroup’s €22.3 million ofequity guarantees itsindependence.

The N+1 Group is supervisedby the Spanish securitiesmarket regulator, the CNMVfor its acronym in Spanish, inits capacity as a consolidatedgroup of investment serviceproviders; in the UK, N+1Singer is regulated by theFCA, in its facet as providerof advisory, corporate brokingand brokerage services in theBritish capital markets.

In Spain, N+1 carries out itsregulated activities throughtwo private equitymanagement companies, twocollective investment schememanagement companies, onedealer and one broker.

The Group has been auditedby Deloitte since itsincorporation.

KEY METRICSTHE N+1 GROUP

key metrics

FINANCIAL METRICS

2010 2012

42.8 44.3

2011

42.645.3

70.4

46.1

Net revenue Aggregate revenue*

64.6%

35.4%

Asset management

Advisory

ATTRIBUTABLE NET PROFIT

2012

10.0

2010

12.6

2011

10.1

EQUITY

20122010

22.320.7

2011

22.8

EBITDA

20122010 2011

15.9

17.5

15.5

REVENUE

€, mn

* Aggregate revenue is the sum of revenue of the investees over whichthe N+1 Group has control or joint control. Net revenue is the revenueconsolidated by the parent of the N+1 Group in its financial statementsunder prevailing accounting standards.

P.13KEY METRICSTHE N+1 GROUP

€, mn 2011 2012 2013(1)

Assets under management or advisory 2,346 3,325 3,464

Real assets 1,820 2,626 2,688

Financial assets 526 699 776

ASSETS UNDER MANAGEMENT

HUMAN RESOURCES

2010 2011 2013*2012

152

210

285

259

BY INVESTMENT CLASS

22.4%

77.6%

Financial assets

Real assets

BY INVESTOR CLASS

42.5%

57.5%

Institutional investors

Families

HEADCOUNT

(*) As of 31 May 2013 (*) Transaction pending of final closing

(1) Assets under management as of 31/5/13.

33%

41%10%

5%5%

1%

2% SpainUnited KingdomGermanyTurkey*FranceItalyBrazilColombiaMexicoLuxembourg

HEADCOUNT BY COUNTRY

STRUCTURETHE N+1 GROUP

products and services

FINANCIAL ADVISORY

(*) Transaction pending of final closing.

Financing

COMPANIES

Mergers & acquisitions Capital Markets

Structured financingRefinancingsPre- and post- bankruptcy filingproceduresDistressed debt

GERMANY

SPAIN

FRANCE

ITALY

UNITEDKINGDOM

TURKEY*

UNITEDKINGDOM

SPAIN

INSTITUTIONS

Equity research, sales and block trades

FAMILY GROUPS

Wealth Advisory

Mergers & acquisitions, Capital Markets, Financing and Debt

Mergers & acquisitions

Incorporation of financial/

strategic investors

Disposals

LBOs

Block tradesAccess to the capital markets andfund-raisingPolicies for creating shareholdervalueCorporate broking

Alternative financing

Advising and placing of corporate

debt to institutional investors

(insurance companies, pension

funds and asset managers)

SPAIN

P.15STRUCTURETHE N+1 GROUP

DIRECT ASSET MANAGEMENT

PRIVATE EQUITY

Management buy out, management buy in, build up and growth capital transactionsfor unquoted middle market companies.

QMC PRODUCTS

Acquisition of stable shareholdings in listed European mid-caps withhigh growth potential. EUROPE

REAL ESTATE

GERMANY

LUXEMBOURG

UNITEDKINGDOM

Origination of proprietary deal-flow and execution of investments and sales

Transactions structuring from a tax and financial perspective

Property management

Investor relations

RENEWABLE ENERGIES

EUROPE AND

AMERICAPrivate equity management specialized in renewable energy projects

BRAZIL

COLOMBIA

SPAIN

MEXICO

Global advisory in the real estate asset management:

GROUP PERFORMANCE IN 2012

MILESTONESGROUP PERFORMANCE IN 2012

milestones

JANUARY FEBRUARY MARCH

• N+1 Corporate Financeranked leading global advisoron refinancings (#2 in Spain;#7 in Europe and #12worldwide) by ThomsonReuters.

• Trinova Real Estate acquirestwo office buildings in the Cityof London for lease on behalfof Swedish investor groupStena AB. The buildings(Holland House and RenownHouse) have an aggregateleasable area of 5,074m2.

• New edition in the Madridoffice of the “Communication I”training program targeted atpartners, directors and VPs.

• Growth in the Capital Raisingeffort, which already had ateam in Madrid, with thecreation of a London-basedteam.

• N+1 Easton (France) advisesGroupe Monoprix and itssubsidiary Naturalia on theacquisition of Serpent Vert, anorganic product retail chain.

• Second meeting of the N+1Group’s Corporate Financeplatform, held in Milan.

• N+1 Brewin (UK) advisesCroma on the acquisition ofCSS Companies.

• Phase I of the three-year “N+1Forest” program encompassingthe gradual plantation of twohectares of forest in Toledo(Spain). N+1 employees andtheir relatives participated inthe planting work.

• 2011 earnings presentation:the N+1 Group posts net profitof €10.1m in a year marked byinternational expansion.

JULY AUGUST SEPTEMBER

• N+1 Private Equity andMercapital announce they arejoining forces to reinforce theirinternational expansion,creating the leading privateequity player in Spain with over€1.1bn under management.

• N+1 merges its Britishsubsidiary, N+1 Brewin, withSinger Capital Markets tocreate one of the leading mid-cap company investmentbanking firms in the UK.

• The funds managed by N+1Private Equity close the sale oftheir investee ZIV to India’sCrompton Greaves, implying arealisation multiple of 3.5x.

• N+1 Corporate Finance(Spain) advises InmobiliariaChamartin on the sale of twoproperties in Portugal toPortuguese fund ECS for€200m.

• First mandate jointly originatedby the Spanish and TurkishCorporate Finance teams.

• Trinova Real Estate closes theacquisition of an office buildingin London's Docklands district.

• Dinamia, Spain’s sole listedprivate equity firm, managed byN+1 Private Equity, sustains aremarkable equity marketperformance between July andAugust, underpinned by highertrading volumes than in thefirst six months of the yearcombined.

• Cross-border origination: firstmandate jointly sourced by theSpanish and Italian teams toadvise on the acquisition of anItalian company and the firstmandate originated by theSpanish and UK teamscovering a potential acquisitionin the UK by a leadingEuropean healthcare provider.

• The funds managed by N+1Private Equity acquire 55% ofSecuoya Grupo deComunicación with a view tocreating the leading provider ofaudiovisual content in Spain.

• N+1 Singer begins to operateas a single company followingthe close of the mergerbetween N+1 Brewin andSinger Capital Markets.

P.19MILESTONESGROUP PERFORMANCE IN 2012

APRIL MAY JUNE

• N+1 Syz (Italy) advises OroCash on the sale of a majorityinterest in the company toprivate equity funds J. Hirsch &Co. and Progressio.

• Eolia Renovables closes thesale of its French pipeline toIMPAX.

• N+1 Brewin (UK) begins topublish "The Nth degree", anew monthly publicationcontaining its strategy ideasand brief overviews of morethan 60 companies.

• N+1 Private Equity holds itstenth annual institutionalinvestor meeting.

• Sahill Shan, of N+1 Brewin,chosen “Best stock picker” inthe Hotels and Leisure sectorby Starmine.

• N+1 extends its investmentbanking and alternative assetmanagement businesses toTurkey, signing an agreementwith Daruma CorporateFinance and creating N+1Daruma.

• N+1 Syz Italy advises LightForce (one of the leadingItalian fashion houses withbrands such as Twin Set andSimona Barbieri) on the sale ofa majority interest in thecompany to The Carlyle Group.

• PlusAlpina, the Group’sGerman real estate division,closes the acquisitions of twooffice buildings, one inStuttgart and one in Munich.

• N+1 Daruma (Turkey) advisesOrion Group on raisingmezzanine financing.

OCTOBER NOVEMBER DECEMBER

• Trinova Real Estate acquires abuilding in the City of London -24 Lime Street - for a Nordicinvestor, marking the secondacquisition made by thisinvestor through Trinova.

• 20th edition of the Real DealsPrivate Equity Awards: N+1ranked #1 Corporate Financehouse in the Mediterraneanregion.

• New offices: N+1 Singermoves its head office to OneBartholomew Lane, in the Cityof London, alongside the Bankof England and the LondonStock Exchange. Meanwhile,the Barcelona office moves toPaseo de Gracia 101, oppositeGaudi’s famous Casa Milà.

• N+1 Mercapital acquires an80% interest in Betapack,Spain’s leading maker of plasticlids (and the #3 player inEurope) and its Braziliansubsidiary, Mirvi.

• Creation of N+1 CreditSolutions, a new N+1 Groupcompany specialised in advisingour European clients onalternatives to bank financingwith teams based in Londonand Madrid.

• Workplace climate surveytargeted at all the professionalslocated in the Group’s offices inSpain with a participation rate ofclose to 90%. The feedbackfrom this survey is used todesign and implement newpolicies and initiatives at thefirm.

• The N+1 Group’s investmentbanking team ends 2012having closed 78 transactions,raised €450m of funds for itsclients in the British capitalmarkets and advised on debtrestructuring transactions withan aggregate value of €2.44bn.

• EQMC Fund ranked the best-performing fund in 2012(return: 23%) according toInverco (acronym in Spanish forthe Spanish Association ofCollective Investment Schemesand Pension Funds).

• The annual Christmas driveorganised by the CSR teamcollects over 400kg of food andmore than €2,000 in cash.

PERFORMANCE BY BUSINESS DIVISION

INVESTMENT BANKING


performance by business division

In investment banking, one of the group’score businesses, N+1 has established itselfas a benchmark advisor in the Europeanmid-market.

To defend and enhance this position we havebeen moving in a dual direction in recentyears: on the one hand, by building a fullyEuropean platform, which in our mindnecessitates a presence on the ground (thegroup currently has local teams in sixcountries – Germany, Spain, France, Italy, theUK and Turkey); and by widening our offer ofspecialist services in order to meet ourclients’ needs, on the other.

Our strategy in this business therefore canbe broken down into the following five linesof initiative:

• Maintaining our strategic focus on the mid-cap segment, meaning companies withenterprise values of between €50 and€500m.

• Consolidating the integration of ourbusinesses across our multiple markets inorder to reinforce our cross-borderplatform.

• Deepening our sector specialisation. To thisend we have added coverage of the mediaand tech sector, bringing the number ofsectors we cover across our pan-Europeanoperations to seven.

• Increasing the scope of our debt advisorysolutions to include not only refinancingactivity but also alternative fund-raising andadvising on how to optimally structurefinancing transactions.

• To this end we have set up N+1 CreditSolutions to advise companies on thesearch for and raising of financing frominstitutional investors specialised in theprovision of credit.

• Developing our capital markets business.

• Mergers & acquisitions

- M&A activity - Investor targeting - Disposals - LBOs

• Financing

- Structured financing - Financial restructuring - Pre- and post- bankruptcy filing procedures - Distressed debt

• Capital markets

- Block trades - IPOs and fund-raising - Shareholder value creation policies - Corporate broking

• Alternative financing

- Advising on and/or placing corporate debt withinstitutional investors (insurers, pension fundsand asset managers)

INVESTMENT BANKING

P.21PERFORMANCE BY BUSINESS DIVISION

INVESTMENT BANKING


A common feature of mid-market corporatetransactions is their increasingly internationalprofile. European companies are looking toincrease their presence abroad, whileinternational investors are beginning to spotattractively-valued investment opportunities inthe mid-market. Against this backdrop, weanticipated the need to complement our team’sacumen in cross-border transactions - proven inrecent years - with a network of local teams,which currently cover Germany, Spain, Italy,France, the UK and Turkey.

SPECIALISATION IN THE MID-MARKET

Sector specialisation is vital to the provision ofservice in the middle market at standards ofexcellence and professionalism equivalent tothose sought in large cap cross-border deals.

N+1 articulates its investment banking teamsaround sector specialisation. It has local teamscovering the following seven sectors: industry,consumer goods and retail, construction andbusiness services, healthcare andpharmaceuticals, energy, real estate andtechnology and media.

DEEP SECTOR KNOW-HOW

In an environment marked by substantiallytighter access to financing than in the recentpast, the ability to help our clients to tap thecapital markets has become a criticalcomponent of our service suite.

Through our equities teams in Spain and theUK, a service that complements the investmentbanking platform, N+1’s clients are guaranteedaccess to the local capital markets and to theleading European and global institutionalinvestors.

In the first six months of 2013, our dedicatedcapital markets specialists have raised €475million for their clients.

Against the backdrop of an extreme bank creditcrunch across Europe, triggered by botheconomic and regulatory factors, our mid-marketclients are asking for alternative ways to financetheir operations.

In order to meet this need, at the end of 2012the Group set up N+1 Credit Solutions, a teambased on London that will advise Europeancompanies on raising financing from variousinstitutional sources: insurers, pension funds andasset managers.

ACCESS TO THE CAPITAL MARKETS ALTERNATIVE FINANCING


INVESTMENT BANKING


The highlights in our investment bankingdivision in 2012 are summed up below:

• We reinforced our presence in the UK withthe creation of N+1 Singer, a market leaderin the mid-market segment. The company,which boasts 119 clients and 24 researchanalysts, covers 247 companies and hasestablished itself as one of the maincontenders in the capital markets advisorysegment. In 2012, N+1 Singer placed€450m of securities on behalf of itsclients. It has already beaten thisperformance in 2013, having raised€475m for its clients in the first six monthsof the year.

• More recently we have established apresence in Germany in order to round outour coverage of the main Europeanmarkets. We have set up with a team of 12Frankfurt-based professionals. The teamhas been working together for over 13years; in the last three years it has advisedon 18 transactions with an aggregate valueof €1.8 billion.

• In 2012 the Spanish investment bankingdivision closed 13 transactions valued at€2.5 billion in total, despite an extremelychallenging economic backdrop. It is worthnoting the growing momentum on the M&Afront, with five deals completed, whilerefinancing transactions remained verydynamic at eight transactions closed.

• Among the deals closed it is worthhighlighting N+1’s role as financial advisorto Betapack’s shareholders on theacquisition of a majority interest byMercapital (in what was one of the mostimportant private equity transactions in

Spain last year). Also worth highlightingwas our role as financial advisor toCondesa, one of the world’s leading steeltube makers, on its refinancing effort, andthe advisory to Maxam on the acquisition of49.9% of the company by AdventInternational (N+1 Spain)

• The real estate sector continues to accountfor a significant number of the refinancingtransactions advised on, with the advisoryservices provided to real estate groupChamartín and property developer Vertixstanding out, among other deals.

• In only its second year of operations, ourItalian team closed two of the mostimportant transactions taking place in themarket in 2012, advising the shareholdersof Oro Cash on the sale of a majorityinterest to J. Hirsch & Co and Progressioand advising Light Force on the sale of amajority interest in Twin-Set to The CarlyleGroup. After year-end we closed the Marnitransaction, in which we advised thecompany’s shareholders on the sale of amajority interest to Only The Brave (DieselGroup). Meanwhile, we continued to expandthe team.

• In Turkey the transactions standing out in2012 include our role as financial advisorto Lodos Karaburun Elektrik on raising$160m of project financing, the advisory toOrion Group in raising €30m of mezzaninefinancing, the advisory to Graniser in thesale of a majority stake to Bancroft, and theadvisory to Hema Group on its mezzaninefinancing.

• In parallel we have further consolidated ourEuropean platform and enhanced its

Business in 2012


INVESTMENT BANKING


management structure. To this end we havereinforced the business’s organisational andmanagement structure with a ManagementCommittee on which all of our localinvestment banking operations arerepresented. This governing body oversees

and supervises the business and is taskedwith designing and implementingorganisational and management policies.We have similarly set up pan-Europeansector committees tasked with executingbusiness operations.

SNAPSHOT OF 2012

161 investment banking professionals

6 European markets

78 deals closed between mergers and acquisitions advised on, capital markets transactions and debt advisory work

34 M&A transactions - aggregate value of deals brokered: €2.98 billion

23 debt advisory transactions - aggregate value of debt refinanced: €2.44 billion

21 capital markets transactions - aggregate funds raised: €450 million


INVESTMENT BANKING


Industrial Spain • The Group advised Maxam on the acquisition of 49.9% of thecompany by Advent International (N+1 Spain)

Germany • The Group advised Tyrol Equity on the sale of SUSPA GmbH to fundsadvised by Andlinger & Co. (N+1 Germany)

Spain • The Group acted as financial advisor to Grupo Condesa on therestructuring of its debt with 13 financial institutions (N+1 Spain)

Spain • The Group advised Minersa on the acquisition of 19.4% of Crimidesa(N+1 Spain)

Spain • The Group advised Betapack on the sale of an 80% interest toMercapital (N+1 Spain)

Consumer Italy • The Group advised Oro Cash on the sale of a majority interest in thecompany to Luxembourg fund ILP and Italian fund ProgressioInvestimenti (N+1 Syz Italy)

Italy • The Group advised Light Force on the sale of a majority interest in thecompany to The Carlyle Group (N+1 Syz Italy)

France • The Group advised Monoprix and Naturalia on the acquisition ofSerpent Vert (N+1 Easton)

France • The Group advised Grupo Campofrio on the sale of a majority interestin Jean Caby to Foxlease Food (N+1 Easton)

France • The Group advised a group of shareholders in St. Amand on the saleof their shareholding to Alma Group (N+1 Easton)

Real Estate Spain • The Group advised Vertix on the restructuring of its debt with sixfinancial institutions (N+1 Spain)

France • The Group advised Medica France on the sale and leaseback of itsreal estate portfolio for €131m (N+1 Easton)

France • The Group advised Montefiore Investment on the sale of a minorityinterest in Homair Vacances to Naxicap Partners (N+1 Easton)

France • The Group advised Société de la Tour Eiffel on the sale of its portfolioof regional clinics (N+1 Easton)

Spain • The Group advised Inmobiliaria Chamartin on the sale of real estateassets (N+1 Spain)

KEY TRANSACTIONS CLOSED IN 2012 (PUBLICLY DISCLOSED)

sector

goods


INVESTMENT BANKING


Healthcare France • The Group advised Almaviva on the acquisition of Axium Group (N+1Easton)

UK • The Group advised Summit on a block trade (N+1 Singer)

UK • The Group advised BioMedica on its fund-raising (N+1 Singer)

UK • The Group advised Silence Therapeutics on its fund-raising (N+1Singer)

UK • The Group advised Oxford Pharmascience on a block trade (N+1Singer)

Services Spain • The Group provided strategic advisory services to Esteban Rivas (N+1Spain)

Turkey • The Group advised Orion Group on the acquisition of a facilitymanagement and maintenance firm (N+1 Daruma)

Spain • The Group advised Aterga on the subscription of an equity loan (N+1Spain)

Turkey • The Group advised Orion Group on raising mezzanine financing (N+1Daruma)

UK • The Group advised Melrose Resources on a scheme arrangement(N+1 Singer)

FIG UK • The Group advised Ground Rents Income Fund Plc on a block trade(N+1 Singer)

Germany • The Group advised Universal Investment on the sale of a 20% interestin the company to Berenberg Bank and Bankhaus Lampe (N+1Easton)

UK • The Group advised Carador on a block trade (N+1 Singer)

UK • The Group advised Raven Russia on a block trade (N+1 Singer)

UK • The Group advised Plus Markets Group on the sale of a subsidiary(N+1 Singer)

business

processes


CAPITAL MARKETS


Through two teams specialised in capitalmarkets coverage (one based in the UK andthe other in Spain), N+1 offers institutionsresearch (ongoing research of 300companies), sales and equity and otherproduct placement services, having raisedover €10.8 billion for its clients in the last 10years.

The UK platform is operated under a fullscope licence, while the Spanish isstructured as a sociedad de valores.

N+1’s client proposition, predicated on threecore values - independence, specialisationand access to the European capital markets- has earned it accolades in the industry.

In 2013, the Wall Street Journal, whichanalysed 110 research houses and over1,300 research analysts in 11 countries forthe WSJ’s 2013 survey of Europe’s bestanalysts, named N+1 Equities one of the topten European brokers.

Meanwhile, the Extel report confirmed N+1Singer as one of the top 5 brokers in the UKby number of corporate clients (119 at thedate of publishing this report).

2012

In 2012, with the industry in the full swing ofconsolidation, N+1 Brewin (the N+1 Group’sinvestment banking division in the UK)merged with Singer Capital Markets, givingrise to one of the leading firms specialised inthe provision of corporate advisory servicesand capital markets fund-raising in theBritish middle market.

With a team of 91 professionals between theinvestment banking and capital marketsefforts located across the platform’s officesin London, Newcastle, Leeds and Edinburgh,N+1 Singer offers its corporate clientscorporate finance, institutional sales andresearch, trading and market makingservices. Its equity research division, made upof 24 analysts, covers a universe of 247stocks in 10 major sectors.

Since the merger closed in September 2012,the sales and trading team, comprising 33professionals, has amply demonstrated itsplacement capabilities: in the first six monthsof 2013, it raised a total of €475m for itsclients.

2012 was another difficult year in the equitybrokerage business in Spain and Portugal.The platform’s trading volumes contractedagain in 2012, this time by 25%, as prices(the IBEX 35 benchmark index) droppedanother 5%, adding to the sharp correctionsustained since 2007.

CAPITAL MARKETS

Rank Broker

1 HSBC Securities

2 UBS

3 Deutsche Bank Research

4 Numis Securities

=5 Peel Hunt llp

=5 Panmure Gordon

7 Commerzbank Corporate & Markets

8 Société Generale

=9 Close Brothers Seydler

=9 N+1 Equities

TOP 10 BROKERS (EUROPE-WIDE)

Source: Wall Street Journal


WEALTH ADVISORY


N+1 provides private banking and wealthadvisory services in Spain through its alliancewith Switzerland’s Syz & Co. With offices inMadrid, Barcelona and Bilbao, this 30-strongteam advises high net worth individuals (> €1million).

In its second year in existence, the privatebanking division consolidated its reputation inSpain as an independent high net worthadvisor.

The Spanish financial system paradigmgenerates important niches for specialisationwhich translates into value creation for clientsand aligns both parties’ interests. N+1 Syz is afine example of this business model:personalised service; team track record,maximum dedication guaranteed by thelimited number of clients allocated to eachprofessional; ongoing search for the finesttalent (in-house or external); and lack ofconflicts of interest.

Business in 2012

The high level of commitment and skillsassociated with this endeavour translatedinto a net asset intake of €139m last year,of which €124m were new assets undermanagement and €15m, new assets underadvisory. All this, despite a tremendouslychallenging year for the markets. As a result,N+1 Syz had €700m of assets undermanagement/advisory at year-end.

This performance is the result of a valueproposition that is unique in the industry asthe idea is to service any investmentrequirement a client may have. It is novel interms of both the relationship model (type ofadvisory services, management, pricestructure, etc.) and the services offered.

Despite this challenging backdrop, withequity market investors focusing far more toeconomic indicators and financial markettensions than to individual listed companies'performances, 2012 was an extremely

positive year for N+1 Equities. The company,which covers some 60 stocks, ended upregistering growth in brokerage fees of 32%in 2012.

WEALTH ADVISORY


ASSET MANAGEMENT


asset management

N+1 Mercapital is the leading private equityplayer in Spain with over €1.1bn of assetsunder management. The entity is the resultof the merger agreed in 2012 betweenMercapital (founded in 1985) and N+1Private Equity (founded in 1990), the N+1Group’s private equity division.

The investment strategy is based on thefollowing premise: globalisation throws upmultiple opportunities for helpingexperienced medium-cap companies with‘exportable’ goods and services to pursuegrowth. These target companies are firms

that, whether in Spain or Latin America,having focused initially on their homemarkets, are following the lead of the large-cap Spanish companies and the so-called‘multi-Latinas’, challenging the incumbentplayers in their respective industries.

The goal is to identify companies that fit thisprofile and provide them with the financialand management support required tofacilitate their international expansion. N+1Mercapital provides this support mainly in itsfour operating markets, whose appeal issummed up in the map below.

PRIVATE EQUITY: UNLISTED COMPANIES

Mexico D.F.

Bogota

São Paulo

Madrid

Mexico

Rigorous economic policies

Stable growth based onexpansion of the emergingmiddle class and convergencewith the US economy

Open economy with investment-friendly legislation

Andean region

Politically and economically stable,economies that are open to tradeand foreign investmentEconomies whose developmentneeds capital and managementskills

The private equity business is stillonly incipient

Spain

Growing number of competitive medium-sized companies with internationalexpansion strategies and ambitions

The structural reforms being rolled outare expected to facilitate economicrecovery from 2014

N+1 Mercapital boasts a leading positionin the market

Brazil

Solid economic fundamentals that will pave the wayfor continued economic growth

Local companies are beginning to expand abroad

Scarcity of asset managers in the middle marketsegment


ASSET MANAGEMENT


Size

Middle market Equity investments: €25-150m

Investment criteria

• Top class management teams • Leaders in their respective

niches/sectors • Exportable competitive

advantages • International growth plays

Key sectors

• Healthcare • Food • Consumer goods and services • Business services • Industrial goods • Infrastructure

INVESTMENT CRITERIA

N+1 Mercapital is positioning itself withinthis context by leveraging five competitiveadvantages:

• Extensive proven investment track record:the team has invested €2.6 billion in 107companies (and made more than 80follow-on investments in its portfoliocompanies) in the sectors spearheadinggrowth in Spain and those currentlydriving development in Latin America.

• Experience in Spain: since starting up in1985, the Spanish economy and itsprivate equity industry have sustainedcontinuous growth and development. Theeconomies of Latin America are currentlytracing out a similar path, etching outgrowth that is expected to continue overthe course of the next decade.

• Presence in Europe and Latin America:with offices in Madrid, Sao Paulo, MexicoCity and Bogota, N+1 Mercapital can

originate dealflow in Spain and Portugalas well as in the key Latin Americanmarkets either directly or throughagreements with local partners.

• The investment team is one of the largestand most experienced on the Europeanprivate equity scene. It comprises 25professionals from Spain and LatinAmerica; between them they boast over200 years’ experience in the private equityindustry. Our Advisory Board, made up ofa group of executives with in-depthknowledge of their respective industries, ishelping us to identify investmentopportunities and add value for ourinvestees.

• Membership of the N+1 Group gives theprivate equity platform greater andenhanced access to businessopportunities, institutional investors andprivate banking clients around the world.


ASSET MANAGEMENT


Company Sector Interest Investment(%) (€,m)

Probos Home decor and furniture 97 46Rubaiyat Premium restaurants 70 49Secuoya Audiovisual services 55 14Betapack Plastic lid manufacturers 74 36Clece End-to-end business services 24 80Mivisa Tin packaging manufacturer 11 34TRYO Electric equipment 98 40EYSA Car parks 100 54Panasa Frozen bread and pastries 53 109MBA Distribution of surgical implants 74 64Ossa Construction of tunnels and underground works 77 67Q Diagnostica Medical imaging diagnostics 97 82Alcad Telecommunications 75 20Xanit Private hospital 67 51Arsys Domain name registration and hosting 38 29Nuter Animal feed 31 35Laude Private education 98 37Novolux Exterior lighting distributor 95 24Bodybell Perfume and cosmetics chain 78 110High Tech Hotel chain 52 31Jofel Industrial hygiene products 52 33Arco Wineries 8 17Nicolás Correa Anayak Manufacture of heavy machinery 2 5

N+1 Mercapital currently manages threefunds:

• Mercapital Spanish Buyout Fund III,closed in 2007 with committed capital of€550m. The investment strategy is toacquire controlling interests in medium-cap companies via buyouts in Spain andPortugal.

• N+1 Private Equity Fund II, closed in2008, with committed capital of €304mfor taking majority interests in companiesin Spain and Portugal.

• Dinamia Capital Privado, Spain’spioneering listed private equity company,with a net asset value of close to €150m.

N+1 Mercapital’s investors include some ofthe leading Spanish and internationalinstitutional investors, pension funds,insurance companies, funds of funds andfinancial institutions, among others.

These investors’ confidence in this platformgives N+1 Mercapital the ability to raiseadditional financing to the capital committedto these funds as they tend to co-invest inlarger-scale transactions.

N+1 Mercapital’s current portfolioencompasses companies in the hands offirst-class management teams that areleaders in their respective markets andwhose strategic priority is internationalexpansion.

The percentage of portfolio companyrevenue that is generated abroad is on therise: revenue generation outside Spain isexpected to jump from 30% of total sales atthe time of upfront investment to around60% upon exit, with Latin Americaaccounting for a very significant percentageof international sales.


ASSET MANAGEMENT


In all of 2012 and so far in 2013, N+1Mercapital has been the most activeplayer in the middle market segment. Intotal it has concluded five investmentsand seven exits during this period. It hasinvested in the following companies:

• Probos: global leader in the provision ofthermoplastic edges for the furnitureindustry with factories in Portugal andBrazil. The company plans to expandinto new emerging markets leveragingits technological and distributionprowess and opening newmanufacturing bases in Russia andMexico.

• Betapack: leader in the production ofplastic lids in Brazil and Europe thanksto its unique manufacturing efficiencyand ability to continually innovate. Thecompany’s strategy is based on tappingthe sharp growth in demand forconsumer products in Latin America.

• Rubaiyat: a Spanish-Brazilian chain ofrestaurants specialised in premiummeats. The chain is planning to expandits business into Brazil, Mexico,Colombia and Chile, leveraging itsprestigious brand and distinctive diningproposition.

• Grupo Secuoya: provider of audiovisualservices, both content production and

the provision of outsourced services fortelevision broadcasters. It is benefittingfrom the industry shift towardsoutsourcing and the scope for tappinggrowth opportunities in Latin Americaby exporting content to localbroadcasters and/or allying with them.

• Clece: leading Spanish provider of end-to-end business services such ascleaning, maintenance, logistics,catering and employee services. Thecompany is in the process of enteringthe Latin American market, whichpresents multiple growth opportunities,by means of select acquisitions.

On the disposal front, last year theplatform sold its investment in HolmesPlace (health club chain), Bodegas Lan(wineries), Lasem (manufacturer offrozen dough and oleochemicals), Blinker(distributor of welding and assemblyproducts and systems for industrialsectors) and O2 Centro Wellness (fitnesscentres); however, its exits from ZIV(provider of services and products forelectric utilities), which generated arealisation multiple of 3.7 times theinvestment cost, and Gasmedi (providerof medicinal gases), at a realised exitmultiple of 2.4x, are the disposals thatstand out.


ASSET MANAGEMENT


QMC’s investment strategy is predicated onacquiring stable shareholdings in listedEuropean mid-caps, generally capitalised atless than €1bn; investees display significantgrowth potential and scope for participationin looming sector consolidation.

These funds stand out for the application tomid-caps of the proprietary know-how builtup in private equity/venture investing, whereN+1 has an extensive track record.Investments are substantial, usually over 5%,albeit always minority. And although QMCdoes not participate directly in thecompanies’ day-to-day management, it doeslend support to investee management teamsin their strategic management, mainlythrough board representation and by makingproposals devised to help create value.

There are currently three products inoperation:

• The QMC fund, which targets investmentopportunities in Spain and Portugal; it waslaunched in 2003 and received €146m ofcapital from its investors. The fund hasreturned over 90% of the capitalcontributed to its investors and presents

substantial capital gains on the portion ofthe portfolio pending divestment. Theinvestments fully divested by the fundhave generated proceeds totalling €150mcompared to initial invested capital of€110m (implying a net realised gain of€40m), as well as €18m of dividendpayments. This sums to a return on fullydivested investments of 1.5x initial capital.

• Throughout the life of the fund, QMC hasoutperformed its benchmark index, theIBEX Small Cap index, by 61%.

• EQMC Europe Capital Development Fund,launched in June 2006, which is the firstpan-European fund created and marketedby N+1. Its approach is to invest in listedcompanies, mainly on the German, Italian,French, UK, Scandinavian and Beneluxequity markets. EQMC is an evergreenfund with over €100m of assets undermanagement at present.

• EQMC FIL, launched in 2011, is a vehicletargeted at Spanish investors andsponsored by N+1 in order to co-investwith the EQMC fund in listed Europeancompanies.

SPECIALIST EQUITY FUNDS: QMC PRODUCTS

QMC DEVELOPMENT CAPITAL FUND, EQMC DEVELOPMENT CAPITAL FUND Y EQMC FILInvestees*

CIE (SP)

Adveo (SP)

WashTec (GE)

Grammer (GE)4

51

2

3

12

73

4

* Does not include seed investments

6

7

8

5

86

AGR (NO)

Speedy Hire (UK)

SKW (GE)

May Gurney (UK)


ASSET MANAGEMENT


QMC Development Capital Fund

Throughout 2012 the QMC fund’smanagement team worked on theprocess of divesting its investments inorder to uphold its commitment to itsinvestors.

The fund’s portfolio is currently highlyconcentrated in two investees thatperformed well in 2012 despite thechallenging economic climateengulfing southern Europe, thanks totheir international footprints.

This business performance wasmirrored in the fund’s outperformancerelative to its benchmark indices: thevalue of the QMC fund corrected by6% in 2012, compared to a correctionin the IBEX Small Cap index of 24%.

The team’s active managementstrategy focused on initiativesdesigned to unlock the intrinsic valueof the portfolio companies. The mostimportant of these initiatives aresummarised below:

• CIE Automotive: support for themanagement team in pursuinginitiatives in new high-growthmarkets (Russia, India and China).

• Adveo: active collaboration on thegroup’s new business plan followingthe successful and transformationalacquisition of Spicers with a view toconsolidating the company as thepan-European leader in the officematerials and consumableswholesaling business.

EQMC Development Capital Fund

In 2012 EQMC’s management teamcontinued to focus strategically onhigh-quality competitive companieswith exposure to global businesses.The main portfolio investmentscontinue to be located in the Europeaneconomies with greatest exportingimpetus and/or presenting morerobust economic variables (Germany,Scandinavia, the UK). This has led theway for continued investee growth andshareholder value creation despite thewidespread slowdown affecting mostof Europe. The EQMC fund revaluedby 22% in 2012.

EQMC’s management team divestedsomewhat over one-third of the fund in2012, mainly as a result of M&Aactivity (c.88% of the exits realised),thereby unlocking some of theportfolio’s hidden value.

In parallel it made new investments,announcing last year new investmentsfor the fund (e.g. May Gurney),concluding follow-on investments inexisting portfolio companies (e.g. SKWand Speedy Hire) and partially closingother investments yet to beannounced.

The following portfolio companytransactions stand out:

• Takeover bid for Augusta Technologiepresented by the TKH group.

• MBO spearheaded by themanagement team of Belgium’sTransics.

• Sales of non-core divisions by ourinvestees that contributed tounlocking value, enhancing theircapital structures (AugustaTechnologie) or responded to otherunique situations (the AGR ‘superdividend’).


ASSET MANAGEMENT


N+1 Eolia is one of the leading Europeanprivate equity managers specialised inrenewable energy developments. Themanagement team has built up tremendoussector experience. Since its incorporation ithas managed two funds - Eolia Mistral(2005) and Eolia Gregal (2006). CurrentlyN+1 Eolia manages Eolia Renovables, avehicle that invests in renewable energygeneration assets which at year-end 2012had a net asset value of €273m.

Throughout its history, N+1 Eolia hasinvested in over 50 renewable energydevelopments, having analysed more than150 investment opportunities in variousEuropean countries. The management teamhas also negotiated over 900 MW of turnkeyand wind turbine supply contracts, securingnon-recourse financing of over €1.27bn,cementing solid relationships with Spain’sleading financial institutions along the way.

The division’s strategy consists of offering itsinvestors attractive returns by investing in

generation assets powered by renewableenergy and their subsequent operation ordisposal; the team boasts a proven trackrecord in successfully divesting these assets.

EOLIA RENOVABLES

Eolia Renovables is one of Spain’s leadingindependent investors specialised in assetsthat generate power from renewablesources.

Since its incorporation, Eolia Renovables hascemented a portfolio of wind and solar powerprojects with aggregate capacity in operationof 663 MW, of which 54 MW correspond tophotovoltaic solar projects up and running inSpain.

PRIVATE EQUITY: RENEWABLE ENERGIES

KEY METRICS (CONSOLIDATED), EOLIA RENOVABLES

2012 2011 % Chg.YoY

Revenue (€ 000) 134,431 122,221 10.0%Revenue from sales (€ 000) 133,400 118,749 12.3%

Wind power 94,732 80,534 17.6%

Photovoltaic solar power 38,668 38,216 1.2%

Other operating income (€ 000) 1,031 3,472 -70.3%EBITDA (€ 000) 104,232 91,660 13.7%

Attributable installed capacity (MW) 663 546 21.4%Wind power 609 492 23.7%

Photovoltaic solar power 54 54 0.5%

Attributable output (MWh) 1,244,797 1,070,534 16.3%Wind power 1,143,963 974,596 17.4%

Photovoltaic solar power 100,834 95,938 5.1%

Average energy sale price (€/MWh) 107 111 -3.5%


ASSET MANAGEMENT


The following asset sales marked thekey milestones of 2012:

• Sale of the French pipeline (103MW) to Impax (specialist renewableenergy investment fund)

• Sale of a wind farm development inCanada (30 MW) to EDPRenovaveis

• Commissioning of 152 MW of windpower capacity in Spain:

- Phase II of the Sant Antoni windfarm with capacity of 37.5 MW

- Monclues wind farm with capacityof 30 MW

- Les Rotes wind farm with capacityof 44 MW

- Barbers wind farm with capacity of30 MW

- Phase III of the Majogazas windfarm with capacity of 10.5 MW

According to the Spanish wind powerbusiness association, the AEE, as of31 December 2012, Eolia Renovableswas the number six ranked player inSpain by accumulated installedcapacity and the number two operatorin terms of new capacity installed inSpain last year.


ASSET MANAGEMENT


N+1 offers its institutional and family officeclients a unique platform for investing inexcellently-located, high-quality properties intwo of the deepest and most liquid propertymarkets in Europe: Germany and the UK.

The team, with offices in London, Frankfurtand Luxembourg, is made up of 25experienced professionals with a proventrack record in our target markets. In the lastfive years, the team has acquired 18properties in Germany’s largest cities(primarily Hamburg, Munich and Stuttgart)and manages eight rental properties inLondon’s top districts (the City and WestEnd).

Rental assets under management at year-end totalled €758m (€535m in Germanyand €223m in London).

The advisory suite provided by N+1encompasses all the services needed toexecute and manage an investment inproperty:

• Origination of mainly proprietary deal-flowand execution of investments and sales.

• Transaction-tailored structured financingand dealings with financial institutionsduring the portfolio’s management.

• Optimal investment structuring from a taxand financial perspective.

• Portfolio value creation:

- Commercial management (rent).

- Technical management (maintenance,refurbishment, modifications for newtenants).

- Quarterly asset-by-asset strategyupdates which include hold/sellrecommendations.

- Property administration by an in-houseteam.

• Dealings with service providers (legal/taxadvisors, auditors and independentappraisers).

• Investor relations: transparent and periodicreporting, tailored to individual investorrequirements.

REAL ESTATE ASSET MANAGEMENT

London4

21

3

56 7

8

Berlin

1 2 7

13 14 1618

9

84

3

1112

17105 15

6

Hamburg

Stuttgart

Frankfurt

Nuremberg

Munich


ASSET MANAGEMENT


United Kingdom (Trinova Real Estate)

Last year this team concludedinvestments and increased the assetsunder its management by a total of€100m.

The following initiatives stand out:

• The acquisition of 6 Greenwich ViewPlace, London E14 9NN on behalfof a private investor. The building isfully leased to a blue chip corporate(Telstra) under a long-term lease.The property’s leasable area totals11,100m2.

• The acquisition of 24 Lime Street,London EC3 for a consortium ofinvestors including a Scandinavianinstitutional investor. The property,which is located in the heart of theCity of London’s insurance district,has a floor area of 865m2 devoted tooffice space, retail premises and arestaurant.

• An exclusive mandate to act asoperating partner for a propertydevelopment in the heart of OxfordStreet for one of the world’s leadingreal estate managers.

Germany (PlusAlpina Real Estate)

In 2012 the German team invested intwo new office buildings, executing itsindividual mandates:

• A retail premises and office buildinglocated in Hamburg’s prime districtwith views onto “Binnenlaster”:Alstertor 17 D-20095 Hamburg. Theproperty has 2,700m2 of Grade Aoffice and prime retail space. It hastop-level tenants such as CreditSuisse Private Banking and HessNatur.

• Bilma Haus in Hamburg, a new officebuilding built in July 2012 to thehighest technical specifications. Witha surface area of around 12,000m2

(retail and office space), its newtenants include the likes of BDO,Accenture, Hochtief and GSKStockmann + Kollegen.

In addition, PlusAlpina opened aproprietary office in Hamburg (wherea large part of its portfolio is located)with a view to further honing its on-the-ground asset managementstrategy and forging closerrelationships with its tenants. To thisend it has hired a professional withbroad experience in the main officerental segments in Hamburg.

CORPORATE SOCIALRESPONSIBILITY

CORPORATE SOCIAL RESPONSIBILITY

N+1 understands corporate responsibility asthe range of initiatives that make a positivecontribution to all its stakeholders. On thisbasis, we believe that corporate citizenship isnot solely incumbent upon N+1 as a firm, butalso on all the agents involved in ourbusiness operations that accordingly benefitfrom joint participation in activities intendedto give back to society.

N+1’s commitment to society is diverse andall-encompassing. Diverse, in that it not onlyfocuses on activities that foster commitment

to our values, but also on those that involveour professionals on a voluntary basis; andall-encompassing in that we engage all theentities close to N+1 in its daily businessoperations in our search for enhanced socialwellbeing. By joining forces in this way, wecan achieve higher goals.

To these end, we prioritise corporateresponsibility initiatives that commit andengage not only the firm, but also all ouremployees and their families, our clients,suppliers and other partners.

corporate social responsibility

Creation of the ‘N+1 Forest’

This project consists of the gradual creation(over three years) of a forest stretching closeto two hectares: the N+1 Forest.

This is an ecological restoration andnaturalisation project for an area of non-productive and deforested agricultural land.

P.41CORPORATE SOCIAL RESPONSIBILITY

The ultimate goals are increased biodiversityand the provision of services and virtues(landscape, aesthetic) and social benefits(education and environmental awareness) tothe community.

The forest is being created at a site close toa wind farm operated by the Group’srenewable energies arm, Eolia, in the town ofNambroca, Toledo (Spain), and is part of theso-called ‘compulsory countervailingenvironmental measures’ incumbent uponEolia at all its facilities.

The forest is being built under a corporatevolunteering scheme: the N+1 employeesand their families, as well as the Group’sclients and friends, that volunteer areresponsible for the planting the treesinstalling the nesting boxes.

To help them in this task, they receivetraining, management, supervision and

support from monitors specialised in therestoration of eco-systems. These monitorscome from Fundación FIRE, a non-profitprivate entity devoted to the restoration andpreservation of ecosystems. They transfertheir academic know-how to real-life, high-impact projects (e.g., carbon capture andstorage, biodiversity protection, etc.).

The first phase of the N+1 Forest plantationprogram took place on 24 March 2012.N+1’s employees and their relatives tookpart in a gratifying day of environmentalcommitment and awareness, planting 0.65hectares.

Phase II of the N+1 Forest program tookplace in April 2013 with the plantation ofanother 0.65 hectares with over 20 forestspecies.

FINANCIAL STATEMENTS


There follows, for informational purposes, a copy

of the Group’s consolidated balance sheet at 31

December 2012 and the consolidated income

statement for the year then ended.

The full text of the audit report, together with the

financial statements and management report, can

be downloaded from the Group’s corporate

website (www.nplusone.com). In this way, we are

joining the growing leagues of companies that are

trying to protect the environment by publishing

their corporate information in electronic format

only. As a result, we are avoiding the printing of

155,000 pages.

The N+1 Group’s financial statements and the

explanatory notes were audited by Deloitte. In its

opinion, the 2012 financial statements give a true

and fair view, in all material respects, of the

consolidated financial position of N Más Uno IBG,

S.A. and its subsidiaries at 31 December 2012

and of its financial performance during the year

then ended, and contain the required information

necessary for their adequate interpretation and

comprehension, in conformity with the generally

accepted accounting principles prevailing in

Spain.

CONSOLIDATED FINANCIAL STATEMENTS OF N MAS UNO IBG, S.A. AND THECOMPANIES COMPRISING THE N+1 GROUP FOR THE YEAR ENDED 31DECEMBER 2012

P.45FINANCIAL STATEMENTS

Thousands of Euros Note 2012 2011 (*)

Interest and similar income 23 41 117 Interest expense and similar charges (2) -

NET INTEREST INCOME 39 117

Income from equity instruments 8 60 -Share of results of entities accounted for using the equity method 10 (510) (720)Fee and commission income 24 45,406 44,630 Fee and commission expense 25 (672) (1,073)Gains/losses on financial assets and liabilities (net):

Held for trading - - Other financial instruments at fair value through profit or loss - - Financial instruments not measured at fair value through profit or loss - - Other - -

Exchange differences (net) 3-t 14 (267)Other operating income - - Other operating expenses 2.9 (20) (20)

GROSS INCOME 44,317 42,667

Staff costs 26 (19,173) (18,227)General expenses 27 (9,237) (8,949)Depreciation and amortisation charge 11 y 12 (362) (283)Provisions (net) - - Impairment losses on financial assets (net):

Loans and receivables 9 (72) (1,015)Other financial instruments not measured at fair value through profit or loss

through profit or loss 8 (570) (235)

PROFIT FROM OPERATIONS 14,903 13,958

Impairment losses on other assets (net):Tangible assets - - Intangible assets - - Other - -

Gains (losses) on disposal of assets not classified as non-current assets held for sale (139) - Negative goodwill on business combinations - - Gains(losses) on non-current assets held for sale not classified as

discontinued operations - -

PROFIT BEFORE TAX 14,764 13,958

Income tax 17 (4,677) (4,508)

PROFIT FOR THE YEAR FROM CONTINUING OPERATIONS 10,087 9,450

Profit/loss from discontinued operations (net) - -

Consolidated profit for the year 10,087 9,450

PROFIT ATTRIBUTABLE TO THE PARENT 22 9,997 10,101

Loss attributable to non-controlling interests 16 90 (651)

EARNINGS PER SHARE (Euros)

Basic 4 69.76 70.80 Diluted 4 75.15 75.62

N MÁS UNO IBG, S.A. AND COMPANIES COMPOSING THE N+1 GROUP

CONSOLIDATED INCOME STATEMENTSFOR THE YEARS ENDED 31 DECEMBER 2012 AND 2011 (NOTES 1 TO 4)

(*) Presented for comparison purposes only.


N MÁS UNO IBG, S.A. AND COMPANIES COMPOSING THE N+1 GROUPCONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2012 AND 2011 (NOTES 1 TO 4)

Thousands of Euros ASSETS Note 31-12-12 31-12-2011 (*)

TREASURY 6 157 63

FINANCIAL ASSETS HELD FOR TRADING:Debt instruments - -Equity instruments - -Trading derivatives - -Other financial assets - -

Memorandum item: Loaned or advanced as collateral - -

OTHER FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSSDebt instruments - -Other equity instruments - -Other financial assets - -


AVAILABLE-FOR-SALE FINANCIAL ASSETS:Debt instruments -Other equity instruments 8 1,166 1,398


LOANS AND RECEIVABLES:Loans and advances to financial intermediaries 7 20,547 27,175 Loans and advances to individuals 9 7,129 8,488 Other financial assets - -

HELD-TO-MATURITY INVESTMENTS: - -Memorandum item: Loaned or advanced as collateral - -

HEDGING DERIVATIVES - -

NON-CURRENT ASSETS HELD FOR SALEDebt instruments - -Equity instruments - -Tangible assets - -Other - -

INVESTMENTSJointly controlled entities - -Associates 10 7,170 879

INSURANCE CONTRACTS LINKED TO PENSIONS - -

TANGIBLE ASSETS:Property, plant and equipment for own use 11 1,036 1,087 Investment property - -

INTANGIBLE ASSETS:Goodwill 12 2,999 2,999 Other intangible assets 12 258 327

TAX ASSETS:Current - -Deferred 17 12 148

OTHER ASSETS 13 763 719

TOTAL ASSETS 41,237 43,283

Memorandum items:

Other memorandum items 20 857,976 832,687


P.47FINANCIAL STATEMENTS

N MÁS UNO IBG, S.A. AND COMPANIES COMPOSING THE N+1 GROUPCONSOLIDATED BALANCE SHEETS AT 31 DECEMBER 2012 AND 2011 (NOTES 1 TO 4)

Thousands of Euros LIABILITIES AND EQUITY Note 31-12-12 31-12-2011 (*)

LIABILITIES

FINANCIAL LIABILITIES HELD FOR TRADING - -

OTHER FINANCIAL LIABILITIES AT FAIR VALUE THROUGHPROFIT OR LOSS - -

FINANCIAL LIABILITIES AT AMORTISED COSTPayable to financial intermediaries 14 1,497 1,406 Payable to individuals -Borrowings and subordinated liabilities - -Other financial liabilities - -

HEDGING DERIVATIVES - -

LIABILITIES ASSOCIATED WITH NON-CURRENT ASSETS HELD FOR SALE - -

PROVISIONS:Provisions for pensions and similar obligations - -Provisions for taxes - -Other provisions 27 - 155

TAX LIABILITIES:Current 17 1,037 1,146 Deferred 17 746 553

OTHER LIABILITIES 13 9,125 11,829

TOTAL LIABILITIES 12,405 15,089

SHAREHOLDERS' EQUITY: 15 27,373 27,084 SHARE CAPITAL

Registered 15 287 287 Less: Uncalled capital

SHARE PREMIUM 15 24,139 24,139 RESERVES 15 546 651 OTHER EQUITY INSTRUMENTS 15 (54) (54)

Less: Treasury shares 15 (99) -PROFIT FOR THE YEAR 15 & 22 9,997 10,101

Less: Dividends and remuneration 15 (7,443) (8,040)

VALUATION ADJUSTMENTS (104) (477)Available-for-sale financial assets 8 (29) (337)Cash flow hedges -Hedges of net investments in foreign operations -Exchange differences 10 112 31 Entities accounted for using the equity method 10 (187) (171)Other valuation adjustments - -EQUITY ATTRIBUTABLE TO THE PARENT 27,269 26,607

NON-CONTROLLING INTERESTS (+/-) 16 1,563 1,587

TOTAL EQUITY 28,832 28,194

TOTAL LIABILITIES AND EQUITY 41,237 43,283


PARTNERS

MANAGING PARTNERS OF THE N+1 GROUP

Santiago EguidazuChairman

Javier LoizagaCo-Chairman and CEO ofN+1 Mercapital

Jorge MataixVice-ChairmanChairman of the AssetManagement Division

José Antonio AbadVice-Chairman Chairman of the InvestmentBanking Division

Miguel SalísChairman of N+1 Eolia

Ricardo PortabellaChairman of N+1 International

Patricia PascualDirector of CorporateDevelopment

Francisco AlbellaGeneral Secretary andHead of Legal Affairs

Iñigo de CáceresGeneral Manager

managing partners of the N+1 group

N+1 Group

CORPORATE SERVICES

SENIOR PARTNERS

P.51MANAGING PARTNERS OF THE N+1 GROUP

Investment Banking (Corporate Finance, Capital Markets & Equities)

GERMANY

Wolfram Schmerl CEO and Managing Director

Robert von FinckensteinManaging Director

Christoph HandrupVice President

Konstantin KastiusDirector

Florian KubeVice President

Laurent CamilliManaging PartnerN+1 Easton

Philippe CroppiManaging PartnerN+1 Easton

Philippe GuézenecManaging PartnerN+1 Easton

FRANCE


Lorenzo Astolfi CEO N+1 Syz

Marcello Rizzo Director N+1 Syz

Francesco MoccagattaManaging DirectorN+1 Syz

ITALY

Guillermo ArbolíCEOCorporate Finance

Roberto LeónManaging DirectorCorporate Finance

Alfonso HigueroCEO N+1 Equities

Miguel HernándezManaging DirectorCorporate Finance

Eduardo MuñozDirectorCorporate Finance

Oscar García CabezaManaging DirectorCorporate Finance

Carlos Rodríguez-ViñaDirectorCorporate Finance

Pablo RosalDirectorCorporate Finance

Francisco RiquelDirector of ResearchN+1 Equities

Adolfo Ximénez de EmbúnCOON+1 Equities

SPAIN

P.53MANAGING PARTNERS OF THE N+1 GROUP

Okan AltugChairmanN+1 Daruma

Orkun AltugManaging DirectorN+1 Daruma

Tulay KayaVice-Chairman and Managing DirectorN+1 Daruma

Ozkan YavasalManaging DirectorN+1 Daruma

Kerim BasarManaging DirectorN+1 Daruma

TURKEY

Timothy Cockroft CEON+1 Singer

Dominic del MarHead of SalesN+1 Singer

Shaun Dobson Head of Corporate FinanceN+1 Singer

Alexander FraserDeputy Head of Corporate FinanceN+1 Singer

Graeme SummersHead of Corporate BrokingN+1 Singer

Mark GibbonHead of ResearchN+1 Singer

Rupert BoleHead of Market MakingN+1 Singer

Marcos FloresCEON+1 Credit Solutions

UNITED KINGDOM

Cristóbal RodríguezCEON+1 Eolia

Fermín MatesanzCOON+1 Eolia

RENEWABLE ENERGIES

Carlos BarallobreManaging PartnerN+1 Mercapital

David EstefanellManaging PartnerN+1 Mercapital

Ignacio MorenoManaging PartnerN+1 Mercapital

Federico PastorManaging PartnerN+1 Mercapital

Javier AranaPartnerN+1 Mercapital

Bruno DelgadoPartnerN+1 Mercapital

Carlos Fernández de la PradillaPartnerN+1 Mercapital

Mariano MorenoPartnerN+1 Mercapital

David SantosPartnerN+1 Mercapital

Gonzalo de RiveraPartnerN+1 Mercapital

Eusebio Martín PozasPartnerN+1 Mercapital

Asset Management

PRIVATE EQUITY


P.55

Luis AltarejosDirector of Back OfficeN+1 Syz

Javier ArrutiChairmanN+1 Syz

Diego BareñoManaging PartnerN+1 Syz

Alfonso GilCEON+1 Syz

Iñigo Marco-GardoquiManaging PartnerN+1 Syz

Jaime PorrasManaging PartnerN+1 Syz

Ignacio Dolz de EspejoDirector of InvestmentsN+1 Syz

WEALTH ADVISORY

Jacobo LlanzaManaging PartnerQMC Products andCapital Raising

Julián CepedaDirector of Investments

QMC PRODUCTS

Edmund CostelloPartner Trinova (UK)

Luis IglesiasDirectorN+1 REAM

Wolfgang SchreierDirector of Investments andMarket Research PlusAlpina (Germany)

Linus ForsbergPartnerTrinova (UK)

Roman KlasenDirector of Structured FinancePlusAlpina (Germany)

Matthias SchreierDirector of Investmentsand Asset ManagementPlusAlpina (Germany)

REAL ESTATE ASSET MANAGEMENT


Design and productionCF Comunicación

www.nplusone.com

an nual r epo r t 2012 - alantra.com

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