interim management report to 30 september 2016

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Interim Management Report to 30 September 2016

2

DeA Capital S.p.A.

Corporate information DeA Capital S.p.A. is subject to the management and

coordination of De Agostini S.p.A. Registered office: Via Brera 21, Milan 20121, Italy Share capital: EUR 306,612,100 (fully paid up), comprising 306,612,100 shares with a nominal value of EUR 1 each (including 45,001,156 treasury shares at 30 September 2016) Tax code, VAT code and recorded in the Milan Register of Companies under no. 07918170015

Board of Directors (*) Chairman Lorenzo Pellicioli Chief Executive Officer Paolo Ceretti Directors Lino Benassi Marco Boroli Donatella Busso (1/5) Marco Drago Carlo Enrico Ferrari Ardicini Francesca Golfetto (3/5)

Severino Salvemini (2/3/5) Daniela Toscani (1/5) Elena Vasco (4/5) Board of Statutory Auditors (*)

Chairman Cesare Andrea Grifoni Permanent Auditors Annalisa Raffaella Donesana Fabio Facchini Deputy auditors Andrea Augusto Bonafè Michele Maranò Marco Sguazzini Viscontini

Manager responsible for preparing the Company’s accounts

Manolo Santilli

Independent Auditors

PricewaterhouseCoopers S.p.A.

(*) In office until the approval of the Financial Statements for the Year Ending 31 December 2018 (1) Member of the Control and Risks Committee (2) Member and Chairman of the Control and Risks Committee (3) Member of the Remuneration and Appointments Committee (4) Member and Chairman of the Remuneration and Appointments Committee (5) Independent Director


3

Contents

Interim Report on Operations

1. Profile of DeA Capital S.p.A. 2. Information for shareholders 3. The DeA Capital Group’s key Statement of Financial Position and Income

Statement figures

4. Significant events in the third quarter of 2016 5. Results of the DeA Capital Group 6. Other information

Consolidated Financial Statements and Notes to the Accounts for the period 1 January to 30 September 2016 Statement of Responsibilities for the Interim Management Report to 30 September 2016


4

Interim Report on Operations


5

1. Profile of DeA Capital S.p.A.

With assets under management of around EUR 10,800 million and an investment portfolio of approximately EUR 450 million, DeA Capital S.p.A. is one of Italy’s largest alternative investment operators. The Company, which operates in both the Private Equity Investment and Alternative Asset Management businesses, is listed on the FTSE Italia STAR section of the Milan stock exchange and heads the De Agostini Group in the area of financial investments. In the Private Equity Investment business, DeA Capital S.p.A. has “permanent” capital, and therefore has the advantage – compared with traditional private equity funds, which are normally restricted to a pre-determined duration – of greater flexibility in optimising the timing of entry to and exit from investments. In terms of investment policy, this flexibility allows it to adopt an approach based on value creation, including over the medium to long term. With regard to Alternative Asset Management activities, DeA Capital S.p.A. – through its subsidiaries IDeA FIMIT SGR and IDeA Capital Funds SGR – is Italy’s leading operator in real estate fund management and private equity funds of funds programmes, respectively. The two asset management companies are active in the promotion, management and value enhancement of investment funds, using approaches based on sector experience and the ability to identify opportunities for achieving the best returns. Alternative Asset Management has been the Company's main focus for strategic development in recent years. In view of this, DeA Capital S.p.A. is expected to continue to concentrate its asset allocation in this business, partly through investments in funds managed by the above-mentioned private equity/real estate platform, with the aim of generating financial returns. PRIVATE EQUITY INVESTMENT

ALTERNATIVE ASSET MANAGEMENT

Direct investment in companies mainly operating in Europe and Emerging Europe.

Indirect Investment in private equity and real estate funds.

IDeA Capital Funds SGR, which manages private equity funds (funds of funds, co-investment funds and theme funds). Assets under management: EUR 1.9 billion

IDeA FIMIT SGR, which manages

real estate funds. Assets under management: EUR 8.0 billion

SPC, a company that specialises in secured and unsecured debt recovery, with a focus on the banking, leasing, consumer and commercial sectors in Italy. Assets under management: EUR 0.9 billion

IRE/IRE Advisory, which operates in

project, property and facility management, as well as real estate brokerage.


6

At 30 September 2016, DeA Capital S.p.A. reported Group shareholders’ equity of EUR 530.8 million, corresponding to a net asset value (NAV) of EUR 2.03 per share, with an investment portfolio of EUR 447.4 million. More specifically, the investment portfolio consists of Private Equity Investment shareholdings of EUR 87.0 million, Private Equity Investment funds of EUR 192.4 million and net assets relating to the Alternative Asset Management business of EUR 168.0 million. At 30 September 2016, the corporate structure of the Group headed by DeA Capital S.p.A. (the DeA Capital Group, or the Group) was as summarised below:

DeA CapitalS.p.A.

ShareholdingKenan

Investments

ShareholdingSigla

Luxembourg

ShareholdingMigros

ShareholdingSigla

Private Equity Investment

Alternative Asset Management

Holding companies

Shareholdingsand funds

Private EquityInvestment “Direct”

Private Equity Investment“Indirect”

Alternative Asset Management

QuotaICF II

QuotaIDeA I

FoF

QuotaICF III

QuotaIDeAOF I

QuotaEESS

QuotaAVA

QuotaToI

QuotaIDeACCR I

IRE /IRE Advisory

100%

IDeACapital Funds

SGR

45%

61,30%

IDeA FIMITSGR

DeA CapitalReal Estate

3,00%

IDeA RE

100%

Mato

SPC

100%

66,32%

100%


7

PRIVATE EQUITY INVESTMENT

o Main investments

minority shareholding in Migros, Turkey's leading food retail chain operator, whose shares are listed on the Istanbul Stock Exchange. The investment is held through the Luxembourg-registered company Kenan Investments S.A., an investment recorded in the AFS portfolio of the DeA Capital Group (with a stake of 17.11%);

strategic shareholding in Sigla, which provides consumer credit for non-

specific purposes (salary-backed loans and personal loans) and services non-performing loans in Italy. The investment is held through the Luxembourg-registered company Sigla Luxembourg S.A., an associate of the DeA Capital Group (with a stake of 41.39%).

o Funds

units in seven funds managed by the subsidiary IDeA Capital Funds SGR, i.e. in the three funds of funds IDeA I Fund of Funds (IDeA I FoF), ICF II and ICF III, in the co-investment fund IDeA Opportunity Fund I (IDeA OF I) and in the theme funds IDeA Efficienza Energetica e Sviluppo Sostenibile (Energy Efficiency and Sustainable Development - IDeA EESS) and IDeA Taste of Italy (IDeA ToI) and in the credit fund IDeA Corporate Credit Recovery I (IDeA CCR I);

units in the real estate fund Atlantic Value Added (AVA), managed by

IDeA FIMIT SGR;

units in six venture capital funds.

ALTERNATIVE ASSET MANAGEMENT

total control of IDeA Capital Funds SGR (100%), which manages private equity funds (funds of funds, co-investment funds and theme funds) with approximately EUR 1.9 billion in assets under management and nine managed funds;

controlling interest in IDeA FIMIT SGR (64.30%), Italy's largest

independent real estate asset management company, with approximately EUR 8.0 billion in assets under management and 38 managed funds (including five listed funds);

controlling interest in SPC (66.32%), a company that specialises in

secured and unsecured debt recovery, with a focus on the banking, leasing, consumer and commercial sectors in Italy, with assets under management of around EUR 0.9 billion. The stake is held via Mato, a wholly-owned subsidiary;

strategically important stake in IRE/IRE Advisory (45%), which

operate in project, property and facility management, as well as real estate brokerage.


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9

Share performance (°)

- Period from 11 January 2007, when DeA Capital S.p.A. began operations, to 30 September 2016

- From 1 January 2016 to 30 September 2016

(°) Source: Bloomberg

0,3

0,8

1,3

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2,3

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DeA Capital FTSE All LPX 50


10

The performance of the DeA Capital share

The Company's share price fell by 51.8% between 11 January 2007, when DeA Capital S.p.A. began operations, and 30 September 2016. In the same period, the FTSE All-Share® and LPX50® fell by 57.4% and 14.8% respectively. The DeA Capital share fell by 18.5% in the first nine months of 2016, while the Italian market index FTSE All-Share® fell by 22.4%, and the LPX50® gained 0.1%. The share’s liquidity was lower than in 2015, with average daily trading volumes of around 170,000 shares. The prices recorded during the first nine months of 2016, adjusted for the amount (EUR 0.12 per share) paid to shareholders in May 2016, are shown below: (in EUR per share) 1 Jan – 30 Sept 2016 Maximum price 1.29 Minimum price 1.00 Average price 1.12 Price at 30 September 2016 1.05 Market capitalisation at 30 September 2016 (EUR million) 322 NB: Capitalisation net of treasury shares: EUR 275 million


11

Investor Relations

DeA Capital S.p.A. maintains stable and structured relationships with institutional and individual investors. In the first nine months of 2016, as in previous years, the Company continued with its communication activities, including attendance at the STAR Conference held in Milan in March and in the STAR Conference held in London in October 2016. Since the start of 2016, the Company has also held meetings and conference calls with institutional investors, portfolio managers and financial analysts from Italy and abroad.

Coverage of the DeA Capital stock is currently carried out via research by the two main intermediaries on the Italian market, Equita SIM and Intermonte SIM, with the latter acting as a specialist, and by Edison Investment Research, an independent equities research specialist based in London. The research prepared by these intermediaries is available in the Investor Relations/Analyst Coverage section of the website www.deacapital.it. In December 2008, the DeA Capital share joined the LPX50® and LPX Europe® indices. The LPX® indices measure the performance of the major listed companies operating in private equity (Listed Private Equity or LPE). Due to its high degree of diversification by region and type of investment, the LPX50® index has become one of the most popular benchmarks for the LPE asset class. The method used to construct the index is published in the LPX Equity Index Guide. For further information please visit the website: www.lpx.ch. The DeA Capital share is also listed on the GLPE Global Listed Private Equity Index created by Red Rocks Capital, a US asset management company specialising in listed private equity companies. The index was created to monitor the performance of listed private equity companies around the world and is composed of 40 to 75 stocks. For further information: www.redrockscapital.com (GLPE Index). The DeA Capital S.p.A. website is available in Italian and English at www.deacapital.it. The site is a source of information, financial data, tools, documents, videos and news about the DeA Capital Group's activities, strategy and investment portfolio. The social networks where DeA Capital S.p.A. has a presence can also be accessed from the homepage; while articles, communications and interesting sections can also be shared on social media. DeA Capital S.p.A. has strengthened its presence on Wikipedia and the social networks Slideshare and LinkedIn, adding its most recent documents for institutional investors such as reports and presentations. Since April 2014, DeA Capital S.p.A. has published an interactive report containing the annual results; the versions for 2013, 2014 and 2015 are available from the "Financial Statements and Reports" section of the website. The website has always been the primary mode of contact for investors. They can subscribe to various mailing lists and receive any news on the DeA Capital Group that interests them, in a timely manner, as well as send questions or requests for information and documents to the Company's Investor Relations area, which is committed to answering queries promptly, as stated in the Investor Relations Policy published on the site. In this way, DeA Capital S.p.A. is continuing its efforts to strengthen its presence on the web and to make information for stakeholders available through many channels.


12

3. The DeA Capital Group’s key Statement of Financial Position and Income Statement figures

The DeA Capital Group’s key Statement of Financial Position and Income Statement figures to 30 September 2016 are shown below, compared with the corresponding figures to 31 December 2015/30 September 2015.

The table below shows the composition of the Group’s NAV during the first nine months of 2016.

(EUR million)

NAV/share (EUR) 2.03 1.95 2.07Group NAV 530.8 515.4 547.0

Investment portfolio 447.4 454.8 454.8

Net financial position - Holding companies 83.7 58.4 90.0Consolidated net financial position 116.3 102.2 133.8

(*) The "adjusted" results at 31.12.2015 take into account the extraordinary dividend distribution of 0,12 € / share, for a total 31,6 million Euro, which was completed in May 2015

(EUR million)

Group net profit/(loss) 9.8 72.8

Comprehensive income (Group share) 18.0 13.8(Statement of Performance – IAS 1)

31.12.2015 "as reported"

First nine months of

2016


2015

30.9.201631.12.2015

"adjusted" (*)

Group NAV "as reported" at 31.12.2015 547.0 263.9 2.07Extraordinary dividend distributed (31.6) (0.12)"Adjusted" Group NAV at 31.12.2015 515.4 1.95Purchase of own shares (3.3) (2.8) (1.20)Treasury shares delivered to the incentive plans 0.6 0.5 1.32Comprehensive income - Statement of Performance – IAS 1 18.0Other changes in NAV 0.1

Group NAV at 30.9.2016 530.8 261.6 2.03

(*) Average price of purchases in 2016

(#) Market price at the date of delivery of shares

No. shares (millions)

Value per share (EUR)Change in Group NAV

Total value (EUR m)

(*)

(#)


13

The table below provides details of the Group’s statement of financial position at 30 September 2016.

M€ €/Sh. M€ €/Sh.

Private Equity Investment- Kenan Inv. / Migros 75.3 0.29 76.3 0.29- Funds - Private Equity / Real Estate 192.4 0.74 194.1 0.74- Other (Sigla, ..) 11.7 0.04 11.7 0.05Total PEI (A) 279.4 1.07 282.1 1.08

Alternative Asset Management- IDeA FIMIT SGR 123.4 0.47 121.7 0.46- IDeA Capital Funds SGR 38.7 0.15 39.7 0.15- IRE / SPC 5.9 0.02 11.3 0.04Total AAM (B) 168.0 0.64 172.7 0.65

Investment Portfolio (A+B) 447.4 1.71 454.8 1.73

Other net assets (liabilities) (0.3) 0.00 2.2 0.00

Net Financial Position Holdings 83.7 0.32 58.4 0.22

NAV 530.8 2.03 515.4 1.95(*) The "adjusted" results at December 31, 2015 take into account the extraordinary dividend distribution of0,12 € / share, for a total 31,6 million Euro, which was completed in May 2016

September 30, 2016December 31, 2015

"adjusted" (*)


14

4. Significant events in the third quarter of 2016 The significant events that occurred in the third quarter of 2016 are summarised below. For events that took place during the first half of the year, please refer to the Half-Year Report to 30 June 2016, which was approved by the Board of Directors on 8 September 2016.

Private equity funds – paid calls/distributions In the third quarter of 2016, the DeA Capital Group increased its respective investments with payments totalling EUR 1.3 million. Investments in the first nine months of 2016 totalled EUR 6.8 million, and relate to the IDeA I FoF, ICF II, ICF III, IDeA EESS, IDeA ToI and IDeA CCR I funds. At the same time, the DeA Capital Group received capital reimbursements totalling EUR 6.6 million during the third quarter. The cumulative total of reimbursements received in the first nine months of 2016 amounted to EUR 17.8 million, and relate to the IDeA I FoF, ICF II, IDeA OF I and IDeA EESS funds. Thus, in the third quarter of 2016, the private equity funds in which DeA Capital S.p.A. invested produced a net positive cash balance totalling EUR 5.3 million for the portion relating to the Group (EUR 11.0 million in the first nine months of 2016).

Acquisition of an indirect stake in SPC In July 2016, the DeA Capital Group acquired, via its subsidiary DeA Capital Real Estate, an indirect stake of 66.3% in SPC, a company that specialises in secured and unsecured debt recovery, with a focus on the leasing, banking, consumer and commercial sectors in Italy. The transaction was carried out via the acquisition of the vehicle, Mato, holder of a majority stake in SPC, and the subsequent capital increase by SPC, with a total investment, to date, of EUR 1 million for the DeA Capital Group. Under the agreements signed with the minority shareholders (SPC management, industrial partners), regulated by a shareholders' agreement, further capital increases will be carried out by the company by the end of 2017, for a planned further investment of EUR 0.6 million for DeA Capital (representing a stake of 68.7% at the conclusion of these capital increases).

Third closing of IDeA Taste of Italy private equity fund On 6 September 2016, the IDeA Taste of Italy fund completed a third closing for a total of EUR 48.5 million, bringing the fund's total commitment to EUR 188.5 million. The fund's final target, which is expected to be achieved by the end of the current financial year, is EUR 200 million.


15

5. Results of the DeA Capital Group The consolidated results relate to the operations of the DeA Capital Group in the following businesses:

Private Equity Investment, which includes the reporting units involved in private equity

investment, broken down into shareholdings (direct investments) and investments in funds (indirect investments);

Alternative Asset Management, which includes reporting units dedicated to asset

management activities and related services, with a focus on the management of private equity and real estate funds.

Private Equity Investment In terms of shareholdings, at 30 September 2016, the DeA Capital Group was a shareholder of:

Kenan Investments, the indirect parent company of Migros (valued at EUR 75.3 million);

Sigla Luxembourg, the parent company of Sigla (valued at EUR 11.5 million); Harvip, which manages funds and investment vehicles used to purchase distressed real

estate and other investments (valued at EUR 0.2 million). The DeA Capital Group is also a shareholder in other smaller companies which are not included in the investment portfolio as they are either dormant or in liquidation and have zero carrying value. At 30 September 2016, the DeA Capital Group was subscribed to units in the following funds (net carrying value from the funds' consolidated financial statements shown in brackets):

IDeA I FoF (valued at EUR 73.3 million); ICF II (valued at EUR 44.8 million); ICF III (valued at EUR 6.3 million); IDeA OF I (valued at EUR 45.6 million); IDeA EESS (valued at EUR 7.1 million); IDeA ToI (valued at EUR 1.9 million); AVA (valued at EUR 3.7 million); IDeA CCR I (valued at EUR 0.2 million); six venture capital funds (with a total value of approximately EUR 9.5 million);

Valuations of shareholdings and funds in the portfolio reflect estimates made using the information available on the date this document was prepared.


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reserve due to the combined effect of the rise in the share price (TRY 18.28 per share at 30 September 2016 compared with TRY 17.45 per share at 31 December 2015) and the depreciation of the Turkish lira against the euro (3.37 TRY/EUR at 30 September 2016 versus 3.17 TRY/EUR at 31 December 2015).

Funds At 30 September 2016, the DeA Capital Group’s Private Equity Investment business included investments – other than the investment in the IDeA OF I fund (fully consolidated in accordance with IFRS 10) and the AVA real estate fund (classified under “Investments in associates”, based on the units held) – in three funds of funds (IDeA I FoF, ICF II and ICF III), three theme funds (IDeA EESS, IDeA ToI and IDeA CCR I) and six venture capital funds, for a total net carrying amount in the Consolidated Financial Statements to 30 September 2016 of EUR 192.4 million (corresponding to the estimated fair value calculated using the information available on the date this document was prepared). Residual commitments for all the funds in the portfolio were approximately EUR 100.4 million.

Migros (mln YTL) First Half 2016 First Half 2015 Change

Revenues 5,079 4,369 16.2%EBITDA 308 267 15.3%Group net profit (53) (114) n.a.

Net financial debt (1,712) (1,748) +36 mln YTL

* Awaiting publication of the data of the first 9 months - the data for half year are provided


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9


20

- On 10 February 2011, it invested in bonds convertible into shares of Euticals, the Italian leader in the production of active ingredients for pharmaceutical companies that operate in the generics sector. As part of the extraordinary operation that led to the transfer of the controlling share in Euticals S.p.A., on 3 April 2012, these bonds were transferred into the acquisition vehicle, Lauro 57, which thus now owns 100% of Euticals S.p.A.; in exchange, a stake of 7.77% was acquired in the same acquisition vehicle. On 2 April 2015, a share capital increase totalling EUR 12.5 million (of which EUR 1.2 million was for IDeA OF I) was completed; this brought the stake held in the company to 8.0%. On 11 July 2016, the acquisition vehicle completed the sale of the entire stake held in Euticals to AMRI (a NASDAQ-listed group that provides manufacturing services to the pharmaceutical and biotechnology industries) for an equity value of EUR 243.5 million, i.e. EUR 19.4 million for the OF I stake. The price was settled partly in AMRI shares (for an indirect stake of 1.31% in the company for the OF I stake) and partly via the issue of a vendor note (EUR 4.4 million for the OF I stake, repayable in three tranches after the third, fourth and fifth year following the sale) with the remaining portion paid in cash (EUR 7.3 million, gross of transaction costs and the escrow account), with a total return on investment of 1.65 times;

- On 11 September 2012, an agreement was signed with the main shareholder,

Filocapital S.r.l., for an investment in Iacobucci HF Electronics S.p.A. (“Iacobucci”), a company that manufactures trolleys for aeroplanes and trains, and specialises in the design, production and marketing of components for aircraft fittings and furnishings. At the date of this document, the investment in Iacobucci consists of a stake of 34.85%, following two reserved capital increases on 7 August 2013 (EUR 3 million) and 19 May 2014 (EUR 3 million), and the conversion of a bond into shares of Iacobucci, for EUR 6 million, which took place on 10 October 2014;

- On 9 October 2012, an indirect stake of 4.6% was acquired in Patentes Talgo S.A.

(Talgo), a Spanish company that designs and produces solutions for the rail sector, chiefly sold on the international market (high-speed trains, rolling stock and maintenance systems). On 7 May 2015, a 45% partial stake in the subsidiary was sold as part of its listing on the Madrid stock exchange with net proceeds for the fund of EUR 24.3 million, a return on investment of 3.6 times. After this sale, IDeA OF I holds an indirect stake of approximately 2.5% in Talgo;

- On 12 December 2012, it acquired a stake of 29.34% in 2IL Orthopaedics, a Luxembourg-registered vehicle which, through a public takeover bid and subsequent delisting of previously listed shares, obtained full control (on 15 February 2013) of the British company Corin Group PLC (Corin). Corin is active in the production and marketing of orthopaedic devices, especially for hips and knees;

- On 27 February 2013, it acquired a 10% stake in Elemaster S.p.A. Elemaster), the leading operator in ODM (original design manufacturing) and EMS (electronic manufacturing services), i.e. the design and construction of electronic equipment. At the same time, the IDeA Energy Efficiency and Sustainable Development Fund, also managed by IDeA Capital Funds SGR, invested an equal amount.

Investment disposals

- On 31 March 2009, a 17.43% stake was acquired in Grandi Navi Veloci S.p.A. (GNV), an Italian shipping company that transports passengers and goods on various routes around the Mediterranean Sea. On 2 May 2011, with the finalisation of Marinvest's entry into the shareholder structure of GNV through the subscription of a reserved capital increase, the stake held by IDeA OF I was diluted to 9.21%.


21

Subsequently, IDeA OF I’s decision not to subscribe, on a pro-rata basis, to two further capital increases (August 2012, January 2014) led to a further dilution in its shareholding to 3.12%. On 25 February 2016, the sale of the entire stake held in GNV to a company in the Marinvest Group, GNV's main shareholder, was completed for a purchase price of EUR 3.4 million;

- On 25 February 2011, it purchased a 9.29% stake in Telit Communications PLC

(Telit), the largest operator in machine-to-machine communications systems in the world. The stake held by IDeA OF I was subsequently diluted to 8.53% due to the exercise of stock options by the company's management. In 2016, the sale of the Telit shares still held by IDeA OF I, which was launched in 2014, was completed for a total price of EUR 30.9 million, with a total return on investment of 3.45 times.

The units held in IDeA OF I were reported in the consolidated financial statements to 30 September 2016 at a net value of EUR 45.6 million, versus EUR 48.5 million at 31 December 2015. The change is attributable to capital calls of EUR +1.6 million, capital reimbursements of EUR -4.3 million, a pro-rata net profit for the period of EUR +0.8 million and a EUR 1.0 million decrease in fair value. The table below shows a breakdown of the fund’s NAV at 30 September 2016.

The table below shows the key figures for IDeA OF I at 30 September 2016.

(EUR million) 100% DeA Capital

Investments in PortfolioGiochi Preziosi 5.2 2.4 Manutencoop Facility Management 18.8 8.8 Lauro Cinquantasette (Euticals) 13.6 6.4 Iacobucci HF Electronics 6.0 2.8 Pegaso Transportation Investments (Talgo) 14.3 6.7 2IL Orthopaedics LTD (Corin) 11.6 5.5 Elemaster 8.5 4.0 Total Investments in Portfolio 78.0 36.6Other long term receivables 9.7 4.6Other aseets (liabilities) (0.5) (0.3)Cash and cash equivalents 9.9 4.7Net equity 97.1 45.6

IDeA OF I Registered office Year of commitment Fund Size Subscribed commitment

% DeA Capital in

fund

Eur (€)IDeA Opportunity Fund I Italy 2008 216,550,000 101,750,000 46.99

Residual CommitmentsTotal residual commitment in: Eur 17,531,525


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25

Other important information: Below is an analysis of the portfolio, at the date of the latest report available, broken down by year of investment, geographical area, sector and type of underlying fund.

Notes:

1. % of the FMV of the investment at 30 September 2016; 2. % of fund size based on paid-in exposure (capital invested + residual commitments) at 30 September

2016.

The units in ICF II had a value of EUR 44.8 million at 30 September 2016 (EUR 41.7 million at 31 December 2015). The increase was due to capital calls of EUR +1.4 million, capital reimbursements of EUR -1.1 million and a fair value increase of EUR +2.8 million. The table below shows the key figures for ICF II at 30 September 2016:

Global

16%

RoW 26%

US

29%

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Cons. Staples5%

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Breakdown by vintage(1) Breakdown by geography(2)

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2014

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27%

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28

out via subscription to a reserved capital increase in SMRE. On 20 April 2016, the process of listing the company's shares on AIM (the section of the Italian stock exchange relating to SMEs) was completed, raising funds of EUR 5.3 million; the resulting dilution reduced the stake held by IDeA EESS in SMRE from 29.9% to 26.6%;

- On 27 December 2013, the fund invested EUR 3.9 million in the special purpose

acquisition company (SPAC) GreenItaly 1, as part of the latter's IPO. This investment breaks down as follows: EUR 3.5 million in ordinary shares, which entitle it to 10% of the company, and EUR 0.4 million, in its capacity as promoter of the vehicle, in special shares without voting rights. In December 2015, the fund increased its investment by EUR 3.1 million (of which EUR 0.1 million was for the above-mentioned special shares), bringing it to a total of EUR 7.0 million, for a stake of 18.57% in the SPAC. On 31 December 2015, in line with the SPAC's objectives, GreenItaly 1 completed the merger with Zephyro S.p.A.. (formerly Prima Vera S.p.A.), an Italian leader in the energy efficiency sector and the supply of energy services via complex structures. After the merger, GreenItaly 1 held a stake of 8.1% in the company;

- During the first half of 2014, the fund invested in several further tranches in Meta

System totalling EUR 12.5 million, representing a stake of 16.0% in the company; this subsequently increased to 21.5% through the reinvestment of its pro-rata proceeds of the sale of a subsidiary of Meta System. Meta System is active in the production of transmission equipment, electronic antennas and alarm systems for the automotive sector, as well as home telematics systems and battery chargers for electric vehicles. On 4 August 2015, an agreement was signed for the full disposal of the company in two tranches. The first tranche has been completed (60% of Meta System) for EUR 12.2 million, i.e. 1.6 times the initial investment, and the second tranche will take place via put/call mechanisms exercisable between October 2017 and February 2018;

- On 5 February 2015, the fund acquired a shareholding in Baglioni via a first capital increase of EUR 8.0 million for a 35.9% stake in the company. This was later increased to 41.2% through a further capital increase of EUR 2 million. Baglioni is a company involved in the design and manufacture of compressed air tanks for applications across a broad spectrum of industrial sectors;

- Following the end of the third quarter of 2016, IDeA EESS completed the acquisition of a 96.77% stake in Tecnomeccanica, an Italian company operating in the production of aluminium components for the automotive lighting sector, for a price of EUR 4.6 million.

Investment disposals

- On 30 July 2015, the fund acquired a 26.81% stake in Italchimici S.r.l. for EUR 11.3 million. Italchimici is a pharmaceutical company specialising in the sale of respiratory and alimentary tract products; it has established itself as a leader in Italy in the paediatrics segment. On 31 May 2016, as part of the acquisition of 100% of Italchimici's share capital by pharmaceutical company Recordati, IDeA EESS completed the sale of the full stake held in said company for a price of EUR 25.3 million, with a return on investment of about 2.5 times.

The units in IDeA EESS had a value of approximately EUR 7.1 million at 30 September 2016 (EUR 7.3 million at 31 December 2015). The decrease was due to capital calls of EUR +0.2


29

million, capital reimbursements of EUR -3.7 million and a fair value increase of EUR +3.3 million. The table below shows the key figures for IDeA EESS at 30 September 2016.

IDeA EESS Registered office Year of commitment Fund Size Subscribed commitment

% DeA Capital in

fund

Euro (€)IDeA Efficienza Energetica e Sviluppo Sostenibile Italy 2011 100,000,000 15,300,000 15.30



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32

IDeA CCR I Registered office Year of commitment Fund Size Subscribed commitment

% DeA Capital in

fund

Euro (€)IDeA CCR I Italy 2016 262,809,252 15,150,000 5.76of which:

Segment New Financing 85,250,000 15,075,000 17.68Segment Credit 177,559,252 75,000 0.04Residual CommitmentsTotal residual commitment in: Eur 14,936,596


- AV

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33

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34

- Venture capital funds

The units in venture capital funds had a total value of approximately EUR 9.5 million in the financial statements to 30 September 2016 (EUR 9.7 million at 31 December 2015). The decrease was due to a EUR 0.2 million fall in fair value. The table below shows the key figures for venture capital funds in the portfolio at 30 September 2016.

Venture Capital Funds Registered office Year of commitment Fund Size Subscribed

commitment% DeA Capital

in fund

Dollars (USD)

Doughty Hanson & Co Technology UK EU 2004 271,534,000 1,925,000 0.71

GIZA GE Venture Fund III Delaware U.S.A. 2003 211,680,000 10,000,000 4.72

Israel Seed IV Cayman Islands 2003 200,000,000 5,000,000 2.50

Pitango Venture Capital III Delaware U.S.A. 2003 417,172,000 5,000,000 1.20

Totale Dollars 21,925,000

Eur (€)

Nexit Infocom 2000 Guernsey 2000 66,325,790 3,819,167 5.76

Sterlings (GBP)

Amadeus Capital II UK EU 2000 235,000,000 13,500,000 5.74

Residual Commitments

Total residual commitment in: Eur 4,327,179


Alt At 30 Sept

100 64. 66 45%

ma

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35

nd facility

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36

The table below summarises the value of assets under management and management fees for IDeA Capital Funds SGR at 30 September 2016.

With regard to operating performance, the company posted a year-on-year increase of EUR 287 million in assets under management in the first nine months of 2016. This increase is due to the third closing of the IDeA ToI fund (EUR 49 million), the closing of the IDeA CCR I fund (EUR 263 million) and the final closing of the ICF III fund (approximately EUR 10 million).

(EUR million)

Asset Under Management at 30 september

2016

Management fees at

30 september 2016

IDeA Capital Funds SGRIDeA I FoF 681 2.6 IDeA OF I 217 1.4 ICF II 281 1.5 IDeA EESS 100 1.4 Idea Crescita Globale 55 1.0 ICF III 67 0.6 Taste of Italy 189 4.2 Investitori Associati IV 86 0.6 IDeA CCR I 263 1.8 Total IDeA Capital Funds SGR 1,939 15.1

IDeA Capital Funds SGR (EUR million)First Nine Months of

2016First Nine Months of

2015

AUM 1,939 1,652

Management fees 15.1 12.8

Net profit 3.8 4.1


- IDe

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(EUR millio

BreakdownAtlantic 1Atlantic 2 AlphaBetaDeltaListed funReservedTotal IDe

anagementtember 201

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IT SGR is tnd EUR 8.0d funds). al investor

nt funds.

T SGR und

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Italy Asset Manafimit.it s:

he largest 0 billion in This make

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38

Some of the key financials of the listed funds in the asset management portfolio are provided below, with an analysis of the real estate portfolio at the date of the latest report available, broken down by geographical area and by intended use, i.e. Atlantic 1, Atlantic 2, Alpha, Beta and Delta (in EUR). Atlantic 1 30/06/2016

Market value of properties 561,100,000 Historical cost and capitalised charges 612,564,276 Financing 302,859,991 Net Asset Value (NAV) 259,411,185 NAV/unit (EUR) 497.4 Market price/unit (EUR) 247.0 Dividend yield from investment* 5.45%

* Ratio of income per unit to annual average nominal value per unit

Atlantic 1: Diversification by geographical area Atlantic 1: Diversification by intended use

Atlantic 2 - Berenice 30/06/2016 Market value of properties 147,359,000 Historical cost and capitalised charges 182,632,301 Financing 66,400,766 Net Asset Value (NAV) 89,714,111 NAV/unit (EUR) 149.5 Market price/unit (EUR) 99.0 Dividend yield from investment* 8.74% * Ratio of income per unit to annual average nominal value per unit

Atlantic 2: Diversification by geographical area Atlantic 2: Diversification by intended use

Lombardia 68%

Lazio 15%

Campania 12%

Piemonte / Emilia R.

5% Offices 83%

Commercial 17%

Lombardia 45%

Lazio 38%

Piemonte 11%

Altri 6%Offices 85%

Other 15%


39

Alpha 30/06/2016

Market value of properties 317,250,000 Historical cost and capitalised charges 303,351,292 Financing 20,625,497 Net Asset Value (NAV) 343,260,021 NAV/unit (EUR) 3,304.5 Market price/unit (EUR) 1,101.0 Dividend yield from investment* 4.94%


Alpha: Diversification by geographical area Alpha: Diversification by intended use

Beta 30/06/2016

Market value of properties 51,745,000 Historical cost and capitalised charges 71,892,107 Net Asset Value (NAV) 56,840,510 NAV/unit (EUR) 211.7 Market price/unit (EUR) 114.6 Dividend yield from investment* 8.00%


Beta: Diversification by geographical area Beta: Diversification by intended use

Lazio 83%Lombardia

12%

Emilia Romagna 5%

Offices 60%Other 40%

Lazio 38%

Umbria 62%

Offices 53%

Special Use 45%

Commercial 2%


40

Delta 30/06/2016

Market value of properties 199,130,000 Historical cost and capitalised charges 256,435,137 Financing 12,421,882 Net Asset Value (NAV) 197,084,958 NAV/unit (EUR) 93.6 Market price/unit (EUR) 52.1 Dividend yield from investment* n.a.

* No distribution from investment

Delta: Diversification by geographical area Delta: Diversification by intended use

* * *

Turning to the management performance of IDeA FIMIT SGR, the company recorded lower management fees (EUR -6.8 million) in the first nine months of 2016 than in the year-earlier period; this was mainly due to sales by the funds managed by the asset management company, and partly due to a review of the fees agreed with some of the managed funds. Note, however, that part of the difference is due to the extraordinary impact on the 2015 figure of revenues relating to variable fees (approx. EUR 2 million) received by the Omicron Plus fund on the sale of a large building (Palazzo Broggi in Milan). At the same time, during the first nine months of 2016, the company provided a fresh impetus to the development of its managed assets, notably by (i) launching the "Trophy Value Added" fund and the IDeA NPL fund, for the purposes of investing in notes issued by securitisation vehicles relating to secured non-performing loans (ii) taking over the management of the Aries fund and (iii) increasing the assets under management of the Ippocrate fund, with the full impact on revenues expected from 2017.

Hotels62%

Other34%

Offices4%

Sardegna14%

Veneto 21%

Calabria 16% Abruzzo 15%

Emilia Romagna

14%

Lombardia 7%

Campania 6%

Piemonte3%

Toscana3%

IDeA FIMIT SGR (EUR million)First Nine Months of

2016First Nine Months of

2015

AUM 8,000 8,599

Management fees 30.3 37.1

Net profit 3.9 6.5

-of which:

- Shareolders 4.2 6.5

- Owner of financial equity instruments (0.3) 0.0


- SPC

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41

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43

Consolidated income statement In the first nine months of 2016, a net profit of around EUR 12.0 million was recorded (of which EUR 9.8 million related to the Group), compared with a profit of around EUR 90.1 million (of which EUR 72.8 million related to the Group) in the same period in 2015, which included large capital gains from the partial sales of Migros and stakes held by the IDeA OF I fund. Revenues and other income break down as follows:

- Alternative Asset Management fees of EUR 43.9 million (EUR 48.2 million in the same period of 2015);

- other investment income, net of liabilities, totalling EUR 6.1 million (net investment income of EUR 73.6 million in the same period of 2015);

- service revenues of EUR 8.3 million (compared with EUR 13.4 million recorded in the same period of 2015).

Costs totalled EUR 44.3 million (EUR 51.2 million in the same period of 2015), of which EUR 39.1 million was attributable to Alternative Asset Management, EUR 1.5 million to Private Equity Investment and EUR 3.6 million to holding company activities. Alternative Asset Management costs include the effects of the amortisation of intangible assets, totalling EUR 3.5 million in the first nine months of 2016, recorded when a portion of the purchase price of the investments was allocated. Net financial expenses, which amounted to EUR -1.6 million at 30 September 2016, mainly relate to exchange rate losses on foreign investments and to other financial income. The total tax impact for the first nine months of 2016 (EUR -1.1 million compared with EUR --1.2 million in the same period of 2015) is the combined result of taxes of EUR -5.0 million due in respect of Alternative Asset Management activities and tax credits of EUR +3.9 million relating to holding activities. Of the net profit of EUR 12.0 million, about EUR 1.6 million was attributable to Private Equity Investment, EUR 11.2 million to Alternative Asset Management and a loss of EUR 0.8 million to holding company operations/eliminations. Of the Group’s net profit of EUR 9.8 million, EUR +0.7 million was attributable to Private Equity Investment, EUR +10.0 million to Alternative Asset Management and EUR -0.8 million to holding company operations/eliminations.


44

Summary Consolidated Income Statement

Performance by business in the first nine months of 2016

Performance by business in the first nine months of 2015

(EUR thousand)

Third Quarter

2016


2016

Third Quarter

2015


2015

Alternative Asset Management fees 15,477 43,938 17,009 48,222Income (loss) from equity investments 547 444 0 (227)Other investment income/expense 8,077 6,148 38,211 73,588Income from services 810 8,302 4,796 13,441Other income 53 120 3,040 3,162Other expenses (11,973) (44,281) (16,009) (51,239)Financial income and expenses (329) (1,592) 1,220 4,073PROFIT/(LOSS) BEFORE TAX 12,662 13,079 48,267 91,020Income tax (222) (1,111) (2,218) (1,235)PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS 12,440 11,968 46,049 89,785 Profit (Loss) from discontinued operations/held-for-sale assets 0 0 116 286PROFIT/(LOSS) FOR THE PERIOD 12,440 11,968 46,165 90,071 - Group share 7,945 9,849 49,141 72,785 - Non controlling interests 4,495 2,119 (2,976) 17,286

Earnings per share, basic (€) 0.038 0.275

Earnings per share, diluted (€) 0.038 0.275

(EUR thousand)Private Equity

Investment

Alternative Asset

ManagementHoldings/

Eliminations Consolidated

Alternative Asset Management fees 0 45,369 (1,431) 43,938Income (loss) from equity investments (56) 500 0 444Other investment income/expense 4,891 1,257 0 6,148Income from services 0 8,100 322 8,422Other expenses (1,541) (39,109) (3,631) (44,281)Financial income and expenses (1,664) 47 25 (1,592)PROFIT/(LOSS) BEFORE TAXES 1,630 16,164 (4,715) 13,079Income tax 0 (5,012) 3,901 (1,111)PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS 1,630 11,152 (814) 11,968 Profit (Loss) from discontinued operations/held-for-sale assets 0 0 0 0PROFIT/(LOSS) FOR THE PERIOD 1,630 11,152 (814) 11,968 - Group share 671 9,992 (814) 9,849 - Non controlling interests 959 1,160 0 2,119

(EUR thousand)Private Equity

Investment

Alternative Asset

ManagementHoldings/

Eliminations Consolidated

Alternative Asset Management fees 0 49,968 (1,746) 48,222Income (loss) from equity investments (101) (126) 0 (227)Other investment income/expense 72,141 1,447 0 73,588Income from services 3,010 13,321 272 16,603Other expenses (1,906) (45,536) (3,797) (51,239)Financial income and expenses 4,772 26 (725) 4,073PROFIT/(LOSS) BEFORE TAXES 77,916 19,100 (5,996) 91,020Income tax 0 (6,724) 5,489 (1,235)PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS 77,916 12,376 (507) 89,785 Profit (Loss) from discontinued operations/held-for-sale assets 286 0 0 286PROFIT/(LOSS) FOR THE PERIOD 78,202 12,376 (507) 90,071 - Group share 63,537 9,755 (507) 72,785 - Non controlling interests 14,665 2,621 0 17,286


45

Comprehensive income - statement of performance (IAS 1) Comprehensive Income or the Statement of Performance (IAS 1), in which performance for the period attributable to the group is reported including results posted directly to shareholders' equity, shows a net positive balance of approximately EUR 18.0 million compared with a net positive balance of approximately EUR 13.8 million in the same period of 2015. This comprised:

net profit of EUR 9.8 million recorded on the income statement; profits posted directly to shareholders' equity totalling EUR +8.2 million (due mainly to

the change in the fair value of IDeA I and IDeA EESS).

(EUR thousand)


2016


2015

Profit/(loss) for the period (A) 11,968 90,071

Comprehensive income/expense which might be subsequently reclassified within the profit (loss) for the period 9,809 (64,166)Comprehensive income/expense which will not be subsequently reclassified within the profit (loss) for the period 111 24Other comprehensive income, net of tax (B) 9,920 (64,142)Total comprehensive income for the period (A)+(B) 21,888 25,929

Total comprehensive income attributable to: - Group Share 18,015 13,812 - Non Controlling Interests 3,873 12,117


46

Consolidated statement of financial position Below is the Group’s statement of financial position at 30 September 2016, compared with 31 December 2015.

At 30 September 2016, Group shareholders’ equity was EUR 530.8 million, compared with EUR 547.0 million at 31 December 2015. The decrease of approximately EUR 16.2 million in Group shareholders' equity in the first nine months of 2016 was due to the extraordinary dividend

(EUR thousand) September 30, 2016 December 31, 2015ASSETS

Non-current assetsIntangible and tangible assets

Goodwill 128,408 129,595 Intangible assets 33,755 37,539 Property, plant and equipment 2,314 3,119

Total intangible and tangible assets 164,477 170,253 Investments - -

Investments valued at equity 16,517 11,467 Investments held by Funds 78,023 90,675 - available for sale investments 46,154 52,536 - invest. in associates and JV valued at FV through P&L 31,869 38,138 Other available-for-sale companies 75,477 76,464 Available-for-sale funds 187,758 173,730 Other avalaible-for-sale financial assets 22 26

Total Investments 357,797 352,362 Other non-current assets - -

Deferred tax assets 2,544 3,676 Tax receivables from Parent companies 1,698 0 Other non-current assets 31,675 31,795

Total other non-current assets 36,495 35,471 Total non-current assets 558,769 558,086

- - Current assets - -

Trade receivables 9,272 17,818 Available-for-sale financial assets 4,241 7,532 Financial receivables 5,791 3,467 Tax receivables from Parent companies 0 2,667 Other tax receivables 1,692 4,567 Other receivables 3,327 2,876 Cash and cash equivalents 106,065 123,468

Total current assets 130,388 162,395 Total current assets 130,388 162,395

Held-for-sale assets 11,487 11,487 TOTAL ASSETS 700,644 731,968

- - SHAREHOLDERS' EQUITY AND LIABILITIES - - SHAREHOLDERS' EQUITY - -

Net equity Group 530,842 546,988 Minority interests 136,073 138,172 Shareholders' equity 666,915 685,160

LIABILITIES - - Non-current liabilities - -

Deferred tax liabilities 11,618 10,801 Provisions for employee termination benefits 3,837 4,713 Long term financial loans 48 0 Payables to staff 0 0

Total non-current liabilities 15,503 15,514 Current liabilities - -

Trade payables 6,551 15,598 Payables to staff and social security organisations 4,148 7,341 Current tax 3,001 3,384 Other tax payables 954 1,571 Other payables 3,205 2,749 Short term financial loans 367 651

Total current liabilities 18,226 31,294 Held-for-sale liabilities 0 0 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 700,644 731,968


47

paid (EUR -31.6 million) and to the reasons already discussed relating to the Statement of Performance - IAS 1 (EUR +18.0 million).

Consolidated net financial position

At 30 September 2016, the consolidated net financial position was EUR 116.3 million, as shown in the table below, which provides a comparison with 31 December 2015:

The change in the consolidated net financial position in the first nine months of 2016 was broadly due to the distribution of the extraordinary dividend by DeA Capital S.p.A. (EUR -31.6 million) and net liquidity generated by investments in private equity funds in the portfolio of EUR +11.0 million.

The Company believes that the cash and cash equivalents and the other financial resources available are sufficient to meet the requirement relating to payment commitments already subscribed in funds, also taking into account the amounts expected to be called up/distributed by these funds. With regard to these residual commitments, the Company believes that the resources currently available, as well as those that will be generated by its operating and financing activities, will enable the DeA Capital Group to meet the financing required for its investment activity and to manage working capital.

Net financial position (EUR million)

Cash and cash equivalents 106.1 123.5 (17.4)Available-for-sale financial assets 4.2 7.5 (3.3)Financial receivables 6.4 3.5 2.9Non-current financial liabilities 0.0 0.0 0.0Current financial liabilities (0.4) (0.7) 0.3TOTAL 116.3 133.8 (17.5)of which: 0.0 0.0 0.0- Alternative Asset Management 22.7 40.4 (17.7)- Private Equity Investment 9.9 3.4 6.5- Holdings 83.7 90.0 (6.3)

30.9.2016 31.12.2015 Change


48

6. Other information

Transactions with parent companies, subsidiaries and related parties

Transactions with related parties, including intercompany transactions, are typical, usual transactions that are part of the normal business activities of Group companies. Such transactions are concluded at standard market terms for the nature of the goods and/or services offered.

Other information At 30 September 2016, the Group had 193 employees, including 35 senior managers, 57 middle managers and 101 clerical staff. Of these, 178 worked in Alternative Asset Management and 15 in Private Equity Investment/the Holding Company. These staff levels do not include personnel on secondment from the Parent Company De Agostini S.p.A. With regard to the regulatory requirements set out in art. 36 of the Market Regulation on conditions for the listing of parent companies of companies formed or regulated by laws of non-EU countries and of major importance in the consolidated accounts, it is hereby noted that no Group company falls within the scope of the above-mentioned provision. Furthermore, conditions prohibiting listing pursuant to art. 37 of the Market Regulation relating to companies subject to the management and coordination of other parties do not apply.


49

Consolidated Financial Statements and Notes to the Accounts for the period 1 January – 30 September 2016


50

Consolidated Statement of Financial Position

(EUR thousand) September 30, 2016 December 31, 2015ASSETS

Non-current assetsIntangible and tangible assets

Goodwill 128,408 129,595 Intangible assets 33,755 37,539 Property, plant and equipment 2,314 3,119

Total intangible and tangible assets 164,477 170,253 Investments - -

Investments valued at equity 16,517 11,467 Investments held by Funds 78,023 90,675 - available for sale investments 46,154 52,536 - invest. in associates and JV valued at FV through P&L 31,869 38,138 Other available-for-sale companies 75,477 76,464 Available-for-sale funds 187,758 173,730 Other avalaible-for-sale financial assets 22 26

Total Investments 357,797 352,362 Other non-current assets - -

Deferred tax assets 2,544 3,676 Tax receivables from Parent companies 1,698 0 Other non-current assets 31,675 31,795

Total other non-current assets 36,495 35,471 Total non-current assets 558,769 558,086

- - Current assets - -

Trade receivables 9,272 17,818 Available-for-sale financial assets 4,241 7,532 Financial receivables 5,791 3,467 Tax receivables from Parent companies 0 2,667 Other tax receivables 1,692 4,567 Other receivables 3,327 2,876 Cash and cash equivalents 106,065 123,468

Total current assets 130,388 162,395 Total current assets 130,388 162,395

Held-for-sale assets 11,487 11,487 TOTAL ASSETS 700,644 731,968

- - SHAREHOLDERS' EQUITY AND LIABILITIES - - SHAREHOLDERS' EQUITY - -

Net equity Group 530,842 546,988 Minority interests 136,073 138,172 Shareholders' equity 666,915 685,160

LIABILITIES - - Non-current liabilities - -

Deferred tax liabilities 11,618 10,801 Provisions for employee termination benefits 3,837 4,713 Long term financial loans 48 0 Payables to staff 0 0

Total non-current liabilities 15,503 15,514 Current liabilities - -

Trade payables 6,551 15,598 Payables to staff and social security organisations 4,148 7,341 Current tax 3,001 3,384 Other tax payables 954 1,571 Other payables 3,205 2,749 Short term financial loans 367 651

Total current liabilities 18,226 31,294 Held-for-sale liabilities 0 0 TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 700,644 731,968


51

Consolidated Income Statement

(EUR thousand)

Third Quarter

2016


2016

Third Quarter

2015


2015

Alternative Asset Management fees 15,477 43,938 17,009 48,222Income from equity investments 547 444 0 (227)Other investment income/expense 8,077 6,148 38,211 73,588Income from services 810 8,302 4,796 13,441Other income 53 120 3,040 3,162Personnel costs (5,586) (21,870) (7,342) (23,834)Service costs (4,182) (15,479) (5,069) (17,023)Depreciation, amortization and impairment (1,514) (4,607) (1,670) (5,055)Other expenses (691) (2,325) (1,928) (5,327)Financial income 152 674 1,634 5,115Financial expenses (481) (2,266) (414) (1,042)PROFIT/(LOSS) BEFORE TAX 12,662 13,079 48,267 91,020Income tax (222) (1,111) (2,218) (1,235)PROFIT/(LOSS) FOR THE PERIOD FROM CONTINUING OPERATIONS 12,440 11,968 46,049 89,785 Profit (Loss) from discontinued operations/held-for-sale assets 0 0 116 286PROFIT/(LOSS) FOR THE PERIOD 12,440 11,968 46,165 90,071 - Group share 7,945 9,849 49,141 72,785 - Non controlling interests 4,495 2,119 (2,976) 17,286

Earnings per share, basic (€) 0.038 0.275

Earnings per share, diluted (€) 0.038 0.275


52

Consolidated Statement of Comprehensive Income (Statement of Performance – IAS 1)

(Euro thousands)


2016


2015

Profit/(loss) for the period (A) 11,968 90,071

Comprehensive income/expense which might be subsequently reclassified within the profit (loss) for the period 9,809 (64,166)

Gains/(Losses) on fair value of available-for-sale financial assets 9,809 (54,655)

Share of other comprehensive income of associates 0 (9,511)

Comprehensive income/expense which will not be subsequently reclassified within the profit (loss) for the period 111 24

Gains/(losses) on remeasurement of defined benefit plans 111 24

Other comprehensive income, net of tax (B) 9,920 (64,142)Total comprehensive income for the period (A)+(B) 21,888 25,929

Total comprehensive income attributable to: - Group Share 18,015 13,812 - Non Controlling Interests 3,873 12,117


53

Consolidated Statement of Changes in Shareholders’ Equity

(EUR thousand) Share Capital

Treasury share reserve, capital

reserve, retained earnings

Fair value Reserve

Profit (loss) for the Group Total Group Non controlling

interestsConsolidated net

equity

Total at 31 December 2014 271,626 323,073 116,415 (57,601) 653,513 173,109 826,622Allocation of previous year's net result 0 (57,601) 0 57,601 0 0 0Cost of stock options 0 (274) 0 0 (274) 0 (274)Purchase of own shares (5,446) (4,424) 0 0 (9,870) 0 (9,870)Dividends distributed 0 (79,854) 0 0 (79,854) 0 (79,854)Other changes 0 12 0 0 12 (10,850) (10,838)Total comprehensive profit/(loss) 0 0 (6,673) 23,644 16,971 17,339 34,310

Total at 30 September 2015 266,180 180,932 109,742 23,644 580,498 179,598 760,096

(EUR thousand) Share Capital

Treasury share reserve, capital

reserve, retained earnings

Fair value Reserve

Profit (loss) for the Group Total Group Non controlling

interestsConsolidated net

equity

Total at 31 December 2015 263,923 179,815 62,178 41,072 546,988 138,172 685,160

Allocation of previous year's net result 0 41,072 0 (41,072) 0 0 0Cost of stock options 0 51 0 0 51 0 51Purchase of own shares (2,775) (552) 0 0 (3,327) 0 (3,327)Treasury shares delivered to the incentive plans 463 148 0 0 611 0 611Dividends distributed 0 (31,557) 0 0 (31,557) 0 (31,557)Other changes 0 61 0 0 61 (5,972) (5,911)Total comprehensive income 0 0 8,166 9,849 18,015 3,873 21,888

Total at 30 September 2016 261,611 189,038 70,344 9,849 530,842 136,073 666,915


54

Consolidated Cash Flow Statement - Direct Method

(EUR thousand)


2016


2015CASH FLOW from operating activities

Investments in funds and shareholdings (17,071) (22,536)Capital reimbursements from funds 11,496 30,326Proceeds from the sale of investments 16,752 152,363Interest received 229 205Interest paid (26) (746)Cash distribution from investments 49 2,686Realized gains (losses) on exchange rate derivatives (1) 15Taxes paid (161) 768Dividends received 1,500 0Management and performance fees received 41,280 49,278Revenues for services 12,123 17,824Operating expenses (43,901) (54,551)

Net cash flow from operating activities 22,269 175,632

CASH FLOW from investment activities

Acquisition of property, plant and equipment (46) (125)Sale of property, plant and equipment 70 354Purchase of licenses (228) (70)

Net cash flow from investing activities (204) 159

CASH FLOW from investing activities

Acquisition of financial assets (1,939) 0Sale of financial assets 4,503 982Share capital issued 2,369 1,745Own shares acquired (3,327) (11,634)Dividends paid (33,492) (99,652)Loan 1,404 (3,187)Quasi-equity loan 0 0Bank loan paid back (466) (4,000)

Net cash flow from financing activities (30,948) (115,746)

CHANGE IN CASH AND CASH EQUIVALENTS (8,883) 60,045

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 123,468 55,583Cash and cash equivalents relating to held-for-sale assets 0 0Cash and cash equivalents at beginning of period 123,468 55,583

Effect of change in basis of consolidation: cash and cash equivalents (8,520) (97)

CASH AND CASH EQUIVALENTS AT END OF PERIOD 106,065 115,531

Held-for-sale assets and minority interests 0 0

CASH AND CASH EQUIVALENTS AT END OF PERIOD 106,065 115,531


55

Structure and content of the Interim Management Report to 30 September 2016 The Interim Management Report to 30 September 2016 (the Report) constitutes the document set out by art. 154-ter of the Testo Unico della Finanza law (TUF). Information regarding the Company’s operating performance and financial position is prepared in accordance with the valuation and measurement criteria set out by the International Financial Reporting Standards (IFRS), issued by the International Accounting Standards Board (IASB) and adopted by the European Commission pursuant to the procedures set out at art. 6 of Regulation (EC) no. 1606/2002 of the European Parliament and Council of 19 July 2002. The accounting standards used in the Report do not differ significantly from those used in the Financial Statements to 31 December 2015 and in the Half-Year Report to 30 June 2016. The Report comprises the following Consolidated Financial Statements – the Statement of Financial Position, the Income Statement, the Cash Flow Statement, the Statement of Changes in Shareholders' Equity and the Statement of Comprehensive Income (IAS 1) – and these Notes to the Accounts; it is also accompanied by the Interim Report on Operations and the Statement of Responsibilities for the Interim Management Report. The Consolidated Financial Statements in the Report have not been audited by the Independent Auditors. Financial information is discussed with reference to the first nine months of 2016 and the same period in 2015; information on the Statement of Financial Position relates to 30 September 2016 and 31 December 2015. The Consolidated Financial Statements are provided in the same format as those relating to 31 December 2015. As allowed by IAS/IFRS, the preparation of the Report required the use of significant estimates by the Company's management, especially with regard to the valuations of the investment portfolio (equity investments and funds). These valuations were calculated by directors based on their best judgement and estimation using the knowledge and evidence available at the time the Report was prepared. However, due to objective difficulties in making assessments, the values attributed to such assets could differ, in some cases significantly, from those that could be obtained when the assets are sold. In accordance with the provisions of IAS/IFRS and current laws, the Company authorised the publication of the Report by the legal deadline. Scope of consolidation The basis of consolidation had changed at 30 September 2016 compared to 31 December 2015, as a result of:

the sale of a 55% stake in Innovation Real; the acquisition of a 66.3% indirect stake in SPC, via the acquisition of the Mato vehicle.

Therefore, at 30 September 2016, the following companies formed part of the DeA Capital Group's scope of consolidation:


56

Company Registered office Currency Share capital % holding Consolidation methodDeA Capital S.p.A. Milan, Italy Euro 306,612,100 HoldingIDeA Capital Funds SGR S.p.A. Milan, Italy Euro 1,200,000 100.00% Full consolidationIDeA OF I Milan, Italy Euro - 46.99% Full consolidationDeA Capital Real Estate S.p.A. Milan, Italy Euro 600,000 100.00% Full consolidationIDeA FIMIT SGR S.p.A. Rome, Italy Euro 16,757,574 64.30% Full consolidationIdea Real Estate S.p.A. Milan, Italy Euro 50,000 100.00% Full consolidationMato S.r.l. Milan, Italy Euro 10,000 100.00% Full consolidationSPC S.p.A. Milan, Italy Euro 70,032 66.32% Full consolidationInnovation Real Estate S.p.A. Milan, Italy Euro 597,725 45.00% Equity accounted Innovation Real Estate Advisory S.r.l. Milan, Italy Euro 105,000 45.00% Equity accounted Atlantic Value Added Rome, Italy Euro - 27.27% Equity accounted


57

Notes to the Consolidated Statement of Financial Position NON-CURRENT ASSETS Non-current assets totalled EUR 558.8 million at 30 September 2016, compared with EUR 558.1 million at 31 December 2015. Intangible assets and property, plant and equipment This item includes goodwill (EUR 128.4 million), other intangible assets (EUR 33.8 million) and property, plant and equipment (EUR 2.3 million). This item, which was EUR 128.4 million at 30 September 2016 (compared with EUR 129.6 million at 31 December 2015), chiefly relates to the goodwill accounted for in relation to IDeA Capital Funds SGR (EUR 31.3 million) and IDeA FIMIT SGR (EUR 96.6 million). Intangible assets mainly relate to customer contracts, which arise from the allocation of the merger costs for the acquisition of IDeA Capital Funds SGR and FIMIT SGR. Investments in associates This item, which totalled EUR 16.5 million at 30 September 2016 (EUR 11.5 million at 31 December 2015), relates to the assets below:

- the investment in IRE, which was valued at EUR 5.2 million; - the units held in the AVA fund, which were valued at EUR 11.3 million.

The table below provides details of investments in associates at 30 September 2016 by area of activity.

Shareholdings held by funds At 30 September 2016, the DeA Capital Group was a minority shareholder, through the IDeA OF I fund, in Giochi Preziosi, Manutencoop, Euticals, Elemaster, Talgo, Corin and Iacobucci. This item, which totalled EUR 78.0 million at 30 September 2016 (EUR 90.7 million at 31 December 2015), relates to the assets below:

(EUR million)Private Equity

Investment

Alternative Asset

ManagementTotal

AVA fund 3.7 7.6 11.3IRE 0.0 5.2 5.2Total 3.7 12.8 16.5


58

Evidence of the impact on the fund's overall earnings in the first nine months of 2016 is shown below:

Available-for-sale investments in other companies At 30 September 2016, the DeA Capital Group was a minority shareholder of Kenan Investments (the indirect parent company of Migros), Stepstone, Harvip, TLcom Capital LLP (management company under English law) and TLcom II Founder Partner SLP (limited partnership under English law). The stake in Kenan Investments is recorded in the Consolidated Financial Statements to 30 September 2016 at EUR 75.3 million (compared with EUR 76.3 million at 31 December 2015). This amount (indirectly corresponding to approximately 6.9% of Migros' capital, i.e. 40.25% of

(EUR million) 30.9.2016

Investments in PortfolioGiochi Preziosi 5.2 Manutencoop Facility Management 18.8

- Lauro Cinquantasette (Euticals) 13.6 Telit Communications - Elemaster 8.5 Investments available for sale 46.1 Iacobucci HF Electronics 6.0 Pegaso Transportation Investments (Talgo) 14.3 2IL Orthopaedics LTD (Corin) 11.6 Investments in associates and JV valued at FV through P&L 31.9 Total investments in Portfolio 78.0

IDeA OF I - Other comprehensive income

(EUR million)Income Statement

(a)Fair Value Reserve

Change (b) OCI (a + b)

Investments in PortfolioGiochi Preziosi 0.0 0.0 0.0Manutencoop Facility Management 0.4 0.0 0.4Lauro Cinquantasette (Euticals) 6.0 0.6 6.6Telit Communications 2.9 (2.9) 0.0Elemaster 0.0 0.0 0.0Investments available for sale (*) 9.2 (2.3) 7.0Iacobucci HF Electronics 0.0 0.0 0.0Pegaso Transportation Investments (Talgo) (3.9) 0.0 (3.9)2IL Orthopaedics LTD (Corin) (2.0) 0.0 (2.0)Investments in associates and JV valued at FV through P&L (#) (5.9) 0.0 (5.9)Totale Portfolio OF I 3.3 (2.3) 1.1Management cost of the Fund (1.5) 0.0 (1.5)Total Change of Shareholders'equity OF I 1.8 (2.3) (0.5) of which: DeA Capital 0.8 (1.0) (0.2)

(*) Change of value of assets are recognised in P&L only when realized

(#) All the changes of assets value , realized and not, are booked at P&L


59

the latter's capital via the Group's interest in Kenan Investments) reflects a price per share of Migros of:

- TRY 26.00 (plus interest of 7.5% per annum from 30 April 2015) for the stake subject to put/call options agreed with Anadolu on 9.75% of Migros and exercisable from 30 April 2017;

- TRY 18.28, being the market price on 30 September 2016, for the remaining stake (30.5% of Migros' capital).

The change in the value of the stake in Kenan Investments at 30 September 2016 compared with 31 December 2015 is attributable to a decrease of EUR -1.0 million in the fair value reserve due to the combined effect of the rise in the share price (TRY 18.28 per share at 30 September 2016 compared with TRY 17.45 per share at 31 December 2015) and the depreciation of the Turkish lira against the euro (3.37 TRY/EUR at 30 September 2016 versus 3.17 TRY/EUR at 31 December 2015). The table below provides details of equity investments in other companies at 30 September 2016 by area of activity.

Available-for-sale funds This item relates to investments in units of three funds of funds (IDeA I FoF, ICF II and ICF III), three theme funds (IDeA EESS, IDeA ToI and IDeA CCR), six venture capital funds and 12 real estate funds, totalling approximately EUR 187.8 million at 30 September 2016, compared with EUR 173.7 million at the end of 2015.

The table below provides a breakdown of the funds in the portfolio at 30 September 2016 by area of activity.


Investment

Alternative Asset

ManagementTotal

Kenan Investments 75.3 0.0 75.3Minority interests 0.2 0.0 0.2Total 75.5 0.0 75.5

(EUR thousand)Balance at

1.1.2016

Change in consolidation

area

Increases (Capital call)

Decreases (Capital

distribution)Impairment

Fair value adjustment

Translation effect

Balance at 30.9.2016

Venture capital funds 9,673 0 0 0 (109) (42) (16) 9,506IDeA I FoF 77,217 0 1,006 (8,675) 0 3,793 0 73,341ICF II 41,710 0 1,363 (1,122) 0 2,805 0 44,756ICF III Core 541 0 71 (119) 0 (27) 0 466ICF III Credit & Distressed 2,525 0 237 (79) 0 8 0 2,691ICF III Emerging Markets 1,751 0 1,266 (6) 0 166 0 3,177IDeA EESS 7,312 0 235 (3,718) 0 3,271 0 7,100Taste of Italy 1,074 0 1,760 (693) 0 (206) 0 1,935IDeA CCR I 0 0 214 0 0 0 0 214IDeA FIMIT SGR Funds 31,927 0 10,000 (1,852) (367) 4,864 0 44,572Total funds 173,730 0 16,152 (16,264) (476) 14,632 (16) 187,758


60

Deferred tax assets The balance on the item “deferred tax assets” comprises the value of deferred tax assets minus deferred tax liabilities, where they may be offset. At 30 September 2016, deferred tax assets totalled EUR 2.5 million, compared with EUR 3.7 million at 31 December 2015. Other non-current assets This item, valued at EUR 31.7 million at 30 September 2016, compared with EUR 31.8 million at 31 December 2015, relates mainly to the receivable from the IDeA OF I fund for the sale of 1% of Manutencoop and the receivable from the Beta Immobiliare fund corresponding to the portion of the overperformance fee that has accrued since the fund was launched and which IDeA FIMIT SGR expects to receive when the fund is liquidated.


Investment

Alternative Asset

ManagementTotal

Venture capital funds 9.5 0.0 9.5IDeA I FoF 73.3 0.0 73.3ICF II 44.8 0.0 44.8ICF III 6.3 0.0 6.3IDeA EESS 7.1 0.0 7.1IDeA ToI 1.9 0.0 1.9IDeA CCR I 0.2 0.0 0.2IDeA FIMIT SGR Funds 0.0 44.6 44.6Total funds 143.2 44.6 187.8


61

CURRENT ASSETS At 30 September 2016, current assets totalled EUR 130.4 million, versus EUR 162.4 million at 31 December 2015. The item mainly comprised:

- EUR 106.1 million relating to cash and cash equivalents (EUR 123.5 million at 31

December 2015); - EUR 9.3 million relating to commercial loans (EUR 17.8 million at 31 December 2015); - EUR 4.2 million relating to investments to be considered as a temporary use of cash

(EUR 7.5 million at 31 December 2015); - EUR 5.8 million relates to financial receivables (EUR 3.5 million at 31 December 2015),

mainly in connection with the loan agreement for Sigla S.r.l. (EUR 2.0 million), receivables due from associate IRE for the extraordinary dividend not yet received (EUR 2.0 million) and the receivable due from the purchasers of the majority stake in IRE relating to the short-term portion of the deferred purchase price (EUR 1.7 million).

SHAREHOLDERS' EQUITY o 57.06 At 30 September 2016, Consolidated Shareholders' Equity totalled around EUR 666.9 million, including EUR 530.8 million pertaining to the Group, compared with EUR 685.2 million (EUR 547.0 million pertaining to the Group) at 31 December 2015. The decrease of about EUR 16.2 million in Group shareholders' equity in the first nine months of 2016 was due to the extraordinary dividend paid (EUR -31.6 million), the reasons already discussed relating to the Statement of Performance - IAS 1 (EUR +18.0 million) and the effects of the share buy-back plan (EUR -2.7 million). NON-CURRENT LIABILITIES At 30 September 2016, non-current liabilities totalled EUR 15.5 million, unchanged compared with 31 December 2015. Deferred tax liabilities This item totalled EUR 11.6 million at 30 September 2016, compared with EUR 10.8 million at 31 December 2015. It mainly included deferred tax liabilities related to the tax effects of allocating part of the acquisition cost of the subsidiaries in the purchase price allocation (PPA) phase. End-of-service payment fund At 30 September 2016, this item totalled EUR 3.8 million, compared with EUR 4.7 million at 31 December 2015, and includes end-of-service payments that are part of defined benefit plans, which were therefore valued using actuarial assessments. CURRENT LIABILITIES At 30 September 2016, current liabilities totalled EUR 18.3 million (EUR 31.3 million at 31 December 2015) and consisted of trade payables (EUR 6.6 million), payables to staff and social security institutions (EUR 4.1 million), current tax and other tax payables (EUR 4.0 million), other payables (EUR 3.2 million) and short-term financial payables (EUR 0.4 million).


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Notes to the Consolidated Income Statement Alternative Asset Management fees In the first nine months of 2016, Alternative Asset Management fees totalled EUR 43.9 million, compared with EUR 48.2 million in the same period of 2015; these essentially related to management fees paid to IDeA FIMIT SGR and to IDeA Capital Funds SGR for the funds they manage. Income from investments valued at equity This item includes the share of income from companies valued at equity for the period. In 2016, income from investments valued at equity was positive at EUR 0.4 million (EUR -0.2 million in the same period of 2015). Other investment income/expenses Other net investment income from investments in shareholdings and funds totalled EUR 6.1 million in 2016, compared with EUR 73.6 million in 2015. It mainly relates to the capital gain of EUR 46.3 million from the disposal of the stakes in Migros and the resulting distribution of liquidity by Kenan Inv., as well as income totalling EUR 28.5 million generated on investments held by IDeA OF I. Service revenues This item, which totalled EUR 8.3 million in 2016 (EUR 13.4 million in 2015), chiefly refers to services relating to real estate consultancy and management, and the sale of buildings in the portfolios of the real estate funds. The item only contains IRE revenues received up to 10 June 2016, given the sale on that date of the controlling interest in the company and the subsequent switch to valuing it at equity. Personnel costs and costs for services, amortisation and other costs In 2016, personnel costs totalled EUR 21.9 million, compared with EUR 23.8 million in 2015. In 2016, service costs totalled EUR 15.5 million, compared with EUR 17.0 million in 2015. Amortisation was EUR 4.6 million in 2016 (EUR 5.1 million in 2015) and mainly included amortisation relating to purchase price allocation. Other costs totalled EUR 2.3 million in 2016, compared with EUR 5.3 million in 2015; the item mainly consists of pro-rata non-deductible VAT on costs incurred by IDeA FIMIT SGR (EUR 1.1 million), and the impairment of receivables relating to fees from certain funds managed by IDeA FIMIT SGR (EUR 1.1 million). Financial income (charges) In the first nine months of 2016, financial income came in at EUR 0.7 million (EUR 5.1 million in the same period of 2015), and financial charges totalled EUR 2.3 million (EUR 1.0 million in the same period of 2015). Income tax Income tax totalled EUR -1.1 million in the first nine months of 2016, versus EUR -1.2 million in the same period of 2015.


63

Significant events after the end of the period and outlook Significant events after the end of the period Private equity funds – paid calls/distributions

After the end of the third quarter of 2016, the DeA Capital Group increased its investments in the IDeA I FoF, ICF II, ICF III, IDeA OF I and IDeA EESS funds with payments totalling EUR 3.9 million. At the same time, the DeA Capital Group received capital reimbursements from the IDeA I FoF, ICF III and IDeA OF I funds (EUR 2.9 million, EUR 1.7 million and EUR 4.6 million respectively) to be used in full to reduce the carrying value of the units. Acquisition of further units in the Idea Energy Efficiency and Sustainable

Development fund On 14 October 2016, DeA Capital S.p.A. completed the acquisition from M&C S.p.A. of all the units and associated rights held by the latter in the Idea Energy Efficiency and Sustainable Development fund, managed by IDeA Capital Funds SGR, for a price of EUR 5.35 million. This represents a discount of approximately 20% on the value of the units, as estimated according to the latest report available on the transaction date. The units comprising the transaction, equal to 15.1% of the total size of the fund, will be added to the stake already held by DeA Capital S.p.A. in the fund (15.3%), increasing its total stake to 30.4%. Note that, as a result of the acquisition, DeA Capital S.p.A. has assumed the residual commitments for the payment of capital that may be called up on the units involved in the transaction up to a maximum of EUR 5.0 million. Outlook The outlook continues to focus on the strategic guidelines followed last year, with an emphasis on increasing the value of assets in the Private Equity Investment area and developing Alternative Asset Management platforms. With regard to the Private Equity Investment area, having completed the sale of the stake in Générale de Santé and half the stake in Migros, the Company will continue its efforts to increase the value of the investments in its portfolio, and will evaluate new direct investment or co-investment initiatives. Turning to Alternative Asset Management, as referred to above, the Company will continue to develop platforms for both private equity (through IDeA Capital Funds SGR) and real estate (through IDeA FIMIT SGR), with a particular focus on launching new products and, more generally, on taking advantage of the business opportunities offered by the Italian economic system. In order to support the strategic guidelines above, the Company will continue to maintain a solid asset/financial base, optimised by returning profits to shareholders (including through buy-back operations), based on the available liquidity.


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Statement of Responsibilities for the Interim Management Report to 30 September 2016


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STATEMENT OF RESPONSIBILITIES FOR THE INTERIM MANAGEMENT REPORT TO 30 September 2016 (PURSUANT TO ART. 154-BIS OF LEGISLATIVE DECREE 58/98)

Manolo Santili, Chief Financial Officer of DeA Capital S.p.A., the manager responsible for preparing the company’s accounting statements, hereby declares, pursuant to art. 154-bis, para. 2 of the Testo Unico della Finanza law, that the information contained in this document accurately represents the figures in the company’s accounting records. Milan, 3 November 2016 Manolo Santilli Manager responsible for preparing the Company’s accounting statements