Alternative Investment Group

Weekly Update

15 January 2010

New fund launches

Jupiter Absolute Return Fund

The Jupiter Absolute Return Fund was launched Dec. 14, 2009 with assets of £250m. This is the UCITS III
version of the Hyde Park Fund, which was launched in February 2000. Both products are run by Phillip Gibbs
who focuses on European financials and stocks. While the UCITS III version is similar, the portfolio
constraints are tighter than for the Offshore Fund. Liquidity is daily and the fees are 1.25% and 15%.

PF Moore, Ltd.

PF Moore is a European Equity Long/ Short Fund launched on Dec. 1, 2009 and it is part of the Moore
Capital platform. The Fund is run by Paul Findley who previously managed the Threadneedle UK Crescendo
Fund for seven years. During his tenure with the Fund, asset size peaked at $1b. He generated an
annualised return of 16% with a volatility of 7%. His co-Portfolio Manager is Steve Hewitt, who is also from
Threadneedle. The Fund pursues a bottom up, fundamentally driven research process with a bias towards
the short book when market conditions dictate. The liquidity terms are monthly with 60 days notice and the
fees are 2% and 20%.

RWC Biltmore Fund

The RWC Biltmore Fund was launched Oct. 1, 2009 and is managed by Mike Corcell, who previously ran the
Threadneedle US Crescendo Fund for five years. The Biltmore Fund follows a Long/ Short US large cap
strategy running along the same lines as the manager's previous fund, which generated an annual return of
19.1% and a Sharpe ratio of 1.9 during his tenure. The Fund’s AUM are $276m and the redemption terms
are monthly with 30 days notice. Management and performance fees are 1.5% and 20%. The group also
launched a UCITS version of the Fund on Oct. 1, which follows the same strategy. This product has AUM of
$251m and offers daily liquidity/pricing. The Fund has a hurdle of Euribor with a fee structure of 2% and 20%.

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Weekly Update

Re-Openings / New Ideas / Other

Silver Point Capital Offshore

Silver Point is a long biased credit/distressed fund that was launched in 2002 by former Goldman Sachs
partners Ed Mule and Bob O’Shea. Following a difficult 2008 the Managers have refocused the portfolio on
more liquid investments and created side pockets for existing illiquid holdings. New investors will not
participate in the side pockets. The Fund now offers liquidity terms of annual rolling liquidity with a 15%
quarterly fund level gate. The Fund rebounded approximately 40% in 2009 and has generated annualized
returns since inception of 11.40% with volatility of 9.75%. The fees are 2% and 20%.

Two Sigma Compass

Two Sigma was founded in 2001 by David Siegel and Mark Pickard from Tudor and John Overdeck from D.E.
Shaw. The Compass Fund is the latest product offering from the Group which provides access to Two
Sigma’s Futures and FX strategies, which have been traded as a subset of the Two Sigma Eclipse and Two
Sigma Spectrum funds. The Fund offers two versions, a Standard product targeting 15% volatility and an
Enhanced version which is run at two times leverage and targets 30% volatility. The terms are monthly with
15 days notice and the fees are standard at 2% and 20%.

Prologue Capital

Prologue is a global fixed income relative value fund which was launched in late 2005. There are two main
partners, David Lofthouse and Graham Walsh, supported by a staff of 20 professionals. The team trades
liquid government bonds, predominantly in the United States. The Manager offers quarterly liquidity with 80
days notice; in addition, a maximum of 25% of holdings may be redeemed on a monthly basis with a
minimum of 45 days notice. This 25% is available over a six month period commencing on January 1 and
July 1, and is computed based on each shareholding/partnership interest at these dates.. There is a soft lock,
with a redemption fee of 2% if a holding is redeemed in the first 12 months. Other fees include a
management fee of 2%, and a performance fee of 20%, which is taken quarterly subject to a high water mark.

Artha Emerging Markets Fund

Artha Capital Management was established in May 2002 by former Morgan Stanley long only EM managers
Jaideep Khanna and Michael Schwabe. The Fund is an Emerging Market Equity Fund that invests across the
emerging market countries including China, India, Mexico, Brazil, South Africa and Russia. The Fund’s
approach is both top down and bottom up, focused on fundamental research. They have annualized 17%
since inception with 10% volatility. The terms of the Fund are Quarterly with 60 days notice. New
investments are subject to a one year soft lock-up with a 3% fee. The Fund reserves the right to impose a
25% fund level gate. The management and incentive fees are 2% and 20%.

Pershing Square International

The Fund opened a new share class in June 2009, which offers investors quarterly liquidity upon 65 days
notice, subject to a 12.5% investor level gate. Pershing Square is a global equity event-driven activist fund.
The Fund’s founder, Bill Ackman, employs a strategy that involves building stakes in companies and then
using those stakes to influence companies to make decisions that allow the fund to reap high gains. The fees
are 1.5% and 20%.

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Weekly Update

CQS ABS Feeder Fund

The terms of the CQS ABS Fund will change as of Jan 1, 2010. The new terms will be Quarterly with 90 days
notice and a one year soft lock with a 4% fee for early redemptions within the first year. The fees remain 2%
and 20%. The ABS fund was launched in late 2006. AUM at launch were $60m, as of October 2009 the
Fund has AUM of $487m. The Portfolio Managers, Alistair Lumsden and Steve Swallow, invest through a
fundamental and quantitative framework in asset backed securities.

Occam Global Emerging Markets UCITS III Fund

Occam Asset Management was founded in 2007 by Jonathan Hughes Morgan and David Shepperd.
Jonathan was formerly director and co-founder of Thames River Capital and David was previously head of
pan-European sales and trading at SG Corporate & Investment Banking. The company is managing $300m,
including $100m in this UCITS compliant fund. The Emerging Markets team is led by Eoghan Flanagan, who
was co-founder of the Thames River Nevsky Fund. The Fund is an emerging markets long/short equity
strategy, investing mainly in large caps across the emerging markets. The Fund has a discretionary one year
soft lock subject to a 3% fee; otherwise they provide daily liquidity with one business day notice. Fees are
1.75% and 20%.

Pacific Alliance Asia Opportunity Feeder Fund II

The Pacific Alliance Group was founded by Chris Gradel and Horst Geicke in 2002. The Fund is a Pan-Asia
Fund, although it is biased towards Greater China, which invests in distressed, special situations and
arbitrage strategies. Currently the Fund is managing $1.2Bn. The strategy and geographic mix of
investments will vary over time depending on the relative attractiveness of opportunities. Given the nature of
the universe the Fund is predominantly long-only and has historically used little or no leverage. New
investments are subject to a 1-year hard lock after which redemptions can be made on a quarterly basis with
6-months notice. There is a 12.5% quarterly gate and the fees are 2% and 20%.

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Weekly Update

Recent due diligence

Funds Principal Strategy

Adelante Exotic Debt Fund
BlueBay Structured Funds: High Income Loan
Fund
Global Emerging Mkt Distressed
Julian Adams / Pernilla Wilson-Rosell
Sovereign Long Only
Europe Fixed Income Credit Long
Anthony Robertson
Bias Leveraged Loa

FrontPoint Offshore Healthcare Fund 2X LP Nolan Olsen US Equity Healthcare

Moore Foreign Exchange Fund Soraya Chabarek Global Macro

Pensato Europa Fund Graham Clapp Europe Equity Long/Short

Redwood Offshore Fund, Ltd. Jonathan Kolatch US Fixed Income Distressed

Silver Point Capital Offshore Fund, Ltd. Edward Mule Global Credit Multi-Strategy

Tewksbury Investment Fund Ltd Matthew Tewksbury Global Managed Futures

TPG-Axon Partners (Offshore), Ltd. Dinakar Singh Global Equity Long/Short

Trafalgar Catalyst Fund Theo Phanos / Lee Robinson Europe Event Driven

Tudor Tensor Fund Limited Ltd Steven Evans Global Managed Futures

Veritas China Fund Ezra Sun China Equity Long/Short

Viking Long Fund III Ltd. Andreas Halvorsen Global Equity Long Only

Tim Rudderow / Paul De Rosa / Roger

Peak Partners Offshore Fund Ltd Global Macro
Alcaly

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Weekly Update

Notable Performances

DECEMBER

Investment Fund Value Date MTD YTD

YORK INVESTMENT LTD -CLASS A/1 31-Dec-09 6.54% 44.90%
MOORE EMERGING MARKET FUND , LTD - A 31-Dec-09 4.62% 20.26%
RUSSIAN PROSPERITY FUND - A 31-Dec-09 4.60% 195.18%
PAULSON CREDIT OPPORTUNITIES LTD 31-Dec-09 4.50% 34.06%
CASTLEROCK FUND LT D 31-Dec-09 4.47% 20.40%
MOORE GLOBAL INV FD, LTD - A $ 31-Dec-09 4.31% 22.08%
SR GLOBAL FUND B - ASIA (Real Perf) 31-Dec-09 3.20% 32.72%
PLATINUM FUND LTD 31-Dec-09 2.79% 37.86%
SR GLOBAL FUND G - EMERGING MKTS (Real Perf) 31-Dec-09 2.60% 49.93%
PAULSON ENHANCED LTD 31-Dec-09 2.58% 12.83%
OW L CREEK OVERSEAS FUND , LTD 31-Dec-09 2.50% 20.66%
MAVERICK FUND, LTD - CLASS A/1 31-Dec-09 1.85% 24.22%
HALCYON OFFSHORE ASSET-BACKED VALUE FUND LIMITED 31-Dec-09 1.64% 23.39%
CQS DIVERSIFIED FUND (SPC) LTD 31-Dec-09 1.37% 24.83%
PAULSON IN TERNATIONAL, LTD 31-Dec-09 1.35% 6.24%
DAVIDSON KEMPNER DIST. OPP. INT. LTD - A - 15-Dec-09 1.19% 45.24%
ELLERSTON GEMS - CLASS A 31-Dec-09 1.13% -3.70%
SR PHOENICIA INC CLASS -A- SERIES 1 31-Dec-09 1.10% 30.85%
GEOSPHERE FUND, LTD 31-Dec-09 1.00% 10.02%
PAULSON ADVANTAGE PLUS LTD 31-Dec-09 0.51% 21.30%
ELLERSTON ASIA PACIFIC FUN D 31-Dec-09 0.45% 5.09%
BRIGADE LEVERAGED CAPITAL STRUCTURES FUND 31-Dec-09 0.42% 39.68%
BREVAN HOWARD ASIA FUND LIMITED 31-Dec-09 0.39% 6.69%
BREVAN HOWARD FUND, LTD - USD CLASS A 31-Dec-09 0.34% 18.60%
MKP OFFSHORE CREDIT FUND 31-Dec-09 0.30% 16.98%
PAULSON ADVANTAGE LTD -A- 31-Dec-09 0.23% 13.57%
KING STREET EUROPE LT D 31-Dec-09 0.20% 9.41%
JUPITER HYDE PARK HEDGE FUND, LTD 31-Dec-09 0.17% 1.88%
SR GLOBAL FUND H - JAPAN (Real Perf) 31-Dec-09 0.10% -18.52%
MOORE MACRO MANAGERS FUND, LTD CLASS -A- 31-Dec-09 -0.39% 16.81%
TUDOR B.V.I GLOBAL FUND LTD -A- 31-Dec-09 -0.63% 15.36%
SR GLOBAL FUND C - INTERNATIONAL (Real Perf) 31-Dec-09 -1.30% 3.28%
BREVAN HOWARD EM. MKT STRATEGIES FUND LTD 31-Dec-09 -1.33% 24.95%
DEEPHAVEN GLOBAL M/S FUND LTD CL A1 S-N-09/96 21-Dec-09 -1.45% 8.96%

Hedge fund performances are reported net of fees, except in certain cases where they are reported
gross of fees by the investment manager.

Source: Administrators

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 Alternative Investment Group
Weekly Update

FINANCIAL MARKETS 15-Jan-10

US Equities
Jan Dec QTD YTD 2009
S&P 500 SPX Index 3.0% 1.8% 3.0% 3.0% 23.5%
Nasdaq CCMP Index 2.1% 5.8% 2.1% 2.1% 43.9%
Russell 2000 RTY Index 3.4% 7.9% 3.4% 3.4% 25.2%

Global Equities
Jan Dec QTD YTD 2009
MSCI World MSELACWF Index 2.4% 3.6% 2.4% 2.4% 26.2%
MSCI Europe GDDLE15 Index 1.7% 4.9% 1.7% 1.7% 28.6%
FTSE 100 UKX Index 1.7% 4.3% 1.7% 1.7% 22.1%
CAC CAC Index 1.5% 7.0% 1.5% 1.5% 22.3%
DAX DAX Index -0.3% 5.9% -0.3% -0.3% 23.8%
Topix TPX Index 6.5% 8.1% 6.5% 6.5% 5.6%
MSCI Asia Pacific Free (ex Japan) MSELC APF Index 0.6% 4.1% 0.6% 0.6% 53.9%
MSCI Emerging MSELEGF Index 1.4% 4.0% 1.4% 1.4% 58.6%

Sectors (MSCI AC World)

Jan Dec QTD YTD 2009
Consumer Discretionary MSCLCDIS Index 2.2% 6.6% 2.2% 2.2% 38.4%
Consumer Staples MSCLCSTA Index 0.9% 2.6% 0.9% 0.9% 16.7%
Energy MSCLENR Index 3.0% 2.0% 3.0% 3.0% 21.8%
Financials MSCLFNCL Index 2.8% 1.0% 2.8% 2.8% 26.3%
Health Care MSCLHC Index 2.8% 3.6% 2.8% 2.8% 15.0%
Industrial MSCLIND Index 5.1% 4.4% 5.1% 5.1% 23.0%
Information Technolgy MSCLIT Index 1.7% 7.3% 1.7% 1.7% 54.5%
Materials MSCLMAT Index 3.5% 4.6% 3.5% 3.5% 52.1%
Telecom MSCLTEL Index -1.3% 2.8% -1.3% -1.3% 6.7%
Utility Sector MSCLUTI Index 0.7% 5.3% 0.7% 0.7% 2.3%

Style
Jan Dec QTD YTD 2009
S&P 500 - Value IVX Index 3.9% 1.6% 3.9% 3.9% 17.4%
S&P 500 - Growth IGX Index 2.1% 2.0% 2.1% 2.1% 29.3%
MSCI Europe - Value GDLVE15 Index 1.7% 4.8% 1.7% 1.7% 30.9%
MSCI Europe - Growth GDLGE15 Index 1.7% 5.0% 1.7% 1.7% 26.3%

Equity Volatility
Jan Dec QTD YTD 2009
CBOE OEX Volatility Index VIX Index -18.7% -11.5% -18.7% -18.7% -45.8%
CBOE NDX Volatility Index VXN Index -15.9% -12.5% -15.9% -15.9% -46.9%
DAX Implied Volatility Index VDAX Index -8.2% -19.6% -8.2% -8.2% -44.9%

Currencies
Jan Dec QTD YTD 2009
Euro EUR Curncy 0.3% -4.6% 0.3% 0.3% 2.5%
Japanese Yen JPY Curncy -2.2% 7.6% -2.2% -2.2% 2.6%
British Pound GBP Curncy 0.8% -1.6% 0.8% 0.8% 10.8%
US Trade-Weighted Dollar Index (Fed) USTW$ Index -0.5% 3.0% -0.5% -0.5% -5.9%

Fixed Income
Jan Dec QTD YTD 2009
Citigroup WGBI All Maturities SBWGL Index 0.2% -1.0% 0.2% 0.2% 1.0%
JPM EMBI Global Diversified JPEIGLBL Index 1.1% 0.3% 1.1% 1.1% 28.2%
ML - US Treasury / Agency Master G0A0 Index 0.7% -2.3% 0.7% 0.7% -2.6%
ML - US Corporate Master Index C0A0 Index 1.6% -1.0% 1.6% 1.6% 19.8%
ML - US High Yield Master II Index H0A0 Index 2.3% 3.1% 2.3% 2.3% 57.5%
ML - US High Yield C Rated Index H0A3 Index 3.9% 5.7% 3.9% 3.9% 96.8%
ML - US Mortgage Master Index M0A0 Index 0.9% -1.5% 0.9% 0.9% 5.8%

Comm odities
Jan Dec QTD YTD 2009
Goldman Sachs Commodity Index SPGSCITR Index -0.6% 0.9% -0.6% -0.6% 13.5%
WTI Crude Oil CL1 Comdty -0.7% 2.7% -0.7% -0.7% 77.9%
Natural Gas NG1 Comdty 1.2% 14.9% 1.2% 1.2% -0.9%
Gold GOLDS Comdty 3.4% -7.0% 3.4% 3.4% 24.4%
Copper HG1 Comdty 1.5% 5.7% 1.5% 1.5% 138.5%
Wheat W 1 Comdty -3.3% -4.6% -3.3% -3.3% -11.3%
Soybeans S 1 Comdty -5.3% -2.0% -5.3% -5.3% 6.9%

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Weekly Update

HEDGE FUNDS Dec-09

Hedge Fund Research Indices
Dec Nov QTD YTD 2008
Fund W eighted HFRIFWI Index 1.3% 1.6% 2.7% 20.0% -19.0%
Fund of Funds HFRIFOF Index 0.4% 0.9% 1.2% 11.2% -21.4%
Convertible Arbitrage HFRICAI Index 1.7% 1.0% 3.4% 58.4% -33.7%
Distressed HFRIDSI Index 3.4% 1.5% 6.5% 29.2% -25.2%
Emerging Markets: Total HFRIEM Index 1.8% 1.5% 4.5% 40.3% -37.3%
Equity Hedge HFRIEHI Index 2.4% 1.6% 3.3% 25.1% -26.7%
Equity Market Neutral HFRIEMNI Index 0.7% -0.1% 0.5% 1.8% -5.9%
Equity Non-Hedge HFRIENHI Index 3.2% 1.9% 4.2% 16.2% -22.9%
Event Driven HFRIEDI Index 3.2% 1.1% 5.0% 26.0% -21.8%
Fixed Income: Total HFRIFI Index 2.2% 0.2% 3.1% 24.7% -20.3%
Macro HFRIMI Index -1.6% 2.2% 0.0% 4.0% 4.8%
Market Timing HFRIMTI Index -3.5% 3.4% -2.0% -2.4% 18.1%
Merger Arbitrage HFRIMAI Index 1.1% 0.5% 2.0% 11.6% -5.4%
Reg 'D' HFRIREGD Index 3.5% -0.9% 2.5% 0.6% -10.1%
Relative Value Arbitrage HFRIRVA Index 2.0% 0.7% 4.0% 25.8% -18.0%
Short Selling HFRISHSE Index -4.1% -2.3% -2.8% -23.5% 28.4%
Fixed Income: High Yield HFRIFIHY Index 1.7% 1.0% 4.4% 31.0% -24.2%
Fixed Income: Mortgage Backed HFRIFIMB Index 3.7% 1.0% 7.9% 26.3% -3.4%
Sector: Energy HFRISEN Index 3.2% 2.6% 5.9% 40.6% -38.3%
Sector: Real Estate HFRISRE Index 2.0% 0.9% 4.3% 23.8% -25.7%
Sector: Technology HFRISTI Index 3.4% 2.7% 5.1% 27.0% -16.7%
Emerging Markets: Asia HFRIEMA Index 1.7% 2.2% 4.2% 36.8% -33.5%
Emerging Markets: E. Europe/CIS HFRICIS Index 1.0% 1.4% 5.9% 51.1% -59.4%
Emerging Markets: Global HFRIEMG Index 2.5% 0.6% 3.7% 35.4% -30.9%
Emerging Markets: Latin America HFRIEMLA Index 2.4% 2.8% 7.0% 47.9% -29.0%

CSFB Hedge Fund Indices

Dec Nov QTD YTD 2008
Hedge Fund Index HEDGNAV Index n/a 2.1% 2.2% 17.5% -19.1%
Convertible Arbitrage HEDGCONV Index n/a 0.8% 3.0% 44.1% -31.6%
Emerging Markets HEDGEMGM Index n/a 1.4% 2.3% 27.5% -30.4%
Event Driven HEDGDRIV Index n/a 2.2% 2.6% 17.7% -17.7%
Fixed Income Arbitrage HEDGFIAR Index n/a 1.7% 3.7% 26.4% -28.8%
Global Macro HEDGGLMA Index n/a 3.5% 3.7% 13.2% -4.6%
Long/Short Equity HEDGLSEQ Index n/a 1.9% 0.7% 17.5% -19.8%
Managed Futures HEDGFUTR Index n/a 4.9% 2.7% -1.7% 18.3%
Market Neutral HEDGNEUT Index n/a 0.1% -0.3% 5.0% -40.3%
Short Bias HEDGDEDS Index n/a -3.0% 1.6% -21.7% 14.9%

HSBC Management (Guernsey) Limited Products

Dec Nov QTD YTD 2008
Multi-Adviser Arbitrage Fund REPMAAI Equity n/a 0.7% 1.1% 13.8% -24.4%
GH Fund REPGHED Equity n/a 0.9% 0.9% 11.8% -16.6%
Global Absolute Ltd. (USD) HSGU LN Equity n/a 1.0% 1.5% 13.1% -16.0%
Asian Advantedge Fund REPASAA Equity n/a -0.1% 0.3% 11.9% -24.2%
European AdvantEdge Fund (Euro) HSBCREE Equity n/a -0.2% 0.4% 16.5% -19.2%
Emerging Advantedge REPEMHA Equity n/a 0.6% 0.2% 18.1% -32.2%
Trading Advantedge HSBTRAD GU Equity n/a 2.8% 0.5% -2.9% 12.8%
Special Opportunity Fund (USD) HSBCSOD GU Equity n/a 0.0% 4.2% 20.9% -29.9%
Real AdvantEdge (Euro) HSBRAEU GU Equity n/a -0.4% -0.5% -0.5% -1.3%

Source: Bloomberg

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Weekly Update

Disclaimer

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