BHGG.L Regulatory News (BHGG)

BH Global LimitedInterim Report and Unaudited Financial Statements 2013

INTERIM REPORT AND UNAUDITED FINANCIAL STATEMENTS30 June 2013

Chairman's Statement

Dear Shareholder,

The six months to 30 June 2013 started promisingly with Net Asset Value ("NAV") per share increasing by some 3.80% to the end of April. However, after a very strong twelve month run in equity markets and a thirty year bull market in bonds, Ben Bernanke's testament to Congress on 22 May 2013 caused investors to reassess their strategies. This resulted in a rapid, albeit as it transpired, temporary set-back for equity markets and triggered significant rises in yields on US Treasuries. Although some of the Brevan Howard managed funds in which BH Global Limited (the "Company") is indirectly invested made significant progress others found the going more difficult. The Manager's Report sets out the detail and I particularly observe the continuing success of Brevan Howard's credit strategies during the reporting period.

The NAV of the Company's US Dollar shares, being the base currency on which your Board focuses, ended the six months with growth of 1.14%. The Sterling class of our shares is the most widely held and actively traded. Hedging at the level of the underlying funds has successfully ensured that the performance of all three classes was broadly similar with the NAV of the Sterling shares growing by 1.49%. During the six months all three classes of the Company's shares traded at persistent discounts to NAV of around 10%. The average over the period for the Sterling class was approximately 10.6%. Both Board and Manager consider such a level of discount to be less than satisfactory.

The Board has authority to buy-back shares in the market and that authority was renewed by the vote of shareholders at the Annual General Meeting on 10 June 2013. During the six month period the Company repurchased 671,599 shares in the market at an average discount of 11.6% and a cost equivalent of approximately USD 12.1 million across the three share classes. As I wrote in March, buy-backs will continue to be used opportunistically and sparingly. Shares bought back are placed into Treasury for possible re-issue in the future. As and when the number of shares in Treasury in any one class approaches 10%, sufficient shares are cancelled to keep the holding below that figure.

In addition to buy-backs, and again as reported in my Statement in March, the Board exercised its discretion to make a partial return of capital to shareholders. This partial return, which represented 100% of the Company's 2012 NAV growth, was made at a discount of approximately 3% to NAV and the quantum was approximately USD 40.65 million. Although different in nature to buy-backs, the Board views such partial return as one of a number of shareholder friendly initiatives.

Shareholders will note the disclosure in note 10 that at the period end Alan Howard, founder of Brevan Howard, held a beneficial interest in approximately 2.19 million shares in the Company. Alan significantly increased his shareholding during the six months and the Board was very pleased to see this further demonstration of support for the Company. Also, as disclosed, all directors are shareholders.

Whilst out-paced by rising equity markets in the six months to 30 June 2013 it should be recalled that the strategy of your Company is to aim for steady progress of NAV growth with low volatility whilst minimising the risk of capital loss. This has been achieved by substantial actively managed diversification across different geographies, strategies and funds. From inception to the end of June 2013 the Company's NAV grew at an annual average rate of 5.36% with annualised volatility of only 3.75% and a Sharpe Ratio of 1.31. NAV has grown in every calendar year since launch in 2008. Nevertheless, many facets of the financial world have changed since launch and it is right that, five years on, the Board should, in tandem with Brevan Howard and advisers, review the Company's position in relation to shareholders' expectations. In addition all companies, and yours is no exception, need to keep a beady eye on costs.

In an environment where economic growth in many developed countries looks to continue to be significantly slower than most electorates have grown used to over their lifetimes, it is my view that investors will have to learn to live with materially lower returns than in the past. If correct in that view, many investors and governments will find that their assumptions for asset and economic growth were overly optimistic and the problems resulting from that over-optimism may prove very difficult both at entity level - for example Detroit - and at political level - witness the troubles of several European governments in trying to implement austerity programmes whilst simultaneously avoiding being ejected from office.

Many of the developed world's economic problems have not yet been resolved. The process of containing, let alone reducing, levels of the debts and other liabilities of many governments - often carried off balance sheet in the manner that banks were so criticised for before the crunch - remains a monumental task in an era of lower growth. Electorates are comprised of human beings and only ascetics would really relish the thought of forced removal of that which many people feel they have become entitled to. Political uncertainties look set to continue.

As the Manager's Report records, uncertainty will create trading opportunities and the experience of Brevan Howard, combined with tight risk controls, should allow those uncertainties to create opportunity to generate further NAV growth with low volatility for the Company.

As always I welcome shareholders' comments and can be contacted though the Company's Administrator, Northern Trust International Fund Administration Services (Guernsey) Limited, at Guernsey_Client_Services@ntrs.com.

Yours sincerely,

Sir Michael Bunbury

Chairman

21 August 2013

Manager's Report

Brevan Howard Capital Management LP is the Manager of the Company and of Brevan Howard Global Opportunities Master Fund Limited ("BHGO").

Performance Summary

The NAV of the USD shares appreciated by 1.14% in the first half of 2013, while the NAV of the EUR shares and the GBP shares appreciated by 1.01% and 1.49% respectively in the first half of 2013.

The month-by-month NAV performance of each currency class of the Company since it commenced operations in 2008 is set out below:

Source: The Company's NAV and NAV per Share data is provided by the Company's administrator, Northern Trust International Fund Administration Services (Guernsey) Limited. Monthly NAV data is unaudited and net of all investment management fees and all other fees and expenses payable by the Company. Shares in the Company do not necessarily trade at a price equal to the prevailing NAV per Share.

* Performance is calculated from a base NAV per Share of 10.0 in each currency. The opening NAV in May 2008 was 9.9 (after deduction of the IPO costs borne by the Company).

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

BHGO - Allocations and Investment Performance

The allocations of BHGO to each of its underlying fund investments were as follows:

Source: Brevan Howard. Figures are rounded to one decimal place (therefore in some instances the total may not equal 100.0). 

Allocations are subject to change.

The underlying funds performed as follows during the first half of 2013:

* USD currency class of each underlying fund; the Company also invests in the EUR and GBP of the underlying funds.

Source: Performance data for the underlying funds is provided by their respective administrators.

Performance data is net of all investment management fees and all other fees and expenses payable.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS

Performance Review

The Company posted a small positive gain in the first half of the year. Strong gains came from BHGO's investments in Asia and credit strategies however these were largely offset by losses in emerging markets strategies. The other strategies in BHGO's fund combined portfolio were largely flat over the reporting period.

During the months of January to April, the Company began well with net asset value ("NAV") returns of just under 4% across all share classes as at the end of April, with a number of the underlying funds posting fairly strong gains. However, May and June proved to be a challenging period for most of the underlying funds and the Company's NAV depreciated approximately 2.5% to end the half year up between 1 to 1.5% across the share classes. During May and June global bond markets came under significant pressure and sold-off substantially taking emerging markets with them, across each of the fixed income, FX and equity asset classes. These large moves across multiple asset classes negatively impacted a few of BHGO's larger risk exposures through underlying funds, in particular a long tilt across emerging market assets, a long tilt in European rates and a long tilt in equities, mainly Japanese.

Allocation Review

Over the period January to June, the Investment Committee ("IC") made minor adjustments to BHGO's target portfolio. The allocations to each of BHEMS, BHST and BHCS were reduced. An initial reduction in BHM's target allocation in January was reversed over the period reflecting the increased perceived macro opportunity set. In June, the IC approved switching BHEML allocation into the Brevan Howard Emerging Markets Local Fixed Income Leveraged Master Fund Limited, a twice leveraged version of BHEML, that carries out active leveraged trading and investment predominantly in global emerging markets. The IC continues to review the concentration and diversification within BHGO's portfolio and will look to adjust weights and allocations to underlying funds in order to improve risk-adjusted performance.

Commentary and Outlook

2013 started off on a positive note for risk assets as markets responded to generally improving data in developed markets, particularly in the US, as well as greater policy accommodation from Japan.

Over May-June, both of these underpinnings came into question as the US Federal Reserve (the Fed) indicated it might begin tapering its quantitative easing policy later in the year and as the market increasingly questioned whether the policy accommodation in Japan would in fact be able to drive economic recovery there. As is often the case at such inflection points, intra-market correlations increased as market participants moved to exit positions.

That said, over the past few months there appears to have been a noticeable improvement in developed market economies, although emerging markets in general are lagging. In the US, in spite of GDP growth averaging a somewhat disappointing 1.4% (annual rate), US job gains have averaged 200,000 per month over the past 6 months and the unemployment rate has declined by half a percentage point to 7.4%. Furthermore, forward looking indicators released in July suggest an improvement in the second half of the year. As a result of these improvements, it is likely that the Fed will shortly follow through with the tapering of its asset purchases.

The euro area has also seen a moderate improvement over the past few months, in particular in the survey data. In July, the Composite PMI for the euro area posted its fourth consecutive monthly rise, now standing above the 50-point watermark for the first time since January 2012. The southern European countries, including France, have accounted for most of the improvement, while the northern European countries have only seen modestly better survey data, albeit from a higher level. After six consecutive quarters of declines, real GDP in the euro area will likely expand moderately in the second quarter. Political risk remains however, with the recent resignations of two key ministers in Portugal and the Spanish government becoming increasingly entangled in the Barcenas corruption scandal.

It also appears that central banks are again becoming increasingly active while policy becomes increasingly differentiated. The Fed's "exit" is likely to be a key factor influencing markets globally for a significant time to come, while in Japan the success and evolution of Prime Minister Abe's major expansionary policy will also be key. In Europe and the UK policy makers have recently been pushing their own boundaries with new forms of forward guidance on policy rates.

This pick up in central bank activity combined with an increasingly multi-speed global economy should make for an interesting environment, rich in both risk and opportunity going forward.

The Manager remains confident in the Company's ability to profit from both tactical and more structural macro trading activity in this dynamic trading environment.

Brevan Howard wishes to thank shareholders once again for their continued support.

Brevan Howard Capital Management, LP,acting by its sole general partner,Brevan Howard Capital Management Limited

21 August 2013

Statement of Directors' Responsibility in Respect of the Interim Unaudited Financial Statements

We confirm to the best of our knowledge that:

· these Interim Unaudited Financial Statements have been prepared in conformity with Accounting Principles Generally Accepted in the United States of America and give a true and fair view of the assets, liabilities, financial position and profit or loss

· these Interim Unaudited Financial Statements include information detailed in the Chairman's Statement, the Manager's Report and the notes to the Interim Unaudited Financial Statements, which provides a fair view of the information required by:-

(a) DTR 4.2.7 of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the Interim Unaudited Financial Statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b) DTR 4.2.8 of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the Company during that period; and any changes in the related party transactions described in the last Annual Audited Financial Statements that could materially affect the financial position or performance of the Company.

Going concern

After making enquiries and given the nature of the Company and its investment, the Directors are satisfied that it is appropriate to continue to adopt the going concern basis in preparing these Financial Statements, and, after due consideration, the Directors consider that the Company is able to continue for the foreseeable future.

Signed on behalf of the Board by:

Sir Michael BunburyChairman

John HallamDirector

21 August 2013

Independent Review Report to BH Global Limited

We have been engaged by the Company to review the Interim Unaudited Financial Statements included in the Interim Report for the six month period to 30 June 2013 which comprises the Unaudited Statement of Assets and Liabilities, the Unaudited Statement of Operations, the Unaudited Statement of Changes in Net Assets, the Unaudited Statement of Cash Flows and the related explanatory notes. We have read the other information contained in the Interim Report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the Interim Unaudited Financial Statements.

This Report is made solely to the Company in accordance with the terms of our engagement letter dated 17 June 2013 to assist the Company in meeting the requirements of the Disclosure and Transparency Rules ("the DTR") of the UK's Financial Conduct Authority ("the UK FCA"). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this Report, or for the conclusions we have reached.

Directors' responsibilities

The Interim Report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the Interim Report in accordance with the DTR of the UK FCA.

As disclosed in note 3, the Annual Audited Financial Statements of the Company are prepared in conformity with accounting principles generally accepted in the United States of America and applicable law.

The Interim Unaudited Financial Statements have been prepared following the same basis as the most recent Annual Audited Financial Statements.

Our responsibility

Our responsibility is to express to the Company a conclusion on the Interim Unaudited Financial Statements included in the Interim Report based on our review.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the UK. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the Interim Unaudited Financial Statements included in the Interim Report for the six month period to 30 June 2013 do not give a true and fair view of the financial position of the Company as at 30 June 2013 and of its financial performance and its cash flows for the six month period then ended, in conformity with accounting principles generally accepted in the United States of America and the DTR of the UK FCA.

Lee C Clark

For and on behalf of KPMG Channel Islands Limited

Chartered Accountants

21 August 2013

Unaudited Statement of Assets and Liabilities

As at 30 June 2013

See accompanying notes to the Interim Unaudited Financial Statements.

Signed on behalf of the Board by:

Sir Michael Bunbury

Chairman

John Hallam

Director

21 August 2013

Unaudited Statement of Operations

For the period from 1 January 2013 to 30 June 2013

See accompanying notes to the Interim Unaudited Financial Statements.

Unaudited Statement of Changes in Net Assets

For the period from 1 January 2013 to 30 June 2013

See accompanying notes to the Interim Unaudited Financial Statements.

Unaudited Statement of Cash Flows

For the period from 1 January 2013 to 30 June 2013

See accompanying notes to the Interim Unaudited Financial Statements.

Notes to the Interim Unaudited Financial Statements

For the period from 1 January 2013 to 30 June 2013

1. The Company

BH Global Limited (the "Company") is a limited liability closed-ended investment company incorporated in Guernsey on 25 February 2008 for an unlimited period, with registration number 48555.

The Company was admitted to a Primary Listing on the Official List of the London Stock Exchange on 29 May 2008. As a result of changes to the UK Listing Regime, the Company's Primary Listing became a Premium Listing with effect from 6 April 2010.

As of 20 October 2008 the Company obtained a Secondary Listing on the Bermuda Stock Exchange and with effect from 11 November 2008, the US Dollar shares of the Company were admitted to a Secondary Listing on NASDAQ Dubai.

The Company offers multiple classes of ordinary shares, which differ in terms of currency of issue. To date, ordinary shares have been issued in US Dollar, Euro and Sterling.

2. Organisation

The Company's investment objective is to seek to generate consistent long-term capital appreciation through an investment policy of investing all of its assets (net of those expenses of the initial public offering borne by the Company and funds required for its short-term working capital requirements) in Brevan Howard Global Opportunities Master Fund Limited ("BHGO").

The Company is organised as a feeder fund and invests substantially all of its investable assets in the ordinary US Dollar, Euro and Sterling denominated Class A shares issued by BHGO, and, as such, the Company is directly and materially affected by the performance and actions of BHGO.

BHGO is an open-ended investment company incorporated with limited liability in the Cayman Islands on 3 March 2008. BHGO's underlying investments as at 30 June 2013 and the percentage BHGO's investment represented of the underlying fund's NAV are as follows:

Brevan Howard Master Fund Limited - 1.37%

Brevan Howard Emerging Markets Strategies Master Fund Limited - 3.09%

Brevan Howard Asia Master Fund Limited - 4.33%

Brevan Howard Credit Catalysts Master Fund Limited - 3.21%

Brevan Howard Commodities Strategies Master Fund Limited - 6.33%

Brevan Howard Systematic Trading Master Fund Limited - 9.35%

Brevan Howard Investment Fund - Emerging Markets Local Fixed Income Fund - 4.17%

Brevan Howard Investment Fund II - Macro FX Fund - 7.07%

These investment funds may invest in a wide range of geographical regions, sectors and instruments. Such instruments may include, but are not limited to, debt securities and obligations (which may be below investment grade or unrated), bank loans, listed and unlisted equities, other collective investment schemes (which may be open ended or closed ended, listed or unlisted, and which may employ leverage), currencies, commodities, futures, options, warrants, swaps, other derivative instruments and any other type of instrument or security. These funds have the ability to take short positions across the majority of these instruments. Subject to BHGO Directors' resolutions, the allocation of assets of BHGO among the Brevan Howard underlying funds in which it is permitted to invest is at the discretion of the Manager.

At the date of these Interim Unaudited Financial Statements, the Company is the only feeder fund investing into BHGO.

Off-balance sheet, market and credit risks of BHGO's investments and activities are discussed in the notes to the BHGO's Interim Unaudited Financial Statements. The Company's investment in BHGO exposes it to various types of risk, which are associated with the financial instruments and markets in which the Brevan Howard underlying funds invest. Market risk represents the potential loss in value of financial instruments caused by movements in market factors including, but not limited to, market liquidity, investor sentiment and foreign exchange rates.

The Company's Interim Unaudited Financial Statements should be read alongside the Interim Unaudited Financial Statements of BHGO which can be found on the Company's website, www.bhglobal.com.

The Manager

Brevan Howard Capital Management LP (the "Manager") is the Manager of the Company. The Manager is a Jersey limited partnership, the sole general partner of which is Brevan Howard Capital Management Limited, a Jersey limited company (the "General Partner"). The General Partner is regulated in the conduct of fund services business by the Jersey Financial Services Commission pursuant to the Financial Services (Jersey) Law 1998 and the Orders made thereunder.

The Manager also manages BHGO and the Brevan Howard underlying funds.

3. Significant accounting policies

The Annual Audited Financial Statements, which give a true and fair view, are prepared in conformity with accounting principles generally accepted in the United States of America and comply with the Companies (Guernsey) Law, 2008. The accompanying Interim Unaudited Financial Statements have been prepared following the same accounting policies and methods of computation as the most recent Annual Audited Financial Statements. The functional and reporting currency of the Company is US Dollars.

The following are significant accounting policies adopted by the Company:

Valuation of investments

The Company records its investment in the Class A shares of BHGO at fair value. Fair Value is determined as the Company's proportionate share of BHGO's capital. At 30 June 2013, 31 December 2012 and 30 June 2012, the Company's US Dollar, Euro and Sterling capital account represents 100%, 100% and 100% respectively of BHGO's capital.

Fair value measurement

Accounting Standards Codification ("ASC") Topic 820 defines fair value as the price that the Company would receive upon selling a security in an orderly transaction to an independent buyer in the principal or most advantageous market of the security.

ASC 820 establishes a three-level hierarchy to maximise the use of observable market data and minimise the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Inputs refer broadly to the assumptions that market participants would use in pricing the asset or liability, including assumptions about risk, for example, the risk inherent in a particular valuation technique used to measure fair value including such a pricing model and/or the risk inherent in the inputs to the valuation technique. Inputs may be observable or unobservable.

Observable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity.

Unobservable inputs are inputs that reflect the reporting entity's own assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances.

Level 1 - Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not applied to Level 1 securities. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgement.

Level 2 - Valuations based on quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly.

Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement.

Inputs are used in applying the various valuation techniques and broadly refer to the assumptions that market participants use to make valuation decisions, including assumptions about risk. Inputs may include price information, volatility statistics, specific and broad credit data, liquidity statistics, and other factors. A financial instrument's level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. However, the determination of what constitutes "observable" requires significant judgement by the Company's Directors (the "Board"). After consultation with the Administrator and Manager, the Board considers observable data to be that market data which is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. The categorisation of a financial instrument within the hierarchy is based upon the pricing transparency of the instrument and does not necessarily correspond to the Board's perceived risk of that instrument.

Fair value is a market-based measure considered from the perspective of a market participant rather than an entity-specific measure. Therefore, even when market assumptions are not readily available, the Board's own assumptions are set to reflect those that market participants would use in pricing the asset or liability at the measurement date.

The Board uses prices and inputs that are current as of the measurement date, including periods of market dislocation. In periods of market dislocation, the observability of prices and inputs may be reduced for many securities. This condition could cause a security to be reclassified to a lower level within the fair value hierarchy.

The valuation and classification of securities held by BHGO is discussed in the notes to BHGO's Interim Unaudited Financial Statements which are available on the Company's website, www.bhglobal.com.

Income and expenses

The Company records monthly its proportionate share of BHGO's income, expenses and realised and unrealised gains and losses. In addition, the Company accrues its own income and expenses.

Use of estimates

The preparation of Financial Statements in conformity with Accounting Principles Generally Accepted in the United States of America requires the Board to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of those Financial Statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

Share issue expenses

Share issue expenses of US$10,552,146 were borne by the Company and were charged against the Share capital account at launch. In accordance with the Placing Agreement dated 28 April 2008, the Manager paid the costs and expenses of, and incidental to, the Offer (including all costs related to the establishment of the Company) (the "Offer Costs") which were in excess of 1% of the gross proceeds of the Offer. The Offer Costs paid by the Manager amounted to US$26,559,274.

Pursuant to the terms of the Management Agreement, the Company must repay to the Manager a fraction of these Offer Costs for every US Dollar by which repurchases, redemptions or cancellations of the Company's shares reduce the Current US Dollar NAV of the Company below its NAV at the time of the Company's listing, being US$1,044,631,308. The Current US Dollar NAV is calculated using the exchange rates ruling at the time of the Company's listing and at 30 June 2013 stood at US$1,172,664,247. The amount of these Offer Costs to be repaid for every US Dollar by which the Company's NAV is reduced will be up to 2.55 cents (or such lower amount as may result from any reduction in the Offer Costs actually paid by the Manager), being the figure obtained by dividing the Offer Costs by the NAV of the Company at the time of its listing. No such payments were due in respect of the current or previous years.

This provision expires on 29 May 2015, however if the Management Agreement were to be terminated for certain grounds either in whole or with respect to a class of shares on or before the seventh anniversary of admission to the London Stock Exchange, being 29 May 2015, any Offer Costs that have not already been repaid to the Manager (or, in the case of termination in respect of a class of shares, the Offer Costs attributable to such class), will be repaid in full to the Manager by the Company. Any repurchases, redemptions or cancellations will be priced to take into account any fractional Offer Cost repayments and therefore ensure that continuing shareholders should not be prejudiced. The Directors consider the likelihood of the Management Agreement terminating and as a consequence the contingent liability described above arising as unlikely and therefore no provision has been made within these Interim Unaudited Financial Statements.

The Directors confirm that there are no other contingent liabilities that require disclosure or provision.

Foreign exchange

Investment securities and other assets and liabilities denominated in foreign currencies are translated into US Dollars using exchange rates at the reporting date for the purposes of an aggregated share class Unaudited Statement of Operations.

The currency gain or loss arising from this translation is substantially offset by currency gains or losses allocated from BHGO.

Transactions denominated in foreign currencies are translated into US Dollars using exchange rates at the date of such transactions.

All currency gains and losses are included in the Unaudited Statement of Operations.

Treasury shares

Where the Company purchases its own share capital, the consideration paid, which includes any directly attributable costs, is recognised as a deduction from equity shareholders' funds through the Share capital account. When such shares are subsequently sold or reissued to the market, any consideration received, net of any directly attributable incremental transaction costs, is recognised as an increase in equity shareholders' funds through the Share capital account. Where the Company cancels treasury shares, no further adjustment is required to the share capital account of the Company at the time of cancellation. Shares held in Treasury are excluded from calculations when determining NAV per share as detailed in note 8 or in the Financial Highlights in note 11.

Allocation of results of the Master Fund

Net realised and unrealised gains/losses of the Master Fund are allocated to the Company's share classes based upon the percentage ownership of the equivalent Master Fund class.

Loan notes payable

Loans are classified in the Statement of Assets and Liabilities as Loan notes payable and are accounted for at amortised cost using the effective interest method. Under a Note Purchase Agreement (note 6), the Company is obliged to pay back the total outstanding amount and all fees and expenses, reimbursements and indemnities of the relevant Issuer by the stated maturity date, unless the Note is previously terminated. Interest shall accrue daily on each Note at the applicable rate. The Company's obligations under the Agreement are secured by charges over a portion of its shares in the Master Fund and over its bank accounts. The purpose of the Note Purchase Agreement is to permit the Company to draw funds to finance the acquisition of the Company's own shares and for other working capital purposes. The Company paid up the utilised amounts in full on 21 May 2013.

4. Management and administration agreements

Management fee

The Company has entered into a management agreement with the Manager to manage the Company's investment portfolio. The Manager receives a management fee of 1/12 of 0.50% (or a pro rata proportion thereof) per month of the closing NAV (before deduction of that month's management fee) as at the last valuation day in each month, payable monthly in arrears. BHGO itself is not subject to management fees, however BHGO's investments are subject to management fees and operational services fees ranging in aggregate from 1% to 2.5% per annum. During the period ended 30 June 2013, US$2,439,243 (31 December 2012: US$5,104,540, 30 June 2012: US$2,571,167) was charged by the Manager as management fees. At 30 June 2013, US$385,577 (31 December 2012: US$436,907, 30 June 2012: US$395,141) of the fee remained outstanding.

The management agreement can be terminated by either party on not less than 24 months' notice without payment of compensation, although the Company would be required to reimburse the Offer Costs if termination were to occur before 29 May 2015. The Company may terminate the management agreement forthwith by notice in the event of specified acts of default by the Manager without payment of compensation. The Company is also entitled to terminate the management agreement without payment of compensation if a resolution is passed to wind up the Company or if the net asset value of the Company declines by 25 per cent. over a twelve month period, although the Company would be required to reimburse the Offer Costs if termination in those circumstances were to occur before 29 May 2015.

In addition, the Company may terminate the management agreement on less than 24 months' notice without cause, but the Company must pay compensation to the Manager equivalent to the aggregate management fees that would otherwise directly or indirectly have been paid by the Company during the 24 months following notice of termination. The Company would also be required to reimburse the Offer Costs if termination in those circumstances were to occur before 29 May 2015.

Administration fee

The Company has appointed Northern Trust International Fund Administration Services (Guernsey) Limited as Administrator, Registrar and Corporate Secretary. The Administrator is paid fees based on the NAV of the Company, payable monthly in arrears. The fee is at a rate of 0.03% of the first US$1 billion of net assets of the Company and then 0.01% per annum thereafter, subject to a minimum fee of £115,000 per annum. In addition to the NAV based fee the Administrator is also entitled to an annual fee of £36,000 for certain additional administration services. The Administrator is entitled to be reimbursed out-of-pocket expenses incurred in the course of carrying out its duties as Administrator.

5. Directors' fees

With effect from 1 July 2012, the Chairman is entitled to a fee of £150,000 per annum (previously £140,000 per annum). John Hallam, as Chairman of the Audit Committee and Nicholas Moss, as Chairman of the Management Engagement Committee are entitled to a fee of £36,000 per annum (previously £33,000 per annum). All other Directors receive £33,000 per annum (previously £30,000 per annum). The Directors are also entitled to be reimbursed for expenses properly incurred in the performance of their duties as Directors.

6. Share capital

Issued and authorised share capital

The Company has the authority to issue an unlimited number of ordinary shares with no par value and an unlimited number of shares with a par value. Shares may be divided into at least three classes denominated in US Dollars, Euro and Sterling. Further issue of shares may be made in accordance with the Articles. Shares may be issued in differing currency classes of ordinary redeemable shares including C shares. The treasury shares have arisen as a result of the discount management programme as described in note 9.

For the period from 1 January 2012 to 30 June 2012

Share classes

In respect of each class of shares a separate class account has been established in the books of the Company. An amount equal to the aggregate proceeds of issue of each share class has been credited to the relevant class account. Any increase or decrease in the NAV of BHGO US Dollars shares, BHGO Euro shares and BHGO Sterling shares as calculated by BHGO is allocated to the relevant class account in the Company. Each class account is allocated those costs, pre-paid expenses, losses, dividends, profits, gains and income which the Directors determine in their sole discretion relate to a particular class.

Voting rights

Ordinary shares carry the right to vote at general meetings of the Company and to receive any dividends, attributable to the ordinary shares as a class, declared by the Company and, in a winding-up will be entitled to receive, by way of capital, any surplus assets of the Company attributable to the ordinary shares as a class in proportion to their holdings remaining after settlement of any outstanding liabilities of the Company.

As prescribed in the Company's Articles, the different classes of ordinary shares have different values attributable to their votes. The attributed values have been calculated on the basis of the Weighted Voting Calculation (as described in the Articles) which takes into account the prevailing exchange rates on the date of initial issue of ordinary shares. Currently, on a vote, a single US Dollar ordinary share has one vote, a single Euro ordinary share has 1.57465 votes and a single Sterling ordinary share has 1.97950 votes.

Treasury shares do not have any voting rights.

Repurchase of shares

The Directors have been granted authority to purchase in the market up to 1,806,798 US Dollar shares, 283,716 Euro shares and 5,659,887 Sterling shares respectively and they intend to seek annual renewal of this authority from shareholders which was last granted on 10 June 2013. The Directors may, at their discretion, utilise this share repurchase authority to address any imbalance between the supply of and demand for shares.

Under the Company's Articles, the Directors are required to convene a shareholders' meeting to consider the repurchase of a class of shares in certain circumstances. See note 9 for further details.

Note Purchase Agreement

The Company is party to a Note Purchase Agreement with JP Morgan Chase Bank dated 17 August 2012 pursuant to which the Company may obtain financing of up to approximately US$50 million to be drawn down on a currency-by-currency basis, if required inter alia, to finance share buybacks pending receipt of the proceeds of redemption from its underlying investments.

On 21 May 2013 the amount utilised of US$6,827,875 was fully paid up (31 December 2012: US$7,007,400 was used under the Note Purchase Agreement, with US$27,805 of loan interest payable at the year end).

Further issue of shares

As approved by the shareholders at the Annual General Meeting held on 10 June 2013 (the "AGM"), the Directors have the power to issue further shares on a non pre-emptive basis for cash in respect of 1,205,336 US Dollar shares, 189,270 Euro shares and 3,775,775 Sterling shares respectively. This power expires on the date falling fifteen months after the date of the AGM or the conclusion of the next Annual General Meeting of the Company, whichever is the earlier.

Distributions

BHGO does not expect to pay dividends to its investors. Therefore, the Directors of the Company do not expect to declare any dividends. This does not prevent the Directors of the Company from declaring a dividend at any time in the future if the Directors consider payment of a dividend to be appropriate in the circumstances. If the Directors declare a dividend, such dividend will be paid on a per class basis.

Treasury shares are not entitled to distributions.

Annual redemption offer

Each calendar year the Directors may, in their absolute discretion, determine that the Company should make an offer to redeem such number of shares of the Company in issue as they may determine provided that the maximum amount distributed does not exceed 100% of the increase in the NAV of the Company in the prior calendar year.

The Directors shall, in their absolute discretion, determine the particular class or classes of shares in respect of which an Annual Redemption Offer will be made, the timetable for that Annual Redemption Offer and the price at which the shares of each relevant class will be redeemed.

Whether a return of capital is made in any particular year and, if so, the amount of the return, may depend, among other things, on prevailing market conditions, the ability of the Company to liquidate its investment to fund the capital return, the success of prior capital returns and applicable legal, regulatory and tax considerations.

On 8 March 2013, the following number of each class of shares were redeemed and cancelled pursuant to the 2013 redemption offer:

559,337 US Dollar shares at a redemption price of US$12.5009, equalling a gross redemption of US$6,992,216.

95,854 Euro shares at a redemption price of €12.6093, equalling a gross redemption of €1,208,651.

1,699,545 Sterling shares at a redemption price of £12.6485 equalling a gross redemption of £21,496,694.

Share conversion scheme

The Company has implemented a Share Conversion Scheme. The scheme provides shareholders with the ability to convert some or all of their ordinary shares in the Company of one class into ordinary shares of another class. From 31 October 2008 shareholders at the discretion of the Board have been able to convert ordinary shares on the last business day of every month. Each conversion will be based on the NAV (note 8) of the share classes to be converted.

7. Taxation

Overview

The Company is exempt from taxation in Guernsey under the provisions of the Income Tax (Exempt Bodies) (Guernsey) Ordinance 1989.

Uncertain tax positions

The Company recognises the tax benefits of uncertain tax positions only where the position is more-likely-than-not (i.e. greater than 50-percent) to be sustained assuming examination by a tax authority based on the technical merits of the position. In evaluating whether a tax position has met the recognition threshold, the Company must presume that the position will be examined by the appropriate taxing authority that has full knowledge of all relevant information. A tax position that meets the more-likely-than-not recognition threshold is measured to determine the amount of benefit to recognise in the Company's Financial Statements. Income tax and related interest and penalties would be recognised by the Company as tax expense in the Statement of Operations if the tax positions were deemed to not meet the more-likely-than-not threshold.

The Company analyses all open tax years for all major taxing jurisdictions. Open tax years are those that are open for examination by taxing authorities, as defined by the Statute of Limitations in each jurisdiction.

The Company identifies its major tax jurisdictions as the Cayman Islands and foreign jurisdictions where the Company makes significant investments. The Company has no examinations by tax authorities in progress.

The Board has analysed the Company's tax positions, and has concluded that no liability for unrecognised tax benefits should be recorded related to uncertain tax positions. Further, the Board is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognised tax benefits will significantly change in the next twelve months.

Foreign Account Tax Compliance Act

The Foreign Account Tax Compliance Act ("FATCA") became effective on 1 January 2013. The legislation is aimed at determining the ownership of US assets in foreign accounts and improving US tax compliance with respect to those assets.

However, the States of Guernsey has recently announced that it is has decided to enter into an intergovernmental agreement ("IGA") with the U.S. Treasury in order to facilitate the requirements under the Act and is currently in negotiations with regards to how this is to be implemented, and as a result, the impact this will have on the Company remains unknown. The Board is monitoring implementation with the assistance of its legal advisers and accountants.

UK-Guernsey Intergovernmental Agreement

The States of Guernsey are in the process of finalising a draft intergovernmental agreement with the UK ("UK-Guernsey IGA") under which potentially mandatory disclosure requirements may be required in respect of Shareholders who have a UK connection. As at the date of this document details of the finalised terms and effective date of the UK-Guernsey IGA have yet to be announced. Once signed, the UK-Guernsey IGA would be subject to ratification by Guernsey's States of Deliberation and the relevant legislation would have to be introduced. Whereas the impact of the UK-Guernsey IGA on the Company and the Company's reporting responsibilities pursuant to the UK-Guernsey IGA are not currently known, the Board is monitoring implementation of the UK-Guernsey IGA with the assistance of its legal advisers and accountants.

8. Publication and calculation of net asset value

The NAV of the Company is equal to the value of its total assets less its total liabilities. The NAV per share of each class will be calculated by dividing the NAV of the relevant share class by the number of shares of the relevant class in issue on that day.

The Company publishes the NAV per share for each class of shares as calculated by the Administrator based in part on information provided by BHGO, monthly in arrears, as at each month end.

The Company also publishes an estimate of the NAV per share for each class of shares as calculated by the Administrator based in part on information provided by BHGO, weekly in arrears.

9. Discount management programme

The Company's discount management programme includes the ability to make market purchases of shares and the obligation to propose class closure resolutions if, in any fixed discount management period (1 January to 31 December each year), the average daily closing market price of the relevant class of shares during such period is 10% or more below the average NAV per share of the relevant class taken over the 12 monthly NAV Determination Dates (generally the last business day of each month) in that fixed discount management period, as described more fully in the Company's Principal documents, which are available from the Administrator on request.

The average discount of the share price to NAV in the period for the US Dollar, Euro and Sterling shares was 10.7%,10.5% and 10.5% respectively.

In the event a class closure resolution is passed, shareholders in a class have the following options available to them:

(i) to redeem all or some of their shares at NAV per share less the costs and expenses of the class closure vote and other outstanding costs and expenses of the Company attributable to the relevant class (including any redemption fees and repayment of Offer Costs as described in note 3);

(ii) subject to certain limitations, to convert all or some of their shares into shares of another class, assuming that other class does not also pass a class closure resolution; or

(iii) subject to the class continuing, to remain in the class. These provisions are disclosed in more detail in the Company's Articles.

The Annual Redemption Offer described in note 6 which enables a partial return of capital is also part of the discount management programme.

The discount management measures will be funded by partial redemptions of the Company's investment in BHGO and by utilising the Note Purchase Agreement.

The total numbers of shares purchased and held in Treasury at 30 June 2013 are as disclosed in note 6.

10. Related party transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions.

The Directors are responsible for the determination of the investment policy of the Company and have overall responsibility for the Company's activities.

The Company is managed by the Manager.

The Company and the Manager have entered into a Management Agreement dated 21 June 2010 under which the Manager has been given responsibility for the day-to-day discretionary management of the Company's assets (including uninvested cash) in accordance with the Company's investment objective and policy, subject to the overall supervision of the Directors and in accordance with the investment restrictions in the Management Agreement and the Articles of Association. Details of the management fees to which the Manager is entitled are in note 4.

The Company has six non-executive Directors. Sir Michael Bunbury, John Hallam, Graham Harrison and Nicholas Moss are independent of the Manager.

Talmai Morgan and Stephen Stonberg are both non-executive Directors of BH Macro Limited. BH Macro Limited is managed by the Manager, and is a feeder fund for Brevan Howard Master Fund Limited into which BHGO invests.

Stephen Stonberg is also a non-executive Director of BH Credit Catalysts Limited. BH Credit Catalysts Limited is managed by the Manager, and is a feeder fund for the Brevan Howard Credit Catalysts Master Fund Limited into which BHGO invests.

Details of Directors' fees to which the Directors are entitled are disclosed in note 5.

The Directors had the following interests in the Company, held either directly or beneficially at 30 June 2013:

As at 30 June 2013 Alan Howard, Brevan Howard founder, held a beneficial interest in 1,206,375 US Dollar shares and 987,553 Sterling shares in the Company. 500,000 USD shares were acquired during the IPO, while the remainder were acquired through on-market purchases.

11. Financial Highlights

The following tables include selected data for a single ordinary share of each of the ordinary share classes in issue at the period end and other performance information derived from the Interim Unaudited Financial Statements.

The per share amounts and ratios which are shown reflect the income and expenses of the Company for each class of ordinary share.

Total return reflects the net return for an investment made at the beginning of the period and is calculated as the change in the NAV per ordinary share during the period from 1 January 2013 to 30 June 2013. Total return is not annualised.

Total return reflects the net return for an investment made at the beginning of the year and is calculated as the change in the NAV per ordinary share during the year from 1 January 2012 to 31 December 2012.

Total return reflects the net return for an investment made at the beginning of the period and is calculated as the change in the NAV per ordinary share during the period from 1 January 2012 to 30 June 2012. Total return is not annualised.

Operating expense and net investment loss are not annualised.

* The net investment loss figure shown above does not include net realised and unrealised gains and losses on investments allocated from BHGO.

** Included in other capital items are the discounts and premiums on conversions between share classes during the period as compared to the NAV per share at the beginning of the period.

*** Company expenses are as disclosed in the Unaudited Statement of Operations, excluding foreign exchange losses on aggregation.

**** BHGO expenses are the operating expenses of BHGO.

12. Subsequent events

Management has evaluated subsequent events up to 21 August 2013, which is the date that the Interim Report and Unaudited Financial Statements were available to be issued, and have concluded there are no further items that require disclosure or adjustment to the financial statements other than those listed below.

Subsequent to the year end and up to the date of this report, the Company purchased the following shares of the Company to be held as treasury shares:

Following the purchase and cancellation of shares, the Company held 1,309,106 US Dollar shares, 3,755,178 Sterling shares and 197,180 Euro shares in Treasury.

Historic Performance Summary

As at 30 June 2013

* Covers the period from 1 January 2013 to 30 June 2013.

Glossary of Acronyms

Detailed below are the underlying funds and their acronyms used within this report:

Management and Administration

Directors

Sir Michael Bunbury* (Chairman) (appointed 1 January 2013)

Lord Turnbull (resigned as Chairman on 1 January 2013)

John Hallam* (Senior Independent Director)

Graham Harrison*

Talmai Morgan

Nicholas Moss*

Stephen Stonberg

(All Directors are non-executive)

* These Directors are independent for the purpose of LR15.2.12-A.

Registered OfficePO Box 255Trafalgar CourtLes BanquesSt Peter PortGuernseyGY1 3QL

Manager

Brevan Howard Capital Management LP4th FloorOne EsplanadeSt HelierJerseyJE2 3QA

Administrator, Registrar and Corporate Secretary

Northern Trust International FundAdministration Services (Guernsey) LimitedPO Box 255Trafalgar CourtLes BanquesSt Peter PortGuernseyGY1 3QL

Independent Auditor

KPMG Channel Islands Limited20 New StreetSt Peter PortGuernseyGY1 4AN

CREST Service Provider

Computershare Investor Services (Jersey) LimitedOrdnance House31 Pier RoadSt HelierJerseyJE4 8PW

Legal Advisors (Guernsey Law)

Carey OlsenCarey HouseLes BanquesSt. Peter PortGuernseyGY1 4BZ

Legal Advisors (UK Law)

Freshfields Bruckhaus Deringer65 Fleet StreetLondonEC4Y 1HS

Corporate Broker

J.P. Morgan Securities Ltd25 Bank Street

Canary WharfLondonE14 5JP

For the latest information

www.bhglobal.com

The Interim Report and Unaudited Financial Statements of BH Global Limited and the Interim Unaudited Financial Statements of BH Global Opportunities Master Fund Limited will shortly be available on the Company's website www.bhglobal.com.