NEWS RELEASE

FINAL CLOSE FOR HERALD VENTURES SECOND FUND WITH COMMITMENTS OF £30.5MILLION

June 20 2005: Herald Investment Management (Herald), the leading technology and media investment fund manager of Herald Investment Trust plc, announces the final close of Herald Ventures II (HVII), its second venture fund, with total commitments of £30.5m (US$55m, Euro46m). HVII will continue the existing strategy of investing in early stage technology, media and communications companies based in the UK. HVII will typically invest between £0.25m and £3.0m in any one company. Herald's first venture fund, Herald Ventures I, which was established in September 1999 with commitments of £20m, was only fully invested in December 2004 having made few investments during the TMT valuation bubble. By value 75% of the commitments of investors in the first fund have been recommitted for the second with an additional £15m from new investors.

Herald founder, Katie Potts, said: "It is a reassuring expression of confidence in our first fund that so many of the original investors have come on board for the second. I believe our success has been achieved by disregarding the herd and resisting investment opportunities in 2000 on unrealistic valuations. In spite of the difficulties associated with boom and bust in our sector we are optimistic that the returns will be satisfactory, and relatively exceptional. I remain an evangelist that supernormal returns can be achieved with a judicious selection of management teams, and a concerted effort to work with those teams to build real businesses and real wealth. For me, that is much more fulfilling than the financial engineering associated with private equity directed towards leveraged buy-outs. For our new fund, I am sure the same approach will bring rewards for both those who have invested with us and in whom we invest."

Herald was established in 1994 by Katie Potts and is one of the UK's leading specialist technology and media investors with approximately £400 million ($700 million) of assets under management. Herald Ventures I was established in 1999 with commitments of £20 million.

JPMorgan Cazenove acted as placement agent. Macfarlanes acted as legal advisers.

For further information, please contact:

Katie Potts or Taymour Ezzat on 0207 553 6300