Management team and equity raising

MAM Funds plc

("MAM Funds" or the "Company")

Strengthening of management team and plans to raise up to £20 million

MAM Funds plc, the AIM quoted fund management group, announces an agreement in principle to strengthen the existing management team and raise additional capital to enhance the existing Group strategy to build a leading investment management business.

Highlights

·; Agreement in principle of proposals to extend existing strategy, strengthen existing management team and raise additional capital

·; Proposed appointment of Directors:

Ø Ian Dighé as Executive Chairman

Ø Gervais Williams as Managing Director

Ø Graham Hooper as Distribution Director

·; Extension of existing successful strategy to build a leading fund management business with strong organic growth potential

·; Planned raising of up to £20 million new equity at 33p per share

·; Planned repayment of all existing Preference Shares, accrued interest thereon and outstanding debt

·; Proposals subject to finalisation, shareholder approval, consent of Lloyds Banking Group, necessary regulatory consents and completion of fundraising

Colin Rutherford, Chairman and CEO, MAM Funds plc, said:

"Since taking over the helm, the Group has undergone a significant turnaround. Non-core businesses have been divested and the focus is now firmly on fund management. We now have a stable platform and with the proposed new equity investment and the addition of new management of the calibre of Gervais Williams and his colleagues, the business is well placed for the next stage of its development.

"These proposals mark a watershed for MAM Funds as we move firmly out of reconstruction mode, having maintained our quoted status, and towards operating with a planned debt-free balance sheet. In handing over to the new team, I would like to pay tribute to the support of Lloyds Bank, all staff at MAM Funds, our customers and stakeholders for their support through the reconstruction phase."

Ian Dighé said:

"We believe the proposed transaction heralds the beginning of a new phase for the growth and development of MAM Funds. There is a significant market opportunity to build a leading fund management business and we believe that a new management team and strengthened capital base will provide the foundation for MAM Funds to exploit this opportunity."

For further information, please contact:

Colin Rutherford, Chairman & Chief Executive, MAM Funds 07768 053 054

Martin Gray, Director of Fund Management, MAM Funds 07785 936 139

Ian Dighé 07785 703 261

Graham Hooper 07831 606 850

Roland Cross, Director, Broadgate Mainland 07831 401309/

020 7726 6111

Neil Kirton, Chief Executive Officer, Arbuthnot Securities 020 7012 2000

James Steel, Director, Arbuthnot Securities 020 7012 2000

MAM Funds plc

("MAM Funds" or the "Company")

Strengthening of management team and plans to raise up to £20 million

MAM Funds, the AIM quoted fund management group, announces that it has reached agreement in principle, subject to finalisation of detailed terms, on proposals (the "Proposals") for a significant extension to the Group's existing strategy backed by a strengthening of the management team and the raising of additional capital to redeem all the existing preference shares, accrued interest thereon and all outstanding bank debt.

The aim of the Proposals is to build on the Group's existing platform to transform MAM Funds into a leading fund management business with strong organic growth potential.

Proposed Board and management changes

Under the Proposals it is envisaged that, following completion of the fund raising, the Company's existing Board and management team will be strengthened through the appointments of Ian Dighé as Executive Chairman, Gervais Williams as Managing Director and Graham Hooper as Distribution Director.

Ian Dighé has been involved in the financial services industry since 1985. After working for Manchester & Exchange Investment Bank, McLeod Russell Holdings PLC and as Head of Corporate Finance at Singer & Friedlander, he led the buy-out of Singer & Friedlander Corporate Finance in 2000 and laid the foundations for the formation of the Bridgewell Group plc of which he was Deputy Chairman. 

Following the sale of Bridgewell in August 2007 he formed Matterley, whose interests were acquired by The Charles Stanley Group PLC in September 2009. He is currently a non-executive Director of Gartmore Growth Opportunities plc (in liquidation), Strategic Equity Capital plc and Artemis Alpha Trust plc and a director of various private companies and charitable trusts.

Gervais Williams has been managing equity portfolios since 1985. He spent five years with Throgmorton Investment Management (later part of the Framlington Group), three years with Thornton Investment Management (part of Dresdner Bank) and more recently 17 years with Gartmore Group Ltd where, as head of UK Small Companies, he headed a team responsible for managing £800 - 900 million of assets. 

These portfolios included funds investing in UK smaller companies and Irish equities. He has won a number of investment awards including Fund Manager of the Year in 2008 and 2009. He has sat on two DTI committees on the quoted small cap sector, is a member of the AIM Advisory Council and is due to join the Board of the Quoted Companies Alliance.

Graham Hooper joined the financial services industry in 1984 and spent 18 years working for Chase de Vere. During this time he was the most quoted financial adviser in the press for four consecutive years, was voted IFA of the Year twice and Best Investment IFA once. After the sale of Chase de Vere to Bank of Ireland, he joined Holden Meehan. Following the acquisition of Holden Meehan by Bradford and Bingley he joined the Commercial Board of Bradford and Bingley. He subsequently left to set up his own consultancy where he worked with a number of major financial services organisations including M&G, Standard Life, Chartwell and Midas Capital Partners (which later became part of the MAM Funds group of companies) to develop their retail distribution strategies. He is currently a non-executive Director of Liontrust plc but would expect to resign from this Board on joining the MAM Funds Board.

On completion of the proposed fundraising and successful introduction of the new management team Colin Rutherford will step down from the Board. The Board wishes to thank Colin for leading MAM Funds through a difficult turnaround and restructuring and for positioning the Group to allow it now to implement the proposed transaction and continue its growth and development.

Adrian Collins will resign from the Board on completion and a new Independent Director will be appointed in due course. Tony Moore will continue as Chief Financial Officer, Nick Hamilton as Senior Independent Director and Lord Wade as an Independent non-executive Director. Martin Gray will remain a member of the Board as Director of Fund Management.

Extended strategy

The extended strategy is intended to build on the Group's existing strong platform together with a broadened product offering and strengthened marketing capability to take advantage of opportunities presented by the Financial Services Authority's Retail Distribution Review, capitalise on demographic shifts in the UK and develop strategies to distribute through new entrants to the UK financial services market.

Funding

The Company will seek to raise up to £20 million of new equity through a placing of ordinary shares at 33p per share. The placing proceeds will be applied to redeem all the existing preference shares issued by the Company together with accrued interest thereon and to repay all outstanding bank debt and provide additional working capital. Of the total amount of £20 million, the new management team expect to invest £3 million from their own personal resources. 

Conditions

Implementation of the Proposals is subject to various conditions including the finalisation of detailed terms, the approval of the Company's shareholders, the consent of Lloyds Banking Group, necessary consents from regulatory authorities and completion of the proposed finance raising. It is currently expected that a shareholder circular will be published during January and that these conditions could be satisfied by the end of February 2011. 

Arbuthnot Securities is acting as Adviser and Broker to MAM Funds in connection with the Proposals.

Further announcements including a trading update will be made in due course as appropriate.

For further information, please contact:

Colin Rutherford, Chairman & Chief Executive, MAM Funds 07768 053 054

Martin Gray, Director of Fund Management, MAM Funds 07785 936 139

Ian Dighé 07785 703 261

Graham Hooper 07831 606 850

Roland Cross, Director, Broadgate Mainland 020 7726 6111

Neil Kirton, Chief Executive Officer, Arbuthnot Securities 020 7012 2000

James Steel, Director, Arbuthnot Securities 020 7012 2000

Arbuthnot Securities Limited, which is authorised in the United Kingdom under the Financial Services and Markets Act 2000 as amended and regulated by the Financial Services Authority, is acting as Adviser and Broker to MAM Funds in connection with the Proposals. Arbuthnot Securities Limited is acting exclusively for the Company and no one else in connection with the Proposals and will not regard any other person as its client or be responsible to any other person for providing the protections afforded to its clients nor for providing advice in relation to the Proposals or any transaction or arrangement related thereto.