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QUARTERLY REPORT for the period from 1 April 2005 to 30 June 2005

STATEMENT OF THE INVESTMENT MANAGERQUARTERLY REPORT

2

INVESTMENT MANAGER’S REPORT

The convertible bond issued by Pearl Holding Limited provides access to the private

equity asset class. For the first time, investors have the opportunity to buy into the

earnings potential of a broadly diversified private equity portfolio, while enjoying

capital protection and a 2% coupon. Its tailor-made structure makes the convertible

bond suitable for German private and institutional investors (i.e. “deckungsstock- und

spezialfondsfähig”).

This document is neither a sales prospectus nor a direct or indirect sales promotion instrument.

OUTSTANDING QUARTER FOR PEARL

In the second quarter, the Pearl convertible bond saw a con-

tinuation of the positive trend from the previous quarter.

Thus, the net asset value (NAV) of the Pearl portfolio rose

during the three months of April, May and June by 5.55%

to 88.23% primarily on the back of valuation adjustments

by numerous partnerships in the portfolio. This is the lar-

gest quarterly NAV increase Pearl has ever seen. Thus, the

NAV now lies over 8% above its low of May 2004 and is on

a par with the level of end-2002.

The mid-market price of the Pearl convertible bond closed

the quarter at 95.25%, i.e. 2.97% higher than at the end of

March.

Pearl made four new commitments during the second quar-

ter of 2005, namely to Bridgepoint Europe III, L.P., Carmel

Ventures II, L.P., Menlo Ventures X, L.P. and Warburg Pincus

Private Equity IX, L.P. In addition, Pearl invested directly

into SunGard Data Systems, a US-based supplier of inte-

grated IT solutions, and Sanitec, a Finnish bathroom cera-

mics manufacturer. Pearl’s commitment to Morgenthaler

Partners VII, L.P was increased through the acquisition of a

secondary tranche. In total, Pearl made capital commit-

ments of almost EUR 55m in the second quarter.

The partnerships in the Pearl portfolio made capitals calls

amounting to around EUR 34m for fund investments, inclu-

ding e.g. Newbridge Asia III, L.P., for its investment in the

Lenovo Group Limited. The investment level increased further

to 70.54% compared to the 50.15% a year ago. This is a direct

result of the previous quarters’ brisk commitment activity.

3

Further, Pearl received EUR 22m in distributions from suc-

cessful exits in the second quarter. Major contributions

stemmed from the sale of Dometic, a Swedish manufactu-

rer of innovative equipment for motorhomes, caravans and

boots, and the sale of US refinery operator Premcor Inc. as

well as from the Partners Group SPP1 Limited secondary

portfolio.

The number of listed private equity companies in the Pearl

portfolio was increased from 15 to 22 during the second

quarter and now constitute roughly 6% of the portfolio.

Thus, this part of the Pearl portfolio has been diversified still

further. At +1.32%, the listed private equity companies also

made a positive contribution to the NAV development in the

second quarter.

B U Y O U T F U N D S I N F U N D R A I S I N G B O O M

Private Equity Intelligence’s 2005 Global Fundraising Review

reports that over 800 private equity funds around the world

will attempt to raise USD 250bn this year. The last time the

industry saw that much money flooding into the asset class

was in 2000.

Recent fundraising activity has been frantic, with most of

the new money being spoken to buyout funds, which are

becoming larger in size. In Europe, BC Partners,

Bridgepoint, CVC Capital Partners and Apax Partners all

recently launched multi-billion euro funds. There is a simi-

lar picture across the Atlantic, with Goldman Sachs Capital

Partners closing the largest buyout fund ever at USD 8.5bn

this spring, while Blackstone Group might breach the USD

10bn mark when its latest offering closes, which will be in

the near future.

Due to strong demand from limited partners, many of the

popular funds that closed recently were oversubscribed and

could have easily raised more capital. This also applies to

groups that are currently fundraising in the market.

The enormous pools of capital being raised by the new

funds, together with the trend among the major buyout

players to form a consortium for specific transactions, give

these buyout firms the purchasing power to pursue mega

deals. A good example of this is Silver Lake’s USD 11.3bn

buyout – the second-largest ever – of SunGard, where it led

a seven-party-strong consortium of financial buyers. Egon

Durban from Silver Lake Partners addressed the topic of

mega deals in a recent interview that is published on the

next pages.

110%

100%

90%

80%

70%

MID-MARKET PRICE AND NAV DEVELOPMENT

31.1

2.0

0

31.0

3.0

1

30.0

6.0

1

30.0

9.0

1

31.1

2.0

1

31.0

3.0

2

30.0

6.0

2

30.0

9.0

2

31.1

2.0

2

31.0

3.0

3

30.0

6.0

3

30.0

9.0

3

31.1

2.0

3

31.0

3.0

4

30.0

6.0

4

30.0

9.0

4

31.1

2.0

4

31.0

3.0

5

30.0

6.0

5

NAV Mid-market price NAV incl. paid and accrued interest

QUARTERLY REPORT

4

MARKET TRENDS

Silver Lake Partners is a leading private equity firm that focuses exclusively on making

large-scale investments in leading technology companies. Silver Lake seeks to achieve

superior returns by investing with the insight of an experienced industry participant,

the operating skills of a world-class management team and the discipline of a leading

private equity firm.

Egon Durban joined Silver Lake in January 1999 as a founding principal. He played a

key leadership role in negotiating and executing Silver Lake’s USD 11.3bn acquisition

of SunGard Data Systems, along with a consortium of six other leading private equity

firms.

Mr Durban, Silver Lake Partners recently put

together a consortium of seven private equity

firms for the second-largest buyout deal ever,

the USD 11.3bn acquisition of SunGard. How do

you select your consortium partners for an

acquisition of this nature and magnitude and

how do you agree on a common strategy?

The consortium is comprised of several of the world’s lead-

ing private equity firms. Each partner in the consortium

brings considerable and complementary expertise to the

investment. It is a group joined together in a shared com-

mitment to invest in SunGard as equal partners and work

closely with the company’s management and employees to

maximize SunGard’s potential. We at Silver Lake Partners

are privileged to be joined by Bain Capital, Blackstone,

Goldman Sachs PIA, Kohlberg Kravis, Providence Equity,

and Texas Pacific Group in this unprecedented transaction.

In making this investment, we looked for partners who

share our commitment to backing SunGard CEO Cris Conde

and the world-class management team he has assembled,

who have the sophistication needed to understand the

attractive opportunity for value creation represented by

SunGard’s unique business model, and who have the

resources and outlook required to support the investment

over the longer term.

5

What are the specific roles of each partner

within the consortium?

There is no formalized differentiation in roles, and the part-

nership is an equal one with each firm focused on creating

long-term value for its limited partners.

What is the reason for the private equity indus-

try’s increased appetite for large buyout deals?

I can’t speak for the industry as a whole, but as far as Silver

Lake is concerned we always have an appetite for great

investment opportunities in industries that we understand

well. The reason we decided to acquire SunGard was not

because we were out to make a large investment. We decided

to acquire SunGard because we saw an opportunity to

invest in a great company with a highly successful manage-

ment team, a superior business model, a predictably grow-

ing revenue stream, and all the other assets required to cre-

ate value over the long term.

What distinguishes a company in which private

equity firms are willing to invest (almost) double-

digit billion USD amounts?

Again, I can’t speak for everyone in the business. The com-

panies that are attractive to Silver Lake are those that are

fundamentally sound, with terrific management teams and

great potential for growth, and where we think we can real-

ize a great return on investment. We like to partner with

management to unlock that value, or accelerate the invest-

ments that will realize that value potential in a way that

public investors – who tend to be focused on shorter term

profitability – generally don’t support. When we find oppor-

tunities that meet those criteria, we work relentlessly to

craft the optimal transaction, execute it effectively and con-

tinue to add value going forward – regardless of the size or

complexity of the investment.

We are proud of our track record in that regard, starting

with our acquisition of Seagate Technology in 1999, which

was the largest technology buyout to date at that time,

through to our investment in NASDAQ and pending acquisi-

tion of Instinet in a complicated, three-way transaction.

And while we like to make sizeable investments in compa-

nies that are operating at scale, that doesn’t limit us to buy-

outs alone. We’ve used convertible bonds to make signifi-

cant minority investments in great companies like

Thomson, the French company that is now the global leader

in the technologies that are driving the media and enter-

tainment businesses, Flextronics and others.

What factors encourage public companies to go

private?

There are a number of factors. The extraordinary and

increasing demands placed on public companies with

regard to reporting and governance are certainly a factor in

many cases. The nature of public markets is also such that

sometimes they simply don’t value certain companies accu-

rately, as was the case with SunGard, where the analysts

and investors valuing the data recovery part of the business

didn’t understand the service processing part of the busi-

ness, and vice versa.

Are mega deals riskier than small or mid-mar-

ket buyout deals?

Only in the sense that the stakes are potentially higher. But

there is nothing inherently riskier about investing on a large

scale. To the contrary, smaller scale deals can often be

completed by a single buyout firm operating independently.

But larger deals by their very nature have to be approached

by several partners working together. I would argue that

the strength of those teams, and the processes that you go

through to put them together, actually mitigate risk.

Looking ahead, how big are the mega deals of

the near future going to be? Will the trend

towards ever larger deals continue?

As many private equity funds themselves have raised more

capital, it is only natural that they are in a position to evalu-

ate and pursue larger target opportunities. And the capital

markets go through cycles, of course. In recent years, there

has been less competition among strategic buyers for big-

ger assets at the same time that the debt financing market

has been robust, creating openings for private equity firms

that might not have existed in the past.

In addition the private equity firms are learning to work

together in partnership to analyze and execute invest-

ments. That said, I think the real trend to watch in private

equity isn’t scale, but rather specialization. Success in the

private equity arena will increasingly come from bringing

deep, industry-specific expertise and value add to the table.

Capital alone will not deliver superior returns. This is a good

thing.

The 35-year history of growth in private equity has been

very healthy for companies and for shareholders. Now that

private equity is established as a viable alternative to even

very large corporations, it is another tool that manage-

ments can use to create longer-term shareholder value.

Private equity is also a market force that can be used to

keep managements focused on shareholder value.

Mr Durban, thank you for this interview.

PORTFOLIO ALLOCATION

QUARTERLY REPORT

6

Pearl has a balanced and by geographic regions, financing stages,

industry sectors and vintage years broadly diversified portfolio.

83% of the portfolio is invested in the stable buyout and special

situations segments.

140

120

100

80

60

40

20

0

2000

2001

2002

2003

2004

YTD

2005

DistributionsDrawndown Commitments

in E

UR

m

110

100

90

80

70

60

50

40

30

20

10

0

INVESTMENTS BY VINTAGE YEARS*

INVESTMENTS AND DISTRIBUTIONS

pre

1996

1996

1997

1998

1999

2000

2001

2002

2003

2004

YTD

2005

in E

UR m

5 12

23

12

94

103

20

53

9

2728

* based on unrealized value of private equity investments

Direct Investments9% Listed Private Equity

6%

Primary Partnerships61%

Secondary Partnerships24%

* Allocation by unrealized value of private equity investments

INVESTMENTS BY TYPE OF INVESTMENTS*


INVESTMENTS BY INDUSTRY SECTORS*

Rest of World9%

North America36%

Europe55%


INVESTMENTS BY GEOGRAPHIC REGIONS*

Other16% Communication & Media

18%

IT & High-Tech7%

Life Sciences12%

Financial Services6%

Retail22%

Industrial Production & Manufacturing19%

7

Special Situations9%

Buyout74%

Venture Capital17%


INVESTMENTS BY FINANCING STAGES


8

PORTFOLIO

During the second quarter of 2005, Pearl made four new commitments, one

secondary transaction and invested directly in two companies, namely Sanitec and

SunGard.

NEW COMMITMENTS

Bridgepoint Europe III, L.P.

In April, Pearl committed EUR 5m to Bridgepoint Europe III,

L.P. The fund will focus on mid-market buyout and growth

capital transactions across Europe. Bridgepoint is one of the

few truly pan-European players with over 40 investment

professionals operating out of offices in Birmingham,

London, Frankfurt, Milan, Madrid, Paris and Stockholm.

Menlo Ventures X, L.P.

Pearl made a USD 5m commitment to Menlo Ventures X,

L.P. in April. The new fund will continue the successful

investment strategy of its nine preceding funds and will

provide seed, start-up, early-stage, expansion and later-

stage financing for companies in the communications, soft-

ware, internet infrastructure, semiconductor, storage, com-

puter hardware and financial services sectors.

Carmel Ventures II, L.P.

In April, Pearl committed USD 6.5m to Carmel Ventures II,

L.P., which held its final closing in May of this year at USD

200m. Carmel Ventures II focuses on Israeli seed and

early-stage IT and telecommunication companies, lever-

aging the fund manager’s considerable software expertise.

Morgenthaler Partners VII, L.P.

Also in April, Pearl acquired an additional stake in

Morgenthaler Partners VII, L.P. through a secondary trans-

action. The fund primarily focuses on early-stage venture

investments but may allocate up to 30% to buyout deals.

Morgenthaler concentrates on the communications, soft-

ware infrastructure and healthcare industry segments.

9

Warburg Pincus Private Equity IX, L.P.

In May, Pearl made a USD 12.5m commitment to Warburg

Pincus Private Equity IX, L.P. The fund will invest across all

stages of business development, including venture capital,

buyout and special situations transactions. The fund aims to

invest 70% of its assets in North America, 15% in Europe

and the balance in Asia. Warburg Pincus is one of the oldest

and most renowned private equity firms worldwide. For over

three decades now, the firm has been investing across all

stages and has experienced various economic cycles.

N E W D I R E C T I N V E S T M E N T S

SunGard Data Systems Inc.

This spring, Pearl, together with a seven-party-strong pri-

vate equity consortium led by Silver Lake Partners, agreed

to acquire SunGard Data Systems Inc. for USD 11.3bn.

SunGard is a global leader in integrated software and pro-

cessing solutions primarily for the financial services indus-

try, as well as the pioneer and leading provider of informa-

tion availability services. SunGard serves more than 20,000

customers in more than 50 countries. The transaction will be

financed through a combination of debt financing and equi-

ty contributed by each of the consortium partners. The

transaction is expected to be completed in the third quarter

of 2005 and will be the largest leveraged buyout since KKR

acquired RJR Nabisco in 1989 for USD 31.3bn.

Sanitec Oy

In spring, Pearl made a direct investment in Finnish bath-

room ceramics company Sanitec Group alongside private

equity house EQT, which bought Sanitec in a secondary buy-

out from BC Partners. Sanitec is a European multi-brand

group that designs, manufactures and markets bathroom

ceramics as well as bath and shower products. The group

comprises, amongst others, Italian Pozzi Ginori and German

Keramag (whose portfolio of brands includes the JOOP!

bathroom line). EQT intends to continue with Sanitec’s ex-

isting strategy and aims to grow organically by developing

new products and by profiting from rising demand for such

products in Eastern Europe.

S E L E C T E D I N V E S T M E N T S

TPG Partners IV, L.P.

In May, Texas Pacific Group and Warburg Pincus agreed to

acquire all the outstanding class A and class B shares in

luxury retailer The Neiman Marcus Group for USD 100 per

share in cash in a transaction valued at approximately USD

5.1bn. The Neiman Marcus Group comprises luxury depart-

ment stores as well as a direct marketing division with both

print catalogue and online operations under the Neiman

Marcus, Horchow and Bergdorf Goodman brand names.

These renowned retailers offer upmarket apparel, accesso-

ries, jewellery, beauty and decorative home products to the

affluent consumer. The deal is the latest in a string of major

retail acquisitions by private equity firms in Europe and in

the US.

S E L E C T E D E X I T S

EQT III, L.P.

In April, Pearl partnership EQT III successfully exited

Dometic Group by selling it to another Pearl partnership,

namely BC European Capital VII, for roughly USD 1.4bn.

The selling price is more than twice the amount EQT inves-

ted back in 2001, when it bought the company from

Electrolux. Today, Dometic is a world-leading supplier to the

growing mobile leisure markets. Since being hived out from

Electrolux, Dometic’s operations have been assembled in an

independent corporate group that has two business areas

and targets customers in the recreation, hotel and medical

industries. Dometic and BC Partners aim to capitalize on the

many attractive growth opportunities in future. The sale,

however, is conditional upon receiving approval by the rele-

vant competition authorities.

Blackstone Capital Partners III, L.P.

Blackstone Capital Partners III, in which Pearl is invested

through Partners Group SPP1, agreed in April to sell fellow

oil refiner Premcor Inc. to Valero Energy Corp. for USD

8.7bn. Blackstone’s USD 275m equity investment in

Premcor (formerly Clark USA Inc.) in 1997 has grown six-

fold. It will sell its 21.4% stake in Premcor for USD 1.39bn

in cash and Valero stock, making its total take from the deal

USD 1.75bn. Once the deal is completed, Valero-Premcor

combined will be the largest US oil refiner.

STATEMENT OF THE INVESTMENT MANAGERÜBERBLICK

2


10

PORTFOLIO OVERVIEW

PRIMARY PARTNERSHIPS

Europe – Buyout

3i Europartners IV, L.P.

Activa Capital Fund FCPR*

Advent International GPE V, L.P.

Advent International GPE V, L.P.*

Apax Europe V, L.P.

Apax Europe VI, L.P.

AXA LBO Fund III-A*

BC European Capital VII Top Up Fund

BC European Capital VIII, L.P.

Bridgepoint Europe II “C”, L.P.*

Bridgepoint Europe III, L.P.

CapVis Equity II, L.P.*

Doughty Hanson & Co. Fund IV, L.P.

Duke Street Capital V, L.P.*

EQT IV, L.P.

Global Private Equity Fund IV-D, L.P.

Graphite Capital Partners VI, L.P.*

Industri Kapital 2000, L.P.

Investitori Associati IV, L.P. *

Italian Private Equity Fund IV, L.P.*

Mercapital Spanish Private Equity Fund II, L.P.

Nmás1 Private Equity Fund US No. 1, L.P.*

Nordic Capital V, L.P.*

Permira Europe III, L.P.

Segulah III, L.P.*

Terra Firma Capital Partners II, L.P.

Third Cinven Fund (No. 4), L.P.

Europe – Venture Capital

Abingworth Bioventures III, L.P.

ACT 2001 Venture Capital Fund, L.P. No. 2

Advent Private Equity Fund III “D”, L.P.

Amadeus II C, L.P.

BrainHeart Capital, L.P.

BrainHeart Capital Annex Fund, L.P.

European Equity Partners (IV), L.P.

Global Life Science Ventures Fund II, L.P.

GMT Communications Partners II, L.P.

HealthCap 1999 GbR

Index Ventures II (Jersey), L.P.

Index Venture Partners III, L.P.

Sofinnova Capital IV, L.P.

Sofinnova Capital Partners V, L.P.

Zweite TechnoStart Ventures Fonds GmbH & Co. KG

Europe – Special Situations

Coller International Partners IV, L.P.

ICG Mezzanine Fund 2003, L.P. No. 1

ICG Mezzanine Fund 2003, L.P. No. 1*

Indigo Capital IV, L.P.*

Special Situations Venture Partners, L.P.

The Rutland Fund

Rest of World – Buyout

Advent Latin American Private Equity Fund II, L.P.

Ironbridge Capital 2003/4 Fund***

IVF (Mauritius) PCC***

Newbridge Asia III, L.P.

Polish Enterprise Fund IV, L.P.

Polish Enterprise Fund V, L.P.*

Unison Capital Partners II (F), L.P.***

Rest of World – Venture Capital

Carmel Ventures II, L.P.

Crimson Velocity Fund, L.P.

Pitango Venture Capital Fund IV, L.P.

SVE Star Ventures Enterprises GmbH & Co. IX KG

Summary of the partnerships, companies

and investment companies in which Pearl

was invested at the end of the second

quarter of 2005.

STATEMENT OF THE INVESTMENT MANAGER

ÜBERSICHT 2004

ÜBERBLICK

211

North America – Buyout

Carlyle Partners IV, L.P.

JP Morgan Partners Global Investors (Cayman), L.P.

Kohlberg TE Investors V, L.P.

Providence Equity Partners V-A, L.P.

Ripplewood Partners II Parallel Fund, L.P.

Silver Lake Partners II, L.P.

TPG Partners IV, L.P.

Warburg Pincus Private Equity VIII, L.P.

Warburg Pincus Private Equity IX, L.P.

William Blair Capital Partners VII QP, L.P.

North America – Venture Capital

Advanced Technology Ventures VII, L.P.

Battery Ventures VII, L.P.**

Boulder Ventures IV, L.P.

Draper Fisher Jurvetson Fund VIII, L.P.**

International Life Sciences Fund III, L.P.

Menlo Ventures X, L.P.


New Enterprise Associates X, L.P.

New Enterprise Associates XI, L.P.**

Oxford Bioscience Partners IV, L.P.

Prism Venture Partners IV, L.P.

Prism Venture Partners V, L.P.**

Prospect Venture Partners II, L.P.

Prospect Venture Partners III, L.P.

Prospect Venture Partners III, L.P.**

Sevin Rosen IX, L.P.**

Summit Ventures VI-B, L.P.

TA Atlantic and Pacific V, L.P.

Vortex Corporate Development Fund, L.P.

North America – Special Situations

Ares Corporate Opportunities Fund, L.P.

Levine Leichtman Capital Partners III, L.P.

Lexington Capital Partners V, L.P.

Paul Associates II International, L.P.

Peninsula Fund III, L.P.

SECONDARY INVESTMENTS

American Industrial Partners Capital Fund III, L.P.

Apollo Overseas Partners III, L.P.

AXA Private Equity Fund II Feeder, L.P.*

Blackstone Communications Partners I, L.P.

Doughty Hanson & Co. Fund III, L.P.

Electra European Fund L.P.*

EQT III Limited (formerly Northern Europe)

EQT Scandinavia II, L.P.

ICG Mezzanine Fund 2000, L.P. No. 2*

ICG Mezzanine Fund 2000, L.P. No. 2


Partners Group Secondary, L.P.

Partners Group SPP1 Limited

PG Carlyle Opportunity Partnership

DIRECT INVESTMENTS

Ahold Supermercados S.L.

AMC Entertainment Inc.

Bodybell

The Automobile Association

Balta Group

Brand Services, Inc.

CellZome AG

CESA Corporacion Eolica S.A.

CiCi Enterprises, Inc.

esmertec AG

Findexa Co-Invest LLC

Gala Group Limited

GMT Casema Holding Limited

Phoqus Pharmaceutical Technologies

Refco Group Ltd.

Sanitec Oy

SunGard Data Systems, Inc.

TFCP II Co-Investment L.P. (UCI/Odeon)

LISTED PRIVATE EQUITY

3i Group Plc

AIG Private Equity Ltd

American Capital Strategies Corp.

Allied Capital Corp.

Candover Investments PLC

Capman Oy

Castle Private Equity Ltd

Deutsche Beteiligungs AG

Dinamia

Dunedin Enterprise

Electra Investment Trust PLC

GIMV N.V.

Graphite Enterprise Trust PLC

HgCapital Trust PLC

Intermediate Capital Group

Martin Currie Capital Return Trust PLC

Northern Investors Company

Onex Corp.

Pantheon International Participation PLC

Private Equity Investor PLC

Standard Life European Private Equity Trust PLC

SVG Capital PLC

* Participation through Partners Group Europe, L.P. at no additional fees

** Participation through Partners Group U.S. Venture 2004, L.P. at no

additional fees

*** Participation through Partners Group Asia-Pacific 2005, L.P. at no

additional fees

Commitments added this quarter are stated in italics.

01.04.2005– 01.01.2005– 01.04.2004– 01.01.2004–30.06.2005 30.06.2005 30.06.2004 30.06.2004

Notes EUR EUR EUR EUR Net income from limited partnershipsand directly held investments 28,307,398 37,369,705 3,789,831 9,237,583- Dividend and interest income 5&14 734,966 3,206,858 635,331 959,177- Revaluation 5&16 23,791,531 28,585,556 3,140,105 7,739,416- Foreign exchange gains and losses 5&15 3,780,901 5,577,291 14,395 538,990

Net income from associates 8,018,817 10,805,650 11,276,803 11,461,656- Dividend and interest income 6&14 - -- Revaluation 6&16 7,007,381 8,892,346 11,137,102 11,060,213- Foreign exchange gains and losses 6&15 1,011,436 1,913,304 139,701 401,443

Net income from listed private equity 2,267,888 4,133,016 (220,466) 1,222,935- Dividend and interest income 7&14 110,696 249,917 350,796 463,666- Gains and losses 7 1,684,588 2,803,345 (516,355) 60,971- Foreign exchange gains and losses 7&15 472,604 1,079,754 (54,907) 698,298

Net income from short-term investments 965,784 2,064,302 1,294,406 2,761,805- Gains and losses 8 965,784 2,064,302 1,294,406 2,761,805

Net income from cash and cash equivalents 161,158 416,181 40,208 106,372- Interest income 10&14 77,783 195,128 40,208 106,372- Foreign exchange gains and losses 15 83,375 221,053 - -

Operating income 39,721,045 54,788,854 16,180,782 24,790,351

Operating expenses (5,819,446) (11,307,306) (5,156,818) (10,379,577)- Management fee 2 (2,538,111) (4,835,824) (2,026,131) (4,052,149)- Insurance fee 2 (3,045,733) (6,015,733) (2,970,000) (5,940,000)- Administration fee 2 (169,207) (322,388) (135,075) (270,143)- Direct investment performance fee - - - -- Tax exemption fee 3 (905) (905) (921) (921)- Other foreign exchange gains and losses 15 7,347 3,434 (828) 1,311- Other operating expenses (72,837) (135,890) (23,863) (117,675)

Financing cost (8,542,090) (17,042,850) (8,378,827) (16,717,687)- Finance cost on convertible bond 12&14 (4,945,612) (9,849,894) (4,782,349) (9,524,731)- Amortization of transaction costs 12 (296,478) (592,956) (296,478) (592,956)- Bond interest 14 (3,300,000) (6,600,000) (3,300,000) (6,600,000)

Surplus / (loss) for the financial period 25,359,509 26,438,698 2,645,137 (2,306,913)


12

UNAUDITED INCOME STATEMENTfor the period from 1 January 2005 to 30 June 2005

UNAUDITED BALANCE SHEETas at 30 June 2005

13

30.06.2005 31.12.2004Notes EUR EUR

Assets Non-current assetsInvestments in limited partnerships and directly held investments 1&5 330,441,035 234,863,468 Investments in associates and joint ventures 6 56,692,176 49,367,973 Investments in listed private equity 7 23,610,419 23,560,460

410,743,630 307,791,901 Current assetsShort-term investments 1&8 144,160,931 208,106,992 Other short-term receivables 9 1,177,887 51,178 Cash and cash equivalents 10 47,379,054 32,899,434

192,717,872 241,642,002

Total assets 603,461,502 549,433,903

EquityCapital and reserves Issued capital 11 10,000 10,000 Reserves (5,627,862) (32,066,560)Total equity (5,617,862) (32,056,560)

LiabilitiesLiabilities falling due after more than one year Convertible bond 12 587,928,970 577,486,120

Liabilities falling due within one yearHedging liabilities 5&6 11,129,699 - Other short-term payables 13 10,020,695 4,004,343 Rounding - -

21,150,394 4,004,343

Total liabilities and equity 603,461,502 549,433,903

The financial statements on pages 12 to 26 were approved by the board of directors on 28 July 2005 and are signed on its behalf by:U. Wietlisbach N. CareyDirector Director


14

Share Share Accumulated

capital premium surplus/(loss) Total

Equity at beginning of reporting period 10,000 155,719,948 (187,786,508) (32,056,560)

Surplus / (loss) for the financial period - - 26,438,698 26,438,698

Rounding - - - -

Equity at end of reporting period 10,000 155,719,948 (161,347,810) (5,617,862)

UNAUDITED STATEMENT OF CHANGES IN EQUITYfor the period from 1 January 2005 to 30 June 2005 (all amounts in EUR)

15

Share Share Accumulated

capital premium surplus/(loss) Total

Equity at beginning of reporting period 10,000 155,719,948 (172,605,105) (16,875,157)

Surplus / (loss) for the financial period - - (2,306,913) (2,306,913)

Rounding - - - -

Equity at end of reporting period 10,000 155,719,948 (174,912,018) (19,182,070)

UNAUDITED STATEMENT OF CHANGES IN EQUITYfor the period from 1 January 2004 to 30 June 2004 (all amounts in EUR)

16

01.01.2005– 01.01.2004–30.06.2005 30.06.2004

Notes EUR EUR Cash flow from operating activities- Management fee 2 (4,835,824) (4,052,149)- Administration fee 2 (322,388) (270,143)- Insurance fee 2 (6,015,733) (5,940,000)- Direct investment performance fee - - - Tax exemption fee 3 (905) (921) - Other operating expenses (135,890) (117,676)- Proceeds from hedging activities 5&6 - 5,537,472

- (Increase) / decrease in other short-term receivables (1,123,275) 99,563- Increase / (decrease) in other short-term payables (583,648) (57,031)

- Interest and dividend income from limitedpartnerships and directly held investments 5 3,206,858 959,177

- Purchase of limited partnerships and directly held investments 5 (82,938,215) (27,294,908)- Distributions by limited partnerships and directly held investments 5 29,006,460 16,974,882

- Purchase of investments in associates 6 (520,967) (968,891)- Distributions by investments in associates 6 8,233,546 5,223,396

- Purchase of listed private equity 7 (8,835,962) (8,318,695)- Sale of listed private equity 7 12,669,103 6,082,540 - Income from listed private equity 7 249,917 436,666

- Purchase of short-term investments 8 (83,989,637) (177,050,161)- Repayment of short-term investments 8 150,000,000 165,000,000

- Interest income received from cash and cash equivalents 10 195,128 106,372

- Interest paid on convertible bond - -

Net increase / (decrease) in cash and cash equivalents (14,258,568) (23,623,507)

Cash and cash equivalents at beginning of reporting period 10 32,899,434 37,990,049

Effects on cash and cash equivalents- movement in exchange rates 221,053 - - rounding (1) -

Cash and cash equivalents at end of reporting period 10 47,379,054 14,366,542

QUARTERLY REPORT

UNAUDITED CASH FLOW STATEMENTfor the period from 1 January 2005 to 30 June 2005

17

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS

1 PRINCIPAL ACCOUNTING POLICIES

The following accounting policies have been applied consistently in dealing with items

which are considered material in relation to the Company's financial statements:

Basis of preparation

The financial statements have been prepared in accordance with International Accounting

Standard 34 (Interim Reporting), except for the following:

For the valuation of investments in limited partnerships, the directors refer to the most

recent available information of the General Partner of the underlying investment. Owing

to the diversified nature of the limited partnership investments and the variety of valu-

ation bases adopted and quality of management information provided by the General

Partners the values included in these financial statements do not necessarily comply with

fair values as defined in IAS 39.

The financial statements have been prepared in accordance with International Financial

Reporting Standards (IFRS) (with the exception indicated above) and under the histori-

cal cost convention as modified by the revaluation of “financial assets and financial lia-

bilities at fair value through profit and loss” and all derivative contracts. Recognized

assets and liabilities that are hedged are stated at fair value in respect of the risk that

is hedged.

The preparation of financial statements in conformity with IFRS requires the use of esti-

mates and assumptions that affect the reported amounts of assets and liabilities and dis-

closure of contingent assets and liabilities at the date of the financial statements and the

reported amounts of revenues and expenses during the reporting period. Although these

estimates are based on management's best knowledge of current events and actions,

actual results ultimately may differ from those estimates.

Net income from short-term investments and cash and cash equivalents

Income from bank deposits is included on an accruals basis. Gains and losses from

short-term investments and gains and losses from cash and cash equivalents also in-

clude the increase in value of bonds purchased at a discount. All realized and unrealized

surpluses and losses are recognized in the income statement.

Expenditure

The expenditure is included in the financial statements on an accruals basis.

Functional and presentation currency

Items included in the Company's financial statements are measured using the currency of

the primary economic environment in which it operates ('The Functional Currency'). This

is the Euro, which reflects the Company's primary activity of investing in European limited

partnerships and private equity. The Company has also adopted Euro as its presentation

currency.

Transactions in foreign currencies are translated into Euro at the exchange rate prevailing at

the date of the transaction. Monetary assets and liabilities denominated in foreign

currencies are translated into Euro at the exchange rate prevailing at the balance sheet

date. Exchange gains and losses are included in the income statement.

Investments in limited partnerships and directly held investments

Investments in limited partnerships are valued initially at cost and thereafter at the most

recent net asset value as reported by the underlying partnership and adjusted for subse-

quent net capital activity.

In selecting investments the Directors have taken into consideration the accounting and

valuation basis of the underlying partnerships and select only those investments, which

adopt an internationally recognized standard.

The Directors also review management information provided by underlying partnerships on

a regular basis. In those cases where the management information is limited, the Directors

work with the underlying partnership in an attempt to obtain more meaningful informa-

tion.

18

NOTES TO THE UNAUDITED FINANCIAL STATEMENTS(continued)

QUARTERLY REPORT

Notwithstanding the above, the variety of valuation bases adopted and quality of manage-

ment information provided by the underlying partnerships and the lack of liquid markets

for the investments held mean that there are inherent difficulties in determining the fair

values of these investments that cannot be eliminated.

Amounts realized on the sale of investments will differ from the fair values reflected in

these financial statements and the differences may be significant.

The directly held investments are being treated as “financial assets at fair value through

profit or loss” and are therefore disclosed at fair value. For determining the fair value,

the Directors refer to the most recent available information provided by the lead inves-

tor of the investment with any changes resulting from additional financing rounds or a

diminution in value.

Any changes in the fair value of the investments are shown within “Net income from limi-

ted partnerships and directly held investments – Revaluation”.

Any distributions, including return of principal of investment, received from the under-

lying limited partnerships and directly held investments are recognized on the distribu-

tion date.

Investments in associates

Investments in associates are valued initially at cost and thereafter at the most recent

net asset value as reported by the underlying investment and adjusted for subsequent

net capital activity. Associates are entities over which the Company generally has be-

tween 20% and 50% of the voting rights, or over which the Company has significant

influence, but which it does not control.

Short-term investments

Short-term investments are defined as investments with maturity between three and

twelve months from the date of purchase and are being treated as “financial assets at

fair value through profit or loss”.

The short-term investments purchased at par are included in the balance sheet at market

values ruling at the balance sheet date. The changes in the fair value are included within

“Net income from short-term investments – Gains and losses”.

The short-term investments purchased at a discount are included in the balance sheet at

market values ruling at the balance sheet date. The changes in the fair value and the inte-

rest received at maturity are included within “Net income from short-term investments –

Gains and losses”. Upon maturity of the short-term investments purchased at a discount

the difference between the last reported fair value and the maturity amount are included

within “Realized gains and losses”.

All transactions relating to short-term investments are recognized on the settlement date.

Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and cash invested in money market

instruments with a maturity of up to three months from the date of purchase. The cash

equivalent investments purchased at a discount are included in the balance sheet at mar-

ket values ruling at the balance sheet date. The changes in the fair value and the interest

received at maturity are included within “Net income from cash and cash equivalents”.

Accounting for derivative financial instruments and hedging activities

The Company's policy of hedging the value of non-Euro investments against the Euro

does not qualify as hedge accounting as defined in IAS 39 (revised 2004). Derivative finan-

cial instruments are initially recognized in the balance sheet at cost and subsequently are

remeasured at their fair value. As a result the unrealized changes in the fair value of these

derivatives and the realized net gains / losses on the derivatives that matured during the

period are recognized in the income statement under the heading of “Net income from

limited partnerships and directly held investments – foreign exchange gains and losses”.

The fair values of various derivative instruments used for hedging purposes are disclosed

in notes 5 and 6.

19

2 E X P E N S E S

Management fee

The management fee is paid quarterly in advance pursuant to the Investment

Management Agreement between Pearl Holding Limited and Pearl Management Limited.

The quarterly management fee is calculated as 0.375% of the higher of the sum of

Private Equity Net Assets and the undrawn commitments or the Net Assets of the

Company.

Administration fee

The administration fee is paid quarterly in advance pursuant to the Administration

Agreement between Pearl Holding Limited and Partners Group (Guernsey) Limited. The

quarterly administration fee is calculated as 0.025% of the higher of the sum of Private

Equity Net Assets and the undrawn commitments or the Net Assets of the Company.

Insurance fee

The insurance fee is paid quarterly in advance pursuant to the Insurance Trust

Agreement between the Company, Pearl Management Limited and European

International Reinsurance Company Limited. The quarterly insurance fee is calculated as

0.45% of the higher of the sum of Private Equity Net Assets and the undrawn commit-

ments or the Net Assets of the Company or the Principal Amount of the Bond.

3 TAXATION STATUS

The Company is exempt from Guernsey income tax under the Income Tax (Exempt

Bodies) (Guernsey) Ordinances 1989 and 1992 and is charged an annual exemption fee

of GBP 600.

4 F I N A N C I A L R I S K M A N A G E M E N T

Financial risk factors

The Company's activities expose it to a variety of financial risks, including the effects of

changes in debt and equity market prices, foreign currency exchange rates and interest

rates. The Company's overall risk management programme focuses on the unpredictability

of financial markets and seeks to minimize potential adverse effects on the financial per-

formance of the Company. The Company may use derivative financial instruments such as

foreign exchange contracts to hedge certain exposures.

(a) Foreign exchange risk

The Company operates and invests internationally and is exposed to foreign exchange risk

arising from various currency exposures. The Company may use forward contracts to

hedge its exposure to foreign currency risk in connection with the functional currency.

(b) Interest rate risk

The Company's income and operating cash flows are substantially independent of changes

in market interest rates. The Company has no significant interest-bearing assets.

(c) Credit risk

The Company has no significant concentration of credit risk. Derivative counterparties

and cash transactions are limited to high credit quality financial institutions.

(d) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable

securities, the availability of funding through an adequate amount of committed credit

facilities and the ability to close out market positions. Due to the dynamic nature of the

underlying businesses, the Company aims at maintaining flexibility in funding by keeping

sufficient liquidity in readily realizable short-term investments.



QUARTERLY REPORT

20

5.2 DISTRIBUTIONS

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Dividends 2,481,662 626,780

Interest income 725,195 332,397

Rounding 1 -

3,206,858 959,177

Return of investments 28,990,321 16,979,118

Gains / (losses) from sale of stock distributions 16,139 (4,236)

Total distributions 32,197,179 17,934,059

5.3 FOREIGN EXCHANGE

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Foreign exchange revaluation 13,060,257 1,954,163

Revaluation of foreign exchange hedges relating

to investments in limited partnerships and directly

held investments (7,482,965) (3,663,782)

Realized gain / (loss) from foreign exchange hedges

relating to investments in limited partnerships and

directly held investments - 2,248,609

Rounding (1) -

5,577,291 538,990

At the balance sheet date, Pearl Holding Ltd. had the following forward foreign exchange

contracts in place. The contracts were entered into to hedge against changes in the foreign

exchange value of the investments in limited partnerships and directly held investments. The

unrealized surplus / (loss) at the end of the reporting period is detailed below:

Fair value estimation

The fair value of publicly traded derivatives and “financial assets at fair value through

profit or loss” securities is based on quoted market prices at the balance sheet date.

The fair value of forward foreign exchange contracts is determined using forward

exchange market rates at the balance sheet date.

In assessing the fair value of non-traded derivatives and other financial instruments, the

Company uses a variety of methods and makes assumptions that are based on market

conditions existing at each balance sheet date. Quoted market prices or dealer quotes

for the specific or similar instruments are used for long-term debt. Other techniques,

such as option pricing models and estimated discounted value of future cash flows, are

used to determine fair value for the remaining financial instruments.

5 LIMITED PARTNERSHIPS AND DIRECTLY HELD INVESTMENTS

5.1 INVESTMENTS

30.06.2005 31.12.2004

Balance at beginning of reporting period 234,863,468 166,100,235

Capital activity recorded at the transaction rate 82,938,215 100,760,092

Distributions (29,006,460) (45,391,930)

Revaluation 28,585,556 20,384,268

Foreign exchange gains / (losses) 13,060,257 (6,989,197)

Rounding (1) -

Balance at end of reporting period 330,441,035 234,863,468

21

Surplus / Surplus /

Amount (loss) (loss)

EUR Rate Value date 30.06.2005 31.12.2004

Sell USD

against EUR 54,417,506 1.34997 15.07.2005 (6,235,141) 373,314

Sell USD

against EUR 12,310,847 1.29723 15.07.2005 (874,511) -

(7,109,652) 373,314

6 I N V E S T M E N T S I N A S S O C I A T E S

6.1 INVESTMENTS

30.06.2005 31.12.2004


Capital activity recorded at the transaction rate 520,967 2,904,797

Distributions (8,233,546) (20,441,286)

Revaluation 8,892,346 11,610,911

Foreign exchange gains / (losses) 6,144,436 (3,812,162)

Rounding - (1)


The only associate, unlisted, is:

Country of incorporation Activity % interest

held

Partners Group SPP1 Limited Guernsey, Holding of

Channel Islands investments 49.64%

6.2 DISTRIBUTIONS

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Dividends - -

Interest income - -

Return of investments 8,233,546 5,223,396

Total distributions 8,233,546 5,223,396

6.3 FOREIGN EXCHANGE

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Foreign exchange revaluation 6,144,436 1,981,110

Revaluation of foreign exchange hedges relating

to investments in associates (4,231,132) (4,868,529)

Realized gain / (loss) from foreign exchange

hedges relating to associates - 3,288,863

Rounding - (1)

1,913,304 401,443

At the balance sheet date, Pearl Holding Ltd. had the following forward foreign exchange

contracts in place. The contracts were entered into to hedge against changes in the foreign

exchange value of the investments in associates. The unrealized surplus / (loss) at the end

of the reporting period is detailed below:


QUARTERLY REPORT

22

Surplus / Surplus/

Amount (loss) (loss)

EUR Rate Value date 30.06.2005 31.12.2004

Sell USD

against EUR 30,769,573 1.34997 15.07.2005 (3,525,568) 211,085

Sell USD

against EUR 6,960,986 1.29723 15.07.2005 (494,479)

(4,020,047) 211,085

7 I N V E S T M E N T S I N L I S T E D P R I V A T E E Q U I T Y

7.1 INVESTMENTS

30.06.2005 31.12.2004


Purchases recorded at the transaction rate 8,835,962 11,361,077

Disposals recorded at the transaction rate (12,669,103) (7,922,267)

Gains / (losses) on listed private equity 2,803,345 2,576,607

Foreign exchange gains / (losses) 1,079,754 (267,129)

Rounding 1 -


7.2 INCOME

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Dividends 227,018 463,666

Realized gains / (losses) on listed private equity 1,183,000 135,384

Unrealized gains / (losses) on listed private equity 1,620,345 (74,413)

Other income 22,899 -

3,053,262 524,637

8 SHORT-TERM INVESTMENTS

8.1 INVESTMENTS

30.06.2005 31.12.2004

At beginning of reporting period 208,106,992 252,823,843

Additions 83,989,637 274,782,948

Redemptions (150,000,000) (325,000,000)

Gains and losses on short-term investments 2,064,302 5,500,201

Rounding - -

At end of reporting period 144,160,931 208,106,992

8.2 INCOME

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Gains and losses

Realized gains / (losses) from short-term investments (15,480) 734,234

Unrealized gains / (losses) from short-term investments 2,079,782 2,027,571

Total gains / (losses) from short-term investments 2,064,302 2,761,805

9 O T H E R S H O R T - T E R M R E C E I V A B L E S

30.06.2005 31.12.2004

Distributions receivable 1,176,887 51,178

Sundry prepayments 1,000 -

1,177,887 51,178

23

1 0 C A S H A N D C A S H E Q U I V A L E N T S

10.1 BALANCE

30.06.2005 31.12.2004

Cash at banks 47,379,054 32,899,434

Rounding - -

Total cash and cash equivalents 47,379,054 32,899,434

10.2 INTEREST INCOME

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Interest received from cash at banks 195,128 106,372

Rounding - -

Total interest income from cash and

cash equivalents 195,128 106,372

11 SHARE CAPITAL

30.06.2005 31.12.2004

Authorized

1,000,000 Class A shares of EUR 0.01 each 10,000 10,000

10,000,100 non classified shares of EUR 0.01 each

(“Ordinary Shares”) 100,001 100,001

110,001 110,001

Issued and fully paid

1'000'000 Class A shares of EUR 0.01 each 10,000 10,000

Bondholders have the right to convert bonds into shares on or after 1 October 2008 and

up to the close of business on 31 August 2010. Bondholders have the right to convert

bonds at their option into either fully paid, ordinary non-voting Class B shares or fully paid,

ordinary voting Class C shares (collectively “Ordinary Shares”). Ordinary shares will rank

pari passu in all respects with all other Ordinary Shares of the issuer which are in issue on

the relevant conversion date, save that Class B shares will not confer voting rights at all,

and Class C shares will not confer voting rights until the earlier of the date upon which 95

per cent of the principal amount of the bonds have been converted or final maturity

(“Specified Date”). From the Specified Date, but prior to the Class A shares being converted

into Class C shares, the holders of Class C shares shall be entitled in aggregate to

4,000,000 votes, representing 80% of the votes available.

Following the Specified Date, the Class A shares issued may, at the option of the holders, be

converted into Class C shares. Upon conversion of all Class A shares into Class C shares,

every shareholder of Class C shares shall have one vote for every share held by him.

1 2 C O N V E R T I B L E B O N D

30.06.2005 31.12.2004


Amortization of transaction costs 592,956 1,185,611

Finance cost on convertible bond 9,849,894 19,210,679

Rounding - -


As at the balance sheet date the nominal value of the convertible bond outstanding was

EUR 660,000,000. The bond is not convertible into shares until on or after 1 October 2008,

at the option of the investor, using the relevant conversion price. Pearl Holding Limited has

entered into an insurance policy to ensure that it is provided with sufficient funds for the

repayment of the principal upon redemption of the bond on 30 September 2010.

24


QUARTERLY REPORT

In accordance with IAS 32, Financial Instruments: Disclosure and Presentation, the net

proceeds of the bond have been split between the liability and equity option compo-

nents. The fair value of the equity component has been calculated as EUR 153,058,174

using cash flows discounted at market interest rates for an equivalent period. This

amount is classified as share premium and will remain part of the permanent equity of

the Company. The remaining net proceeds, after the allocation of the liability related

transaction costs, of EUR 497,711,848 are allocated to the liability component. The lia-

bility, including transaction costs, is therefore stated at a discount of 0.84276% per

quarter to the maturity value.

The result of this technical requirement in IAS 32 is that the discount is amortized

through the income statement as a finance cost, on a yield to maturity basis, over the

life of the bonds until the beginning of the conversion period. This accounting treat-

ment has no effect on either the economic position or the net asset value of the

Company. The cumulative finance cost in retained earnings is offset by an equivalent

credit in share premium. However, the required treatment clearly does have a signifi-

cant impact on the net surplus or loss reported in the income statement over the period

to the conversion of the bond.

1 3 O T H E R S H O R T - T E R M P A Y A B L E S

30.06.2005 31.12.2004

Accrual of interest on convertible bond 9,900,000 3,300,000

Sundry accruals 120,695 704,343

10,020,695 4,004,343

1 4 D I V I D E N D A N D I N T E R E S T I N C O M E A N D E X P E N S E

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Interest income:

- Dividend and interest income from limited

partnerships and directly held investments 3,206,858 959,177

- Dividend and interest income from listed

private equity 249,917 463,666

- Interest income from cash and cash equivalents 195,128 106,372

Total dividend and interest income 3,651,903 1,529,215

Interest expense:

- Finance cost on convertible bond (9,849,894) (9,524,731)

- Bond interest (6,600,000) (6,600,000)

Total interest expense (16,449,894) (16,124,731)

1 5 F O R E I G N E X C H A N G E G A I N S A N D L O S S E S

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Foreign exchange gains and losses on:

- limited partnerships and directly held investments 5,577,291 538,990

- investments in associates 1,913,304 401,443

- investments in listed private equity 1,079,754 698,298

- cash and cash equivalents 221,053 -

- other foreign exchange gains and losses 3,434 1,311

8,794,836 1,640,042

25

1 6 R E V A L U A T I O N

01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Revaluation of:

- limited partnerships and directly held investments 28,585,556 7,739,416

- investments in associates 8,892,346 11,060,213

37,477,902 18,799,629

1 7 C O M M I T M E N T S

30.06.2005 31.12.2004

Total commitments translated at the rate

prevailing at the balance sheet date 886,025,165 747,679,953

Unutilized commitments translated at the rate

prevailing at the balance sheet date 378,689,103 350,761,132

1 8 D I L U T E D N E T A S S E T S P E R O R D I N A R Y S H A R E

The net assets are calculated by deducting the Liabilities falling due within one year

from the Total Assets. The 660,000 convertible bonds at a par value of EUR 1,000 each,

if converted at EUR 100 per share would result in 6,600,000 shares. Once 95% of the

convertible bonds are converted, the existing 1,000,000 Class A shares will be converted

at 10,000 : 1, resulting in 100 Class C shares after conversion.

30.06.2005 31.12.2004

Net assets of the company 582,311,108 545,429,560

Outstanding shares at the balance sheet date 100 100

Additional shares due to conversion 6,600,000 6,600,000

Net assets per share after conversion 88.2276 82.6396

1 9 I N S U R A N C E P O L I C Y

On 29 June 1999, Pearl Holding Limited and Pearl Management Limited entered into an

Insurance Agreement with European Reinsurance International Company Limited, to ensure

that the Company will be provided with sufficient funds to be able to pay the principal

amount of the Bond at maturity on 30 September 2010.

2 0 N U M B E R O F E M P L O Y E E S

At the balance sheet date no persons were employed by the Company.

2 1 R E L A T E D P A R T Y T R A N S A C T I O N S

GE & W AG, a majority of whose shares are held by the founding partners of Partners

Group Holding, and Partners Group Holding hold 100% of the Class A shares.

Partners Group Holding owns 19.9% of the share capital of GE & W AG.

Mr. Wietlisbach, a Director of Pearl Holding Limited and a partner of Partners Group, con-

trols 26.7% of the issued share capital of GE & W AG.

Partners Group and all its subsidiaries and affiliates are considered to be related parties to

the Company. The directors as disclosed in the Directors' Report are also considered to be

related parties to the Company.


26


QUARTERLY REPORT

Transactions with related parties

The following transactions were carried out with related parties:

i) Services 01.01.2005- 01.01.2004-

30.06.2005 30.06.2004

Management fee:

- Pearl Management Limited (4,835,824) (4,052,149)

Administration fee:

- Partners Group (Guernsey) Ltd (322,388) (270,143)

Insurance fee:

- Pearl Management Limited (6,015,733) (5,940,000)

Direct investment performance fee:

- Pearl Management Limited - -

Directors' fees paid (15,006) (7,719)

Reimbursement of fees paid by related limited

partnerships:

- Partners Group (Guernsey) Ltd 715,722 661,108

22 PARENT COMPANY AND ULTIMATE CONTROLLING PARTY

GE & W AG, a company organized under Swiss law holds the majority of the Class A

shares. Partners Group Holding holds 19.9% of the share capital of GE & W AG.

2 3 R I S K S

It is expected, that a large proportion of the Company's investments will be made by

investing in private equity funds (including affiliated funds). Many of the private equity

funds may be wholly unregulated investment vehicles. In addition, certain of the private

equity funds may have limited or no operational history and have no proven track record

in achieving their stated investment objective.

The value of the investments in the private equity funds and the income from them may

fluctuate significantly.

The Company's over-commitment strategy could result in periods in which the Company

has inadequate liquidity to fund its investments or to pay other amounts payable by the

Company.

The Company expects that a portion of the private equity investments to be made by the

Company will be in a number of different countries and denominated in a number of dif-

ferent currencies. Any returns on and value of, such portion of the private equity invest-

ments made by the Company may, therefore, be materially affected by exchange rate fluc-

tuations, local exchange control and other restrictions, including restrictions on the con-

vertibility of the currencies in question and also by political and economic developments in

the relevant countries.

27

NOTES

LIST OF ADRESSES

Registered office

Pearl Holding Limited

Elizabeth House

Les Ruettes Braye

St Peter Port, Guernsey

Channel Islands

Phone +44 1481 730 946

Facsimile +44 1481 730 947

E-mail: [email protected]

Info: www.pearl-privateequity.net

Investment manager

Pearl Management Limited

Guernsey, Channel Islands

Investors relations

Isabelle Hess

E-mail: [email protected]

Auditors

PricewaterhouseCoopers

Guernsey, Channel Islands

Trading information

Price information

Reuters DGZ07

German Security Number 558.527

Swiss Security Number 1.140.571

Market Maker

DekaBank

Frankfurt a. M., Germany

Phone +49 69 7147 1301

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