Kingswood H. Regulatory News (KWG)

THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY OR SUBSCRIBE FOR SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL AND, IN PARTICULAR, IS NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES OF AMERICA, CANADA, AUSTRALIA, THE REPUBLIC OF IRELAND, THE REPUBLIC OF SOUTH AFRICA OR JAPAN.

27 May 2015

European Wealth Group Limited

("European Wealth", or "the Group" or "the Company")

PLACING TO RAISE £2.0 MILLION AND PROPOSED ACQUISITION OF ISM SOLUTIONS

European Wealth (AIM: EWG, EWGL), the fast growing wealth management group, is delighted to announce that it has raised, subject to certain conditions, £2.0 million (approximately £1.9 million net of expenses) by way of a placing of 2,527,095 new Ordinary Shares (the "Placing Shares") with both new and existing shareholders at a price of 80 pence per Ordinary Share (the "Placing Price").

The Placing Price represents a discount of approximately 9.6 per cent. to the closing price of 88.5 pence per Ordinary Share on 26 May 2015, (being the last practical date prior to the announcement of the Placing). Panmure Gordon is acting as the Company's bookrunner in relation to the Placing.

The Placing Shares will represent approximately 11.3 per cent. of the Ordinary Share capital as enlarged by the Placing and will, when issued, be credited as fully paid and will rank pari passu in all respects with the Ordinary Shares then in issue, including all rights to all dividends and other distributions declared, made or paid following Admission.

The Placing is expected to raise net proceeds of approximately £1.9 million. The Directors intend that the net Placing Proceeds will be used by the Company to:

• invest in European Wealth's growth strategy through acquiring high quality businesses in the wealth management industry including payment of elements of the Initial Consideration in respect of the Proposed Acquisition;

• increase the level and reach of market activities through smaller bolt-on acquisitions and recruitment of experienced revenue generating staff; and

• strengthen the balance sheet.

An Extraordinary General Meeting of the Company will be held at the registered office of the Company at Mill Court, La Charroterie, St Peter Port, Guernsey GY1 3QZ at 11.00 a.m. on 12 June 2015

John Morton, Executive Chairman of European Wealth said: "I am delighted to announce the latest phase in European Wealth's growth strategy. The combined fundraising, introducing new and highly supportive institutional investors into our already strong shareholder base, together with our strategic acquisition of ISM Solutions, is evidence of the robust strategy of the European Wealth Group and the manner in which it is viewed by the outside world. The developments announced today give us the opportunity to move forward with our growth objectives both through acquisition and organic expansion."

For further details, please contact:

All defined terms used in this announcement are defined in Appendix I to this announcement.

IMPORTANT INFORMATION

Panmure Gordon (UK) Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as nominated adviser and broker to the Company and no one else in connection with the Placing. The responsibilities of Panmure Gordon (UK) Limited as the Company's nominated adviser and broker, under the AIM Rules for Nominated Advisers, are owed solely to London Stock Exchange plc and are not owed to the Company or to any Director, shareholder or any other person, in respect of his decision to acquire shares in the Company in reliance on any part of this announcement, or otherwise. Panmure Gordon (UK) Limited is not making any representation or warranty, express or implied, as to the contents or completeness of this announcement. Panmure Gordon (UK) Limited has not authorised the contents of this announcement for any purpose and, without limiting the statutory rights of any person to whom this announcement is issued, will not be offering advice and will not be responsible for providing customer protections to any other person (whether or not recipients of this announcement) in respect of any acquisition of shares.

This announcement shall not constitute an offer to buy, sell, issue or subscribe for any securities in, nor the solicitation of an offer to buy, sell, issue or subscribe for any securities in, nor shall there be any sale of securities on the basis of this announcement in, any jurisdiction in which such offer, solicitation or sale would be unlawful.

The Placing Shares referred to in this announcement have not been and will not be registered under the US Securities Act of 1933, as amended (Securities Act) or under the securities laws of any state. The Placing Shares are only being offered and sold outside the United States in "offshore transactions," as defined in, and in reliance on Regulation S under the Securities Act. Subject to certain exceptions, the Placing Shares may not be offered or sold within the United States.

Certain statements in this announcement are "forward-looking statements" which includes all statements other than statements of historical fact, including, without limitation, those regarding the Group's financial position, business strategy, plans and objectives of management for future operations, or any statements preceded by, followed by or that include the words "targets", "believes", "expects", "aims", "intends", "will", "may", "anticipates", "would", "could" or similar expressions or negatives thereof. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the Group's control that could cause the actual results, performance or achievements of the Group to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements and therefore undue reliance should not be placed on such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding the Group's present and future business strategies and the environment in which the Group will operate in the future. These forward-looking statements speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to disseminate any updates or revisions to any forward-looking statements contained herein to reflect any change in the Group's expectations with regard thereto or any change in events, conditions or circumstances on which any such statements are based unless required to do so by applicable law or the AIM Rules.

1. Background to and reasons for the Placing

European Wealth is a diverse wealth management business that was first authorised by the then Financial Services Authority in 2010 and further to the Reverse Takeover, was readmitted to AIM in 2014.

Since 2010, the Company has grown rapidly both through organic growth and acquisition. The acquisitions have involved attracting teams of individuals with both expertise and client following, together with acquiring businesses in the same sector as European Wealth operates. As a result, the Company now manages or advises on over £1 billion of assets held on behalf of over 6,800 clients.

The business is currently split into two equally important sub sectors of the wealth management industry - financial planning and investment management.

Financial Planning business

The financial planning business advises on over £384 million of assets acting for over 6,000 clients and 50 pension schemes. The business has three main revenue streams - traditional financial planning offering, group pension plans and specialist high net worth personal tax planning. Changes in the financial planning industry ranging from the government's recent initiative to give individuals over the age of 55 access to their pension assets and the further liberalisations recently announced by the Government have, in the Directors' opinion, increased the need for individuals to take expert pension advice.

At the same time, the Regulator has introduced new industry practices which have resulted in a number of underlying businesses reviewing their models and deciding or concluding to withdraw from the industry. This has given the Company the opportunity to acquire a number of financial planning businesses that make up European Wealth today.

Investment Management business

The investment management business manages £627 million split across three distinct disciplines - discretionary portfolio management, treasury and cash management and specialist execution-only dealing. The main ethos of the business has been to deliver an institutional style investment management process to the private client marketplace, which over a rolling three year period has produced investment performance resulting in each model beating its benchmark in every case. The treasury and cash management service is focused on the institutional marketplace endeavouring to generate a return in excess of that available from cash deposits without taking an unreasonable amount of risk.

2. Strategy and Current Trading

Strategy

A key part of the development and growth of European Wealth is centred on continuing to make bolt-on acquisitions and attract experienced individuals who will increase the depth of expertise within the Group but also generate significant increases in Group turnover.

Current Trading

The Company announced full year results to the 31 December 2014 on 22 May 2015, which showed a full year pre-tax profit of £22,000 (before exceptional items) on turnover of £5.6 million.

The growth of the Company since the Reverse Takeover in May 2014, has been accelerated by two acquisitions. In June 2014, the Company acquired Compass, which increased the Group's exposure to both group personal pension schemes and also personal financial planning clients.

In November 2014, the Company made its first overseas acquisition with the purchase of P&C Global Wealth Managers SA ("P&C") in Zurich, Switzerland. As part of this acquisition, the company acquired the investment management contract for GTI Fund Investment Limited, a Cayman Island based umbrella fund structure. This acquisition gave the Group the ability to provide offshore fund management together with a service to the ultra-high net worth marketplace. As this is a new service offering for the Group, we were able to benefit from some core efficiencies but have also made a significant enhancement to the range of services offered by the Group as a whole and the Directors believe that the extra revenue is having a positive impact on the Group. The Directors believe that this effect will be further enhanced by the Proposed Acquisition.

3. Proposed Acquisition

On 8 April 2015, European Wealth entered into certain commitments (the "SPA"), subject to satisfaction of certain conditions, to acquire a high quality financial planning business, Greensnow Limited which trades under the name ISM Solutions (hereafter referred to as "ISM") based in the City of London. The clients of ISM are made up of predominantly young, aspiring professionals in both the legal and accountancy professions. For the full year to 31 March 2015 ISM had turnover of £1.1 million of which approximately 92 per cent was recurring income and profit before tax of £114,986. As at 31 March 2015, ISM had aggregate net assets of £29,000.

The aggregate maximum consideration for the Proposed Acquisition is £3.0 million (the "Maximum Consideration"), of which 50 per cent. is to be satisfied in cash and 50 per cent. in new Ordinary Shares. The initial payment due on the SPA becoming unconditional (the "Completion of the Proposed Acquisition") is £1.25 million (the "Initial Consideration"), with £625,000 to be paid in cash and £625,000 to be paid in new Ordinary Shares. Any balance of the Maximum Consideration will be paid approximately 12 months after Completion of the Proposed Acquisition and is contingent, inter alia, on ISM's recurring revenue for the 12 month period following Completion of the Proposed Acquisition. Assuming the Maximum Consideration became due and payable under the terms of the SPA, the second payments of consideration due to the vendors of ISM would be £875,000 in cash and £875,000 in shares. Part of the proceeds of the Placing will be used to satisfy the cash element of the Initial Consideration.

4. Use of Proceeds

The Placing is expected to raise net proceeds of approximately £1.9 million.

The Directors intend that the net Placing Proceeds will be used by the Company to:

• invest in European Wealth's growth strategy through acquiring high quality businesses in the wealth management industry including payment of elements of the Initial Consideration in respect of the Proposed Acquisition;

• increase the level and reach of market activities through smaller bolt-on acquisitions and recruitment of experienced revenue generating staff; and

• strengthen the balance sheet.

5. Details of the Placing

The Company proposes to raise gross proceeds of £2.0 million (approximately £1.9 million net of expenses) by way of a conditional, non-pre-emptive placing of 2,527,095 new Ordinary Shares at the Placing Price. The Placing Shares will be placed by Panmure Gordon as agent for the Company and pursuant to the Placing Agreement, with institutional and other professional investors.

The Placing Price of 80 pence per share represents a discount of approximately 9.6 per cent. to the closing mid-market price of 88.5 pence per Ordinary Share on 26 May 2015 (being the last practical date prior to the posting of the Circular).

The Placing of the First Placing Shares is conditional only upon Admission of the First Placing Shares to trading on AIM. It is expected that Admission of the First Placing Shares will occur on 15 June 2015.

The Placing of the Second Placing Shares is conditional, inter alia, on the approval of the Resolutions at the Extraordinary General Meeting of the Company to be held on 12 June 2015 and upon Admission of the Second Placing Shares to trading on AIM. It is expected that Admission of the Second Placing Shares will occur on 16 June 2015.

The Placing Shares will represent approximately 11.3 per cent. of the Enlarged Issued Share Capital and will, when issued, be credited as fully paid and will rank pari passu in all respects with the Ordinary Shares then in issue, including all rights to all dividends and other distributions declared, made or paid following Admission.

Pursuant to the terms of the Placing Agreement, Panmure Gordon, as agent for the Company, conditionally agreed to use its reasonable endeavours to place the Placing Shares on a non-underwritten basis at the Placing Price.

The Placing Agreement is conditional upon (amongst other things) the Placing Agreement not having been terminated, the passing of all the Resolutions at the General Meeting and, in relation to the First Placing Shares, First Admission occurring on or before 8.00 a.m. on 15 June 2015 (or such later date as Panmure Gordon and the Company may agree, not being later than 4.30 p.m. on 30 June 2015) and in relation to the Second Placing Shares, First Admission having occurred and Second Admission occurring on or before 8.00 a.m. on 16 June 2015 (or such later date as Panmure Gordon and the Company may agree, not being later 4.30 p.m. on 30 June 2015).

The Placing Agreement contains warranties from the Company in favour of Panmure Gordon in relation to (amongst other things), the Company and its business. In addition, the Company has agreed to indemnify Panmure Gordon in relation to certain liabilities it may incur in undertaking the Placing. Panmure Gordon has the right to terminate the Placing Agreement in certain circumstances prior to First Admission, in particular, it may terminate in the event that there has been a material breach of any of the warranties or for force majeure.

In order to aid with the administration of the VCT and EIS applications, the Placing is being carried out in two tranches. The First Placing Shares will be issued to those investors who may seek relief under the VCT and EIS legislation. The Second Placing Shares will be issued to non-EIS and non-VCT investors and to other investors who will not be seeking relief under the VCT and EIS legislation.

Application will be made for the Placing Shares to be admitted to trading on AIM. It is expected that dealings in the First Placing Shares will commence on AIM on 15 June 2015. It is expected that dealings in the Second Placing Shares will commence on AIM on 16 June 2015. It should be noted that First Admission is not conditional upon Second Admission. However, Second Admission is conditional on First Admission. Assuming full implementation of the Placing, the interests of the Directors as at the date of this announcement and on Second Admission, are or are expected to be as follows:

Notes:

(1) Of these Ordinary Shares, (a) 1,838,617 (representing 9.30 per cent. of Existing Issued Share Capital) are held by John Morton directly; (b) 444,367 (representing 2.25 per cent. of Existing Issued Share Capital) are held by John Morton through his SIPP account; (c) 49,222 (representing 0.25 per cent. of Existing Issued Share Capital) are held by Rebecca Morton, the wife of John Morton; (d) 35,928 (representing 0.18 per cent. of Existing Issued Share Capital) are held through the Morton Discretionary Trust.

(2) Of these Ordinary Shares, (a) 2,002,590 (representing 10.13 per cent. of Existing Issued Share Capital) are held by Rod Gentry directly; and (b) 311,881 (representing 1.58 per cent. of Existing Issued Share Capital) are held by Rod Gentry through his SIPP account.

(3) Holding of Courvoisier & Associates SA, an entity of which Kish Gopaul is a director.

* Assuming that all the Placing Shares are issued and that no other new Ordinary Shares are issued prior to Second Admission.

6. VCT and EIS Investments

The Company has applied for confirmation from HMRC that the Company qualifies as a qualifying company for the purpose of the legislation relating to VCT and EIS investments. Neither the Company nor the Directors give any warranties or undertakings that VCT or EIS qualifying status will be available to investors or that, if given, such relief or status will not be withdrawn. Should the law regarding VCT and EIS investments change then any reliefs or qualifying status previously obtained may be lost.

Whilst the Company cannot guarantee to conduct its activities in a way to allow it to maintain its status as a qualifying VCT and EIS investment, the Directors intend, so far as possible, to do so. Circumstances may arise where the Directors of the Company believe that the interests of the Company are not best served by acting in a way that preserves VCT and EIS qualifying status. In such circumstances, the Company cannot undertake to conduct its activities in a way designed to secure or preserve any such relief or status claimed by any Shareholder.

The funds raised from the investment by VCT and EIS investors must be employed in a qualifying trade within two years of investment.

7. Shareholder Approval

The Second Placing is conditional, inter alia, upon the Company obtaining approval from its Shareholders to provide the Directors with authority to allot the Second Placing Shares and to disapply statutory pre-emption rights which would otherwise apply to the allotment of the Second Placing Shares. Accordingly, the Extraordinary General Meeting is being convened for the purpose of considering the Resolutions which will give the directors of the Company the necessary authorities to allot the Second Placing Shares.

8. Recommendation

The Directors consider that the Placing and the Resolutions are in the best interests of the Company and its Shareholders as a whole and accordingly recommend that Shareholders vote in favour of the Resolutions, as they intend to do in respect of their own legal and/or beneficial shareholdings, amounting, in aggregate, to 6,636,612 Ordinary Shares (representing approximately 33.6 per cent. of the Existing Ordinary Shares).

The Circular will be posted to Shareholders later today, providing details of the Placing and incorporating a Notice of Extraordinary General Meeting. The Extraordinary General Meeting will be held at the registered office of the Company at PO Box 268, Mill Court, La Charroterie, St Peter Port, Guernsey GY1 3QZ at 11.00 a.m. on 12 June 2015.

The Company will also make copies of the Circular (including the notice of general meeting) available on its website at www.europeanwealth.com.

EXPECTED TIMEABLE

APPENDIX 1: DEFINITIONS

All references in this announcement to "£", "pence" or "p" are to the lawful currency of the United Kingdom.