Rockwood Strategic : Factsheet Q4 2022

Fund Factsheet

30 December 2022

Investment Objective & Strategy

The Fund seeks investments capable of delivering 15% IRRs over a 3-5 year time horizon in publicly listed UK Small companies. The strategy targets up to 10 'core' positions which represent the majority of NAV and a further 15-25 more liquid smaller investments. We have a 'value' investor mindset, are cash-flow focused, and seek proven businesses and opportunities for strategic, operational or management change to unlock shareholder value. The team adopts an 'engaged' approach, backed up with material shareholdings in target investments.

Performance %					Key Facts as at 30 December 2022
				Manager	Richard Staveley
	YTD	3M	12M	36M
	Year end	March
Total Shareholder Return	22.8	21.9	22.8	62.0
NAV £m	46
NAV Return	10.1	25.1	10.1	52.9
FTSE Small (ex ITs)	-19.8	8.0	-19.8	2.8	Share price (Mid)	1725p
Financial Year's Performance %				NAV per share	1809.95p
			Discount to NAV	4.7%
	2022	2021	2020	2019
	No. of holdings	15
Total Shareholder Return	22.2	59.3	-5.3	20.4
Net cash	£0.5m
NAV Return	27.5	44.3	-14.3	8.0
	£120,000 p.a <£60m NAV, 1%
FTSE All-Share Total Return	13.0	26.7	-18.5	6.4	AMC
thereafter
Investment Manager's Commentary				Performance fee	10% over 6% p.a. hurdle, high
			watermark
Q4 experienced an improvement in stock markets. Commentators have linked
Bloomberg Ticker	RKW.LN
this to a very slightly better than expected US inflation rate of 7.1%, yet was
ISIN	GB00BYRH4982
more to do with the extremes of negative investor sentiment. Ben Bernanke
Sedol	BYRH498
was awarded the Nobel Prize, as the QE he initiated continues to reverse. The
inverted yield curve is a likely pre-cursor to the recession ahead. Xi Jinping was

re-elected for a third time as China suffers from its unique approach to COVID-19. Another quarter, another UK Prime Minister. The markets appreciated the relevance of his CV and recalibration of fiscal policy. U.K. Interest rates were raised for a 9th time to 3.5%, retail price inflation hit 14%, the highest since 1980. It was confirmed the economy was contracting in Q3, which is likely to continue. UK house prices are rolling over as mortgage costs adjust. Real incomes remain under pressure. UK natural gas prices are back to pre-Ukraine invasion levels. The best performing sectors in 2022 were Oil & Gas, Mining, Tobacco, Pharmaceuticals and Banks. The FTSE 100 stood out in world markets with a paltry +0.9% return for the year. The context was Nasdaq -33.1%, FTSE Aim -31.3% and the worst year for government bonds in decades. The key to 2023 will be the direction and pace of core inflation. Markets desire central banks to 'pivot'.

The Fund's best-in-class performance was driven by a takeover approach for Crestchic (+46.7%), significant gains at RM following non- core disposals (+107.4%), progress on the formal sales process of Bonhill (+36.4%), a successful re-financing of Pressure Technologies (+50.0%) and positive trading updates at Argentex (+38.7%) and Van Elle (+27.0%).

The 'engaged' approach of Rockwood has clearly contributed to the stella recent returns for shareholders at Crestchic. Our significant involvement with Bonhill is now bearing fruit. We anchored the fundraise at Pressure Technologies, influencing strategy evolution and expect material upside over the medium-term if key deliverables are achieved. Whilst delighted with the early returns from our largest new investment in 2022, RM Plc, we believe there is considerable further upside from unlocking all the shareholder value within its three divisions. We anticipate an elevated cash position after a successful takeover of Crestchic. Our pipeline is full, and we will carefully redeploy during 2023. The market environment is capital hungry, forced sellers abound and valuations are depressed. This enhances the structural investment opportunity in small UK equities and should seed further long-term compounding of the fund's performance.

Top Ten Holdings as % of NAV

Company	Sector	%
Crestchic	Industrials	33.6%
Flowtech Fluidpower	Distribution	8.1%
RM	Education services	7.9%
Centaur Media	Media	7.1%
M&C Saatchi	Media	6.7%
Pressure Technologies	Industrials	6.0%
Van Elle	Services	6.0%
Bonhill (Equity and Loan)	Media	5.1%
City Pub Co	Consumer	4.4%
Smoove	Technology	4.0%
Cash & equivalents	Cash & equivalents	1.2%

Key Risk Considerations

Holding Information

• Nick Mills is a Non-Executive Director at Crestchic
• Richard Staveley is a Non-Executive Director at Bonhill and Centaur Media
• IAG member Jamie Brooke is a Non-Executive Director at Flowtech Fluidpower.
• Crestchic is in receipt of a takeover offer
• Bonhill is conducting a formal sales process

Past performance is not a reliable indicator of current or future performance, and investors may not get back the original amount invested. Investment in RKW may not be appropriate for investors who plan to withdraw their money within 5 years. Shares of RKW may trade at a discount or a premium to Net Asset Value ("NAV") for variety of reasons. On a sale you could realise less than the NAV and less than you initially invested. RKW's portfolio is focused towards small companies; these may involve a higher degree of risk than larger sized companies.

Source: *Harwood Capital, Bloomberg. All data as at 30 December 2022.

Fund Management Team

Richard Staveley was formerly lead manager for GHS plc, Majedie UK Small Companies, R&M UK Small Companies, Société Générale UK Small Companies, after he had qualified as an ACA at PWC. He is a CFA charterholder and has >20 years small company fund management experience.

Nick Mills joined Harwood Capital in '19 to work on the Oryx International Growth and NASCIT strategies. He had previously spent five years at Gabelli Asset Management in New York as an analyst. He is also a NED at Circassia Group plc and Hargreaves Services plc .

Other Features

• 'Skin in the Game' - Christopher Mills (CIO and Founder of Harwood) and Richard Staveley have purchased 29.9% of the issued share capital of Rockwood Strategic
• Premium listing on London Stock Exchange
• Investment universe of nearly 1000 UK small companies
• Focused portfolio, majority of capital in <10 holdings
• Ability to hold up to 15% in private companies or instruments

Investment Advisory Group (200 years combined experience)

Christopher Mills; Founder of Harwood Capital, JO Hambro Capital Management and Harwood Wealth. CEO North Atlantic Small Companies IT, Executive Director of Oryx International Growth, >45 years investment experience

Adam Parker; Co-Founder of Majedie Asset Management, formerly at Mercury Asset Management, >35 years UK small companies fund management experience (Oxford, Chemistry)

Jamie Brooke; Formerly Hanover, Lombard Odier, Henderson Global, Gartmore, 3i and Deloitte (ACA), 30 years UK small companies investment experience (Oxford, Maths). NED at Flowtech Fluidpower and Chapel Down plc.

Rupert Dyson; Founder of Edale Capital LLP, formerly Sloane Robinson and Invesco, 29 years European equities investing experience (Bristol, History)

Yuri Khodjamirian; Formerly an analyst and fund manager at Majedie Asset Management, 14 years UK and Global equities experience. CIO Tema ETFs and founder of snippetfinance.com (Cambridge & LSE, Economics and Bioscience Enterprise).

David Potter; >50 years of financial services and transaction experience incl. CSFB, Samuel Montagu, Midland Bank and CEO of Guinness Mahon, 25 years of NED/Chair roles (Oxford, PPE)

Company History

Initially listed as NewMediaSpark in 1999 into the heights of the TMT boom, the company's tech-biased investment portfolio was gradually exited in the years that followed.

In 2015 it adopted a new investment strategy focused primarily on UK publicly listed small companies and was renamed Gresham House Strategic plc.

In October 2021 Harwood Capital was appointed as manager

In April 2022 the company was re-named Rockwood Strategic plc and re-started actively investing under the returning lead fund manager, Richard Staveley.

In September 2022 the company migrated from the AIM to the premium list of the London Stock Exchange

How to Invest

Investors can access the strategy on the London Stock Exchange (ticker: RKW).

Prospective investors can buy shares through their wealth manager, financial adviser or stockbroker.

Contact Information

www.rockwoodstrategic.co.uk

[e-mail]

[phone]

Important Information

An investment should be considered only as part of a balanced portfolio. To ensure you understand whether this product is suitable against your individual needs and risk tolerance, please read the information provided on the website and the key information document, available at rockwoodstrategic.co.uk, which provides more information about the risk profile of the investment. If you are in any doubt as to the suitability of RKW for your investment needs, we recommend you seek independent professional advice prior to investing.

This factsheet is for information purposes only and does not constitute an offer, solicitation or investment recommendation for the purchase or sale of any securities or financial instruments mentioned and should not be relied on by any person for making an investment decision. Nothing in this factsheet should be construed as investment advice and is therefore not a recommendation to buy or sell shares in RKW.