Polar Capital Regulatory News (POLR)

11 October 2018 Polar Capital Holdings plc

Crystallisation of business unit and issue of shares

Polar Capital Holdings plc ("Polar Capital" or the "Company") announces the crystallisation of a set of Preference Shares held by Dr Daniel Mahony and Gareth Powell, co-heads of the Polar Capital Healthcare Team and managers of the Polar Capital Healthcare Opportunities Fund, Polar Capital Healthcare Blue Chip Fund and Polar Capital Global Healthcare Trust plc. The crystallisation is in respect of the Healthcare Opportunities Fund and the Polar Capital Global Healthcare Trust plc, part of the Healthcare business unit. This crystallisation is expected to be immediately earnings enhancing for shareholders. Based on the results for the financial year ended 31 March 2018, the impact of the crystallisation would have been an earnings enhancement of around 3p per share1.

Background

As set out at the time of the Company's admission to AIM, Polar Capital has structured its fund management operations in such a way that the fund management teams are placed in separate business units. Each business unit is a separate profit centre and the fund managers responsible receive each year a payment which comprises a share of their unit's core operating profit (operating profit before performance fees and related distributions) and performance fees.

In addition to the remuneration structure described above, each fund management team is offered the prospect of an interest in the capital of the Company through the purchase of an individual class of preference shares in Polar Capital Partners Limited, a wholly owned subsidiary of the Company. These preference shares have been structured in such a way as to become convertible upon the occurrence of certain events, known as crystallisation events, into cash or, at the option of the Company, ordinary shares at a ratio that is intended to be earnings enhancing for the Group.

From the effective date of crystallisation, the fund managers concerned cease to be eligible to receive their share of the business unit's core operating profit which has been crystallised and simultaneously going forward will receive a reduced interest in their performance fees.

Healthcare Team business unit crystallisation

Dr Daniel Mahony and Gareth Powell have elected to crystallise their preference shares in relation to the Healthcare Opportunities Fund and the Polar Capital Global Healthcare Trust plc.

Under the terms of the preference shares the crystallisation value is calculated as at 31 March 2018 and either satisfied in cash, or at the option of the Company, by issue of new ordinary shares. The Company has elected to satisfy the consideration by the issue of new ordinary shares.

The initial crystallisation is in relation to the crystallisation period ended 31 March 2018. The initial crystallisation value is to be satisfied by the issue of up to 4,060,074 new ordinary shares, in tranches as described below. This value is re-calculated at each of the first, second, and third anniversaries of 31 March 2018, based on the profits of the business unit in the 12 months ended on the respective anniversary. If the result of the re-calculation provides for a smaller cash or share consideration, then the amounts paid or shares issued to the owners of the preference shares are adjusted accordingly. The effect of such re-calculation is to adjust downwards any consideration and there can never be an increase in the Crystallisation Value. In return for this delivery of new ordinary shares, the Healthcare team will be forfeiting the interest in their core operating profit in relation to the Healthcare Opportunities Fund and the Polar Capital Global Healthcare Trust plc for the financial year ended 31 March 2018.

Under the terms of the preference shares 10 percent of the new ordinary shares are issued immediately with the balance of 30 percent of the new ordinary shares due (subject to the re-calculation described above) on or as soon as practicable after each crystallisation anniversary.

The Company will issue a total of 406,006 new ordinary shares which will rank pari passu with the Company's existing ordinary shares at the time of issue. Application has been made to AIM for the new ordinary shares to be admitted to trading and dealings are expected to commence on 16 October 2018.

The Company's current issued share capital is 93,655,541 ordinary shares and following admission of the new ordinary shares the total ordinary shares in issue will be 94,061,547.

1 Presented for illustrative purposes based on the year end results for 31 March 2018 and assuming the full crystallisation occurred as at 31 March 2018.

For further information please contact:

Polar Capital +44 (0)20 7227 2700

Gavin Rochussen (CEO)

John Mansell (COO)

Canaccord Genuity - Nomad and Joint Broker +44 (0)20 7523 8000

Simon Bridges (QE)

David Tyrrell

Peel Hunt - Joint Broker +44 (0)20 7418 8893

Guy Wiehahn

Camarco +44 (0)20 7757 4984

Ed Gascoigne-Pees