Baronsmead VCT 3 plc



                         Interim Management Statement



For the three month period from 1 January 2014 to 31 March 2014.



Headlines



+4.5%                    Increase in Net Asset Value per share before payment
                         of interim dividend


8.0p                     Interim dividend paid on 7 March 2014


£9.7m                    Raised net of costs in January / February 2014




Performance Summary


                                         As at       As at

Capital return                   31 March 2014 31 Dec 2013    Movement



Total net assets                       £82.82m     £74.88m

Net asset value per share             118.53p*     113.40p        4.5%

Share price                            103.75p     106.25p       (2.4%)

Discount to NAV                         (6.1%)      (6.3%)

* Adjusted for 8.0p (£5.3m) interim dividend paid on 7 March 2014 for
comparative purposes. Actual NAV at 31 March 2014 including the interim dividend paid
7 March 2014 was 110.53p per share.



Total Return                             3 month (%)  1 year (%)  5 years (%) 10 years (%)

Net asset value total return (1)            4.63       13.21       70.13      120.51


Key: (1) NAV total return = NAV + reinvested dividends; Source: ISIS EP LLP


These total returns are stated before the inclusion of VCT tax
reliefs which are designed to mitigate the higher risks and costs associated
with investing in smaller companies and the constraints of the VCT legislation.
The front end income tax reliefs available at the time of subscription were 20%
prior to the end of the 2003/04 tax year, 40% in the 2004/05 and 2005/06 tax
years and 30% since then, so any adjusted performance measure including this
relief will vary depending on the date of subscription.  There is the
additional benefit of receiving VCT dividends tax free.


Investment Performance


The net asset value of the company increased by 4.5% during the quarter
excluding the interim dividend paid during the period.  The unquoted portfolio
valuation stayed broadly flat in the quarter and the AIM portfolio increased by
7.7%.



The Company's net assets as at 31 March 2014 were £82.8 million.  This figure
takes account of the valuation of the Company's investments as at 31 March 2014
and takes account of the payment of the interim dividend of 8.0p per share paid
on 7 March 2014 (£5.3 million) and the £9.7m (net of costs) raised during the
period under review.



Top Ten Investment Holdings

                                                                      Percentage
                                                                          of NAV
Position at   Position at                                                  as at
31 Mar 2014   31 Dec 2013                Company                     31 Mar 2014



      1            1       Nexus Vehicle Holdings Limited                    5.7

      2            2       Netcall plc                                       3.4

      3            4       Vectura Group plc                                 3.0

      4            5       IDOX plc                                          3.0

      5            3       Crew Clothing Holdings Limited                    2.9

      6            7       Valldata Group Limited                            2.2

      7            9       ICCM                                              2.1

      8            10      Murgitroyd Group plc                              2.0

      9            8       Tasty plc                                         1.9

     10            20      Jelf Group plc                                    1.7

    Total                                                                   27.9



Analysis of Total Assets



                                   Percentage of total      Percentage of total
                                                assets                   assets

                                         31 March 2014              31 Dec 2013



Unquoted investments                                32                       38

AIM, listed, ISDX &                                 48                       47
collective investments
vehicle

Listed interest bearing                        0                   5
securities

Net current assets                             20                  10

Total cash portfolio                                20                       15

Total Assets                                       100                      100




Analysis of Investment Portfolio by Sector

(excluding cash and interest bearing securities)



                                       Percentage of total  Percentage of total
                                            investments at       investments at
                                             31 March 2014          31 Dec 2013



Business Services                                       43                   45

Consumer Markets                                        12                   13

Healthcare & Education                                  17                   16

Technology, Media &
Telecommunications                                      28                   26

Total                                                  100                  100




Investment Activity


One new unquoted investment of £952,000 was made during the period in Kingsbridge a specialist insurance broker.

A total of £508,000 was invested in one new and two follow on investments in AIM traded companies




Investments made



Company                              Date            Cost (£'000)

Daily Internet plc                   Jan 2014                  25

Kingsbridge Limited                  Jan 2014                 952

EG Solutions plc Loan note           Feb 2014                  33

Scholium Group plc                   Mar 2014                 450



Total investments                                           1,460



Realisations


During the period under review Baronsmead VCT 3 realised proceeds of £2.3m from the sale of two unquoted investments (Empire World Trade and Inspired Thinking Group). Arcas Investments was dissolved in the period and the funds returned to the VCT.


The sale of Baronsmead VCT 3's holding in Inspired Thinking Group in March 2014
realised a return of 3.4 times its original cost including interest income.



                                           Cost    Proceeds  Multiple
Company                         Date     (£'000)    (£'000)     (X)

Inspired Thinking Group       Mar 2014     796       2315      3.4*
Limited
                              Mar 2014    1,000       998       1.0
Arcas World Trade Limited
                              Jan 2014    1,297       25        0.0
Empire World Trade Limited


Total realisations                        3,093      3,338




*Includes interest/ dividends received, loan note redemptions and partial
realisations accounted for in prior periods



Dividend paid on 7 March 2014



Following recent profitable sales of investments, the Directors declared an
interim dividend of 8.0p per share with respect to the year to 31 December
2014.  The dividend was paid on 7 March 2014 to shareholders on the register as
of 21 February 2014. It is the Board's current expectation that this interim
dividend will be in lieu of the dividend that would normally be declared on the
publication of the Company's results for the six months to 30 June 2014.



Fundraising



An offer for subscription to raise gross proceeds of up to £10 million was
launched on 22 January 2014.  The Company's offer was fully subscribed by 19
February 2014, raising £9.7 million net of expenses.  As a result, on 14 March
2014 the Company allotted 8,896,261 shares at a price of 112.40p per share. The
Board would like to thank the 482 existing shareholders and extend a very warm
welcome to 576 new shareholders who invested in the Company through this
fundraising. The Company had 4,084 shareholders as at 31 March 2014.



Events after the period end



Other than the events described above, the Board is not aware of any
significant events or transactions which have occurred between 1 April 2014 and
the date of publication of this statement which would have a material impact on
the financial position of the Company.



Investment objective



Baronsmead VCT 3 plc is a tax efficient listed company which aims to achieve
long-term investment returns for private investors.


Further information


Further information regarding the Company, including net asset values published
since the end of the period and quarterly factsheets, can be found at the
Company's website

www.baronsmeadvct3.co.uk



Contact



For further information please contact:



The Company's Investment Manager, ISIS EP LLP as follows:



Email:       baronsmeadvcts@isisep.com

Telephone:   020 7506 5717

Facsimile:   020 7506 5718

Post:        100 Wood Street, London, EC2V 7AN




Neither the contents of the Company's website nor the contents of any website
accessible from hyperlinks on this announcement (or any other website) is
incorporated into, or forms part of, this announcement.