Issue of equity: 15 April 2009

Placing of 72 million new Ordinary Shares at 24 pence to raise £17.3 million

New significant shareholder, new proposed board appointments and strengthening of balance sheet

The Board of Panmure Gordon is pleased to announce that the Company has conditionally raised approximately £17.3 million before expenses in a placing with BlueGem LP (“BlueGem”) through its subsidiary BlueGem Water Holding B.V. and an institutional investor of 72 million new ordinary shares (“Ordinary Shares”) in the Company (the “Placing Shares”) at a price of 24 pence per Ordinary Share (the “Placing”).

Following the Placing, BlueGem will own approximately 40.3% of Panmure Gordon’s enlarged share capital1.


Strategic investment in Panmure Gordon by BlueGem
• BlueGem Capital Partners LLP, led by Marco Capello, a former Managing Director of Merrill Lynch Global Private Equity, is the management company of BlueGem, a London-based private equity fund formed at the end of 2006
• BlueGem makes private equity investments in mid-market companies mainly in the UK and in Italy
• Panmure Gordon is its fourth announced investment and the first in the financial services sector
• BlueGem has capital commitments of over €200 million and targets companies with an enterprise value up to €200 million

Placing will significantly strengthen Panmure Gordon’s balance sheet
• Including the net proceeds of the Placing, Panmure Gordon Group (the “Group”) will have regulatory assets of over £40 million, representing over three times its required regulatory capital

With BlueGem as a strategic investor, Panmure Gordon’s business will be enhanced in existing and additional areas of activity
• Panmure Gordon’s Board anticipates that working together with BlueGem, the Group will enhance its existing product offering, gain access to new clients and have the ability to offer new products
• BlueGem’s investment philosophy is built around creating long term value in quality companies

Board to be strengthened with proposed addition of two non-executive directors
• Marco Capello, managing partner at BlueGem, formerly a managing director of Merrill Lynch Global Private Equity and with over 18 years of investment banking experience at First Boston, Wasserstein Perella and Merrill Lynch in London and New York
• Emilio Di Spiezio Sardo, a partner at BlueGem, formerly a hedge fund manager at York Capital Management and investment banker at Merrill Lynch

All the Directors owning shares have signed irrevocable undertakings to vote their shares in favour of the Placing.

Welcoming BlueGem as a significant shareholder in the Company, Tim Linacre, Panmure Gordon chief executive, said:

“Today’s announcement marks an important new phase in broadening and strengthening Panmure Gordon’s franchise for the future. BlueGem is a London-based private equity firm established by senior investment bankers and investment managers and its investment in Panmure Gordon is a tremendous endorsement of our long-term strength and direction. BlueGem will bring outstanding contacts and expertise to the firm, which will help to create new revenue streams for the Group and further assist in realising the potential inherent in our business model.

“The investment ensures we have the financial flexibility to take advantage of market and revenue opportunities as they arise. The significant cost reductions taken in 2008 mean we have a platform with significant operational gearing to take advantage of any market upturn. I will also look forward to welcoming both Marco Capello and Emilio Di Spiezio Sardo to the Board as non-executive directors.”

Marco Capello, founder of BlueGem Capital Partners LLP, said:

“BlueGem’s investment in Panmure Gordon signals its firm belief in the Company’s brand, reputation, management and 130 year heritage, as well as its attractive business model. The industry has very interesting prospects, as well as an abundance of available, talented professionals. With its robust financial position and strong client list, Panmure Gordon is extremely well positioned to take advantage of these opportunities.

“As a shareholder, BlueGem is keen to reinforce Panmure Gordon’s prospects with substantial capital and access to our network of industry expertise. We look forward to supporting the firm’s management as it takes the Company to the next stage of its development.”

Advisers to BlueGem: Lincoln International LLP as corporate finance advisor; Burness LLP as legal advisor.

Advisers to Panmure Gordon: ING Corporate Finance as corporate finance advisor; Berwin Leighton Paisner LLP as legal advisor.

Tim Linacre, Chief Executive: 020 7459 3600
Ed Gascoigne-Pees/Billy Clegg, Financial Dynamics: 020 7269 7132
Nathaniel Webb, Group Communications Manager: 020 7614 8333

William Marle, ING Corporate Finance: 020 7767 1000
Mark Garrood, ING Corporate Finance: 020 7767 1000


1. Introduction
The Company announces that it has entered into a conditional subscription agreement with BlueGem and an institutional investor to raise approximately £17.3 million before expenses by the issue of 72,000,000 Ordinary Shares. The Placing Shares are being issued at 24 pence per Ordinary Share. The proposed Placing is conditional, inter alia, on shareholder approval of certain matters relating to the Placing (the “Proposals”). A circular including, inter alia, a notice of a general meeting (the “General Meeting”) at which the Company’s shareholders will be asked to approve the Proposals will be posted to shareholders shortly.

2. Background to and reasons for the Placing and use of proceeds
Stock markets during most of 2008 and early 2009 have been volatile with an underlying severe decline. This has resulted in investment banks and stockbrokers seeing falling revenue caused by reduced institutional commission as a result of both lower volumes and lower share prices, as well as a sharp reduction in investment banking revenues. While Panmure Gordon has avoided any exposure to toxic debt and other similar instruments, the Company could not avoid the impact of these extreme markets.

With many stock markets down some 40 per cent., Panmure Gordon has been focussed on reducing costs while protecting the Company’s balance sheet strength and has concentrated on reducing non-personnel costs (having sought to exit from and vacate office space as it became surplus to requirements). Cost reductions have unfortunately, however, also led to a significant number of redundancies. Furthermore, Panmure Gordon has also sought to de-risk its UK trading positions by reducing the size of its trading book. While the Group suffered losses in exiting illiquid positions in 2008, it is now benefiting as market conditions continue to be difficult.
All the cost reduction actions described above have impacted the Company’s balance sheet strength; whilst the revenue reductions caused by the falling markets were felt immediately, cost reductions take some time to take effect. The Company is aware that in difficult markets both corporate and institutional clients want to ensure that the broker and investment bank they deal with is financially robust. While the Board of the Company believes that the Company’s financial strength is satisfactory, with a significant buffer over regulatory capital requirements, it understands that clients want comfort regarding balance sheet strength combined with the excellent client service the Company continues to provide.

The Board was approached by BlueGem with the proposal that they invest approximately £15 million in the Company. In addition to these financial resources, the Board believes BlueGem will also bring additional business, skills and opportunities.

3. Effect on the Company of the Placing
The Placing will significantly strengthen the Company’s balance sheet. On a pro-forma basis, taking the regulatory assets of the Group as at 31 March 2009 (£23.8 million) and adjusting for the net proceeds of the Placing, the Group will have regulatory assets of over £40 million, representing significantly enhanced regulatory capital headroom. In the opinion of the Directors this will place the Group in a strong position to withstand further market turbulence, provide the Group with further strength to execute transactions on behalf of clients and also to be a counter-party of choice to institutional investors.

On completion of the Placing, Marco Capello and Emilio Di Spiezio Sardo (whose details are set out below) will join the Board.

Marco Capello, age 48, proposed non-executive director
Marco Capello is the founder and managing partner of BlueGem Capital Partners LLP. From 2002 to 2006 he was a managing director of Merrill Lynch Global Private Equity. Previously he worked for over 18 years at First Boston, Wasserstein Perella and, since 1994, at Merrill Lynch. During his career in investment banking he worked primarily in mergers and acquisitions both in New York and London. Mr Capello holds an MBA from Columbia University in New York. He graduated in Civil Engineering from the Politecnico di Torino. He is a board member of Olicar S.p.A., the Private Clinic Ltd. and director-elect of Fintyre S.p.A.

Emilio Di Spiezio Sardo, age 32, proposed non-executive director
Emilio Di Spiezio Sardo is a partner of BlueGem Capital Partners LLP. Before joining BlueGem as a partner, in 2007, he worked in London as a hedge fund manager at York Capital Management, a global multi-strategy hedge fund with approximately $10 billion under management. Before that he worked for six years in Investment Banking at Merrill Lynch in London and Rome. Mr Di Spiezio Sardo graduated summa cum laude in Economics and Finance from Bocconi University in Milan. He is a board member of Olicar S.p.A., the Private Clinic Ltd. and director-elect of Fintyre S.p.A.

4. Principal Terms of the Placing with BlueGem
The Company and BlueGem have entered into a subscription agreement (the “Subscription Agreement”) under which BlueGem has agreed to subscribe for 63,650,000 of the Placing Shares at the Placing price subject to the satisfaction of the following conditions:

i. the approval of the Proposals at the General Meeting;
ii. admission of the Placing Shares to trading on AIM;
iii. approval from The Panel on Takeovers and Mergers of a waiver of Rule 9.1 of The Takeover Code;
iv. approval from the Financial Services Authority; and
v. deemed approval from The United States Financial Industry Regulatory Authority

occurring, in each case, on or before the later of (a) 31 May 2009 and (b) such later date as is agreed by the parties.

Under the terms of the Subscription Agreement, the Company has given warranties, in a form customary in relation to a transaction of this nature, to BlueGem.

BlueGem may terminate the Subscription Agreement in certain circumstances prior to the passing of the resolutions requested to implement the Proposals at the General Meeting, including if the warranties given by the Company pursuant to the terms of the Subscription Agreement were untrue when they were given and the circumstances giving rise to such breach of warranty is material.

The Company and BlueGem have also entered into a relationship agreement. This agreement is conditional upon completion of the Placing. Under the terms of the relationship agreement, BlueGem has given certain undertakings to ensure, inter alia, that the Company is able, at all times, to carry on its business independently of BlueGem and that all agreements and arrangements entered into between the Company and BlueGem are on arm’s length terms.
The Company and BlueGem have also entered into an agreement pursuant to which BlueGem has undertaken to the Company that it will not for a period of 12 months commencing on the completion of the Subscription Agreement deal (except in certain permitted circumstances) in the Ordinary Shares to be issued to it pursuant to the Placing other than through the Company’s broker from time to time.

The Company has entered into an agreement with BlueGem pursuant to which the Company has agreed to pay a fee (the “Break Fee”) of £292,155 to BlueGem in certain circumstances. The circumstances in which the Break Fee may be payable include the announcement of (or the Directors recommending) certain transactions (including an offer for the entire issued share capital of the Company or a subscription by a third party for new shares in the Company) and the resolutions to be proposed at the General Meeting not being passed.

Each of the Directors, with the exception of Paul Gismondi who does not hold any shares in the Company, has today undertaken to BlueGem, inter alia, to exercise the voting rights attaching to the ordinary shares held by him to vote in favour of the resolutions to be proposed at the General Meeting. The ordinary shares held by the Directors and in respect of which such irrevocable undertakings have been given represent, in aggregate, 3,474,205 ordinary shares, or 4.58% of the Company’s issued ordinary shares (excluding shares held in treasury).

Notes to editors:

About the Panmure Gordon Group
Founded in 1876, Panmure Gordon & Co (PMR.L) is a leading independent mid-cap institutional stockbroker and investment bank. Encompassing its US franchise, ThinkEquity, LLC, the Group employs approximately 250 professionals across the US, the UK and Nyon, Switzerland, offering a blend of transatlantic financial services including research, sales and trading, wealth management and asset management. and

1 Existing share capital enlarged for issuance under the Placing and taking into account in the money options.