Adagio Presentation, 2016.pptx

OPPORTUNITIES IN REAL ESTATE
Residential Income Arbitrage
2016
Table of Contents
Legal Disclosures . . . . . . . . . . . . . . . . . . . . . . .
3
About Adagio . . . . . . . . . . . . . . . . . . . . . . . . .
4
Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
Equity Portfolio . . . . . . . . . . . . . . . . . . . . . . . . .
8
Asset-Based Real Estate Finance . . . . . . . . .
15
Performance & Risk Characteristics . . . . . . .
26
Investment Overview . . . . . . . . . . . . . . . . . . .
28
Professional Profiles . . . . . . . . . . . . . . . . . . . . . 30
Contact Information . . . . . . . . . . . . . . . . . . . . 32
General Disclosures . . . . . . . . . . . . . . . . . . . . . 33
General Presentation Notes . . . . . . . . . . . . . . 35
2
Legal Disclosures
This presentation is not an offer to sell, nor a solicitation of an offer to purchase any securities instrument or any
interest in Adagio, LLC or its current or future affiliated entities (hereafter; collectively, “Adagio”). Any investment
in Adagio must be made via Subscription Agreement and accompanied by a Confidential Offering
Memorandum and any other documents as may be required by law.
This presentation is confidential and intended only for sophisticated and accredited investors as allowed by law.
Private investments may be speculative and involve a high degree of risk. Such investments are not intended to
be a complete or stand-alone investment program. Performance may be volatile. There Is no assurance that
Adagio will achieve its investment objectives. The fees and expenses charged in connection with an investment
in Adagio may be higher than those charged in connection with other investments, and in some market
conditions, may offset its investment profits, if any. Investors may be charged fees and expenses during periods of
investment loss. In some instances, investment loss could be material. Investors could lose all or a substantial
amount of their investment. Only investors who can withstand the loss of all or a substantial part of their
investment should consider investing in Adagio. Because there are restrictions on transferring and redeeming
interests in Adagio, and because there is no secondary market for interests in Adagio and none is expected to
develop, investors should not require ready access to their capital.
This document contains certain "forward-looking statements" that are based on our assumptions and judgments
with respect to, among other things, future economic, competitive and market conditions, future business
decisions, representative investments, anticipated portfolio concentration, investment opportunities, ability to
create value, nature of investments, fund characteristics, strategy implementation, investment criteria, and/or
strategy objectives, all of which are difficult or impossible to predict accurately and many of which are beyond
our control. Because of the significant uncertainties inherent in these assumptions and judgments, you should not
place undue reliance on these forward-looking statements, nor should you regard the inclusion of these
statements as our representation that Adagio will achieve any strategy, return objectives or other plans. The
opinions expressed herein are current opinions as of the date appearing in this material only. There is no
obligation to update these forward-looking or any other statements, nor is there any assurance that the policies,
strategies or approaches discussed herein will not change.
3
About Adagio
Adagio is a private alternative asset management firm founded in 2005 by Managing
Director Ben Summers. Adagio's initial focus was investing in the New Urban
communities along the Florida Gulf Coast and consulting to the finance world
regarding real estate and energy matters. These activities uncovered new
opportunities in residential real estate markets leading to Adagio developing its unique
asset-based lending program. Adagio now engages in a full complement of investing
activities through its development of liquidity management processes and discrete
operating structures.
Adagio focuses on identifying and creating market specific profit opportunities – while
recognizing that investment gains and losses aren’t realized in a vacuum, free from the
effects of global economic turbulence and market irrationality. We also recognize the
difficulties inherent in predicting these turbulences or a market’s return to rationality. As
a result, we believe successful long-term investing demands proactive management
of a portfolio’s risk/reward profile.
As an expression of these core principles, we manage our assets with a unique
mandate: to rigorously select micro-level investment opportunities that meet our
specific fundamental criteria while managing our exposures to macroeconomic
trends. Through effective and efficient communication, planning and management,
we strive to deliver exceptional results that meet the goals of our investors.
4
Strategy
Investment Objective
Adagio ABL, LLC (the “Fund”) is an open-end, residential income real estate fund focused
on meeting the demand for non-recourse bridge financing in the investor market and is
managed by Adagio, LLC (the “Manager”). The Fund utilizes low-LTV mortgages in
conjunction with various lease and option structures designed to generate an internal
hedge against residential real estate market volatility via arbitrage.
Investment Approach
The Manager views residential real estate value as a function of its net rental income as
opposed to the popular comparable sales model. Historically, while comparable sales
values have experienced significant volatility, Owner Equivalent Rents (“OER”), as tracked
by the U.S. Bureau of Labor Statistics (“BLS”), have been relatively stable. Constructing
arbitrage trades between income-based and comparable sales valuations has insulated
the Manager’s portfolio from systemic risk, such as the crisis of 2008, while increasing overall
returns.
5
Strategy (cont.)
6
Strategy (cont.)
o  Adagio’s unique mandate provides two important benefits when
applied to our core market of real estate:
!  Fundamentally valuing real estate based upon its rental income
offers opportunity for both immediate profit and long-term price
appreciation eliminating much of the risk and volatility associated
with traditional valuation methods.
!  Identifying the global influences that impact local investing allows
us to manage our exposure to changes in the world’s financial
landscape.
o  The practical impact of Adagio’s strategy remains consistent:
!  Identify opportunities to harvest short-term returns on assets that
also hold potential for significant long-term price appreciation.
7
Equity Portfolio
Real Estate:
!  Acquisition sources range from distressed sellers and bank-owned assets to
creatively negotiated seller-financed deal terms.
!  Deal terms are designed to minimize risk to capital while maximizing positive
cash flow and exposure to upside price appreciation.
o 
o  Liquidity Management:
!  Maintain a high cash reserve to support real estate activity
!  Partnered with Morgan Stanley in New York to manage interest rate exposure
through multi-asset class portfolio of liquid securities
o  Other Assets (outside Adagio ABL Fund):
!  Mitigate inflationary risk by trading favorably priced commodities as
opportunities arise and maintain precious metal holdings
Real Estate
Portfolio
8
Overlapping area indicates the
relationship between our cash
management tools and our real
estate portfolio.
Liquidity
Mgmt.
Our Core – Real Estate
o  Critical, independent valuations synthesizing detailed information:
!  Community-specific demographics
!  Lending practices of local banks
!  Raw industry data
o  Extended due diligence on appropriately priced deals:
!  Inspect for physical & legal defects
!  Proprietary market knowledge
!  Opportunity costs of capital & impact to overall portfolio
!  Predicted hold time
o  Evaluation of exit strategies:
!  Model scenarios from worst to best case
!  Formulate pre-planned exit strategies for each
9
Our Real Estate Process
Selection of Specific Local Markets
Identification of
Opportunities
Analysis &
Valuation
Exit Strategies
Adagio
Investment
10
Each property that Adagio
holds passes through
multiple filters, each more
stringent than the prior.
Identification of Opportunities
o  Deal flow is imperative to constructing effective and repeatable
investment processes.
!  Ensures opportunities
!  Supports and improves valuation efforts
o  Adagio’s professionals maintain a vast and ever-expanding network
of contacts cultivated throughout our careers.
!  Our sources include:
•  Commercial Bank Officers and Asset Managers
•  Commercial Real Estate Investors
•  Property Management Companies
•  Other Private and Professional Investors
•  High Sales Volume Real Estate Brokers and Agents
11
Analysis and Valuation
o  Appraising true current market value requires more than sales comps
and housing statistics.
!  Adagio’s valuations are predicated on each property’s effective
cap rate ensuring plan cash flow and mitigating speculation.
!  Accurate evaluation of current value and potential appreciation
comes through market-specific knowledge and experience.
o  Adagio understands the cultural and market dynamics of the
communities in which we invest, down to block by block variances.
!  Among the specific factors we consider are:
•  Sales volume, listings and viewing activity in the community
•  Rental history of both target and comparable properties
•  Seasonal dynamics of sale and rental markets
•  Community infrastructure development and improvement
•  Opportunity costs of capital/negotiability of deal terms
12
Exit Strategies
o 
Investors often fail to capture value because their only contingency plan is a
“fire-sale”.
!  Undue reliance on over-estimated market conditions
!  Forced to recognize there is no market at their “market value”
•  Liquidation is a viable exit strategy only if accompanied by accurate
market comprehension prior to investment.
o 
We plan multiple strategies for profitable or loss-mitigating exits:
!  Option and option-like agreements to capture value identified before
target is openly marketed
!  Increase bid flow by offering financing
!  Timely liquidation of vacation rental properties near end of peak season
Target
Option Example
Agreement
• Beach Estate
• Adagio acquires the buy/
• Traditional comp.
sell rights for $5k
sales val. ≈ $2.5m
• Lock in purchase price of
•  Our Income-based $1.6m
val. ≈ $1.6m
13
Exit Strategies
1)  Re-sell property before option expires, profits
= Sale Price (up to $2.5m) - $1.6m
2)  Execute straight purchase, hold for cash flow
and improved market conditions
3)  Allow contract to expire, loss = $5k
Liquidity Management
o  Although properly priced real estate is liquid, transaction times dictate
that it is not as free-flowing as cash or exchange-traded equities.
!  Adagio places a premium on effectively managing our overall
portfolio liquidity.
o  Aspects of our liquidity management include:
!  Maintaining high cash to equity reserves
!  Capturing interest rate spreads
•  Finance purchases of Adagio’s properties at rates above
Adagio’s borrowing costs
•  Multi-asset class portfolio of liquid securities
14
Asset-Based Real Estate Finance
Adagio has expended significant resources investigating and investing in
residential real estate. Those efforts lead to the development of our unique assetbased lending (“ABL”) in residential real estate program that complements our
firm’s core strategy and improves the risk/reward profile of our overall portfolio.
ABL Portfolio
(Loans & REO)
Real
Estate
Area outside ABL represents
options/option-type
opportunities for short-term
profit.
15
Liquidity
Mgmt.
Current Environment
o  Uncertainty presents opportunities for forward-thinking investors.
!  Positive cash flowing real estate and liquidity management abilities
position our firm to seize these opportunities.
o  Misguided underwriting and poorly understood home values provide
an ideal environment for Adagio’s ABL in residential real estate
program.
!  Real Estate investors face two critically significant risks:
•  Liquidity trouble due to obligations of an amortization schedule
•  Maintaining deal flow of opportunities to invest at a discount to
non-speculative market value
!  Our model addresses these risks through:
•  Objective lending criteria
•  Conservative valuations based on income and market specific
knowledge
•  Effective management of our Real Estate Owned (“REO”)
16
Adagio vs. Conventional Lenders
Adagio ABL
•  Loan to Value (LTV)
•  Utilize Adagio investment
process for valuation
•  Add market-specific
knowledge and experience
•  Lending criteria based on
property’s value
•  Loan collateral de facto
strong
•  Loan terms avoid the
foreclosure process
•  Managing a portfolio of real
estate is our strength
17
Conventional Lending
•  Loan to Cost (LTC)
•  Borrower responsible for
valuation
•  Appraiser relies on sales data
up to 12 months old
•  Lending criteria based on
borrower credit profile
•  Loan likely poorly
collateralized
•  Default means lengthy,
expensive foreclosure
•  Ill-equipped to effectively
manage REOs
Conventional Mortgage Lending
o  Conventional mortgage lending practices lead many to view real
estate lending and investing as excessively risky.
!  Excessive risk is due to flawed appraisal methods.
o  Conventional lenders base amounts on a hybrid of loan to
[comparable sales] value (“LTV”) and loan-to-cost (“LTC”) or loan-toprice (“LTP”), i.e. lesser of contract price and property value.
!  Due diligence consists of assigning the responsibilities of valuation
to market participants with conflicts of interest.
•  Borrowers & Realtors pursue inflated appraisals to maximize
loan amount
o  Ineffective at mitigating loss after borrower default
!  Outside of core competencies & business model
!  Lax valuation methods = poorly collateralized loans = illiquid REOs
!  Compound losses by allowing REOs to fall into disrepair
18
Lender Stress Creates Opportunity
“[Most] investors may be quite willing to take the risk of being wrong in the
company of others, while being much more reluctant to take the risk of being
right alone.” – John Maynard Keynes
o  Our model was developed to mitigate exposure to volatility/risk
imposed by market cycles and macroeconomic instability.
! 
Credit-hungry market
+
Short-Term Financing
= Premium Interest Rates
! 
Adagio shifts borrower default from a risk to a potential windfall
• 
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Quickly take possession of defaulted-on properties at significant
discounts to already distressed prices.
Market Demand for ABL
o  Solely in the Florida market, we estimate demand for Adagio ABL at
approximately $1.2B annually.
!  Unique approach to mitigating foreclosure costs supports our
ability to offer an ABL program that redefines real estate lending
!  Current firm resources should allow placement of approximately
$150 million over the next two quarters.
o  Lack of competition:
!  No true asset-based lenders in the residential real estate market
!  “Hard money” lenders are often borderline predatory.
•  Interest rate and default terms may resemble ABL, but they
o  qualify borrower credit-worthiness and are full recourse.
o  employ subjective and inconsistent underwriting standards.
o  rely on speculative comparable sales valuations.
o  require arbitrary “skin in the game”.
o  charge excessive or unnecessary fees.
20
ABL & Risk Mitigation
o 
o 
Our model capitalizes on the mistakes of conventional lenders.
! 
! 
Avoid using borrower credit profiles as a risk management tool
Appraisals implement existing skills and valuation process
! 
No undue reliance on 3rd party appraisals
•  Often based on listings and comps up to 12 months old.
Adagio makes every effort to ensure our valuations reflect current market
value.
! 
Process designed to determine the minimum sale price within a 3 month
timeframe
• 
Cap rate used as principal valuation metric
• 
• 
Weight most recent actual sales more heavily
Add local market experience and participation
o  Further risk mitigation by utilizing a standardized, non-recourse leaseback with
option structure in lieu of a traditional mortgage
! 
21
Mitigates regulatory and foreclosure risk
ABL & Real Estate Investing
o  As mentioned earlier, two significant challenges must be addressed to
profitably invest in real estate:
!  The liquidity concerns presented by commitment to an
amortization schedule:
•  Amortized financing increases holding costs and reduces IRR.
•  It adds repayment risk or forces sales at a loss in the event a
property’s net operating income becomes less than its debt
service.
! 
22
Maintaining a strong deal flow of opportunities to purchase at a
discount to true market value:
•  The asset class itself holds significant potential for appreciation,
•  Forced appreciation comes from purchasing at a discount in
the immediate environment.
o  Relying on prices one year ago or projections one year
forward is speculating, not investing.
ABL & Liquidity
Our financing terms grant Adagio clear title to the subject property immediately
upon default effectively collateralizing any non-performing loan. Without debt
service, we capture an improved internal rate of return on our REOs.
Property X (Adagio valuation of $1m)
Assuming model “worst case”:
" Model’s min. acceptable cap rate of 6.5%.
" Loan at max amount of 70% LTV minus points.
" Adagio takes possession 90 days after close.
Hold Property
If property produces the same net
operating income, annual yield is $65,000
(9.6%) on our initial investment of
$679,000 (70% LTV less 3 discount points).
* We would also maintain opportunity for
appreciation.
23
Liquidate Property
We re-sell the property at 90% net of our
appraisal, yielding a profit of $221,000
(32.5%) after transaction costs.
*Due to our emphasis on income-based
valuations, we expect to sell most REOs
at or above our appraisal.
ABL & Deal Flow
o  Adagio’s ABL strategy increases our already strong deal flow pipeline.
!  Lend only on non-owner occupied property
•  Borrowers are generally investors/high net worth individuals
o  They serve an analyst-type function by presenting deals at
least minimally pre-screened.
o  Firm resources are freed to focus on accurate valuations
and managing overall portfolio risk.
o  Profiles of target properties improve.
!  Otherwise unattractive property can yield a high return when
acquisition cost is effectively capped at 70% of true market value.
o  We are positioned as credit providers, not competing investors.
!  Gain an edge through first-hand knowledge of other investors’
activity
24
Additional Benefits & Terms
o  We play a large role in dictating the liquidity of our specific markets.
!  Aspect of self-determination largely unavailable in other
investment strategies
o  By financing purchases of our REOs, we increase profit margins.
!  Increased pool of buyers means increased offer volume leading to
increased prices
!  Re-occurring defaults on an REO reduce our cost basis.
o  Some additional loan terms:
!  Leaseback with option term of 6-12 months
!  Transaction fee
•  Immediate return, even on loans that later default
25
Performance & Risk Characteristics
26
Performance does not include Adagio management and performance fees ("Adagio Fees"). The Adagio Fees and any other expenses that the investor incurs will
reduce the returns to investors. The Adagio Fees are described in the Private Placement Memorandum. Past performance in not indicative of future results. Full year and/
or TYD performance may not equal the monthly or quarterly compounded results due to the effects of rounding and may include estimated and/or unaudited results.
Performance & Risk Characteristics (cont.)
27
Performance does not include Adagio management and performance fees ("Adagio Fees"). The Adagio Fees and any other expenses that the investor incurs will
reduce the returns to investors. The Adagio Fees are described in the Private Placement Memorandum. Past performance in not indicative of future results. Full year and/
or TYD performance may not equal the monthly or quarterly compounded results due to the effects of rounding and may include estimated and/or unaudited results.
Investment Overview
Adagio’s combination of distressed real estate investing and ABL gives our firm a unique return
profile. We are confident that we will continue to capture superior risk-adjusted gains via our loan
portfolio and ancillary investing activities. Given the comprehensive nature of our strategy, we
believe an investment with Adagio will best appreciate over a 60-month time horizon.
The Manager currently has approximately $24MM AUM allocated amongst five investors as
follows: three HNWI, one private firm, and one public entity. Historically, the Manager’s primary
area of focus has been the residential income markets of Northwest Florida’s (South Walton & Bay
County) New Urban communities and the Tri-County area of South Florida (Miami-Dade, Broward,
Palm Beach) because of their appeal as global destinations and abundance of investment
opportunities. While these markets are beginning to peak, new opportunities remain in the
markets of Tampa, FL, Jacksonville, FL, Pittsburgh, PA and Cleveland, OH based upon unique local
factors. Across single family markets, comparable sales values begin to diverge from respective
rental income at list prices of approximately $70k. The median property value of the Fund’s
portfolio is $194k with the average value being $260k; the Fund’s corresponding median and
mean bases are $124k and $171k, respectively. To offset risk associated with the illiquid nature of
real estate assets, the Fund proactively manages a low-risk, multi-asset class portfolio of liquid
securities through Morgan Stanley that accounts for a minimum of 15% of the Fund’s NAV at all
times. In anticipation of imminent market corrections, the Fund’s portfolio of liquid securities will be
further moved into cash and increase to above 25% of NAV from the 15% minimum.
Under our structure, ABL financing and REO management is performed via Adagio ABL, LLC, a
subsidiary pass-through entity wholly-owned by Adagio, LLC and its investors. The Fund is valued
on a quarterly basis and audited annually by a reputable national accounting firm.
28
Investment Overview (cont.)
Tentative Offering Terms
For detailed investment terms, consult your Private Placement Memorandum or Adagio representative.
Class A Membership Units (“Preferred Shares”)
Quarterly subscriptions with initial lock-up period of 60 months. Cumulative, non-convertible and nonparticipating with 7% annual coupon (preferred return) paid quarterly.
Class B Membership Units (“Common Shares“)
Quarterly subscriptions with initial lock-up period of 60 months. Net 70/30 terms with 7% threshold
calculated against high-water mark (no management fee).
Direct Mortgage Lending
In lieu of passive investment, active investors can lend directly to Adagio ABL, LLC via low-LTV first
mortgages on either a loan-by-loan basis or via a mortgage line of credit. All funds can be secured in
real time. A minimum investment of $50,000 yields an 7% fixed return for up to a 24 month term.
Additional information can be found at our Mortgage Line of Credit Term Sheet
(www.theadagiogroup.com/investors/Lender_Term_Sheet.pdf).
29
Professional Profiles
Benjamin D. Summers, Managing Director & Founder
Recognizing the strengths of real estate as an investment vehicle, Ben founded Adagio in 2005 on the unique
investment strategies he developed to mitigate risk and capture value appreciation in the residential income
market. In addition to real estate, Ben has significant senior management experience within the energy services
sector managing large-scale infrastructure development projects in Africa and developing global markets for
innovative drilling technologies. Throughout his energy services tenure, Ben achieved high profit margins while
managing up to half-billion dollar budgets. His move into the energy services arena was preceded by a
professional baseball career begun via the San Diego Padres organization.
Ben graduated from Louisiana State University with a Bachelor of Science degree in physics, having studied
music (theory & composition / piano performance) as a second discipline.
Joseph A. Maiullo IV, Executive Director
Joe has over nine years of Wall Street experience at firms including Morgan Stanley and UBS. In addition to his
role at Adagio, Joe maintains his position at Morgan Stanley working closely with institutional clients and ultra high
net worth families in coordinating investments across all asset classes, including alternative investments;
additionally, Joe advises middle market institutional clients providing equity sales coverage. Prior to Morgan
Stanley, Joe worked in middle markets at UBS advising both institutions and ultra high net worth families.
Joe graduated from Michigan State University with a Bachelor of Arts degree in interdisciplinary studies in
economics. Joe currently serves as Vice President of Finance for the Michigan Epsilon Alumni Volunteer
Corporation, a civic board promoting alumni volunteer efforts of Sigma Phi Epsilon. 30
Professional Profiles (cont.)
Ilir "Lidi" M. Hajdari, Director
As a Director, Lidi manages the development and expansion of Adagio's physical crude oil and refined products
business. He is responsible for deal origination, commercial operations and overall commodities trade strategies.
With over seven years of financial services and commodities business experience, Lidi has a breadth of expertise
leading complex initiatives involving risk management, contract negotiation and structured transactions.
Lidi is also a co-founder and current managing partner of Merchant Power Partners, LLC ("MPP"), an energy
advisory firm that specializes in restructurings and asset optimization in the power generation sector. Prior to MPP,
Lidi began his career with Newbridge International, Inc., a commodities trading firm/broker-dealer, leading the
firm's transition from its traditional lines of business into energy advisory. In this role, he helped develop the
company's expertise and strategy positioning it to participate in the entire life-cycle of Natural Gas Combined
Cycle ("NGCC") power plant projects, from capital formation and financial structuring through execution.
Lidi graduated from the University of Colorado at Boulder with a Bachelor of Science degree in economics and a
minor in business.
Karl R. Moore, Financial Consultant
Prior to joining Adagio, Karl worked for the half-billion dollar alternative asset management firm Summit Private
Investments (SPI). There, Karl worked closely with the firm’s principals to manage the risk/reward profile of the
portfolio. He began his career in financial services with UBS. At UBS, he advised private clients and institutions
regarding their respective portfolios. Before his move to investment management, he served as a consulting
attorney to multiple publicly traded companies during securities-related investigations and litigation.
Karl received his Juris Doctorate from Vanderbilt University and his B.S. in Business Administration, summa cum
laude, from Mississippi College. 31
Contact Information
If you would like more information, please contact us:
ADAGIO GROUP
5100 Westheimer Rd, Ste 115
Houston, Texas 77056
Office: +1 (832) 356-0775
Fax:
+1 (954) 229-2223
www.theadagiogroup.com
Contact Benjamin D. Summers directly via email at:
[email protected]
Contact Joseph A. Maiullo IV directly via email at:
[email protected]
32
General Disclosures
Risk Management
Risk management is primarily performed by the investment team. The first, and most important, step in risk
management is the granular analysis performed before making any investment. On a regular basis, multiple
stress scenarios are performed across each asset and the overall portfolio. Portfolio risk metrics are monitored
daily, including concentrations, gross leverage, net exposure and counterparty risk.
General Hedge Fund Risk Factors
Fees and Expenses
The Fund may have higher fees and expenses than other investment vehicles, and such fees and expenses
could have an impact on the level of returns. Due to the nature of real estate transactions and their frequency,
the Fund may incur higher fees and other transaction costs than other investment vehicles. The performance
reallocation of the net profits to the Fund Manager may create an incentive for the Fund Manager to make
investments that are riskier or more speculative than would be the case absent such arrangement.
General Investment Risk
All securities investments risk the loss of capital. The nature of the securities to be purchased and traded by the
Fund and the investment techniques and strategies to be employed by the Fund Manager may increase this risk.
Investors could lose all or a substantial amount of their investment.
Illiquidity
The trading of interests in the Fund may be highly illiquid. There is no secondary market for hedge funs, and there
may be restrictions on assigning or otherwise transferring investments in the Fund without the approval of the
Fund Manager. Investors may have to put their capital at risk for an indefinite period of time.
33
General Disclosures (cont.)
Leverage
The Fund may use leverage. Leverage can magnify the gains and losses and the volatility of returns in the
portfolio. If the interest expense on borrowings were to exceed the net return on the portfolio assets purchased
with borrowed funds, the Fund’s use of leverage would result in a lower rate of return than otherwise.
Absence of Regulatory Oversight
Private funds are not registered under the Investment Company Act and, accordingly, investors will be be
afforded the protections of the Investment Company Act.
Taxes
The Fund may involve complex tax structures and delays in distributing important tax information to investors.
Lack of Transparency
Alternative Investments typically are not required to provide periodic pricing or valuation information to investors.
These and other specific investment risks and conflicts of interest are more fully disclosed in the Private
Placement Memorandum.
Absence of Regulatory Oversight
Private funds are not registered under the Investment Company Act and, accordingly, investors will be be
afforded the protections of the Investment Company Act.
34
General Presentation Notes
No Liability for Accuracy
Certain data and information in this presentation are based primarily upon information provided by third parties.
The Manager has assumed the accuracy of such material. The Manager shall not be liable in any way for claims
relating to these materials and makes no express or implied representations or warranties as to their accuracy or
completeness or for the statements or errors contained herein, or omissions from, them. The Manager does not
undertake to advise you of changes in the information contained herein.
Informational Purposes
These materials are solely for informational and discussion purposes, and are not to be reproduced or distributed.
This presentation shall not constitute an offer to sell or the solicitation of an offer to buy interests in the Fund. Any
offering of interests by the Fund will be made solely pursuant to its Private Placement Memorandum and related
documentation.
Investor Suitability
An investment in the Fund may not be suitable for your specific circumstances. Accordingly, you should consult
you own tax, legal or other advisors to determine such suitability.
Conflicts of Interest
The Manager has or may have affiliates that engage in a broad spectrum of activities. Certain affiliates of the
Manager may provide brokerage and other services from time to time to the Manager. These relationships may
result in the Manager receiving commissions and other fees in consideration for such services and may
consequently present an actual or potential conflict of interest with those of investors in the Fund.
Non-reliance
Prospective investors should not rely on all or part of these materials or any other information that is not
contained in the related Private Placement Memorandum in making any investment decision.
35