Dear InvestorAs we enter the second half of 2015, we review six months of positive performance in a weak environment for returns from risk assets. Markets at best have only managed mediocre returns, whilst volatility has increased markedly. In this difficult environment we believe that we are well positioned for the remainder of the year.

HALF-YEAR REVIEW OF 2015 PERFORMANCE – JANUARY TO JUNE 2015 (THE “PERIOD”)20 JULY 2015

All fees quoted net of fees. Note:

The Hollard Stable Fund consists of Silver Cluster Loan Stock Company (Pty) Ltd, The BlueInk Vesting Trust No 37 and the CFS Stable Trust and these make up the strategy. Capricorn Performer Fund (CPF) consists of the Capricorn Performer Partnership. The Capricorn GEM Fund comprises the Capricorn GEM Fund LP and Capricorn GEM Fund Inc. Capricorn Market Neutral Fund consists of Imalivest Quantitative Investments (Pty) Ltd.

THE CAPRICORN MARKET NEUTRAL FUND (CMN)

Returned 7.9% in ZAR for the Period. CMN’s unique offering as a performance fund with very low correlation to the market allows investors to diversify their risk while not giving up performance.

Returned 5.2% in USD outperforming the MSCI Emerging Market Index for the Period, which only managed to return 3.1%. The Fund has once again managed to deliver alpha in a difficult environment.

THE CAPRICORN GEM FUND (GEM)

Returned 7.0% in ZAR for the Period. HSF is now in its twelfth year of existence, having never had a down calendar year whilst still returning in excess of 16% pa.

THE HOLLARD STABLE FUND (HSF)

Returned 10.5% in ZAR, strongly outperforming the JSE All Share Index (on a total return basis) for the Period, which returned 5.6%. CPF replicates the HSF mandate but aims for a higher return by following a more aggressive exposure strategy.

THE CAPRICORN PERFORMER FUND (CPF)

GOOD PERFORMANCE IN A WEAK RETURN ENVIRONMENT –

performance for period 1 January to 30 June 2015:

J O H A N N E S B U R G • L O N D O N • E M E R G I N G M A R K E T S H E D G E F U N D S

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SANLAM SELECT FLEXIBLE EQUITY FUND (FLEX)

Returned 8.61% in ZAR for the period, significantly outperforming the JSE’s 5.6%. The Fund started in September 2014 and we are excited to present our first long-only offering to our investors.

Returned 6.3% in USD for the period, outperforming the JSE’s return of -0.60% in USD strongly. The Fund was launched in January 2015 and allows investors the option of investing in the CPF strategy on a USD hedged basis.

THE CAPRICORN PERFORMER (CAYMAN) FUND ($CPF)

We continue to focus on transformative themes and the companies that can capture these benefits, in order to deliver strong long-term returns for our Investors.

In our previous letter, we warned investors that markets were

primed to be more nuanced than in previous years and that

“the tide would fail to lift all ships” and this is certainly what has

transpired in the year thus far. In South Africa, the JSE All Share

index returned 5.6% in ZAR terms for the half-year. This result

masks significant intra-sector divergences and was significantly

supported by a 5.9% depreciation of the Rand against the Dollar.

The MSCI Emerging Markets Index managed to return 3.1% in

USD, but was largely driven by a significant rally in the Chinese

market that distorts generally weak performance from almost all

other EM countries. As we are always at pains to make clear, the

divergences between countries, sectors and stocks are enormous

and we believe our skill set allows us to capitalise on this.

We believe that the key question on investors’ minds remains the

normalisation of interest rates in the United States and whilst

this remains the case, volatility in Emerging Markets will continue

to worry investors. In our view, the Federal Reserve will retain

its cautious approach, rather raising rates “behind the curve”

in order to ensure the economic recovery is not jeopardised. In

addition, this “lower-for-longer” strategy is being supported by

the larger economic blocks of Europe, China and Japan who

have all been forced to keep a very accommodative policy in

order to support their economies.

MAIN DRIVERSIn our view, the primary drivers of the market for the first half of 2015 were:

i. A slow, but consistent economic recovery in the United States with the result of significant Dollar strength.

ii. A divided European Union that is struggling to deliver any form of sustainable growth, whilst the

situation in Greece remains fragile.

iii. Further weakening of commodity prices off the back of undisciplined supply and lack-lustre demand.

iv. Interest rates globally have remained lower on the back of anaemic global growth and the threat of

deflation and this looks set to continue for some time to come.

INVESTMENT STRATEGY AND MARKET ANALYSIS

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R E V I E W T O J U N E 2 0 1 5

Historic favourites of ours in the South African market, including

Brait, Steinhoff, Naspers, Woolworths and Discovery, continued

to deliver strong returns and are excellent examples of our

methodology of finding stories that play out over many years.

Performance was further supported by Rockcastle, Investec and

Curro which all represent newer ideas that we have been working

on, whilst tactical positions in Foschini and Firstrand worked well.

Most pleasingly however, was the level of performance that was

generated from our short-book in South Africa. Shorts were focused

on South African iron ore producers, gold producers and industrials

which we believed were vulnerable to the current environment.

Our long-book in South Africa continues to remain invested in the

best-of-breed operators that have been able to internationalise their

business and reduce exposure to South Africa. We continue to place

a significant premium on those companies that exhibit optionality,

which is typically under-appreciated by the general market.

Our ex-South Africa exposures continue to illustrate the successful

internationalisation of our methodology and the progression of

the emerging market strategy outside of South Africa is a deliberate

effort as we see the possibility of better returns in these jurisdictions.

Included in our top 10 contributors to profit we have longs in AKR

Corporindo (Indonesia), My EG Services (Malaysia), SM Investments

(Philippines) and Raia Drogasil (Brazil) as well as shorts in various

Turkish Steel producers and global resource companies. This

represents our broadest performance to date and an indication of

the depth and knowledge we have built in these markets.

We returned gains in every country this year apart from Russia

where we have lost less than 1% of performance. The Russian

stocks in context of last year’s very large gains and also the scale of

the rally early this year is actually very pleasing to us.

Our review begins in South Africa where the economy continues to

disappoint. It faces lack lustre growth and many tough decisions

need to be made with little political will being apparent. The

country experienced some respite earlier in the year with a

significant decline in oil, but this has more than been erased with

the depreciating Rand.

However, with the vast majority of the JSE being exposed to other

offshore economies the stock market is far less linked to this

weakness than investors appreciate. We have long-held that South

Africa has not reformed as a country, but the listed entities within

it have. They have all spent significant amounts of capital and

energy in taking their businesses global and in 2015 this theme has

continued with many of our favoured counters expanding outside

of SA. This peculiar structure in South Africa will result in significant

divergences between companies that have embraced change

and those that have not and as a Hedge Fund we are positioned

to exploit this. We remain bearish on the consumer where a

decade long boom in credit as well as supportive government

policy has accelerated consumption that now needs to normalise.

This process of deleveraging will take years to unwind and the

companies exposed to this will need to adjust. The government will

turn its focus to investment and over time we do expect them to

achieve some level of success with the National Development Plan.

This will be at the expense of the consumer.

In Turkey the Period culminated in parliamentary elections in

which the ruling AKP party lost its majority for the first time since

it came into power 13 years ago. We entered the year constructive

on Turkey as we believed the dramatic fall in the oil price would

benefit the domestic economy. While we were concerned about

the political dynamic unfolding, we underestimated the effect

on business and consumer confidence. Our longs returned

mixed success. Tav airports continued to perform very strongly

benefitting from continued strong passenger numbers but

Coca Cola and Ulker performed poorly as a result of weaker

volume growth. Our shorts in banks and steel names performed

excellently and added substantially to performance, appearing in

our top performers for the 6 month period.

Investors will be aware of our negative view on Russia for many

years. In the early part of the year, Russia was the best performing

market in Emerging Markets after spiking up aggressively from the

lows. While this was not pleasant for us as managers, we added

to our shorts as the rally unfolded and in the past 2 months some

of the Russian stocks have even retested their lows. We maintain

our shorts in Russian oil and gas as well as mining. The outlook

is poor as lower commodity prices (particularly oil) mean the

structural adjustment will continue. We will continue to use any

major rally to increase shorts in our preferred names.

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R E V I E W T O J U N E 2 0 1 5

INVESTMENT STRATEGY AND MARKET ANALYSIS (CONTINUED)

Indonesia has experienced a tough period too. President Jokowi

has done many things right – the removal of the fuel subsidy and

injections of cash to recapitalize SOE’s but the real test remains

the implementation of his infrastructure plan. He has had to deal

with some internal politicking and is consolidating his power

base even within his own party. For us, the signs are positive but

in the meantime economic growth has slowed and the domestic

economy is sluggish. Our stock selection however has been very

successful this year as longs in AKR Corporindo and Matahari

Departments stores have outperformed.

The Philippines is one of the places we are the most constructive

due to the multitude of high quality, family owned businesses

and entrepreneurial culture. Longs in Xurpas and SM Investments

have added to performance this year. Economically the country

is performing well due to its double underpin from overseas

remittances and the fast growing BPO sector as well as the

abundance of dollar liquidity, a rarity in emerging markets.

Demographics are positive and we are constructive on the outlook

for the remainder of the year and beyond.

We have had further success this year in Latam. In Brazil, longs in

Raia Drogasil and shorts in iron ore and the consumption space

have provided handsome gains for GEM. We believe that Brazil

is symptomatic of the broader malaise in commodity producing

countries as they are forced into fiscal adjustments at the precise

time that their economy is contracting. Brazil has the further

problem of chronically high inflation. The interest rate cycle has

been particularly aggressive too and this could present some

upside as and when it comes to an end. However, we remain

negative on the broader economy and maintain a balanced book

.

Mexico has seen success as our holding in Oma, the northern

airports operator has continued to rally on very strong passenger

growth numbers and its structural opportunity. We are particularly

excited by the outlook in Mexico despite the many negative

headlines we continue to see on corruption and politicking.

The reforms passed by the Pena Nieto administration are historic

and far reaching and we believe some of the best bottom up

opportunities in our universe are available here. The consumption

space is particularly interesting as wages begin to pick up for the

first time in over a decade and the formal retail space is extremely

underpenetrated (even relative to emerging peers).

Our shorts in the mining space globally have been some of the

leading contributors to performance. We reiterate our view that

China’s investment led growth has already begun morphing to

a more consumption/services based type of growth. We have

already seen a sharp fall in commodity prices and we think that

this will continue with far reaching implications for companies

and countries which rely heavily of high commodity prices.

In terms of the luxury sector, we have been disappointed this

year and as touched on in June’s factsheet we believe the

supernormal period of returns is at an end and we have as a

result reduced exposure.

This year has also seen the entry of GEM into India and we have

returned a gain on our single position in this market. We have

allocated substantial resources to understanding the opportunity

in India and now have over a year’s experience of looking in depth

at the opportunity set. We have travelled to the country and

investors should expect in the months ahead to see a number of

names appear in the portfolio.

Worth mentioning too, is our view on China. While we have

always held a detailed view of anything that is China, we have not

invested directly in the Chinese market (A shares). We see some of

the changes this year, particularly the possible opening up of the

A share market as a very positive reform step and while it is very

premature to expect a direct investment, we are exploring ways for

us to capitalise upon what is sure to become a dominant feature

of any emerging markets fund in the future.

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R E V I E W T O J U N E 2 0 1 5

INVESTMENT STRATEGY AND MARKET ANALYSIS (CONTINUED)

As we pass the halfway mark of 2015, the focus has moved to global growth concerns and the apparent lack of inflation. Political risk and its potential impact on capital markets is much more of a concern. Events in Europe are being watched carefully and we continue to maintain a cautious stance in our portfolios.

Key themes that are currently being expressed in our book include:

I. Commodity prices: These continue to surprise the market

on the downside which supports our long-held view that the

supercycle is over. As a consequence of this, we expect significant

distress in certain producers and will not be surprised if there are

failures within this space.

II. Emerging market consumer: We continue to explore the

evolution of the emerging market consumer and the positive

structural trend that this represents. We will look to own

those franchises that can capture this and thus generate

super-economic profits.

III. Platform businesses in the emerging world: We continue to

own and look for more exposure to platform businesses in the

emerging world, particularly those with a digital base. These

businesses are accelerating the development of commerce

and in many instances mean these economies are skipping

traditional phases that developed markets went through.

IV. Healthcare theme: The theme of healthcare remains central

to us, with the aging and growing wealth of the global economy

providing a multi-decade driver for these companies. We have

exposures to these businesses in almost all our jurisdictions and

will continue to look for more.

V. Liquidity: The world is awash with liquidity and while the US

is gradually tapering this looks to be more than offset by an

expansion in easing from both the ECB and BOJ.

OUTLOOK

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We would like to express our gratitude and appreciation to all our investors and stakeholders for all your support and trust over the past six months. We believe our current suite of funds offer an optimal choice for capital preservation, capital appreciation and geographical diversification. We are committed to continue investing in our people, processes and systems and maintain our top quartile performance position.

CONCLUSION AND THANKS

SUMMARY OF CAPRICORN FUNDS:

SOUTH AFRICAN EQUITY LONG-SHORT

A Rand denominated South African long/short equity hedge fund. The fund has a strong focus on capital preservation, targeting anabsolute return in excess of cash. The conservative, counter-cyclical nature of the fund could result in underperformance during equitybull markets, whilst outperforming in equity bear markets.

HOLLARD STABLE FUND (HSF)

Launch date Return 2015 ytd CAGR since inception

Annual monthly volatility (historic)

AUM 30/06/2015 AUM 30/06/2014

JULY 2003 7.0% 16.0% 5.9% R1,536m R1,321m

A Rand denominated South African long/short equity hedge fund. The fund has a strong focus on long term capital appreciation,targeting an absolute return in excess of cash. The fund aims to provide returns with lower volatility and lower drawdowns than equities.

CAPRICORN PERFORMER PARTNERSHIP (CPF)

Launch date Return 2015 ytd CAGR since inception

Annual monthly volatility (historic)

AUM 30/06/2015 AUM 30/06/2014

AUGUST 2012 10.5% 30.8% 10.8% R410m R291m

US Dollar denominated (with USD, GBP and EUR share classes), moderate risk, equity long/short hedge fund, which aims to achieve superior risk-adjusted returns on an absolute basis by investing in Global Emerging Markets.

CAPRICORN GEM FUND (GEM)*

EMERGING MARKETS EQUITY LONG-SHORT

Launch date Return 2015 ytd CAGR since inception

Annual monthly volatility (historic)

AUM 30/06/2015 AUM 30/06/2014

MARCH 2008 5.2% 11.5% 7.3% $160m $160m

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Total AUM for the Capricorn GEM Strategy is $220m. The strategy consists of Capricorn GEM Fund Inc, Capricorn GEM Fund LP and Lyxor/Capricorn GEM Fund UCITS.

* Comprises Capricorn GEM Fund Inc. and Capricorn GEM Fund LP

A USD denominated South African long/short equity hedge fund. The fund has a strong focus on long term capital appreciation,targeting an absolute return in excess of cash. The fund aims to provide returns with lower volatility and lower drawdowns than equities.

CAPRICORN PERFORMER (CAYMAN) FUND LIMITED (CPF$)

Launch date Return 2015 ytd CAGR since inception

Annual monthly volatility (historic)

AUM 30/06/2015 AUM 30/06/2014

AUGUST 2012 6.3% 9.5% N/A $4.8m $0

Returns are net of fees

SUMMARY OF CAPRICORN FUNDS (CONTINUED):

South African Long-Only:

A Rand denominated, flexible asset allocation fund which looks to deliver equity like returns at lower risk levels. The Fund aims to achieve maximum capital growth over the medium to long term.

SANLAM SELECT FLEXIBLE EQUITY FUND (FLEX)

Launch date Return 2015 ytd CAGR since inception

Annual monthly volatility (historic)

AUM 30/06/2015 AUM 30/06/2014

SEPTEMBER 2014 8.61% 14.2% N/A R254m n/a

A Rand denominated, low risk, market neutral hedge fund that employs multiple investment methodologies to construct a portfolio. Itaims to deliver superior risk adjusted returns that are uncorrelated to the general market over any 12 month period by investing in JSElisted equity instruments.

CAPRICORN MARKET NEUTRAL FUND (CMN)

South African Market Neutral

Launch date Return 2015 ytd CAGR since inception

Annual monthly volatility (historic)

AUM 30/06/2015 AUM 30/06/2014

APRIL 2006 7.9% 15.5% 6.9% R204m R163m

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DISCLAIMER

Important Notice:ALL DATA unless otherwise stated is as at 30 June 2015 (net of fees) Source: Quintillion Limited & Capricorn Fund Managers (Pty) Ltd

Important Notice: This document is prepared by Capricorn Capital Partners (UK) Ltd (“CCPU”) authorised and regulated by the Financial Conduct Authority (“FCA”) in the United Kingdom. The investment products and services of CCPU are only available to persons who are professional clients and eligible counterparties as defined in FCA’s rules. They are not available to retail clients.

Within the EEA Capricorn’s products are only available to Professional Investors as defined in the Alternative Investment Fund Managers Directive, or as otherwise permitted by local Member State law. Outside the EEA, the Products are only available to Professional Clients or Eligible Counterparties as defined by the FCA, and in compliance with local law.

This document is not intended for distribution to, or use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation. The Products referenced herein is an unregulated collective investment scheme for the purposes of the Financial Services and Markets Act 2000. UK Investors should be aware that the Products are not covered by the Financial Services Compensation Scheme. In particular, this document is not intended for distribution in the United States or for the account of U.S. persons (as defined in Regulation S under the United States Securities Act of 1933, as amended (the “Securities Act”)) except to persons who are “qualified purchasers” (as defined in the United States Investment Company Act of 1940, as amended (the “Companies Act”)) and “accredited investors” (as defined in Rule 501(a) under the Securities Act). This document is provided for information purposes only and should not be regarded as an offer to buy or a solicitation of an offer to buy shares in the funds managed by CCPU (the “Funds”). Investment in the Products managed by CCPU carries significant risk of loss of capital and investors should carefully review the terms of the Funds’ offering documents for details of these risks.

The prospectuses of the Funds are the only authorised documents for offering of shares of the Funds and may only be distributed in accordance with the laws and regulations of each appropriate jurisdiction in which any potential investor resides. Nothing described herein is intended to imply that an investment in the Funds is “safe”, “conservative”, “risk free” or “risk averse”. Where information provided in this document contains “forward-looking” information including estimates, projections and subjective judgment and analysis, no representation is made as to the accuracy of such estimates or projections or that such projections will be realised. This document does not consider the specific investment objective, financial situation or particular needs of any investor and an investment in the Funds is not suitable for all investors. Investors are reminded that past performance should not be seen as an indication of future performance and that they might not get back the amount that they originally invested. The price of shares can go up as well as down and can be affected by changes in the rates of exchange. Performance information for the month of the document is net of all fees and expenses, the performance data disclosed is not audited. Comparison to the index where shown is for information only and should not be interpreted to mean that there is a correlation between the portfolio and the index. The views expressed in this document are the views of CCPU at time of publication and may change over time. Nothing in this document constitutes investment, legal tax or other advice nor is it to be relied upon in making an investment decision. No recommendation is made positive or otherwise regarding individual securities mentioned herein. No guarantee is made as to the accuracy of the information provided which has been obtained from sources believed to be reliable. The information contained in this document is strictly confidential and is intended only for use of the person to whom CCPU and CFM has provided the material. No part of this document may be divulged to any other person, distributed, and/or reproduced without the prior written permission of CCPU.

Malta House36-38 PiccadillyLondonW1J ODPUnited Kingdom

Andrew Crawford: andrewc@capricorncapital.comDoug Stott: douglass@capricorncapital.comRobert Fihrer: robf@capricorncapital.com

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Capricorn House32 Impala RdChislehurston2196South Africa

Jonty Campion: jcampion@capricorncapital.comDarryl Noik: dnoik@capricorncapital.comRobert Gottlieb: rgottlieb@capricorncapital.com Authorised and regulated by the Financial Conduct Authority

LONDON OFFICE JOHANNESBURG OFFICE

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J O H A N N E S B U R G • L O N D O N • E M E R G I N G M A R K E T S H E D G E F U N D S