Liberty Group (South Africa)

On 09 March 2006 Liberty Life announced the disposal of its subsidiary Liberty Ermitage ("LE") , a Jersey-based fund of hedge fund manager, to a NewCo formed by Caledonia Investments and the management team of LE. LE is one of the oldest and largest offshore fund of hedge funds management groups in Europe. As at 31 December 2005, it managed approximately $2.4 billion, of which 70% was invested in funds of hedge funds and the balance in money market funds. Around one third of LE's assets are managed for the parent company.

Caledonia is a UK investment trust company, listed on the London Stock Exchange. The Company aims to achieve a long term shareholder return in excess of the FTSE All-Share Total Return while maintaining a progressive annual dividend. Caledonia has established a reputation as a supportive and constructive long term investor, with considerable experience in the investment management sector.

Liberty will realise a total of c. £80mlion from the transaction. The total acquisition price is £41.1mlion, of which £6.0mlion is payable over the next three years, dependent upon the level of assets managed in that period by LE. Liberty will also realise excess capital of £24.4mlion at Completion, and a further amount of up to £14.0mlion receivable in mid-2007.

The transaction is subject to regulatory approvals and is scheduled to close during the second quarter of 2006.

Paul Myners, a highly regarded figure in the investment management world, will become chairman of LE and will invest in the company alongside Caledonia and the management team.