BarclaysGlbl.InvEnII - Interim Results

Notes to Editors*

BONUS RATES AND GROWTH

Prospective return per annum after all Company expenses

The latest net asset value of 107.85p per share was calculated as at 31 March 2006

The prospective annual rate of return to an investor holding shares to redemption, based on the main assumptions listed below, would be:

These figures are for illustrative purposes and are not guaranteed.

Main assumptions

• Unchanged bonus rates over the remaining life of the Company

• No brokerage is charged on share purchases

• All policies are held until maturity

• Policy premiums are paid to maturity

• The issuing life offices honour their contractual guarantees

• Base rates continue at 4.50% per annum for the life of the Company

• Administrative costs increase at 2.5% per annum for the life of the Company

• No benefits arise from early deaths or other windfall gains

• The Company is exempt from tax on gains throughout its life

• One fifth of the Company's shares will be redeemed in each of the years 2005 to 2009

Chairman's Statement

Overview

I am pleased to report that we have seen good growth in the Company's NAV during the period despite on-going reductions in maturity payouts on longer dated policies by the life funds. It is also pleasing to see a general improvement in returns generated by the life assurance industry after the rigorous and difficult cost-cutting of recent years. The growth in the Company's NAV during the period should enable us to make a second capital redemption at a level in excess of last year's, while the medium term prospects for the life industry clearly continue to improve.

Economies and markets

European and Japanese equity markets rose in 2005 by 20% and 35% respectively, although the US S∓P 500 Index climbed by just 5%. While US profit growth has slowed, it nevertheless achieved 15% over the last year and is now about a third higher than its previous peak during the technology bubble in 2000. The average economic forecast is now looking for US economic growth of about 3.5% this year. Consumer spending generally remains buoyant, and although oil prices have traded at levels of more than US$70 a barrel, the Federal Reserve seems less hawkish on interest rates, leaving liquidity conditions supportive of equity valuations.

In contrast, the turnaround in the European and Japanese economies has come as a surprise to most investors, and economists have been further revising their forecasts upwards. Foreign net investment in Japanese equities has surged in recent months to the highest level in more than a decade, helping to explain Japan (EUREX: FMJP.EX - news) 's very strong stock market growth since April 2005. Although the Japanese economic climate remains fragile, further profit upgrades are forecast and sentiment is upbeat, so that the recent good performance seems likely to continue.

The European Central Bank has raised interest rates to 2.5% in response to accelerating growth and higher reported inflation. The outlook for European equity markets remains good against a background of stronger domestic economic activity and global growth, although we should anticipate some degree of consolidation after recent gains.

UK Equities have continued to show strong growth, with oil and financial sectors accounting for most of the market's profit growth in the past decade. The current outlook for the UK Economy remains challenging against a background of rising consumer debt and weak productivity growth, although policy makers are likely to leave interest rates unchanged for the time being. In contrast, the outlook for the stock market is positive as equity valuations remain attractive, corporate balance sheets are relatively healthy, and corporate M∓A activity continues to intensify. Several leading British companies have been taken over in the last year and this trend looks set to continue.

Most of those life industry trends that were evident when I wrote to you last autumn are still with us. Despite the stock market's continued strength, only the larger, better funded life offices have had the confidence to raise bonus rates, and the Faculty and Institute of Actuaries still warns of reducing payouts on longer dated policies. Against this background, the TEP market itself has seen a significant downward shift in Pricing Discount Rates as TEP prices continue rising to meet ongoing demand. This demand comes increasingly from overseas funds rather than private individuals in the UK, and TEP prices now tend to be set through a relatively small number of large trades. Some of this may explain the tighter discounts to NAV at which most quoted TEP funds have traded recently.

Shareholder Returns

The Company's net asset value (NAV) increased by 6.05% from 100.38p to 106.45p per share in the six months to 28 February 2006. Over the same period the share price rose by 10.0% from 87.5p to 96.25p in the six months to 28 February 2006, and as I write stands today at 100.5p. By comparison, over the same period the FTSE All Share Index rose by 11.2%; and the FTSE Actuaries British Government 5-15 Year Index fell by 1.1%. This net asset performance reflects the recent strength of equities, tempered by the continuing action of life funds to bring maturity payouts back into line with asset share following a period of overpayment in earlier years.

The proceeds from policies maturing during the period returned an average compound growth rate of 3.1% p.a. since purchase, and amounts received were used to repay debt before the redemption of share capital later this year. Interest on outstanding debt was arranged during the period at rates between 5.0% and 5.1% p.a. A total of £3.516m was receivable from 153 policies that matured in the six months to 28 February 2006. During the period no policies ceased on the deaths of the live assured.

Bonus trends

Some of the stronger life funds have increased annual bonuses this year, but maturity payouts on longer dated policies have generally continued to decline in accordance with the warnings in recent years by the Faculty and Institute of Actuaries that payouts on longer term with-profit policies will continue to fall. We do not believe that the considerable strength of equity markets of the last three years will be sufficient in the near term to reverse this trend, although the improved market returns are clearly to be welcomed.

The Life Assurance Industry

The major groups have recently announced significant profit increases following strong growth in sales, and these often reflect improved operating ratios as the benefits of earlier cost cutting efficiencies have started to come through.

More importantly for this company, most life funds have generated healthy returns despite holding a lower proportion of equities than in earlier years. Of the major offices perhaps only Standard Life (Other OTC: SLFPF.PK - news) has disappointed with a relatively low level of returns over the year. Faced with its forthcoming flotation later in 2006, it has also reduced the number of its employees and switched the emphasis of its sales relationships towards banks rather than independent financial advisors.

During the last six months most offices have been able to build upon the more secure business footing achieved during the previous three years and, despite a few setbacks, have acquired the confidence to develop new constructive expansion plans, including attempts to free up capital from inherited estates, purchase the assets and liabilities of company pension schemes, acquire closed life fund books, and enter the bulk annuity market.

Other developments saw Old Mutual (LSE: OML.L - news) win a long drawn out contested takeover of Skandia, and Aviva (LSE: AV.L - news) announce a takeover bid for the Prudential (LSE: PRU.L - news) which was subsequently withdrawn, while speculation also continues about mergers or takeovers between other life assurance groups in the UK and overseas. I believe it may be only a matter of time before significant further consolidation occurs in the European life sector, because the life industry is in competition with more efficient asset managers worldwide, and only the most efficient are likely to survive.

New data on longer life expectancy in the UK and the need to provide retirement income over a more extended period theoretically offer the life and pensions industry greatly improved opportunities for selling savings products. However, the Turner Report on pensions indicated that the life industry would be unlikely to play a key role in running the proposed national savings scheme, as most offices are currently unable to provide investment management cheaply enough. Once again, it is the larger and more efficient groups that are likely to be in a better position to offer suitable products and thereby profit from this significant long term opportunity.

On the regulatory front the most significant development for the Fund has probably been the reported concern of the FSA about the transparency and governance of some with- profit funds, particularly the amount of capital earmarked to meet risks. It intends to launch an investigation into these matters.

Capital Redemption

You will receive, together with this interim report, a letter concerning the second annual redemption of the Company's shares which is due to be made in September. Despite the disappointing performance of life fund assets and relatively low level of maturity payouts received by the Fund, it was pleasing to make a payment last year of 100p per share. Although most maturity payouts received by the Fund continue to be reduced in value, we believe it should be possible to make a second capital redemption at a level in excess of last year's. The accompanying Notice sets out the timetable and steps leading to redemption.

Outlook

In accordance with our previous practice and the Company's investment plan, the Directors have used the cash proceeds of maturing policies to reduce the level of the outstanding loan. This means that we will need to redraw sums temporarily under the existing borrowing facility in order to make the capital redemption payment to shareholders in September.

Although most major economies and stock markets are likely to see some further growth this year, we believe that life funds will continue to reduce policy payouts on longer dated policies for the time being. Even allowing for the clear uptrend that TEP market prices continue to enjoy at the present time, the increase in the company's NAV is, therefore, likely to be fairly modest over the medium term. As last year, your Directors intend to decide the level of capital redemption payment by reference to the latest NAV available at the time their decision is made.

Peter Bailey, Chairman

19 April 2006

STATEMENT OF TOTAL RETURN (UNAUDITED)

For the six months ended 28 February 2006

The return for the 6 months to 28 February 2006 is based on 19,999,887 ordinary shares in issue following the redemption of shares on 7 September 2005, which was unchanged for the remainder of the period. The effect of this redemption was to increase the net asset value of the remaining shares by 0.10p per share.

The full accounts for the year ended 31 August 2005, which have been summarised above, received an unqualified auditors' report and have been delivered to the UK Financial Services Authority and the Jersey Financial Services Commission.

BALANCE SHEET (UNAUDITED)

As at 28 February 2006

On 7 September 2005, the company redeemed one fifth of its ordinary shares at 100p per share. The redemption proceeds repaid share capital and premium of £5,000,000 to shareholders.

CASH FLOW STATEMENT (UNAUDITED)

For the six months ended 28 February 2006