<table><tr><th>From:</th><th>David Stern</th></tr><tr><td>Sent:</td><td>Friday, June 1, 2012 9:29 AM</td></tr><tr><td>To:</td><td>Jeffrey Epstein</td></tr><tr><td>Subject:</td><td>Tim Collins</td></tr></table>

Kleinwort parent pressured to spin off assets

The parent company of Kleinwort Benson, one of the oldest names in =ritish banking, is facing pressure from activist shareholders to break =tself up and spin off all its assets.

Kleinwort, the private banking and wealth management group with roots =tretching back to 1786, was acquired in October 2009 by RHJ =nternational, a Brussels-listed private equity fund, from Commerzbank, =he German lender.

Disgruntled shareholders holding more than 3 per cent of RHJ have =ritten to the company's directors to demand an extraordinary dividend =hat would in effect abort its plan to create a larger banking franchise =round Kleinwort. Separately, Equilibria Capital Management, a Bermuda-based hedge fund =oordinating the shareholder revolt, demanded the board consider a =reak-up of RHJ and a spin off of Kleinwort Benson, its biggest asset.

"The best way forward for shareholders is through a break-up of RHJ, =nd it begins with the payment of an extraordinary dividend," said =aniel Tafur, chief investment officer at Equilibria, which itself =ontrols about 1.5 per cent of the shares. The minority bloc say there is more value in the sum of RHJ's parts than in its €343m market capitalisation — much of which comes €266m =n cash on its balance sheet.

They are demanding a special dividend of €2.40 per share, which would =rain about €200m of RHJ's cash reserves. Their view was backed by analysts at ABN Amro, which wrote in a research =ote "we see more upside in a case of a break-up," but said it was =nclear if the activist shareholders would get the required votes at the =une 19 annual general meeting.

The immediate impact of an imposed change in strategy would be to pull =he plug on RHJ's planned acquisition of BHF, a private banking arm of =eutsche Bank which it has been in negotiations to buy for coming up to = year.

Beyond Kleinwort, RHJ owns a handful of minority stakes in industrial =nd financial company stakes, concentrated in Europe and Japan.

The company's second-biggest shareholder, Tim Collins, made his name a =ecade ago scooping up Long-Term Credit Bank of Japan alongside US =inancier Christopher Flowers.

RHJ is a 2005 spin-off from the Ripplewood Holdings private equity fund =e founded in 1995, which itself has run into trouble following a string =f investments at the top of the credit bubble.

Touted by Mr Collins as a European version of Warren Buffett's =erkshire Hathaway, the US investment firm, it tried and failed to buy =ut General Motors' Opel subsidiary in 2009 before bidding for =leinwort.

A top five RHJ shareholder supportive of management said the activists' =equests were not in the best interests of the company. "There is an =pportunity to invest in financial assets in Europe, which RHJ is well =ositioned to do," the shareholder said.

RHJ declined to comment.

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