DREF.L Regulatory News (DREF)

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, DIRECTLY OR INDIRECTLY, TO U.S. PERSONS OR INTO OR IN THE UNITED STATES, AUSTRALIA, CANADA OR JAPAN

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") to be published by Duet Real Estate Finance Limited (the "Company") in due course in connection with the proposed admission of its to be issued ordinary shares ("Ordinary Shares") to the premium listing segment of the Official List of the UK Listing Authority and to trading on the Main Market for listed securities of the London Stock Exchange. Copies of the Prospectus will, following publication, be available from the Company's registered office.

This announcement is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia) (the "United States"), Australia, Canada or Japan. This advertisement does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in the United States, Australia, Canada or Japan. The securities of Duet Real Estate Finance Limited have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to any national, resident or citizen of Australia, Canada or Japan.

This announcement does not constitute an offer to sell, or the solicitation of an offer to subscribe for or to buy, shares in any jurisdiction in which such offer or solicitation is unlawful.

The contents of this announcement, which have been prepared by and are the sole responsibility of the Company, have been approved by Duet Private Equity Limited (the "Investment Adviser") solely for the purposes of section 21 of the Financial Services and Markets Act 2000.

26 July 2011

Duet Real Estate Finance Limited

(the "Company")

Placing and Related Party Transactions

Introduction

Further to the Company's announcement on 7 July 2011, the Company is pleased to announce its intention to proceed with a secondary fundraising targeting in excess of £25 million. The fundraising will be by way of a placing of up to 50,000,000 ordinary shares ("New Ordinary Shares") to both new investors and existing shareholders (the "Placing"), with substantially all of the available net proceeds of the fundraising being invested in the European Real Estate Debt Fund L.P (the "Master Fund").

The Investment Adviser is continuing to evaluate many different investment opportunities, and seeing a strong pipeline of attractive opportunities to deploy capital by investing in debt backed by high quality European commercial property. The Master Fund is currently over 33% invested at its current size of £274.6m, with the active pipeline of deals standing at £229.5m across 11 different transactions.

The Placing will allow the Company to increase its exposure to the Master Fund, thereby providing additional capital which will enable the Master Fund to build up its portfolio and achieve its objectives. The placing price for the New Ordinary Shares will be 100.25 pence (the "Placing Price"), which represents a premium to both the NAV per Ordinary Share and the issue price of the ordinary shares at the initial public offering ("IPO") of the Company (the "IPO Price").

It is anticipated that a prospectus relating to the Placing will be published by the Company in early August, with the New Ordinary Shares commencing trading in late August.

Oriel Securities Limited is acting as sole Sponsor, financial adviser and bookrunner for the Placing.

Company update

Following the IPO of the Company, the Master fund has closed a further two transactions for a total investment value of approximately £33 million. Following the completion of these two transactions the Master Fund's invested portfolio has an average cash coupon of 10% and expected gross IRR of more than 15%.

The Company also announced today its maiden quarterly dividend of 1.0 pence per Ordinary Share, payable on 18 August 2011 to those shareholders on the register on 5 August 2011, and its unaudited NAV per Ordinary Share of 98.6 pence as at 30 June 2011. The dividend represents an annualised yield of 4.0 per cent on the IPO Price as expected at the time of the IPO in March 2011.

Benefits of the Placing

The Board, as advised by the Investment Adviser, continues to be positive about the opportunities in the European commercial real estate debt market. The directors believe that the Placing will have the following benefits:

§ the Company will increase its exposure to the Master Fund, thereby providing additional capital which will enable the Master Fund to build up its portfolio and achieve its objectives;

§ having a greater number of Ordinary Shares in issue is likely to provide the Ordinary Shares with additional liquidity;

§ the Placing Price will be at a premium to the NAV per Ordinary Share; and

§ the Company's fixed running costs will be spread across a wider shareholder base, thereby reducing the total expense ratio.

It remains the expectation of the Master Fund that the total commitments made to the Master Fund (including the net proceeds of the Placing) will be deployed within 12 months of the date of the IPO, being 14 March 2011.

Related Party Transaction and disapplication of pre-emption rights

The Company has received expressions of interest both from new investors and existing shareholders (and/or their associates) to participate in the Placing. Existing shareholders West Yorkshire Pension Fund and Midas Capital Partners Limited (the "Related Parties" or each a "Related Party") each hold or, since the time of the IPO, have held, Ordinary Shares representing 10 per cent. or more of the current issued ordinary share capital of the Company. Therefore, for the purposes of the Listing Rules, each of them and their respective associates are considered to be related parties of the Company and, in the event that a Related Party participates in the Placing, its participation would be expected to be a related party transaction for the purposes of the Listing Rules. Consequently, should a Related Party wish to participate in the Placing, its participation will be dependent upon the prior approval of the independent shareholders of the Company.

It is proposed that the maximum number of New Ordinary Shares for which each Related Party will subscribe in the Placing will be no greater than the lesser of (i) 7,500,000 New Ordinary Shares and (ii) such number of New Ordinary Shares as, if subscribed by the Related Party, would result in the combined shareholding of a Related Party and its associates following completion of the Placing being equal to 15 per cent. of the issued share capital of the Company.

In the event of excess demand under the Placing, existing shareholders will be given priority up to their proportional participation in the Placing, to the extent reasonably practicable, over any allocations to the Related Parties in excess of their proportional participation.

The Company's articles of incorporation (the "Articles") contain pre-emption rights which require that, in the event that the Company issues Ordinary Shares for cash, such Ordinary Shares shall first be offered pre-emptively to existing shareholders before they may be offered to third parties (unless such rights have been disapplied by a special resolution). As the number of New Ordinary Shares to be issued pursuant to the Placing is expected to exceed the amount specified in the disapplication of the pre-emption rights currently in place (which relates to 4,995,000 Ordinary Shares), the Company will be required to obtain shareholder approval by way of a special resolution to be permitted to issue the New Ordinary Shares to placees pursuant to the Placing free of the pre-emption rights in the Articles.

A circular (the "Circular") is being sent today to shareholders giving notice of an extraordinary general meeting of the Company at which approval will be sought from shareholders for (i) a disapplication of pre-emption rights in respect of the issue of up to 50,000,000 New Ordinary Shares pursuant to the Placing and (ii) related party transactions that may arise as a result of each Related Party participating in the Placing.

Notice of EGM

The extraordinary general meeting at which approval will be sought for the proposals set out in the Circular has been convened for 9.30 a.m. on 15 August 2011.

Document viewing

A copy of the Circular has been submitted to the National Storage Mechanism and will shortly be available for inspection at www.Hemscott.com/nsm.do. The circular will also shortly be available for viewing on the Company's website, www.dreflimited.com.

A copy of the Circular may be inspected at the offices of Berwin Leighton Paisner LLP, Adelaide House, London Bridge, London EC4R 9HA during usual business hours on any weekday (excluding Saturdays, Sundays and public holidays) up to and including 15 August 2011.

For further information, please contact:

Forward-looking Statements

This announcement contains "forward-looking" statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company's control and all of which are based on the directors' and /or the Investment Adviser's current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "projects", "anticipates", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the directors or the Company or the Investment Adviser with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Company's business concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth and strategies of the Company and the industry in which it operates.

These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this document. The Company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this document to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure and Transparency Rules of the Financial Services Authority.