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Business development 2005

Development of the placement volume

The development, design, initiation and sale of high-yield and tax-optimised funds represent the core business of MPC Capital. In 2005, three new investment concepts were launched onto the market in addition to the existing product lines. With the Fortrust Note, the Real Estate Opportunity America Fund and the life insurance fund based on British policies, MPC Capital added innovative concepts to its range of products for investors and sales partners. In the first year of initiation, the new products were already contributing 20% to the Group's placement volume. The MPC Capital Group strengthened its position as an independent, innovative and powerful product partner for the bank and savings bank sector.

Placement volume again around EUR 1 billion
In the past financial year, the MPC Capital Group placed equity of almost EUR 1 billion. With syndicated equity of EUR 974 million, the second best result in the company's history was achieved. Due to the placement development, the successes in product sourcing and the many new developments which were closely followed in the market, MPC Capital revised its expectations upwards on numerous occasions in the course of the year. Compared with the previous year's figure of EUR 1.093 billion, the placement volume declined by 11% as expected and was within the range of between EUR 950 million and EUR 1 billion forecast by the Management Board.

Around 120,000 customers invest in the products
With an increase of 23%, MPC Capital crossed the 100,000 customer line in the 2005 financial year. The number of investors increased from at least 97,000 to around 120,000. The share of investors investing in more than one product increased in the reporting period from 22% to 23%. Since 1994, investors have invested a total of EUR 4.8 billion of equity in MPC Capital products and thus realised a total investment volume of over EUR 12 billion.

Banks and savings banks represent the largest sales channel
MPC Capital has access to a first-class network of independent and institutional distribution partners for the marketing of its investments. High-quality products are - connected with dependability in terms of initiation, training and management - the key to successful partnerships. In 2005, the customers of banks and savings banks in Germany subscribed to 63% of the placed equity. The desire of the customers to be given independent advice ("best advice") and the independence of MPC Capital continued to determine the demand of the banks for the issuing house's alternative investments.

During the reporting year, the independent sales partners were again an important and extremely loyal distribution mainstay and increased their share in placed equity to 31%. In Austria, 78% of the placed equity is sold through institutional investors. The exclusive cooperation with banks on individual fund products is the reason that there has been another increase compared with last year. Independent sales partners reached a share of 22% in 2005.

In the Netherlands, the majority of the placed equity continues to be mediated directly to the customers.

Little influence from statutory changes
As part of the implementation of the Investor Protection Improvement Act, since July 1, 2005, it has been necessary for the Federal Financial Supervisory Authority (BaFin) to approve the sale of closed-end fund products. MPC Capital has fully implemented the statutory regulations and has implemented the corresponding processes with the BaFin. All statements made in the prospectuses by MPC Capital were received positively.

In December 2005, the Bundestag and Bundesrat (lower and upper houses of the German Parliament) gave consent to the Act for limiting loss offsetting in connection with tax deferral models and thus got eliminated all possibilities for loss offsetting with closedend funds backdated to November 10, 2005. As the product range offered by MPC Capital owes it attractiveness exclusively to yield expectation and not to tax-induced effects, this statutory regulation has no effect on the sales opportunities of the investments on offer.