dms ucits platform fund - draft prospectus - 28 october 2015 … · 2016. 7. 25. · they do not...

PROSPECTUS

DMS UCITS Platform FundFonds Commun de Placement

(A mutual investment fund organized under the laws of the Grand Duchy of Luxembourg)

Dated January 2016

VISA 2016/101938-8729-0-PCL'apposition du visa ne peut en aucun cas servird'argument de publicitéLuxembourg, le 2016-02-01Commission de Surveillance du Secteur Financier

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IMPORTANT INFORMATION

The Fund is a mutual investment fund (“fonds commun de placement”) organized under the laws of theGrand Duchy of Luxembourg as an umbrella fund with one or more Sub-Funds. It is an unincorporatedco-proprietorship of its assets, managed in the interest of the Unitholders by the Management Company.

The assets of the Fund and of each Sub-Fund, which are held in custody by the Depositary, aresegregated from those of the Management Company. The Fund is organized pursuant to part I of theLaw of 2010.

Authorization does not imply approval by any Luxembourg authority of the contents of this Prospectusor the portfolio of securities held by the Fund. Any representation to the contrary is unauthorized andunlawful.

The Units are currently not listed on any stock exchange; however, the Management Company reservesthe right to list the Units of a Sub-Fund in the future if it considers it to be in the best interest of thatSub-Fund.

The Management Company accepts responsibility for the information contained in this Prospectus. Tothe best of the knowledge and belief of the Management Company (who has taken all reasonable careto ensure that such is the case) the information contained in this Prospectus is in accordance with thefacts and does not omit anything likely to affect the import of such information. The ManagementCompany accepts responsibility accordingly.

The Units represent undivided interests solely in the assets of the Fund. They do not represent interestsin or obligations of, and are not guaranteed by any government, the Depositary, the ManagementCompany (as defined hereinafter) or any other person or entity except as more fully described below.

The distribution of this Prospectus and the offering of the Units in certain jurisdictions may be restricted.Persons into whose possession this Prospectus comes are required to inform themselves about and toobserve any such restrictions. Potential subscribers or purchasers of Units should also informthemselves as to the possible tax consequences, the legal requirements and any foreign exchangerestrictions or exchange control requirements which they might encounter under the laws of thecountries of their citizenship, residence or domicile and which might be relevant to the subscription,purchase, holding or sale of Units. This Prospectus does not constitute (and may not be used for thepurpose of) an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation isnot authorized or to any person to whom it is unlawful to make such offer or solicitation.

The most recent annual and semi-annual reports of the Fund will be available at the registered office ofthe Management Company and of the Administrator and will be sent to investors upon request. ThisProspectus and the KIIDs can also be obtained from the registered office of the Management Company.

Statements made in this Prospectus are, except where otherwise stated, based on the law and practicecurrently in force in Luxembourg and are subject to changes therein.

This Prospectus may be translated into other languages. Any such translation shall only contain thesame information and have the same meaning as the English language Prospectus. To the extent thatthere is any inconsistency between the English language Prospectus and the Prospectus in anotherlanguage, the English language will prevail, except to the extent (but only to the extent) required by thelaws of any jurisdiction including the regulations or requirements of the financial regulator of suchjurisdiction where the Units are sold, that in any action based upon disclosure in the Prospectus in alanguage other than English, the language of the Prospectus on which such action is based shall prevail.

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The Units have not been, and will not be, registered under the 1933 Act, or qualified under anyapplicable state statutes, and the Units may not be offered, sold or transferred in the United States or toor for the benefit of, directly or indirectly, any U.S. Person, except pursuant to registration or anexemption. The Fund is not, and will not be, registered under the 1940 Act, and investors will not beentitled to the benefit of such registration.

The Units have not been approved or disapproved by the United States Securities and ExchangeCommission, any state securities commission or other U.S. regulatory authority, nor have any of theforegoing authorities passed upon or endorsed the merits of this offering or the accuracy or adequacyof these offering materials. Any representation to the contrary is unlawful.

The Units are subject to restrictions on transferability and resale. Units of certain Sub-Funds may notbe sold, transferred or resold in the United States if explicitly stated in the relevant Supplement. Eachperson subscribing for Units must agree that the Management Company may reject, accept or conditionany proposed transfer or assignment of those Units.

If it comes to the attention of the Management Company at any time that a U.S. Person unauthorizedby the Management Company, either alone or in conjunction with any other person, owns Units, theManagement Company may compulsorily redeem such Units. No person has been authorized to giveany information or to make any representations, other than those contained in this Prospectus, inconnection with the offering of Units and, if given or made, such information or representations mustnot be relied on as having been authorized by the Management Company. Neither the delivery of thisProspectus nor the allotment or issue of Units shall, under any circumstances, create any implicationthat there has been no change in the affairs of the Fund since the date hereof.

Any further distribution or reproduction of this Prospectus, in whole or in part, or the divulgence of anyof its contents, is prohibited. A prospective investor should not subscribe for Units unless satisfied thathe and/or his investment representative have asked for and received all information which would enablehim to evaluate the merits and risks of the proposed investment.

No representations or warranties of any kind are intended or should be inferred with respect to theeconomic return or the tax consequences from an investment in the Fund. No assurance can be giventhat existing laws will not be changed or interpreted adversely. Prospective investors are not to construethis document as legal or tax advice. Each investor should consult his own counsel and accountant foradvice concerning the various legal, tax and economic considerations relating to his investment. Eachprospective investor is responsible for the fees of his own counsel, accountants and other advisers.

No information herein contained shall constitute advice to a proposed investor in respect of his personalposition. Any person interested in subscribing for Units should consult his professional advisers onmatters referred to in this Prospectus. Persons interested in subscribing for Units should informthemselves as to (a) the legal requirements within the countries of their nationality, residence ordomicile of such acquisition, (b) any foreign exchange restriction or exchange control requirementswhich they might encounter on the acquisition, holding, redemption or disposal of Units and (c) the taxconsequences which might be relevant to the acquisition, holding, redemption or disposal of Units inthe Fund.

Although the Fund or a Sub-Fund may be similar to one or more other investment vehicles or accountsadvised by the Management Company, a relevant Investment Manager or any of their affiliates, theFund and each Sub-Fund is managed as a separate vehicle with its own distinct investment objectives,policies, risks and expenses as explained in this Prospectus. The Fund or any Sub-Fund and any otherinvestment vehicle or account advised by the Management Company, a relevant Investment Manageror adviser will have different investment results, and information about those other investment vehiclesand accounts should not be assumed to apply to the Fund or any Sub-Fund.

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There can be no assurance that the Fund or any Sub-Fund will achieve its investment objective.The Funds’ and each Sub-Fund’s investments are subject to normal market fluctuations and therisks inherent in all investments and there can be no assurances that appreciation will occur. Itwill be the policy of the Fund and each Sub-Fund to maintain a diversified portfolio of investmentsso as to minimize risk. This Fund may not be suitable for investors who seek long-term capitalgrowth. The Fund and the Sub-Funds target prudent investors who aim to preserve the value ofthe capital and of its assets they have invested and obtain the highest possible return. Howeverthere can be no guarantee that the investor will get back all the capital invested becauseinvestments in this Fund are not guaranteed. Each prospective investor should carefully reviewthis Prospectus and carefully consider the risks before deciding to invest. The attention ofinvestors is also drawn to sections 27 and 26 in this Prospectus.

This Prospectus contains forward-looking statements, which provide current expectations or forecastsof future events. Words such as “may”, “expects”, “future” and “intends,” and similar expressions, mayidentify forward-looking statements, but the absence of these words does not mean that a statement isnot forward-looking. Forward-looking statements include statements about the Fund’s plans, objectives,expectations and intentions and other statements that are not historical facts. Forward-lookingstatements are subject to known and unknown risks and uncertainties and inaccurate assumptions thatcould cause actual results to differ materially from those expected or implied by the forward-lookingstatements. Prospective Unitholders should not unduly rely on these forward-looking statements, whichapply only as of the date of this Prospectus.

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CONTENTS

IMPORTANT INFORMATION ............................................................................................................2

CONTENTS............................................................................................................................................5

DIRECTORY..........................................................................................................................................7

DEFINITIONS........................................................................................................................................8

PART I .................................................................................................................................................13

1. THE FUND..............................................................................................................................13

2. MANAGEMENT OF THE FUND..........................................................................................13

3. DIRECTORS OF THE MANAGEMENT COMPANY..........................................................15

4. OTHER SERVICE PROVIDERS ...........................................................................................17

5. UNIT AND CLASS STRUCTURE.........................................................................................18

6. BASE CURRENCY.................................................................................................................18

7. INVESTMENT OBJECTIVE AND STRATEGY ..................................................................18

8. INVESTMENT RESTRICTIONS...........................................................................................19

9. RISK MANAGEMENT PROCESS ........................................................................................25

10. TECHNIQUES AND INSTRUMENTS..................................................................................25

11. DISTRIBUTION POLICY ......................................................................................................28

12. INVESTING IN THE FUND ..................................................................................................28

13. SUBSCRIPTIONS...................................................................................................................29

14. TRANSFERS...........................................................................................................................31

15. REDEMPTIONS .....................................................................................................................32

16. CONVERSION OF UNITS.....................................................................................................35

17. FEES AND EXPENSES..........................................................................................................36

18. DETERMINATION OF THE NET ASSET VALUE .............................................................37

19. SUSPENSION OF DETERMINATION OF THE NET ASSET VALUE..............................39

20. TAX CONSIDERATIONS......................................................................................................41

21. REPORTS AND FINANCIAL YEAR....................................................................................48

22. INVESTORS’ RIGHTS TOWARDS THE FUND .................................................................48

23. HISTORICAL PERFORMANCE ...........................................................................................48

24. DURATION, MERGER AND LIQUIDATION OF THE FUND, A SUB-FUND OR ACLASS.....................................................................................................................................48

25. GENERAL INFORMATION..................................................................................................50

26. CONFLICTS OF INTEREST..................................................................................................53

27. RISK FACTORS .....................................................................................................................54

PART II (SUB-FUND SPECIFIC SUPPLEMENT) ..........................................................................101

ARVEUS FUND (A SUB-FUND OF DMS UCITS PLATFORM FUND).......................................101

1. INVESTMENT MANAGER.................................................................................................101

2. PRIME BROKER ..................................................................................................................101

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3. CLASSES ..............................................................................................................................101

4. BASE CURRENCY...............................................................................................................102

5. INVESTMENT OBJECTIVE AND STRATEGY ................................................................102

6. GLOBAL EXPOSURE CALCULATION METHODOLOGY ............................................103

7. PROFILE OF A TYPICAL INVESTOR, DISTRIBUTION.................................................103

8. DETERMINATION OF THE NET ASSET VALUE ...........................................................104

9. SUBSCRIPTIONS.................................................................................................................104

10. REDEMPTIONS ...................................................................................................................105

11. SWITCHES ...........................................................................................................................106

12. FEES AND EXPENSES........................................................................................................106

13. SUB-FUND SPECIFIC RISKS .............................................................................................109

14. DISTRIBUTION/DIVIDEND POLICY................................................................................110

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DIRECTORY

Management Company

DMS Offshore Management Services (Europe) Limited25-28, North Wall Quay, Dublin 1Ireland

Directors of the Management Company

Derek Delaney – 25-28, North Wall Quay, Dublin 1, IrelandConor MacGuinness – 25-28, North Wall Quay, Dublin 1, IrelandTim Madigan – Apt. 69, Grand Canal Wharf, South Dock Road, Dublin 4, IrelandDavid McGeough – Cliff House, Killiney Hill Road, Killiney, IrelandJeremy O'Sullivan – 25-28, North Wall Quay, Dublin 1, Ireland

Depositary

ING Luxembourg S.A.52, route d’EschL-1470 LuxembourgGrand Duchy of Luxembourg

Administrator

SS&C GlobeOp (Luxembourg) SARL2, rue Jean MonnetL-1740 LuxembourgGrand Duchy of Luxembourg

Auditor

PricewaterhouseCoopers, société coopérative2, rue Gerhard MercatorL-2182 LuxembourgGrand Duchy of Luxembourg

Legal Advisors in Luxembourg

Dechert (Luxembourg) LLP1, Allée SchefferL-2520 LuxembourgGrand Duchy of Luxembourg

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DEFINITIONS

The following definitions apply throughout this Prospectus unless the context otherwise requires:

Administration CooperationDirective

Council Directive 2014/107/EU of 9 December 2014amending Directive 2011/16/EU as regards mandatoryautomatic exchange of information in the field of taxation;

Administrator SS&C GlobeOp (Luxembourg) SARL;

Administration Agreement the agreement entered into between the Administrator and theManagement Company;

Articles the articles of incorporation of the Management Company;

Base Currency the base currency of the Fund (being U.S. Dollar) or the basecurrency of each Sub-Fund and Class as specified in therelevant Supplement;

Board the board of directors of the Management Company includinga duly authorized committee thereof, if any;

Business Day a week day in Luxembourg other than New Year's Day, GoodFriday, Easter Monday, Christmas Eve, Christmas Day and theday following Christmas Day, unless otherwise provided in therelevant Supplement;

Calculation Day a Business Day on which the Net Asset Value per Unit iscalculated for the Fund, a Class and/or a Sub-Fund, as definedfor each Sub-Fund in Part II. The Management Company mayalso take into account whether relevant local stock exchangesand/or Eligible Markets are open for trading and settlement,and may elect to treat such closures as non-Calculation Daysfor Sub-Funds which invest a substantial amount of theirportfolio on these closed stock exchanges and/or EligibleMarkets. The Fund typically invests a substantial amount of itsportfolio on US equity and futures exchanges;

CHF or Swiss Francs the Swiss Franc, the lawful currency of Switzerland;

Circular 08/356 CSSF Circular 08/356 on the rules applicable to undertakingsfor collective investment when they employ certain techniquesand instruments relating to Transferable Securities and MoneyMarket Instruments, as amended;

Circular 14/592 CSSF Circular 14/592 on Guidelines of the EuropeanSecurities and Markets Authority (ESMA) on ETFs and otherUCITS issues;

Class or Classes one or more separate classes of Units of no par value in a Sub-Fund;

CRS Common Reporting Standard;

CSSF the Commission de Surveillance du Secteur Financier;

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Depositary ING Luxembourg S.A.;

Depositary Agreement the agreement made and entered into between the ManagementCompany and the Depositary;

DMS Group as defined under 2.1.

Eligible Market a regulated market as defined in the MiFID II Directive or anyother market established in the EEA or a G20 Member whichis regulated, operates regularly and is recognised and open tothe public;

ESMA the European Securities and Markets Authority (formerly theCommittee of European Securities Regulators);

ESMA Guidelines 10-049 CESR’s guidelines 10-049 dated 19 May 2010 on a commondefinition of European Money Market Funds, as amended;

ESMA Guidelines 10-788 CESR guidelines 10-788 dated 28 July 2010 on riskmeasurement and the calculation of global exposure andcounterparty Risk for UCITS, as amended;

ESMA Guidelines 2014/937 ESMA Guidelines and Recommendations 2014/937 dated1 August 2014 regarding Guidelines on ETFs and other UCITSissues, as amended;

EU the European Union;

EUR or Euro the Euro, the lawful currency of the Member States that arepart of the Euro Area;

Euro Area the monetary union of 19 of the 28 Member States which haveadopted the Euro as their common currency and sole legaltender;

EU Savings Directive the EU Savings Directive 2003/48/EC, as amended;

FATF the Financial Action Task Force established by the G-7Summit in Paris in July 1989 to examine measures to combatmoney laundering;

FATF State such country (as shall be reviewed and) deemed from time totime by the FATF to comply with the FATF regulations andcriteria necessary to become a member country of FATF andto have acceptable standards of anti

FDI a financial derivative instrument;

Fixed Income Instrument any type of investment under which the borrower/issuer isobliged to make payments of a fixed amount on a fixedschedule;

Fund DMS UCITS Platform Fund;

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G20 Members the Group of Twenty, i.e. the 19 member states (Argentina,Australia, Brazil, Canada, China, France, Germany, India,Indonesia, Italy, Japan, South Korea, Mexico, Russia, SaudiArabia, South Africa, Turkey, the United Kingdom and theUnited States) and the European Union that assemble in aninternational forum of governments and central bankgovernors of the members;

Grand Ducal Regulation of2008

the Grand-Ducal Regulation of 8 February 2008 relating tocertain definitions of the Law of 2010;

Initial Offering Period the date or period determined by the Management Companyduring which Units are offered for subscription at a fixed priceas shall be specified in the relevant Supplement;

Institutional Investor an institutional investor within the meaning of articles 174, 175and 176 of the Law of 2010;

Investment Manager the investment manager, duly appointed, in relation to arelevant Sub-Fund;

Investment ManagementAgreement

the agreement entered into between the Investment Managerand the Management Company;

KIID a key investor information document produced in respect ofeach Class;

Law of 2005 the Luxembourg law of 21 June 2005 implementing theEU Savings Directive in national legislation in Luxembourg,as may be amended from time to time;

Law of 2010 the Luxembourg law of 17 December 2010 relating toundertakings for collective investment, as may be amendedfrom time to time;

Management Company DMS Offshore Management Services (Europe) Limited;

Management Regulations the management regulations of the Fund;

Member State a member state of the EU from time to time;

Mémorial Mémorial C, Recueil des Sociétés et Associations;

MiFID II Directive Directive 2014/65/EU of the European Parliament and of theCouncil of 15 May 2014 on markets in financial instrumentsand amending Directive 2002/92/EC and Directive2011/61/EU, as amended;

Net Asset Value or NAV the value of the assets less liabilities attributable to the Fund, aSub-Fund, a Class or a Unit, as applicable, calculated inaccordance with the provisions of this Prospectus;

OECD the Organization for Economic Co-operation andDevelopment;

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OECD Member State a member state of the OECD;

Other UCI other UCIs within the meaning of article 1(2) a) and b) of theUCITS Directive;

Part I the general part of this Prospectus’ applicable to all Sub-Funds;

Part II the Supplements to Part I, each of which pertains only to aspecific Sub-Fund and which must, for purposes of the relevantSub-Fund, be read together with Part I;

Prospectus the prospectus of the Fund, comprised of Part I and therelevant Supplement in relation to the Sub-Fund in question;

RCSL Registre de Commerce et des Sociétés;

Redemption Price unless otherwise provided herein, the Net Asset Value perUnit of a Class, as specified in the relevant Supplement;

Sub-Fund a separate sub-fund established and maintained in respect ofone or more Classes to which the assets and liabilities andincome and expenditure attributable or allocated to each suchClass or Classes of Units will be applied or charged;

Subscription Price unless otherwise provided herein, the Net Asset Value perUnit for each Class;

Transferable Securities transferable securities within the meaning of the Law of 2010and the Grand Ducal Regulation of 2008;

Supplement a supplement to this Prospectus in which the name and thespecifications of each Sub-Fund and Class are described;

UCI an undertaking for collective investment, including UCITS;

UCITS an undertaking for collective investment in TransferableSecurities authorized pursuant to the UCITS Directive;

UCITS Directive Directive 2009/65/EC of the European Parliament and of theCouncil of 13 July 2009 on the coordination of laws,regulations and administrative provisions relating toundertakings for collective investment in transferablesecurities, as may be amended from time to time;

Unit or Units a registered unit or registered units of no par value of anyClass;

Unit Distribution andRedemption Agreement

each agreement entered into between a Distributor and theManagement Company;

Unitholder a holder of Units of the relevant Sub- Fund;

United States or U.S. the United States of America, its territories and possessions,any state of the United States and the District of Columbia;

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USD or U.S. Dollars the United States Dollar, the lawful currency of the UnitedStates of America;

U.S. Person as set out under section 25.4;

1933 Act the United States Securities Act of 1933, as may be amended;and

1940 Act the United States Investment Company Act of 1940, as maybe amended.

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PART I

1. THE FUND

The Fund is managed by the Management Company in accordance with the ManagementRegulations which became effective on 18 January 2016. The Management Regulations areon file with the RCSL, where they may be inspected and copies obtained. A notice advisingof the filing of the Management Regulations with the RCSL is published in the Mémorialon 28 February 2016.

The net assets of the Fund may not be less than EUR 1,250,000 (or equivalent in othercurrenc(y)(ies)) and must be reached within six months from the date of the authorization ofthe Fund (and may not be less than this amount thereafter).

The Management Company shall maintain for each Sub-Fund a separate portfolio of assets.Each portfolio of assets shall be invested for the exclusive benefit of the relevant Sub-Fund.A Unitholder shall only be entitled to the assets and profits of that Sub-Fund in which heparticipates. The Fund shall be considered as one single legal entity. With regard to thirdparties, including the Fund’s creditors, the Fund shall be responsible for all liabilitiesincurred by a Sub-Fund exclusively based on the assets of the relevant Sub-Fund. Theliabilities of each Sub-Fund to its Unitholders shall only be incurred with respect to therelevant Sub-Fund.

The subscription proceeds of all Units in a Sub-Fund are invested in one common underlyingportfolio of investments. Each Unit is, upon issue, entitled to participate equally in the assetsof the Sub-Fund to which it relates on liquidation and in dividends and other distributionsas declared for such Sub-Fund or Class.

The Fund is established for an indefinite period and authorised as a UCITS under the Lawof 2010.

The Management Regulations do not provide for meetings of Unitholders.

Unitholders, their successors, and any other beneficiaries may not demand the dissolutionor division of the Fund.

2. MANAGEMENT OF THE FUND

2.1 The Management Company of the Fund is DMS Offshore Management Services (Europe)Limited.

The Management Company is authorised and regulated as a management company by theCentral Bank under the European Communities (Undertakings for Collective Investment inTransferable Securities) Regulations 2011 and has the necessary permissions to manageUCITS. The Management Company is fully authorised and is therefore authorised tomanage Luxembourg funds under article 119 sqq. of the Law of 2010. The ManagementCompany was incorporated in Ireland on 7 August 2012. It is a 100% subsidiary of DMSOffshore Investment Services (Europe) Limited, a limited liability company incorporated inIreland, which is a 100% subsidiary of DMS Offshore Investment Services Limited, aCayman incorporated private limited company which is regulated by the Cayman IslandsMonetary Authority.

The directors of the Management Company are Derek Delaney, Jeremy O Sullivan, ConorMacGuinness, Tim Madigan and David McGeough. Specific responsibility for monitoringthe management functions of the Management Company has been allocated to certainpersons (each a “Designated Person”) as set out below. While the board of directors of the

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Management Company is ultimately responsible, as a whole, for the business of theManagement Company, the Designated Persons have responsibility for monitoring therespective management functions allocated to them.

Management Function Designated Person(s)

Decision Making All

Monitoring of Investment Policy, Investment Strategies andPerformance

Colm O’Driscoll

Monitoring Compliance Tim Madigan

Risk Management Derek Delaney

Liquidity Management Colm O’Driscoll

Operational Risks Derek Delaney

Conflicts of Interest Tim Madigan

Supervision of Delegates Jeremy O'Sullivan

Financial Control Jeremy O'Sullivan

Monitoring of Capital Jeremy O'Sullivan

Internal Audit Conor MacGuinness

Complaints Handling Tim Madigan

Accounting Policies and Procedures Jeremy O'Sullivan

Record Keeping Jeremy O'Sullivan

Remuneration Tim Madigan

Reporting Process Conor MacGuinness

The capital of the Management Company currently amounts to EUR €1,265,000 and isowned for 100% by DMS Offshore Investment Services (Europe) Limited.

The Management Company and DMS Offshore Investment Services Limited are part of theDMS Group. The DMS Group is a worldwide leader in fund governance, with the industry'slargest team of more than 80 full-time directors, associate directors and associates, allutilising forensic governance techniques and leveraging industry-leading proprietarytechnologies. The DMS Group serves all major offshore financial centres and representsleading investment funds from the largest funds in the industry to ambitious start-up funds.Based in the Cayman Islands, the DMS Group also has offices in Dublin, Luxembourg,London, Brazil, Hong Kong and New York led by principals experienced in their specialistmarkets.

2.2 The DMS Group has expanded beyond its initial focus of offering independent directors toCayman domiciled hedge funds to offering complementary services to its hedge fund clients,to include investment management, corporate services, banking and trust services, andinsurance. It has a long and successful relationship with US investment managers and itsIrish based operations are expected to grow significantly to support this client base inestablishing UCITS compliant funds.

2.3 Notwithstanding any delegation, the Management Company is ultimately responsible inrespect of the Fund for the following functions:

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2.3.1 the investment management functions, which include portfoliomanagement and risk management;

2.3.2 the general administration functions, including:

(a) legal and fund management accounting services;

(b) response to customer queries;

(c) valuation and pricing of the assets, including tax returns;

(d) regulatory compliance monitoring;

(e) maintenance of the Unitholders’ register;

(f) distribution of income;

(g) issue and redemption of Units;

(h) settlement of contracts, including certificates dispatch; and

(i) record keeping;

2.3.3 the marketing functions.

The Management Company retains the right to offer only one or more Classes of Units forsubscription by investors in any particular jurisdiction in order to conform to local law,custom or business practice or for any other reason. In addition, the Board may adoptstandards applicable to classes of investors or transactions which permit, or limit investmentto, the subscription of a particular Class of Units by an investor.

3. DIRECTORS OF THE MANAGEMENT COMPANY

The Management Company is responsible for the overall management and administrationof the Fund.

3.1 The Board currently consists of the following directors: Derek Delaney

Mr Delaney is Managing Director / Chief Executive Officer of the Management Company.He is also Managing Director of DMS Offshore Investment Services (Europe) Limited(“DMS Europe”), a position he has held since April 2011, and Global Head of BusinessDevelopment for the DMS Group.

Previously, Mr Delaney was employed with BNY Mellon Fund Services (Ireland) Limitedin Dublin from September 2007 to April 2011, initially as the European and Asian Head ofAIS Client Services and then as Global Product Manager (Head of Business Solutions withinthe European Alternative Investment Services division).

Before joining BNY Mellon, he was employed with Citco Fund Services (Dublin) Limitedfrom May 2005 to September 2007 where he initially served as Senior Fund Accountant andlater moved into the role of Senior Manager. Mr Delaney began his career as a fundaccountant at International Fund Services (Ireland) Limited, working out of both its Irelandand New York offices between February 2004 and April 2005.

He earned a Bachelor's Degree in Business Studies and Accountancy from WaterfordInstitute of Technology. He serves as an independent director on Luxembourg and Irishregulated funds and he has extensive experience in UCITS, non-UCITS, alternative

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investment vehicles and private equity structures. He is also a member of the Institute ofDirectors in Ireland.

3.2 Conor MacGuinness

Mr. MacGuinness is a director of the Management Company. Mr. MacGuinness joined DMSEurope in December 2013 and brings to his role his well-rounded experience in fundadministration, with particular emphasis on alternative investment structures, which hegained in Ireland, Switzerland and Luxembourg.

Prior to joining DMS Europe, Mr. MacGuinness was Vice President and Manager of theclient services team with BNY Mellon Fund Services (Ireland) Limited, a position he hadheld from November 2005 to December 2013. In this role he managed a team of clientservice professionals covering a range of alternative asset manager clients worthapproximately US$100bn AUA, covering Ireland, Luxembourg, Hong Kong and Tokyooffices.

Prior to this, from August 1999 to August 2004, Mr. MacGuinness worked as a Team Leaderwith Man Investments, a leading provider of alternative investment solutions to private andinstitutional clients worldwide.

He has extensive experience in UCITS, non-UCITS, alternative investment vehicles andprivate equity structures. Mr. MacGuinness holds an MBA from the UCD Michael SmurfitSchool of Business, a Certificate in Investment Management from the Society of InvestmentAnalysts in Ireland and a Bachelor of Arts Degree in Accounting and Finance from DublinCity University.

3.3 Jeremy O'Sullivan

Mr O'Sullivan is a director of the Management Company and joined DMS Europe in January2012. He assists the DMS Group's global client base in understanding the requirements andoptions open to them in the European regulated space and also oversees GMT time-zonesupport from the DMS Group to its European clients.

Prior to joining DMS Europe, Mr O'Sullivan was a Senior Manager with BNY Mellon FundServices (Ireland) Limited from October 2007 to December 2011, where he was responsiblefor the EMEA and APAC alternative investment services new business implementation teamcovering alternative investments and private equity structures.

From May 2006 to October 2007 Mr O'Sullivan worked as a Business Solutions Managerwith FundAssist, a specialist service provider to the investment funds industry. MrO'Sullivan began his career in July 1999 in the Accounting and Valuations Alternative FundsDepartment at HSBC Securities Services (Ireland) Limited, where he worked until May2004.

He serves as an independent director of a number of Irish regulated funds and has extensiveexperience in UCITS, non-UCITS, alternative investment vehicles and private equitystructures. Mr O'Sullivan is a Chartered Alternative Investment Analyst and holds aBachelor of Science Degree in Finance from University College Cork, Ireland. He is also amember of the Institute of Directors in Ireland.

3.4 Tim Madigan

Mr. Madigan has served as an independent non-executive director of a number of Dublinbased investment funds, both UCITS and non-UCITS. He is chairman and independent non-executive director of the Management Company. From 2010 to 2011 Mr. Madigan was

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finance director of Aviva Investment Management Europe, where he led the set-up of thefinance function for Aviva Europe's Dublin based centre of excellence, established tomanage treasury assets and investment management mandates. Prior to this, Mr. Madiganwas managing director of cross-border life insurance company Aviva Life International from2006 to 2010 (previously he was finance director for that company). In this role he chairedthe Investment Committee as well as leading a strategic review of business in 2009 followingthe onset of the global financial crisis. He holds a bachelor’s degree in Business Studies(Finance) from the University of Limerick and is a Fellow of the Association of CharteredCertified Accountants.

3.5 David McGeough

Mr. McGeough is an independent non-executive of the Management Company. FromFebruary 2007 to date, Mr. McGeough has been a non-executive director of, and adviser to,various asset management firms and investment funds and an international Hedge FundOperational, Risk Assessment and Rating business. From July 2002 until 1 February 2007,Mr. McGeough was a partner, member of the Management Committees and GeneralCounsel at Vega Asset Management Group: a hedge fund manager with US$12.5 billionassets under management (2005). Prior to this Mr. McGeough was COO and CEO ofMobileaware Limited, an international technology business. Before joining MobileawareLimited, from January 1994 to December 2000, Mr. McGeough was a partner at MathesonOrmsby Prentice, one of Ireland’s largest law firms, where he managed the financial servicesand investment funds practice. Mr. McGeough has served as a member of the Departmentof An Taoiseach’s International Banking and Treasury Group and as a member of theSteering Committee of the Advisory Group to the Irish Government in relation to thedisposal of the National TV Transmission 36 Network. Mr. McGeough is an HonoursGraduate of Law (Magna Cum Laude) from University College Dublin Law School, Ireland.

4. OTHER SERVICE PROVIDERS

4.1 Depositary

Pursuant to the Depositary Agreement, ING Luxembourg S.A. serves as the depositary ofthe Fund.

The Depositary shall assume its functions and responsibilities in accordance with theapplicable provisions of the Law of 2010.

The Depositary may entrust all or part of the assets of the Fund and/or any Sub-Fund, inparticular securities traded outside of Luxembourg or listed on a stock exchange outsideLuxembourg or admitted to a clearing system, to such clearing system or to suchcorrespondent banks as may be determined by the Depositary from time to time. TheDepositary’s liability shall not be affected by the fact that it has entrusted all or part of theassets in its care to a third party.

All cash and securities constituting the assets of the Fund and each Sub-Fund shall be helddirectly or indirectly by the Depositary. The Depositary may entrust banks and financialinstitutions with the custody of such securities. The Depositary may hold securities infungible or non-fungible accounts with such clearing houses as the Depositary maydetermine. The Depositary will have the normal duties of a bank with respect to the Fund’sdeposits of cash and securities held by it. The Depositary may only dispose of the assets ofthe Fund and make payments to third parties on behalf of the Fund on receipt of instructionfrom the Management Company or its appointed agents or as otherwise agreed in theDepositary Agreement. Upon receipt of instructions from the Management Company or itsappointed agents, the Depositary will perform all acts of disposal with respect to the assetsof the Fund. Without limiting the generality of the preceding description, the Depositary

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shall also perform such duties and functions as may be set forth in the agreement betweenthe Depositary and the Management Company with respect to the custody of the Fund’sassets.

4.2 Administrator

Under the terms of the Administration Agreement, SS&C GlobeOp (Luxembourg) SARL,has been appointed as Administrator, Corporate Agent, Paying Agent, Registrar andTransfer Agent for the Fund. As the Administrator, SS&C GlobeOp (Luxembourg) SARL,is responsible for the general administrative functions required by Luxembourg law and forthe processing of the issue and redemption of Units, the determination of the Net Asset Valueof the Units and the maintenance of accounting records of the Fund.

4.3 Auditor

PricewaterhouseCoopers, société coopérative has been appointed as auditor of the Fund andwill fulfil all obligations in accordance with the applicable laws and regulations.

4.4 Investment Manager

The Management Company may appoint an investment manager to act as investmentmanager to the relevant Sub-Fund. Details of the Investment Manager will be disclosed inthe relevant Supplement.

5. UNIT AND CLASS STRUCTURE

Under the Management Regulations, the Management Company has the power to establishand issue one or more Classes, including Classes with different characteristics, including,but not limited to, different charging structures, minimum investment amounts, liquidityprofiles or currencies of denomination.

Classes of Units available for subscription in each Sub-Fund will be described in theSupplement of the relevant Sub-Fund.

6. BASE CURRENCY

The base currency of the Fund for accounting and reporting purposes is the U.S. Dollar.However, individual Sub-Funds and/or Classes may be denominated in a currency other thanthe U.S. Dollar. Furthermore, the Fund may publish net asset values in currencies other thanthe base currency for the convenience of Unitholders.

To the extent that a Sub-Fund and/or Class is denominated in a currency other than the U.S.Dollar, the Management Company may, at its discretion, engage in foreign exchangetransactions for such Sub-Fund and/or Class. The profits, gains, losses, costs, income andexpenditures in relation to these transactions will be allocated to the relevant Sub-Fundand/or Class.

7. INVESTMENT OBJECTIVE AND STRATEGY

7.1 Investment Objective

The Fund has been designed to offer investors a selection of securities and other permittedassets consistent with the limits and conditions set forth hereafter in the Prospectus, toprovide investors with active and professional management, to diversify investment risk andto satisfy the financial needs of investors seeking various investment objectives.

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The investment objective for each Sub-Fund is set out in the Supplement relating to therelevant Sub-Fund.

There is no guarantee that the Fund or any Sub-Fund will meet their investment objectivesand losses may be incurred.

7.2 Investment Strategy

The investment strategy for each Sub-Fund is set out in the Supplement relating to therelevant Sub-Fund.

8. INVESTMENT RESTRICTIONS

The following investment restrictions apply, unless otherwise provided for in theSupplement of the relevant Sub-Fund.

Investments

8.1 Generally, the Fund and each Sub-Fund may (save to the extent otherwise provided for inthe relevant Supplement) invest in:

8.1.1 Transferable Securities and Money Market Instruments admitted to ordealt on an Eligible Market;

8.1.2 recently issued Transferable Securities and Money Market Instruments,provided that the terms of issue include an undertaking that applicationwill be made for admission to official listing on an Eligible Market andsuch admission is secured within one year of the issue;

8.1.3 units of UCITS and/or Other UCIs, whether situated in a Member State ornot, provided that:

(a) such UCIs have been authorized under the laws of any Member State,OECD Member State or under the laws of a G20 Member;

(b) the level of protection for unitholders in such Other UCIs isequivalent to that provided for unitholders in a UCITS, and inparticular that the rules on assets segregation, borrowing, lending, anduncovered sales of Transferable Securities and Money MarketInstruments are equivalent to the requirements of the UCITSDirective;

(c) the business of such Other UCIs is reported in half-yearly and annualreports to enable an assessment of the assets and liabilities, incomeand operations over the reporting period;

(d) no more than 10% of the assets of the UCITS or Other UCIs, whoseacquisition is contemplated, can, according to their constitutionaldocuments, in aggregate be invested in units of Other UCITS or OtherUCIs;

8.1.4 deposits with credit institutions which are repayable on demand or havethe right to be withdrawn, and maturing in no more than 12 months,provided that the credit institution has its registered office and isauthorized under the laws of any Member State, FATF State, OECDMember State or under the laws of a G20 Member;

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8.1.5 FDIs, including equivalent cash-settled instruments, dealt in on an EligibleMarket and/or FDIs dealt in over-the-counter (“OTC derivatives”),provided that:

(a) the underlying consists of instruments covered by this section,financial indices, interest rates, foreign exchange rates or currencies,in which the Sub-Fund may invest according to its investmentobjective;

(b) the counterparties to OTC derivative transactions are institutionssubject to prudential supervision, and belonging to the categoriesapproved by the CSSF;

(c) the OTC derivatives are subject to reliable and verifiable valuation ona daily basis and can be sold, liquidated or closed by an offsettingtransaction at any time at their fair value at the Fund’s initiative;

and/or

8.1.6 Money Market Instruments other than those dealt in on an Eligible Market,if the issue or the issuer of such instruments are themselves regulated forthe purpose of protecting investors and savings, and provided that suchinstruments are:

(a) issued or guaranteed by a central, regional or local authority or by acentral bank of a Member State, the European Central Bank, the EUor the European Investment Bank, an OECDMember State or, in caseof a Federal State, by one of the members making up the federation,or by a public international body to which one or more Member Statesbelong, or

(b) issued by an undertaking any securities of which are dealt in onEligible Markets, or

(c) issued or guaranteed by a credit institution which has its registeredoffice in a country which is an OECD Member State and a FATFState, or

(d) issued by other bodies belonging to the categories approved by theCSSF provided that investments in such instruments are subject toinvestor protection equivalent to that set forth in the first, the secondor the third indent and provided that the issuer is a company whosecapital and reserves amount to at least ten million Euro(10,000,000 Euro) and which presents and publishes its annualaccounts in accordance with the fourth directive 78/660/EEC, is anentity which, within a group of companies which includes one orseveral listed companies, is dedicated to the financing of the group oris an entity which is dedicated to the financing of securitizationvehicles which benefit from a banking liquidity line.

8.2 In addition, the Fund may invest a maximum of 10% of the net assets of any Sub-Fund inTransferable Securities and Money Market Instruments other than those referred to under8.1 above.

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8.3 Ancillary liquid assets

The Fund and each Sub-Fund may hold ancillary liquid assets.

8.4 Transferable Securities or Money Market Instruments by the same issuing body

8.4.1 The Fund will invest no more than 10% of the net assets of any Sub-Fundin Transferable Securities or Money Market Instruments issued by thesame issuing body.

The Fund may not invest more than 20% of the net assets of any Sub-Fund indeposits made with the same body. The risk exposure of a Sub-Fund to acounterparty in an OTC derivative transaction may not exceed 10% of its netassets when the counterparty is a credit institution referred to in 8.1.4 or 5% ofits net assets in other cases.

8.4.2 The total value of Transferable Securities and Money Market Instrumentsheld by a Sub-Fund in the issuing bodies in each of which it invests morethan 5% of its net assets shall not exceed 40% of the value of its net assets.

This limitation does not apply to deposits and OTC derivative transactions madewith financial institutions subject to prudential supervision.

Notwithstanding the individual limits set forth in 8.4.1, the Fund may notcombine, where this would lead to investment of more than 20% of the net assetsof a Sub-Fund in a single body, any of the following:

(a) investments in Transferable Securities or Money Market Instrumentsissued by that body;

(b) deposits made with that body; and/or

(c) exposure arising from OTC derivative transactions undertaken withthat body.

8.4.3 The limit of 10% set forth in 8.4.1 is increased to a maximum of 35% inrespect of Transferable Securities or Money Market Instruments which areissued or guaranteed by a Member State, its local authorities, or by anotherEligible State or by public international bodies of which one or moreMember States are members.

8.4.4 The limit of 10% set forth in 8.4.1 is increased to 25% for certain bondswhen they are issued by a credit institution which has its registered officein a Member State and is subject by law, to special public supervisiondesigned to protect bondholders. In particular, sums deriving from theissue of these bonds must be invested in conformity with the law in assetswhich, during the whole period of validity of the bonds, are capable ofcovering claims attaching to the bonds and which, in case of bankruptcyof the issuer, would be used on a priority basis for the repayment ofprincipal and payment of the accrued interest.

If a Sub-Fund invests more than 5% of its net assets in the bonds referred to inthis sub-paragraph and issued by one issuer, the total value of such investmentsmay not exceed 80% of the net assets of a Sub-Fund.

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8.4.5 The Transferable Securities and Money Market Instruments referred to in8.4.3 and 8.4.4 shall not be included in the calculation of the limit of 40%in 8.4.2.

8.4.6 The limits set out in paragraphs 8.4.1, 8.4.2, 8.4.3 and 8.4.4 may not beaggregated and, accordingly, investments in Transferable Securities orMoney Market Instruments issued by the same issuing body, in depositsor in FDIs effected with the same issuing body, may not, in any event,exceed a total of 35% of any Sub-Fund’s net assets;

Companies which are part of the same group for the purposes of theestablishment of consolidated accounts, as defined in accordance with directive83/349/EEC or in accordance with recognized international accounting rules, areregarded as a single body for the purpose of calculating the limits contained inthis paragraph 8.4.

The Fund may cumulatively invest up to 20% of its net assets in TransferableSecurities and Money Market Instruments within the same group.

Notwithstanding the above provisions, the Fund is authorized to invest upto 100% of the net assets of any Sub-Fund, in accordance with the principleof risk spreading, in Transferable Securities and Money MarketInstruments issued or guaranteed by a Member State, by its local authoritiesor agencies, or by another member State of the OECD or by publicinternational bodies of which one or more Member States are members,provided that such Sub-Fund must hold securities from at least six differentissues and securities from one issue do not account for more than 30% ofthe net assets of such Sub-Fund.

8.5 Investments in shares and/or bonds issued by the same issuing body

8.5.1 Without prejudice to the limits set forth in paragraph 8.6, the limitsprovided in 8.4 are raised to a maximum of 20% for investments in sharesand/or bonds issued by the same issuing body if the aim of the investmentpolicy of a Sub-Fund is to replicate the composition of a certain stock orbond index which is sufficiently diversified, represents an adequatebenchmark for the market to which it refers, is published in an appropriatemanner and is disclosed in the relevant Sub-Fund’s investment policy.

8.5.2 The limit set forth in paragraph 8.5.1 is raised to 35% where justified byexceptional market conditions, in particular on Eligible Markets wherecertain Transferable Securities or Money Market Instruments are highlydominant. The investment up to this limit is only permitted for a singleissuer.

8.6 Limits to the acquisition of shares

8.6.1 The Management Company acting on behalf of the Fund may not acquireshares carrying voting rights which should enable it to exercise significantinfluence over the management of an issuing body.

8.6.2 The Fund may acquire no more than:

(a) 10% of the non-voting shares of the same issuer;

(b) 10% of the debt securities of the same issuer; or

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(c) 10% of the Money Market Instruments of the same issuer.

8.6.3 These limits under the second and third indents may be disregarded at thetime of acquisition, if at that time the gross amount of debt securities or ofthe Money Market Instruments or the net amount of the instruments inissue cannot be calculated.

The provisions of paragraph 8.6.2 shall not be applicable to TransferableSecurities and Money Market Instruments issued or guaranteed by a MemberState or its local authorities or by any other Eligible State, or issued by publicinternational bodies of which one or more Member States are members.

These provisions are also waived as regards shares held by the ManagementCompany on behalf of the Fund in the capital of a company incorporated in anon-Member State which invests its assets mainly in the securities of issuingbodies having their registered office in that State, where under the legislation ofthat State, such a holding represents the only way in which the Fund can investin the securities of issuing bodies of that State provided that the investment policyof the company from the non-Member State complies with the limits set forth in8.4, 8.5 and 8.7.1, 8.7.2, 8.7.3 and 8.7.4.

8.7 Acquisition of UCITS and/or Other UCIs

8.7.1 The Fund may acquire units or shares of UCITS and/or other UCIs referredto in paragraph 8.1.3, provided that no more than 10% of a Sub-Fund’s netassets be invested in the units or shares of UCITS or Other UCIs or in onesingle such UCITS or Other UCI.

8.7.2 The underlying investments held by the UCITS or Other UCIs in whichthe Fund invests do not have to be considered for the purpose of theinvestment restrictions set forth under 8.4.

8.7.3 When the Fund invests in the units or shares of UCITS and/or Other UCIsthat are managed directly or by delegation by the Management Companyor by any other company with which the Management Company is linkedby common management or control, or by a substantial direct or indirectholding, the Management Company or other company cannot chargesubscription or redemption fees to the Fund on account of its investmentin the units or shares of such UCITS and/or UCIs.

In respect of a Sub-Fund’s investments in UCITS and Other UCIs, the totalmanagement fee (excluding any performance fee, if any) charged both to such aSub-Fund and the UCITS and/or Other UCIs concerned shall not exceed 2% ofthe relevant assets. The Fund will indicate in its annual report the totalmanagement fees charged both to the relevant Sub-Fund and to the UCITS andOther UCIs in which such Sub-Fund has invested during the relevant period.

8.7.4 The Fund may not acquire more than 25% of the units or shares of thesame UCITS or Other UCI. This limit may be disregarded at the time ofacquisition if at that time the gross amount of the units or shares in issuecannot be calculated. In case of a UCITS or Other UCI with multiplecompartments, this restriction is applicable by reference to all units orshares issued by the UCITS or Other UCI concerned, all compartmentscombined.

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8.8 The Management Company shall ensure for each Sub-Fund that the global exposure relatingto FDIs does not exceed the net assets of the relevant Sub-Fund.

The exposure is calculated taking into account the current value of the underlying assets, thecounterparty risk, foreseeable market movements and the time available to liquidate thepositions. This standard shall also apply to the following subparagraphs.

If the Fund invests in FDIs, the exposure to the underlying assets may not exceed inaggregate the investment limits set forth in 8.4 above. When the Fund invests in index-basedFDIs (such index to be compliant with CSSF Circular 14/592), these investments are notsubject to the limits set forth in 8.4.

When a Transferable Security or Money Market Instrument embeds a derivative, the lattermust be taken into account when complying with the requirements of this paragraph.

8.9 Borrowing and loans

8.9.1 The Management Company acting behalf of the Fund may not borrow forthe account of any Sub-Fund amounts in excess of 10% of the net assetsof that Sub-Fund, any such borrowings to be from banks and to be effectedonly on a temporary basis, provided that the Management Company actingon behalf of the Fund may acquire foreign currencies by means of back toback loans.

8.9.2 The Fund may not grant loans to or act as guarantor on behalf of thirdparties.

This restriction shall not prevent the Fund from (i) acquiring TransferableSecurities, Money Market Instruments or other financial instruments referred toin 8.1.3, 8.1.5 and 8.1.6 which are not fully paid, and (ii) performing permittedsecurities lending activities, neither of which shall be deemed to constitute themaking of a loan.

8.9.3 The Fund may not carry out uncovered sales of Transferable Securities,Money Market Instruments or other financial instruments.

8.9.4 The Fund may not acquire movable or immovable property.

8.9.5 The Fund may not acquire either precious metals or certificatesrepresenting them.

8.10 Exceptions to the limits

8.10.1 The Fund needs not comply with the limits set forth in this section whenexercising subscription rights attaching to Transferable Securities orMoney Market Instruments which form part of its assets. While ensuringobservance of the principle of risk spreading, recently created Sub-Fundsmay derogate from paragraphs 8.4, 8.5 and 8.6.1, 8.6.2 and 8.6.3 for aperiod of six months following the date of their launch.

8.10.2 If the limits referred to in paragraph 8.10.1 are exceeded for reasonsbeyond the control of the Management Company acting on behalf of theFund or as a result of the exercise of subscription rights, it must adopt asa priority objective for its sales transactions the remedying of thatsituation, taking due account of the interests of the Unitholders.

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8.10.3 To the extent that an issuer is a legal entity with multiple compartmentswhere the assets of the compartment are exclusively reserved to theinvestors in such compartment and to those creditors whose claim hasarisen in connection with the creation, operation or liquidation of thatcompartment, each compartment is to be considered as a separate issuerfor the purpose of the application of the risk spreading rules set out in 8.4,8.5, 8.6 and 8.7.

If provided for in the Supplement of a Sub-Fund, such Sub-Fund may, under theconditions set out under article 181(8) of the Law of 2010, subscribe, acquireand/or hold Units to be issued or issued by one or more other Sub-Funds.

The Fund will in addition comply with such further restrictions as may berequired by the regulatory authorities in any country in which the Units aremarketed.

9. RISK MANAGEMENT PROCESS

The Management Company will employ a risk-management process which enables it tomonitor and measure at any time the risk of the positions and their contribution to the overallrisk profile of the Fund. The Management Company will employ, if applicable, a processfor accurate and independent assessment of the value of any OTC derivative instrument.

In accordance with ESMA Guidelines 10-788 and CSSF Circular 11/512, the ManagementCompany will determine for each Sub-Fund, as specified in the relevant Supplement, theglobal exposure determination methodology, the expected level of any leverage (in case theVaR approach is applied) and/or the reference portfolio (in case the relative VaR is applied).

Upon request of a Unitholder, the Management Company will provide supplementaryinformation to such Unitholder relating to the quantitative limits that apply in the riskmanagement of each Sub-Fund, to the methods chosen to this end and to the recent evolutionof the risks and yields of the main categories of instruments.

10. TECHNIQUES AND INSTRUMENTS

10.1 General

Unless further restricted in the Supplement in respect of a specific Sub-Fund, the Fund mayemploy techniques and instruments relating to Transferable Securities and Money MarketInstruments. Such techniques and instruments may also be used for efficient portfoliomanagement or hedging purposes.

When these operations concern the use of FDIs, these conditions and limits will conform tothe provisions laid down in the section 8.

Under no circumstances will these operations cause a Sub-Fund to diverge from itsinvestment objectives and policies.

10.2 Securities lending

A Sub-Fund may, if provided in the relevant Supplement, enter into securities lendingtransactions (generally a program whereby securities are temporarily transferred toborrowers in exchange for collateral) in accordance with the provisions of Circular 08/356,Circular 14/592 and ESMA Guidelines 2014/937.

The Fund will ensure that it is able at any time to recall any security that has been lent outor terminate any securities lending agreement to which it has entered.

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10.3 Repurchase Agreements

A Sub-Fund may, if provided in the relevant Supplement, enter into sale with the right torepurchases transactions (“achat de titres à réméré”) as well as reverse repurchasetransactions (“operations de prise en pension”) and repurchase agreement transactions(“vente de titres à réméré”) in accordance with the provisions of Circular 08/356, Circular14/592 and ESMA Guidelines 2014/937.

10.4 Efficient Portfolio Management

The reference to techniques and instruments which relate to Transferable Securities andMoney Market Instruments and which are used for the purpose of efficient portfoliomanagement shall be understood as a reference to techniques and instruments which fulfilthe following criteria:

10.4.1 they are economically appropriate in that they are realized in a cost-effective way;

10.4.2 they are entered into for one or more of the following specific aims:

(a) reduction of risk;

(b) reduction of cost; or

(c) generation of additional capital or income for the Fund with a levelof risk which is consistent with the risk profile of the Fund and therisk diversification rules set forth under section 8; and

10.4.3 their risks are adequately captured by the risk management process of theManagement Company.

Techniques and instruments which comply with the criteria set out in the paragraph aboveand which relate to Money Market Instruments shall be regarded as techniques andinstruments relating to Money Market Instruments for the purpose of efficient portfoliomanagement.

A Sub-Fund’s ability to use these strategies may be limited by market conditions, regulatorylimits and tax considerations. The use of these strategies involves special risks, such as creditrisk, counterparty risk and market risk. Please see section 27.

Any direct and indirect operational costs and fees arising from efficient portfoliomanagement techniques will be deducted from the revenue delivered to the Fund. Thesecosts and fees will not include hidden revenue. Such costs and fees should, under normalcircumstances, not be higher than 50% of the gross revenue of the relevant efficient portfoliomanagement technique. Positive returns arising from the use of efficient portfoliomanagement techniques will be solely for the benefit of the relevant Sub-Fund(s). Any directand indirect operational costs and fees incurred and the identity of the counterparty(ies) tothese efficient portfolio management techniques will be disclosed in the annual report of theFund.

Before a Sub-Fund enters into any arrangement regarding efficient portfolio managementtechniques, the Management Company or, where applicable, the Investment Manager willbe required to

10.4.4 carefully estimate the expected costs and fees and to compare them withthe applicable market standard (if any) and

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10.4.5 evaluate whether the use of the efficient portfolio management techniquesis in the best interest of the Unitholders of the relevant Sub-Fund(s).

The net exposures (i.e. the exposures of the Fund less the collateral, if any, received by theFund) to a counterparty arising from the use of efficient portfolio management techniqueswill be taken into account in the 20% limit provided for in Article 43(2) of the Law of 2010pursuant to point 2 of Box 27 of ESMA Guidelines 2014/937.

The Fund will further respect all rules established by the CSSF in relation to the efficientportfolio management techniques, and in particular the rules set out in Circular 08/356,Circular 14/592, ESMA Guidelines 2014/937 and any additional laws, regulations andprovisions, which may apply to such transactions.

It is not expected that conflicts of interest will arise when using techniques and instrumentsfor the purpose of efficient portfolio management.

The Fund’s annual report will contain details of the following:

10.4.6 the exposure obtained through efficient portfolio management techniques;

10.4.7 the identity of the counterparty(ies) to these efficient portfoliomanagement techniques;

10.4.8 the type and amount of collateral received by the Fund to reducecounterparty exposure; and

10.4.9 the revenues arising from efficient portfolio management techniques forthe entire reporting period together with the direct and indirect operationalcosts and fees incurred.

10.5 Use of FDIs

The Fund may use FDIs involving Transferable Securities and Money Market Instrumentsfor the purpose of efficient portfolio management of its assets and for hedging purposes, asdetailed in the Prospectus including the Supplement for the relevant Sub-Fund. The Fundmay also use FDIs for investment purposes in accordance with ESMA Guidelines 2014/937to meet the Fund’s investment objectives only if provided for in the Prospectus and/or theSupplement for the relevant Sub-Fund. The Fund may use financial FDIs under theconditions and within the limits set forth by law, regulation and administrative practice.

A Sub-Fund may, if provided in the relevant Supplement, use total return swaps or otherFDIs with the same or similar characteristics.

10.6 Management of Collateral

When entering into lending transactions, OTC derivative transactions, repurchaseagreements or other efficient portfolio management techniques as further described in thisProspectus, the Fund will require the relevant counterparty to provide collateral whose valuemust at all times be at least equivalent to 90% of the value of the relevant Sub-Fund’s assets.Collateral received must be sufficiently liquid so that it can be sold quickly at a price that isclose to its pre-sale valuation.

The Fund will ordinarily only accept very high quality collateral which is typically notsubject to a haircut. The Fund may only receive cash collateral. Cash collateral can only be:

10.6.1 placed on deposit with entities prescribed in Article 50(f) of the UCITSDirective;

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10.6.2 invested in high-quality government bonds;

10.6.3 used for the purpose of reverse repurchase transactions provided thetransactions are with credit institutions subject to prudential supervisionand the Fund is able to recall at any time the full amount of cash on accruedbasis; or

10.6.4 invested in short-term money market funds as defined in ESMA’sGuidelines on a Common Definition of European Money Market Funds.

Re-invested cash collateral exposes the Fund to certain risks such as the risk of a failure ordefault of the issuer of the relevant security in which the cash collateral has been invested.Please see “Credit Risk” under section 27.1.28 and “Counterparty Risk” under section27.1.50.

11. DISTRIBUTION POLICY

The Management Company may establish Classes in respect of which distributions may bemade at the discretion of the Management Company and Classes in respect of which it is notintended that distributions be made.

Details of the distribution policy of each Sub-Fund are disclosed in the Supplement of therelevant Sub-Fund. The Management Company may amend this policy at any time uponnotice without Unitholder approval.

No distribution may be made which would result in the net assets of the Fund falling belowthe minimum provided for by Luxembourg law.

Dividends not claimed within five years from their payment date will lapse and revert to therelevant Sub-Fund.

12. INVESTING IN THE FUND

12.1 Eligible Investors

Investors must represent, warrant and declare to the Management Company that, amongother things, they are able to acquire Units without violating applicable laws in particularthe rules and regulations aiming to prevent money laundering. The Management Companywill not knowingly offer or sell Units to any investors to whom such offer or sale would beunlawful.

12.2 Offering of Units

The Management Company may, at any time and at its discretion, suspend or limit the issueof Units to potential investors temporarily or permanently in particular countries or areasand may, at its discretion, decline to permit investors to subscribe for Units of any Class.

Performance can be affected by the Fund’s and/or a Sub-Fund’s size. With this in mind anddepending upon market conditions, the Management Company may consider the impositionof periods which are closed to new investors and/or further investment where they considerthis will be beneficial to the Fund and/or a Sub-Fund as a whole.

12.3 Verification of Identity

Pursuant to the Luxembourg laws of 19 February 1973 to combat drug addiction, asamended, of 5 April 1993 on the financial sector, as amended, of 12 November 2004 on thefight against money laundering and terrorist financing, as amended, as well as to the Grand-

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Ducal regulation of 1 February 2010 providing details on the aforementioned law of 12November 2004 and to the relevant circulars of the supervisory authority, obligations havebeen imposed on professionals of the financial sector to prevent the use of undertakings forcollective investment such as the Fund for money laundering purposes. Within this contextmeasures to ensure the identification of investors have been imposed. Measures aimedtowards the prevention of money laundering and terrorism financing will require theAdministrator to carry out a detailed verification of the identity of any person or entityapplying to the Fund for Units prior to accepting the application and prospective investorssubmitting applications to subscribe for Units will need to complete the anti-moneylaundering supplement included in the application form.

In the event of delay or failure by the applicant to supply any information required for duediligence purposes or as otherwise requested by the Management Company or theAdministrator at their sole discretion, the Management Company and the Administrator mayrefuse to accept the application and subscription money or return, subject to applicable law,subscription money (less expenses) if information required is not supplied. The applicantwill required to acknowledge that it shall indemnify and hold the Fund, the Administratorand the Management Company harmless against any loss arising as a result of a failure toprocess the subscription if such due diligence documentation requested from theAdministrator or Management Company has not been supplied on time by the applicant.

The right is reserved by the Management Company to reject any application in whole or inpart. If an application is rejected, the application money or balance thereof will be returnedat the risk of the applicant and without interest as soon as reasonably practicable at the costof the applicant.

13. SUBSCRIPTIONS

13.1 Initial Offer of Units

Units of each Class may be subscribed at a fixed price per Unit during an Initial OfferingPeriod at the discretion of the Management Company, as disclosed in the Supplement of therelevant Sub-Fund.

13.2 Subscriptions Following the Initial Offering Period

Following the close of the Initial Offering Period in respect of a Class, investors may applyto subscribe for Units of each Class as disclosed in the Supplement of the relevant Sub-Fund.

13.3 Minimum Initial Subscription Amount

The Management Company may, at its discretion, specify a minimum initial subscriptionamount in respect of each Class and/or Sub-Fund which will be disclosed in the Supplementof the relevant Sub-Fund.

The Management Company may waive at its discretion the minimum initial subscriptionamount in respect of an individual application or generally, provided that the principle ofequal treatment between Unitholders which are in the same situation is complied with.

13.4 Minimum Subsequent Subscription Amount

The Management Company may, at its discretion, specify a minimum subsequentsubscription amount in respect of each Class and/or Sub-Fund which will be disclosed in theSupplement of the relevant Sub-Fund.

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The Management Company may waive, at its discretion, the minimum subsequentsubscription amount in respect of an individual application or generally, provided that theprinciple of equal treatment between Unitholders which are in the same situation is compliedwith.

13.5 Minimum Residual Holding Amount

The Management Company may, at its discretion, specify a minimum residual holdingamount in respect of each Class and/or Sub-Fund which will be disclosed in the Supplementof the relevant Sub-Fund.

The Management Company may waive, at its discretion, the minimum residual holdingamount in respect of an individual application or generally, provided that the principle ofequal treatment between Unitholders which are in the same situation is complied with.

If, as a result of redemptions or conversions, the minimum residual holding of a Unitholderin a Class and/or Sub-Fund is less than the amount determined by the Management Companyfor such Class and/or Sub-Fund, the Management Company may consider that theUnitholder has requested to convert or redemption its entire holding in such Class and/orSub-Fund. The above is not applicable in case the value of an investor’s holding falls belowthe minimum holding threshold by reason of market movements affecting the portfoliovalue.

13.6 Methods of Communication

For an investor’s initial application for Units of any Class and/or Sub-Fund the originalapplication form must be received by the Administrator before the specified subscriptiondeadline. Subsequent applications for Units may be sent by facsimile, e-mail or post to theAdministrator and must be received by the Administrator before the appropriate subscriptiondeadline.

13.7 Acceptance of Subscriptions

The Management Company reserves the right to accept or refuse any application tosubscribe Units of any Class and/or Sub-Fund in whole or in part. To the extent that anyinvestor is subject to any investment restrictions or limitations, these should be disclosed atthe time of subscription applications.

13.8 Irrevocability of Subscriptions

Any request for the subscription of Units of any Class and/or Sub-Fund shall be irrevocableand may not be withdrawn by any investor in any circumstance without the prior consent ofthe Management Company, except in the event of a suspension of the determination of theNet Asset Value. In the event of a suspension, the Administrator will process thesubscription requests on the first applicable Calculation Day in the relavant Supplementfollowing the end of the period of suspension.

13.9 Confirmation of Subscriptions

The Administrator will process subscription requests which are received by facsimile, emailor post as agreed between the Management Company and the Administrator. For the initialsubscription in the Fund, the original document should follow by mail/courier to theAdministrator thereafter. Neither the Management Company nor the Administrator shall beresponsible for any mis-delivery or non-receipt of any facsimile if they have notacknowledged receipt of the facsimile. Facsimiles sent to the Administrator shall only beeffective when actually acknowledged by the Administrator.

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Written confirmation of completed subscriptions will be sent by e-mail to the subscriber atthe address provided in the application form as soon as reasonably practicable after therelevant Net Asset Value was made available. No formal Unit certificates will be issued.

13.10 Fractions

Unless otherwise provided for in the Supplement of the relevant Sub-Fund, no fractions ofUnits will be issued. For the issue or redemption of Units, the Net Asset Value may berounded up or down to the nearest unit of the relevant currency or otherwise as provided forin the Supplement of the relevant Sub-Fund. In cases of conversion of Units (if allowed),any cash balance due as a consequence of fractions will be paid out to the Unitholder whoseUnits were the subject of the conversion.

13.11 Personal Data

Unitholders are informed that their personal data or the information given in the subscriptiondocuments or otherwise in connection with an application to subscribe for Units, as well asdetails of their unitholding, will be stored in digital form and processed in compliance withthe provisions of the Luxembourg law of 2 August 2002 on data protection, as amended.

Pursuant to articles 18 and 19 of the abovementioned law, Unitholders are giving theirexpress consents to the transfer, if applicable, of their data to a third country, which may ormay not ensure an adequate level of protection.

The personal data in relation to Unitholders is required to enable the Management Company,the Investment Manager, the Distributors and the Administrator, among others, to fulfil theservices required by Unitholders and to comply with its legal and regulatory obligations.

Unitholders have a right of access and of rectification of the personal data in cases wheresuch data is incorrect or incomplete.

The personal data shall not be held for longer than necessary with regard to the purpose ofthe data processing. The personal data shall be stored during the time required by law.

Investors should be aware that their personal data or information (as mentioned above) maybe disclosed to the Management Company and any other companies affiliated to theManagement Company for the purpose of developing and processing a business relationshipwith the Unitholders.

Investors must be aware that the personal data will be disclosed (i) to the Administrator andother parties who assist the Administrator with undertaking its duties to the Fund (e.g.external processing centres, dispatch or payment agents), including companies based incountries where data protection laws might not exist or be of a lower standard than in theEuropean Union or (ii) when required by law or regulation (Luxembourg or otherwise).

Unitholders must also be aware that telephone conversations with the ManagementCompany, the Investment Manager and the Depositary may be recorded. Recordings will beconducted in compliance with the applicable laws and regulations. Recordings may beproduced in court or other legal proceedings with the same value in evidence as a writtendocument.

14. TRANSFERS

All transfers of Units must be effected by written instrument signed by the transferor andcontaining the name of the transferee and the number of Units being transferred, or in suchother manner or form and subject to such evidence as the Management Company and the

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Administrator shall consider appropriate. All transfers are subject to the express priorconsent of the Management Company. The transfer will take effect on registration of thetransferee as holder of the Units. The transferee will be required to give the warrantiescontained in the Fund’s application form and thereafter hold Units with a minimum value,as set out above, and must also provide such additional information as the Administrator orthe Management Company deem necessary. The Management Company may set differentlevels for minimum investments or minimum transactions for investors in certain countriesor for investments through any savings plan for investment in different Classes, if theManagement Company decides to introduce this facility.

The Management Company intends to restrict transfers of Units to any U.S. Persons.Further, the Management Company may also be entitled to require the transfer of Unitswhich are held by any such person or any other person holding Units where such Units areowned directly or beneficially by any person who, by virtue of the holding concerned givesrise to a regulatory, pecuniary, legal, taxation or material administrative disadvantage to theManagement Company or its Unitholders.

15. REDEMPTIONS

15.1 General

Any Unitholder may apply for the redemption of some or all of his Units of a Class on aCalculation Day for such Class. Units are redeemed at the Redemption Price per Unit asdisclosed in the Supplement of the relevant Sub-Fund.

15.2 Minimum Redemption Amount

The Management Company may, at its discretion, specify a minimum redemption amountin respect of each Class as disclosed in the Supplement of the relevant Sub-Fund.

15.3 Confirmation of Redemption Requests

The Administrator will process redemption requests which are received by facsimile, e-mailor by any other means as previously agreed with the Administrator and as provided for inthe Supplement of the relevant Sub-Fund. Written confirmation of completed redemptionrequests will be sent by e-mail at the address provided in the redemption request as soon asreasonably practicable after the relevant Net Asset Value was made available.

15.4 Redemption Price per Unit

Unless otherwise provided for in the Supplement of the relevant Sub-Fund, the RedemptionPrice per Unit of each Class is the Net Asset Value per Unit of such Class determined as atthe Calculation Day for such Class in respect of which the redemption application has beenaccepted.

15.5 Payment of Redemption Proceeds

Repurchase proceeds are paid in the reference currency of the relevant Class by or on behalfof the Depositary as disclosed in the Supplement of the relevant Sub-Fund.

The Management Company may, at its sole discretion, settle redemption requests in wholeor in part at a later date where the disposal of the underlying assets is not reasonablypracticable without being seriously detrimental to the interests of the Unitholders or if, inthe opinion of the Management Company, a fair price cannot be calculated for the relevantassets.

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Payment of redemption proceeds will normally be made to the bank account of the registeredUnitholder, provided that any outstanding identification documents have been received bythe Administrator.

Redemption proceeds will be paid by telegraphic transfer (or such other method as theAdministrator deems appropriate at its sole discretion) in the denominated currency of theClass (or in such other currency as may be agreed with the Administrator from time to time).

15.6 Irrevocability of Redemption Requests

In normal circumstances, except in the event of a suspension of the determination of the NetAsset Value, applications for redemptions of Units are irrevocable and may not bewithdrawn by any Unitholder. In the event of such a suspension, the Unitholders of therelevant Class, who have made an application for redemption of their Units, may give writtennotice to the Management Company that they wish to withdraw their application. Further,the Management Company may at its sole discretion, taking due account of the principle ofequal treatment among Unitholders, decide to accept any withdrawal of an application forredemption.

15.7 Limitation on Redemption Requests

The Management Company may also limit the total number of Units which may beredeemed in aggregate on any Calculation Day to 10% of the Net Asset Value of a Sub-Fund or any higher percentage as may be determined by the Management Company at itssole discretion. Where this restriction is applied, Units will be redeemed on a pro rata basisand any Units which for this reason are not redeemed on any particular Calculation Day willbe treated as if a request for redemption had been made in respect of each subsequentCalculation Day until all the Units to which the original request related had been redeemed.Requests for redemption which have been carried forward from an earlier Calculation Daywill be redeemed in priority to requests received and/or carried forward from a laterCalculation Day. Notwithstanding the foregoing, any redeeming Unitholder shall be entitledto receive the entire proceeds due and payable within four calendar quarters and shall forthose purposes, if necessary, benefit from a priority.

15.8 Compulsory Redemption

The Management Company has the power to impose or relax the restrictions on any Unitsof the same Class (other than any restrictions on transfer of Units, but including therequirement that Units be issued only in registered form), as it may think necessary for thepurpose of ensuring that no Units in the Fund are acquired or held by or on behalf of:

15.8.1 any person in breach of the law or requirements of any country orgovernmental or regulatory authority (if the Management Company shallhave determined that the Management Company, the Fund, the InvestmentManager or any Connected Person (as defined in the ManagementRegulations) would suffer any disadvantage as a result of such breach), or

15.8.2 any person in circumstances which in the opinion of the ManagementCompany might result in the Management Company, the InvestmentManager, the Fund or the Unitholders incurring any liability to taxation orsuffering any other pecuniary disadvantage which they might nototherwise have incurred or suffered, including a requirement for theManagement Company, or the Fund or the Investment Manager to registerunder any securities or investment or similar laws or requirements of anycountry or authority, or market timing and/or late trading practices.

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The Management Company has the power to compulsory redeem Units in the circumstancesunder 15.8.1 and 15.8.2 above.

The Management Company is also entitled to compulsorily redeem all Units of a Unitholder:

15.8.3 where a Unitholder has transferred or attempted to transfer any portion ofhis Units in violation of the Prospectus and/or of the ManagementRegulations; or

15.8.4 where any of the representations or warranties made by a Unitholder inconnection with the acquisition of Units was not true when made or hasceased to be true; or

15.8.5 where a Unitholder (i) has filed a voluntary petition in bankruptcy; (ii) hasbeen adjudicated bankrupt or insolvent, or has had entered against it anorder for relief, in any bankruptcy or insolvency proceeding; (iii) has fileda petition or answer seeking any reorganization, arrangement,composition, readjustment, liquidation, dissolution or similar relief underany statute, law or regulation; (iv) has filed an answer or other pleadingadmitting or failing to contest the material allegations of a petition filedagainst him in any proceeding of this nature; or (v) has sought, consentedto or acquiesced in the appointment of a trustee, receiver or liquidator ofsuch Unitholder or of all or any substantial part of the Unitholder’sproperties; or

15.8.6 in any other circumstances in which the Management Companydetermines at its absolute discretion that such compulsory redemptionwould avoid material legal, pecuniary, tax, economic, proprietary,administrative or other disadvantages to the Fund.

Furthermore, the Management Company may:

15.8.7 reject at its discretion any application for Units when the ManagementCompany deems it necessary;

15.8.8 redeem at any time the Units held by Unitholders who are excluded frompurchasing or holding Units.

Where it appears to the Management Company that any Units are owned directly orbeneficially by or being acquired for the account or benefit of, directly or indirectly, (i) anyperson or persons who are precluded pursuant to the Management Regulations from holdingUnits, (ii) a U.S. Person, or (iii) who or which, by virtue of the holding concerned, give riseto a breach of any applicable laws or requirement in any jurisdiction or may, either alone ortogether with any other person(s), in the sole and conclusive opinion of the ManagementCompany:

15.8.9 prejudice the tax status or residence of the Fund or the Unitholders; or

15.8.10 cause the Fund or any Unitholder to suffer any legal, regulatory,pecuniary, taxation or material administrative disadvantage; or

15.8.11 cause the Fund to be required to comply with any registration or filingrequirements in any jurisdiction with which it would not otherwise berequired to comply,

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then the Management Company may compulsorily redeem all Units held by suchUnitholder.

16. CONVERSION OF UNITS

Switching of Units shall only be permitted if explicitly set-out in the Supplement of therelevant Sub-Funds.

Subject to the qualifications for investment being met, a Unitholder may request the switchof all or, providing the value of the Units to be switched equals or exceeds the minimuminitial or subsequent subscription amount (as applicable) specified for each Sub-Fund in therelevant Supplement (subject to any applicable waiver as described under heading 13), partof his Units of one Sub-Fund or Class into Units of another Sub-Fund or Units of anotherClass of the same Sub-Fund.

A Unitholder wishing to switch into a Class reserved for Institutional Investors will need toprovide to the Central Administration Agent such information and documentation as isnecessary to verify that such Unitholder is an Institutional Investor.

Unless otherwise provided for in the relevant Supplement of the Sub-Fund, switching maybe made free of charge.

Unitholders must read the relevant KIID and fill out and sign an irrevocable application forswitching which must be addressed with all the switching instructions to the CentralAdministration Agent. The Fund may also accept switches transmitted via facsimile.

If, for any reason, the value of the holdings of a single Unitholder in Units of a particularSub-Fund (or, if more than one Class of Units have been issued in a Sub-Fund, of that Class)falls below the minimum holding amount specified for that Sub-Fund (or, if applicable, forthat Class) in the relevant Supplement (subject to any applicable waiver as described under13), then the Unitholder will at the discretion of the Fund be deemed to have requested theswitching of all of his Units of that Sub-Fund (or, if applicable, of that Class).

The switching is performed on the basis of the Net Asset Value of the Classes concerned onthe day the switching application is received in proper form by the Central AdministrationAgent, provided that such day is a Calculation Day for both of the Classes involved in theswitching and the switching application has been received in proper form as set out in therelevant Supplement. Units may not be switched if the determination of the Net Asset Valueof one of the relevant Sub-Funds is suspended.

A switching order may require the conversion of currency from one Sub-Fund to another.In such event, the number of Units of the New Sub-Fund (as defined below), obtained on aswitching will be affected by the net foreign currency exchange rate, if any, applied to theswitching.

The rate at which Units in a given Sub-Fund or Class (the “Initial Sub-Fund”) are switchedinto Units of another Sub-Fund or Class (the “New Sub-Fund”) is determined by means ofthe following formula:

F = A x (B-C) x E

D

A is the number of Units of the Initial Sub-Fund subject to the switching order;

B is the Net Asset Value per Unit of the Initial Sub-Fund;

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C is the switching fee if any;

D is the Net Asset Value per Unit of the New Sub-Fund;

E is the currency exchange rate (prevailing in Luxembourg) between the currency of theInitial Sub-Fund and the currency of the New Sub-Fund. If the currency of the Initial Sub-Fund and the currency of the New Sub-Fund are the same, E will be equal to 1; and

F is the number of Units of the New Sub-Fund obtained in the switching.

A confirmation statement will be sent by email to the relevant Unitholder (or third party asrequested by the subscriber), detailing the switching transactions as soon as reasonablypracticable after the Redemption Price and Subscription Price of the Units being switchedhas been determined. Unitholders should check this statement to ensure that the transactionshave been accurately recorded.

17. FEES AND EXPENSES

17.1 Management Company’s Fees

The Management Company will be entitled to receive a management fee in respect of a Sub-Fund or Class pursuant to the Management Agreement. Details of the management fee willbe contained in the relevant Supplement.

The management fee will be calculated and accrued on each Calculation Day based on theNAV of the relevant Sub-Fund as of the relevant Calculation Day and will generally be paidmonthly in arrears.

The Management Company is responsible for the payment of the fees of the Depositary, theAdministrator and the Auditor.

Details of any fees payable to any Investment Manager (including performance fees, if any)will be set out in the relevant Supplement.

17.2 Initial Sales Charge

Investors may be subject to a sales charge, as set out in the relevant Supplement.

17.3 Redemption Charge

A redemption charge may be levied in relation to certain Sub-Funds or Classes as disclosedin the relevant Supplement.

17.4 Conversion/Switch Charge

A conversion/switch charge may be levied in relation to certain Sub-Funds or Classes asdisclosed in the relevant Supplement.

17.5 Other Payments

Unless otherwise provided for in the Supplement of the relevant Sub-Fund, the Fund maybear other expenses related to its operations that are not covered by the managementcompany, agency and distribution fees, including but not limited to: (i) taxes andgovernmental fees; (ii) brokerage fees and commissions and other portfolio transactionexpenses; (iii) costs of borrowing money, including interest expenses; (iv) extraordinaryexpenses, including costs of litigation and indemnification expenses; and (v) any expensesallocated or allocable to a specific Class including, but not limited to performance fees and

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expenses relating to audit (other than the annual audit), marketing, reporting or other Classspecific expenses.

The Fund will pay out of its assets certain other costs and expenses incurred in its operationas more fully described under 18.2.

18. DETERMINATION OF THE NET ASSET VALUE

18.1 Base Currency

The base currency of account of the Fund is the U.S. Dollar and the Net Asset Value of theFund is expressed in U.S. Dollar. To the extent that a Sub-Fund’s base currency differs fromthat of the Fund, the net asset value of the Sub-Fund will, for these purposes only, beconverted to U.S. Dollar at the then-prevailing rates of exchange.

The Net Asset Value will be made available at the registered office of the ManagementCompany and of the Investment Manager. For the issue, redemption, or, if permitted,conversion of Units, the Net Asset Value may be rounded up or down to the nearest unit ofthe relevant currency or otherwise as provided for in the Supplement of the relevant Sub-Fund.

18.2 Assets and Liabilities

18.2.1 The assets of the Fund shall be deemed to include:

(a) all cash on hand or on deposit, including any interest accrued thereon;

(b) all bills and demand notes and accounts receivable (includingproceeds of securities sold but not delivered);

(c) all bonds, time notes, units, stock, debenture stocks, units/units inundertakings for collective investment, subscription rights, warrants,options and other investments and securities owned or contracted forby the Management Company for the Fund;

(d) all stock, stock dividends, cash dividends and cash distributionsreceivable by the Fund (provided that the Management Companymay make, adjustments with regard to fluctuations in the marketvalue of securities caused by trading ex-dividends, or ex-rights or bysimilar practices);

(e) all interest accrued on any interest-bearing securities owned by theFund except to the extent that the same is included or reflected in theprincipal amount of such security;

(f) the preliminary expenses of the Fund insofar as the same have notbeen written off; and

(g) all other assets of every kind and nature, including prepaid expenses.

18.2.2 The value of such assets shall be determined as follows:

(a) the value of any cash on hand or on deposit, bills and demand notesand accounts receivable, prepaid expenses, cash dividends andinterest declared or accrued as aforesaid and not yet received shall bedeemed to be the full amount thereof, unless in any case the same isunlikely to be paid or received in full, in which case the value thereof

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shall be arrived at after making such discount as the ManagementCompany may consider appropriate in such case to reflect the truevalue thereof;

(b) the value of securities and/or FDIs which are quoted or dealt in onany stock exchange shall be based, except as defined in (c), in respectof each security on the last reported sales price on the stock exchangewhich is normally the principal market for such security;

(c) where investments of the Fund are both listed on a stock exchangeand dealt in by market makers outside the stock exchange on whichthe investments are listed, then the Management Company willdetermine the principal market for the investments in question andthey will be valued at the latest available price in that market;

(d) securities dealt in on another regulated market are valued in a manneras near as possible to that described in (b);

(e) in the event that any of the securities held in the Fund’s portfolio onthe Calculation Day are not quoted or dealt in on a stock exchange oranother regulated market, or for which no price quotation is available,or if the price as determined (b) and/or (d) is not in the opinion of theManagement Company representative of the fair market value of therelevant securities, the value of such securities shall be determinedprudently and in good faith, based on the reasonably foreseeable saleprice or any other appropriate fair valuation principles;

(f) the FDIs which are not listed on any official stock exchange or tradedon any other organized market will be valued in a reliable andverifiable manner on a daily basis and verified by a competentprofessional appointed by the Management Company;

(g) units or units in underlying open-ended investment funds shall bevalued at their last available net asset value reduced by any applicablecharges;

(h) liquid assets and Money Market Instruments are valued at theirmarket price, at their nominal value plus accrued interest or on anamortized cost basis in accordance with ESMA Guideline 10-049. Ifthe Management Company considers that an amortization method canbe used to assess the value of a Money Market Instrument, it willensure that this will not result in a material discrepancy between thevalue of the Money Market Instrument and the value calculatedaccording to the amortization method; and

(i) in the event that the above mentioned calculation methods areinappropriate or misleading, the Management Company may adjustthe value of any investment or permit some other method of valuationto be used for the assets of the Fund if it considers that thecircumstances justify that such adjustment or other method ofvaluation should be adopted to reflect more fairly the value of suchinvestments.

18.2.3 The liabilities of the Fund shall be deemed to include:

(a) all loans, bills and accounts payable;

39

(b) all accrued or payable administrative expenses (including but notlimited to investment advisory fees, performance or managementfees, custody fees and corporate agents’ fees);

(c) all known liabilities, present and future, including all maturedcontractual obligations for payments of money or property, includingthe amount of any unpaid dividends declared the Fund where theCalculation Day falls on the record date for determination of theperson entitled thereto or is subsequent thereto;

(d) an appropriate provision for future taxes based on capital and incomeon the Calculation Day, as determined from time to time by theManagement Company, and other provisions, if any, authorized andapproved by the Management Company covering, among others,liquidation expenses; and

(e) all other liabilities of the Fund of whatsoever kind and nature exceptliabilities represented by Units in the Fund.

In determining the amount of such liabilities the Management Company shalltake into account all expenses payable by the Fund comprising formationexpenses, the remuneration and expenses of its Management Company, feespayable to its investment advisers or investment managers, fees and expensespayable to its service providers and officers, accountants, custodian andcorrespondents, domiciliary, registrar and transfer agents, any paying agent andpermanent representatives in places of registration, any other agent employed bythe Management Company for the Fund, registration costs, regulatory fees, feesand expenses incurred in connection with the listing of the Units of the Fund atany stock exchange or to obtain a quotation on another regulated market, fees forlegal and tax advisers in Luxembourg and abroad, foreign registration fees, feesfor auditing services, printing, reporting and publishing expenses, including thecost of preparing, translating, distributing and printing of the prospectuses,notices, rating agencies, explanatory memoranda, registration statements, orinterim and annual reports, taxes or governmental charges, Unitholders servicingfees and distribution fees payable to distributors of Units, currency conversioncosts, and all other operating expenses, including the cost of buying and sellingassets, interest, bank charges and brokerage, postage, telephone and telex. TheManagement Company may calculate for the Fund administrative and otherexpenses of a regular or recurring nature on an estimated figure for yearly orother periods in advance, and may accrue the same in equal proportions over anysuch period.

The Fund constitutes a single legal entity and its assets will be invested for the exclusivebenefit of the Unitholders.

19. SUSPENSION OF DETERMINATION OF THE NET ASSET VALUE

19.1 The Management Company may suspend the calculation of the Net Asset Value as well asthe issue, redemption and conversion of Units of a Class and/or a Sub-Fund in the followingcases:

19.1.1 during any period when dealing the units/shares of any underlying vehiclein which the relevant Sub-Fund may be invested are restricted orsuspended;

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19.1.2 during any period when any market or stock exchange, which is theprincipal market or stock exchange on which a material part of theinvestments of the relevant Sub-Fund for the time being are quoted, isclosed, other than for legal holidays, or during which dealings aresubstantially restricted or suspended, provided that such restriction orsuspension affects the valuation of the investments of the relevant Sub-Fund;

19.1.3 during the existence of any state of affairs which constitutes an emergency,in the opinion of the Management Company, or when, as a result ofpolitical, economic, military, terrorist or monetary events or anycircumstances outside the control, responsibility and power of the relevantSub-Fund, disposal of the underlying assets of the relevant Sub-Fund isnot reasonably practicable without being seriously detrimental toUnitholders’ interests or if, in the opinion of the Management Company,a fair price cannot be calculated for those assets as a result of whichdisposal or valuation of investments of the Fund by the ManagementCompany is not possible;

19.1.4 during any breakdown in the means of communication normally employedin determining the price or value of the relevant Sub-Fund’s investmentsor the current price or value on any market or stock exchange;

19.1.5 if the Fund is being or may be wound up, liquidated or merged, from thedate on which notice is given of a proposed resolution to that effect or if aSub-Fund is being liquidated or merged, from the date on which therelevant notice is given;

19.1.6 when for any other reason the prices of any investments owned by therelevant Sub-Fund cannot promptly or accurately be ascertained(including the suspension of the calculation of the net asset value of anunderlying undertaking for collective investment);

19.1.7 during any period when the Management Company is unable to repatriatefunds for the purpose of making payments on the redemption of Units orduring which any transfer of funds involved in the realization oracquisition of investments or payments due on redemption of Unitscannot, in the opinion of the Management Company, be effected at normalrates of exchange; or

19.1.8 any other circumstances beyond the control of the Management Company.

19.2 The Management Company may, in any of the circumstances listed above, suspend the issueand/or, redemption and/or conversion of Units of a Class and/or a Sub-Fund withoutsuspending the calculation of the Net Asset Value of that Class and/or Sub-Fund.

19.3 Notice of such suspension will be given to the CSSF.

A notice of the beginning and of the end of any period of suspension will be published in aLuxembourg newspaper and in any other newspaper(s) and/or media selected by theManagement Company, if, in the opinion of the Management Company, it is likely to exceedseven Business Days.

The Fund is not liable for any error or delay in publication or, to the extent that the Fund hadinstructed a third party to arrange for a publication, for non-publication.

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19.4 Notice will likewise be given to any applicant or Unitholder, as applicable, applying for theissue, redemption and conversion of Units of a Class. Such Unitholders may give notice thatthey wish to withdraw their application for subscription, redemption and conversion ofUnits. If no such notice is received by the Management Company such application forredemption or conversion as well as any application for subscription will be dealt with onthe first Calculation Day following the end of the period of suspension.

20. TAX CONSIDERATIONS

20.1 General

The following statements on taxation below are intended to be a general summary of certainLuxembourg tax consequences that may result to the Fund and Unitholders in connectionwith their investment in the Fund and are included herein solely for information purposes.They are based on the law and practice in force in Luxembourg at the date of this Prospectus.

There is no assurance that the tax status of the Fund or Unitholders will not be changed as aresult of amendments to, or changes in the interpretation of, relevant tax legislation andregulations. This summary is of general nature only and is not intended to be, nor should itbe construed to be, legal or tax advice to any particular investor. Prospective investors shouldtherefore consult their own professional advisers as to the effects of state, local or foreigntax laws, including Luxembourg tax law, to which they might be subject.

As is the case with any investment, there can be no guarantee that the tax position orproposed tax position prevailing at the time an investment in the Fund is made will endureindefinitely. The information should not be regarded as legal or tax advice.

Unitholders Resident Outside of Luxembourg

It is expected that Unitholders will be resident for tax purposes in many differentjurisdictions. Consequently, no attempt is made in this Prospectus to summaries the taxationconsequences for each investor of subscribing, holding or redeeming or otherwise acquiringor disposing of Units. These consequences will vary in accordance with the law and practicecurrently in force in a Unitholder’s country of citizenship, residence, domicile orincorporation and with his personal circumstances. Investors should inform themselvesabout, and when appropriate consult their professional advisers on, the possible taxconsequences of subscription for, buying, holding, redeeming or otherwise disposing ofUnits under the laws of their country of citizenship, residence, domicile or incorporation.

Taxation of the Fund Outside of Luxembourg

The Fund may be subject to local withholding taxes in respect of income or gains derivedfrom its investments in underlying investee countries.

20.2 Luxembourg

Taxation of the Fund

The Fund is subject to Luxembourg law in respect of its tax status. Under legislation andregulations currently prevailing in Luxembourg, the Fund is subject to a subscription tax onits net assets (“taxe d’abonnement”), calculated and payable quarterly. This tax is borne bythe Fund. The rate of the taxe d’abonnement is currently (i) normally 0.05% per annum ofthe Net Asset Value of the Net Asset Value of each Class which is available to all investorsand (ii) 0.01% per annum of the Net Asset Value of each Class which is restricted toInstitutional Investors. Are exempt from the subscription tax the value of the assetsrepresented by units held in Other UCIs, provided such units have already been subject to

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the subscription tax. Specific provisions in a Sub-Fund Supplement may determine that thetaxe d’abonnement attributable to a Sub-Fund is to be borne by one of the service providersof the Classes reserved for Institutional Investors will normally be able to benefit from anexemption.

The Fund is in principle considered to be a tax transparent entity for Luxembourg taxpurposes. As a consequence, the Fund, in principle, is not entitled to benefit from doubletaxation treaties although its tax treatment may be different in jurisdictions other thanLuxembourg. Potential investors should inform themselves about the possibility to benefitdirectly from the provisions of double taxation treaties.

Taxation of Unitholders

Under current Luxembourg legislation, Unitholders are not subject to any capital gains,income or withholding tax in Luxembourg, except for (i) those domiciled, resident or havinga permanent establishment in Luxembourg or (ii) in some limited cases, pursuant to the EUSavings Directive, individuals who are resident or deemed to be resident in the EuropeanUnion.

20.3 European Tax Considerations

The Council of the European Union adopted on 3 June 2003 the EU Savings Directive.Under the EU Savings Directive, Member States are required to provide tax authorities ofanother Member State with details of payments of interest or other similar income paid by aperson within its jurisdiction to an individual resident in that other Member State.

The Grand Duchy of Luxembourg has decided to amend the Law of 2005 and to end as from1 January 2015 the transitional period foreseen in the EU Savings Directive where accountholders could opt between the exchange of information and the withholding tax to introduceautomatic exchange of information on interest payments made by a paying agent establishedin Luxembourg. According to article 8 of the EU Savings Directive, the paying agent willreport to the Luxembourg tax authorities the following information regarding the beneficialowner of the payment:

20.3.1 Identity and residence of the beneficial owner;

20.3.2 Name and address of the paying agent;

20.3.3 Account number of the beneficial owner or where there is none,identification of the debt claim giving rise to the interest;

20.3.4 The total amount of interest or similar income or sales price or repurchaseprice or repayment price.

The Luxembourg tax authorities will automatically transmit this information to thecompetent authority of the Member State where the recipient is established. Thecommunication of information shall be automatic and shall take place at least once a yearwithin six months following the end of the tax year of the Member State of the paying agent,for all interest payments made during that year. The first exchange of information will takeplace in 2016 regarding payments made in 2015.

The foregoing is only a summary of the implications of the EU Savings Directive and theLaw of 2005, is based on the current interpretation thereof and does not purport to becomplete in all respects. It does not constitute investment or tax advice and investors shouldtherefore seek advice from their financial or tax adviser on the full implications forthemselves of the EU Savings Directive and the Law of 2005.

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20.4 United States

20.4.1 Some of the Sub-Funds may allow U.S. Persons as investors.

20.4.2 The following discussion is a general summary of certain U.S. federal taxconsequences that may result to the Fund and its Unitholders in connectionwith their investment in the Fund. The discussion does not purport to dealwith all of the U.S. federal income tax consequences applicable to theFund or to all categories of investors, some of whom may be subject tospecial rules. In particular, because U.S. Taxpayers (as defined below)generally will not be permitted to invest in the Fund except in accordancewith the provisions of a Supplement, the discussion does not address theU.S. federal income tax consequences to such persons of an investment inUnits.

The following discussion is based on laws and regulations currently in effect,which may change retroactively or prospectively. The discussion assumes thatthe Fund will not hold any interests (other than as a creditor) in any “UnitedStates real property holding corporations” as defined in the U.S. InternalRevenue Code of 1986, as amended (the “Code”). Investors should consult theirown tax advisors regarding the tax consequences to them of an investment in theFund under applicable U.S. federal, state, local and foreign income tax laws aswell as with respect to any specific gift, estate and inheritance tax issues.

As used herein, the term “U.S. Taxpayer” means: a U.S. citizen or resident alienof the United States (as defined for U.S. federal income tax purposes); any entitytreated as a partnership or corporation for U.S. tax purposes that is created ororganized in, or under the laws of, the United States or any State thereof(including the District of Columbia); any other partnership that is treated as aU.S. Taxpayer under U.S. Treasury Department regulations; any estate, theincome of which is subject to U.S. income taxation regardless of source; and anytrust over whose administration a court within the United States has primarysupervision and all substantial decisions of which are under the control of one ormore U.S. fiduciaries. Persons who have lost their U.S. citizenship and who liveoutside the United States may nonetheless, in some circumstances, be treated asU.S. Taxpayers.

The following discussion assumes for convenience that the Fund, including eachSub-Fund thereof, will be treated as a single entity for U.S. federal income taxpurposes. The law in this area is uncertain. Thus, the Fund may adopt analternative approach, treating each Sub-Fund as a separate entity for U.S. federalincome tax purposes. There can be no assurance that the U.S. Internal RevenueService will agree with the position taken by the Fund.

Taxation of the Fund

The Fund generally intends to conduct its affairs so that it will not be deemed tobe engaged in trade or business in the United States and, therefore, none of itsincome will be treated as “effectively connected” with a U.S. trade or businesscarried on by the Fund. If none of the Fund’s income is effectively connectedwith a U.S. trade or business carried on by the Fund, certain categories of income,including dividends (and certain substitute dividends and other dividendequivalent payments) and certain types of interest income, derived by the Fundfrom U.S. sources will be subject to a U.S. tax of 30 per cent., which tax isgenerally withheld from such income. Certain other categories of income,generally including capital gains (including those derived from the use of

44

derivative instruments) and interest on certain portfolio debt obligations (whichmay include U.S. Government securities), original issue discount obligationshaving an original maturity of one hundred and eighty three days or less, andcertificates of deposit will not be subject to this 30 per cent. tax. If, on the otherhand, the Fund derives income which is effectively connected with a U.S. tradeor business carried on by the Fund, such income will be subject to U.S. federalincome tax at the graduated rates applicable to U.S. domestic corporations, andthe Fund may also be subject to a branch profits tax.

As stated above, the Fund generally intends to conduct its activities so as to avoidbeing treated as engaged in a trade or business in the United States for U.S.federal income tax purposes. Specifically, the Fund intends to qualify for safeharbours in the Code, pursuant to which the Fund will not be treated as engagedin such a business if its activities are limited to trading in stocks and securities orcommodities for its own account. To qualify for the commodities safe harbour,the commodities must be of a kind customarily dealt in on an organizedcommodity exchange, and the transaction must be of a kind customarilyconsummated at such place. These safe harbours apply regardless of whether thetrading is done by the Fund or a resident broker, commission agent, depositaryor other agent, or whether such agent has discretionary authority to makedecisions in effecting the transactions. These safe harbours do not apply to adealer in stocks, securities or commodities; the Fund does not intend to be sucha dealer.

It should be noted, however, that only limited guidance, including proposedregulations that have yet to be finalized, exists with respect to the tax treatmentof non-U.S. persons who effect transactions in securities and commoditiesderivative positions for their own account within the United States. For example,as currently proposed, the regulations provide a safe harbour with respect totrading interests in currencies and currency derivatives only if the currencies areof a kind customarily dealt in on an organised commodity exchange. Futureguidance may cause the Fund to alter the manner in which it engages in suchactivity within the United States.

Pursuant to the US Foreign Account Tax Compliance Act (“FATCA”), the Fund(or each Sub-Fund) must comply (or be deemed compliant) with extensive newreporting and withholding requirements designed to inform the US Departmentof the Treasury of US-owned foreign investment accounts. Failure to comply (orbe deemed compliant) with these requirements will subject the Fund (or eachSub-Fund) to US withholding taxes on certain US-sourced income and (effective1 January 2019) gross proceeds. Pursuant to an intergovernmental agreementbetween the United States and Luxembourg, the Fund (or each Sub-Fund) maybe deemed compliant, and therefore not subject to the withholding tax, if itidentifies and reports US taxpayer information directly to the Luxembourg.Unitholders may be requested to provide additional information to the Fund toenable the Fund (or each Sub-Fund) to satisfy these obligations. Failure toprovide requested information or (if applicable) satisfy its own FATCAobligations may subject a Unitholder to liability for any resulting US withholdingtaxes, US tax information reporting and/or mandatory redemption, transfer orother termination of the Unitholder’s Units. Detailed guidance as to themechanics and scope of this new reporting and withholding regime is continuingto develop. There can be no assurance as to the timing or impact of any suchguidance on future operations of the Fund or its Sub-Funds. See also “US TaxWithholding and Reporting under FATCA” below.

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Taxation of Unitholders

The U.S. tax consequences to Unitholders of distributions from the Fund and ofdispositions of Units generally depends on the Unitholder’s particularcircumstances, including whether the Unitholder conducts a trade or businesswithin the United States or is otherwise taxable as a U.S. Taxpayer.

U.S. Taxpayers will be required to furnish the Fund with a properly executed IRSForm W-9; all other Unitholders will be required to furnish an appropriate,properly executed IRS Form W-8, as necessary. Amounts paid to a U.S.Taxpayer as dividends from the Fund, or as gross proceeds from a redemption ofUnits, generally will be reported to the U.S. Taxpayer and the U.S. InternalRevenue Service on an IRS Form 1099 (except as otherwise noted below).Failure to provide an appropriate and properly executed IRS Form W-8, asnecessary (in the case of Unitholders who are not U.S. Taxpayers) or IRS FormW-9 (for U.S. Taxpayers), may subject a Unitholder to backup withholding tax.Backup withholding is not an additional tax. Any amounts withheld may becredited against a Unitholder’s U.S. federal income tax liability.

Tax-exempt entities, corporations, non-U.S. Taxpayers and certain othercategories of Unitholders generally will not be subject to reporting on IRS Form1099 or backup withholding, if such Unitholders furnish the Fund with anappropriate and properly executed IRS Form W-8 or IRS Form W-9, asnecessary, certifying as to their exempt status.

Unitholders will be required to provide such additional information as the Fundmay from time to time request. Failure to provide requested information maysubject a Unitholder to liability for any resulting U.S. withholding taxes, U.S. taxinformation reporting and/or mandatory redemption of the Unitholder’s Units.

U.S. State and Local Taxation

In addition to the U.S. federal income tax consequences described above,investors should consider potential U.S. state and local tax consequences of aninvestment in the Fund. U.S. state and local tax laws often differ from U.S.federal income tax laws. Investors should seek U.S. state and local tax advicebased on the investor’s particular circumstances from an independent tax advisor.

California Taxation

The Fund, if classified as a corporation for federal income tax purposes asindicated above, will be subject to California franchise or corporation income taxonly on its California-source income. If treated as a non-US corporation, theFund can avoid having California-source income from direct investments inintangible personal property if either (1) its commercial domicile is outsideCalifornia or (2) its investment activities fall within a safe harbour that allows itto trade in “stocks or securities” for its own account without generatingCalifornia-source income. A corporation’s commercial domicile is the principalplace from which its trade or business is directed or managed. The Fund intendsto take the position that its commercial domicile is not in California. One factorthat may, however, be taken into account in determining the Fund’s commercialdomicile is the fact that its investments are managed from California. Thus, therecan be no assurance that the Fund’s position will be upheld if challenged. Inaddition, although the Fund generally intends to conduct its investment activitiesin a manner that satisfies the “stocks or securities” trading safe harbour, there isvery little guidance on the definition of “securities” for this purpose. If it were

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determined, for example, that commodity linked swaps and structured notes,credit default swaps or other derivative instruments are not “securities” for thispurpose, the Fund could fail to qualify under the “stocks or securities” safeharbour. Consequently, there is no assurance that the Fund will avoid havingCalifornia-source income.

20.5 US Tax Withholding and Reporting under FATCA

The FATCA provisions of the US Hiring Incentives to Restore Employment Act of 2010(the “HIRE Act”) represent an expansive information reporting regime enacted by theUnited States (“US”) aiming at ensuring that US investors holding financial assets outsidethe US will be reported by financial institutions to the US Internal Revenue Service (“IRS”),as a safeguard against US tax evasion. As a result of the HIRE Act, and to discourage non-US financial institutions from staying outside this regime, a non-US financial institution thatdoes not enter and comply with the regime will be subject to a US tax withholding of 30%on certain US-sourced income and (effective 1 January 2019) on gross sales proceeds.

The Model I Intergovernmental Agreement between the Government of the United States ofAmerica and the Government of the Grand Duchy of Luxembourg to Improve InternationalTax Compliance and to Implement FATCA (Foreign Account Tax Compliance Act) hasbeen signed on March 28, 2014 in Luxembourg. Under the terms of the IntergovernmentalAgreement (“IGA”), the Fund (or each Sub-Fund) will be obliged to comply with theprovisions of FATCA under the terms of the IGA and under the terms of Luxembourglegislation implementing the IGA (the “Luxembourg IGA Legislation”), rather than underthe US Treasury Regulations implementing FATCA. Under the IGA, Luxembourg residentfinancial institutions that comply with the requirements of the Luxembourg IGA Legislationwill be treated as compliant with FATCA and, as a result, will not be subject to withholdingtax under FATCA (“FATCA Withholding”). The Fund (or each Sub-Fund) will in principlebe considered to be a Luxembourg-resident financial institution that will need to complywith the requirements of the Luxembourg IGA Legislation and, as a result of suchcompliance, the Fund (and its Sub-Funds) should not be subject to FATCA Withholding.Under the Luxembourg IGA Legislation, the Fund (or each Sub-Fund) via the ManagementCompany will be required to report to the Luxembourg tax authorities certain holdings by,and payments made to, (a) certain US investors, (b) certain US controlled non-US entityinvestors and (c) non-US financial institution investors that do not comply with the terms ofthe Luxembourg IGA Legislation. Under the Luxembourg IGA Legislation, suchinformation will be onward reported by the Luxembourg tax authorities to the US IRS underthe general information exchange provisions of the US-Luxembourg Income Tax Treaty.The first report to the Luxembourg tax authorities has to be submitted in 2015, in respect of2014.

Additional intergovernmental agreements similar to the IGA have been entered into or areunder discussion by other jurisdictions with the United States. Investors holding investmentsvia distributors (whether or not resident in Luxembourg or in another IGA country) shouldcheck with such distributors as to their compliance with FATCA. Additional informationmay be required by the Management Company or distributors from certain investors in orderto comply with their obligations under FATCA or under an applicable IGA.

The scope and application of FATCA Withholding and information reporting pursuant tothe terms of FATCA and the IGAs is subject to review by the US, Luxembourg and otherIGA governments, and the rules may change. Investors should contact their own tax advisorsregarding the application of FATCA to their particular circumstances.

In order to be compliant with FATCA, the Management Company and/or the Administrator,the distributors and local paying agents have implemented proper Anti Money Launderingand Know Your Customer (AML/KYC) rules and new investors will be accepted only if

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certain conditions are met. Indeed, potential investors are required to provide theManagement Company and/or the Administrator, the distributors and local paying agentswith certain documents and self-certification. This documentation that may vary accordingthe local legislation applicable to the potential investor is mandatory, the most commondocument being the application or subscription form. As a consequence, should the potentialinvestor refuse to provide such documentation, the Management Company and/or theAdministrator, the distributors and local paying agents will refuse the subscription from suchinvestor.

In case of self-certification, the Management Company and/or the Administrator, thedistributors and local paying agents should assess a “reasonableness” to FATCA purposes.“Reasonableness” means that a cross-check will be made between information, US indicia(as defined below), self-certification and AML/KYC collected information. In caseinconsistency in information contained in self-certification is detected, more clarificationswill be required. In case the request is declined, the investor will not be accepted.

On the basis of the documentation received, a verification of the status (U.S. Person or notU.S. Person) will be made.

Any investor must be aware that the Management Company and the Fund will comply withFATCA and the IGA Luxembourg Legislation.

As a result, the Administrator, the distributors and local paying agents will consequentlymonitor all data provided for by an investor from time to time in order to check if any changein circumstances (US Indicia) to FATCA purposes occurs, which could cause the investorclassification as a U.S. Person or not and the investor will agree to provide them with therequested documents.

Notwithstanding the above, the investor will communicate to the Administrator, thedistributors and local paying agents in writing any change of circumstances in its status (USIndicia) in a timely manner and in any case no later than 30 business days from the date ofthe change of circumstances and provide them with any relevant documentation evidencingsaid change in circumstances.

List of US Indicia - provided for information and subject to modification.

Any individual investor will communicate to the Administrator, the distributors and localpaying agents, in a timely manner, a change in the following information:

20.5.1 US citizenship or residency;

20.5.2 US address of residence and mailing address (i.e. including a US postoffice box);

20.5.3 US telephone number;

20.5.4 standing instruction to pay amounts to an account maintained in the US;

20.5.5 power of attorney or signatory authority granted to a person with a USaddress;

20.5.6 an “in-care of” address or “hold mail” address that is the sole addressprovided for by the investor.

Any corporate investor will communicate to the Administrator, the distributors and localpaying agents, in a timely manner, a change in its US place of incorporation or organization,or in an US address.

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The investors who do not comply with their obligations of communication in change ofsituation as described above will be subject to reporting to the local tax authority and, assuch, be treated as “US Reportable Accounts”.

21. REPORTS AND FINANCIAL YEAR

Annual audited reports as of 31 December starting in 2016 will be available at the registeredoffice of the Management Company and of the Administrator within three months of theclose of the relevant financial year. Unaudited half-yearly reports as of 30 June of each yearwill also be made available in the same manner within two months of the end of the periodto which they refer. As an exception, the first report is an unaudited half-yearly report as of30 June 2016.

Information on the Fund, including the total Net Asset Value, is available on any BusinessDay at the registered office of the Management Company and of the Administrator.

22. INVESTORS’ RIGHTS TOWARDS THE FUND

The Management Company draws the attention of the Unitholders to the fact that aUnitholder will only be able to fully exercise his rights directly against the Fund if theUnitholder is registered himself and in his own name in the register of Unitholders. In caseswhere a Unitholder invests in the Fund through an intermediary investing into the Fund inits own name but on behalf of the Unitholder, it may not always be possible for theUnitholder to exercise certain Unitholder rights directly against the Fund. Unitholders areadvised to take advice on their rights.

23. HISTORICAL PERFORMANCE

Past performance information on each Sub-Fund is included in the latest available auditedannual and unaudited semi-annual reports of the Fund.

Past performance is not necessarily a guide to future performance. Investors may not getback the full amount invested, as prices of Units and the income from them may fall as wellas rise. Changes in the rates of exchange between currencies may cause the value ofinvestments to diminish or increase. Fluctuation may be particularly marked in the case of ahigher volatility fund and the value of an investment may fall suddenly and substantially.Levels and bases of taxation may change from time to time.

24. DURATION, MERGER AND LIQUIDATION OF THE FUND, A SUB-FUND OR ACLASS

24.1 Duration of the Fund and the Sub-Funds

The Fund has been established for an indefinite period.

Unless otherwise provided for in the Supplement of the relevant Sub-Fund, Sub-Funds willbe established for an indefinite period. Unitholders, their successors, and any otherbeneficiaries may not demand the dissolution or division of the Fund.

24.2 Liquidation of the Fund

The Fund may be dissolved at any time by mutual agreement of the Management Companyand the Depositary. Notice thereof will be published in the Mémorial and in two newspapers,one of which at least must be a Luxembourg newspaper. No Units may be issued after thedate of such decision of the Management Company and the Depositary. The ManagementCompany will, however, not be precluded from redeeming or, if permitted, converting all orpart of the Units, at their request, at the applicable Net Asset Value (taking into account

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actual realization prices of investments as well as realization expenses in connection withsuch dissolution), as from the date on which the resolution to dissolve the Fund has beentaken until its effectiveness, provided that such redemption or conversion does not affect theequal treatment among Unitholders.

In the event of the liquidation of the Fund, the Management Company shall realize the assetsof the Fund in the best interest of the Unitholders, and the Depositary shall distribute the netliquidation proceeds, after deduction of liquidation charges and expenses, to the holders ofUnits in the proportion of the respective rights of each Class, all in accordance with thedirections of the Management Company.

The closure of the liquidation of the Fund shall, in principle, take place within a period ofnine months starting from the decision of the Management Company relating to theliquidation. Where the procedure of liquidation of the Fund cannot be closed within a periodof nine months, a written request for exemption shall be submitted to the CSSF detailing thereasons why the closure of the liquidation cannot be pronounced.

Liquidation proceeds that could not be distributed to the persons entitled thereto at the closeof liquidation shall be deposited with the Caisse de Consignation in Luxembourg until theapplicable prescription period shall have elapsed.

24.3 Liquidation of Sub-Funds and Classes

A Sub-Fund or Class may be dissolved by resolution of the Management Company if its NetAsset Value of a Sub-Fund or a Class is below USD 5,000,000(or currency equivalent) orsuch other amount as may be determined from time to time by the Management Company,or in the event of special circumstances beyond its control, such as political, economic, ormilitary emergencies, or if the Management Company should conclude, in light of prevailingmarket or other conditions, including conditions that may adversely affect the ability of aSub-Fund or a Class to operate in an economically efficient manner, and with due regard tothe best interests of Unitholders, that a Sub-Fund or a Class should be terminated. In suchevent, the, assets of the Sub-Fund or Class shall be realized, the liabilities discharged andthe net proceeds of realization distributed to Unitholders in the proportion to their holdingof Units in that Sub-Fund or Class. In such event, notice of the termination of the Sub-Fundor Class will be given in writing to registered Unitholders. No Units shall be issued after thedate of the decision to liquidate the Sub-Fund or Class. The Management Company,however, will not be precluded from redeeming or converting all or part of the Units, at theirrequest, at the applicable Net Asset Value (taking into account actual realization prices ofinvestments as well as realization expenses in connection with such dissolution), as from thedate on which the resolution to dissolve the Sub-Fund or Class has been taken until itseffectiveness, provided that such redemption or conversion does not affect the equaltreatment among Unitholders. Any amounts not claimed by a Unitholder at the close ofliquidation of the Sub-Fund or Class will be deposited with the Caisse de Consignation inLuxembourg on behalf of their beneficiaries.

24.4 Merger of Sub-Funds and Classes

A Sub-Fund or Class may merge with one or more other Sub-Funds or Classes by resolutionof the Management Company if the Net Asset Value of a Sub-Fund or Class is belowUSD 5,000,000 (or currency equivalent) or in the event of special circumstances beyond itscontrol, such as political, economic, or military emergencies, or if the ManagementCompany should conclude, in light of prevailing market or other conditions, includingconditions that may adversely affect the ability of a Class to operate in an economicallyefficient manner, and with due regard to the best interests of the Unitholders, that a Sub-Fund or Class should be merged. In such events, notice of the merger will be given in writingto registered Unitholders. Each Unitholder of the relevant Sub-Fund or Class shall be given

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the option, within a period to be determined by the Board, but not being less than one month,unless otherwise authorized by the regulatory authorities and specified in said notice, torequest free of any redemption charge, the redemption of its Units. Any applicablecontingent deferred sales charges are not to be considered as redemption charges and shalltherefore be due.

24.5 Division of Sub-Funds and Classes

If the Management Company determines that it is in the interests of the Unitholders of therelevant Sub-Fund or Class or that a change in the economic or political situation relating tothe Sub-Fund or Class concerned has occurred which would justify it, the reorganization ofone Class, by means of a division into two or more Sub-Funds or Classes, may take place.This decision will be notified to Unitholders as required. The notification will also containinformation about the two or more new Sub-Funds or Classes. The notification will be madeat least one month before the date on which the reorganization becomes effective in order toenable the Unitholders to request the redemption of their Units, free of charge, before theoperation involving the division into two or more Sub-Funds or Classes becomes effective.Any applicable contingent deferred sales charges are not to be considered as redemptioncharges and shall therefore be due.

24.6 Merger of the Fu0nd

The Management Company may decide to proceed with a merger of the Fund, either asreceiving or merging UCITS, with:

24.6.1 another Luxembourg or foreign UCITS (the “New UCITS”); or

24.6.2 a sub-fund thereof,

24.6.3 and as appropriate, to redesignate the Units as units of this New UCITS orof the relevant sub-fund thereof, as applicable.

In all merger cases above, the Unitholders have the right to request, without any charge otherthan those retained by the Fund to meet disinvestment costs, the redemption or redemptionof their Units or, where possible, to convert them into units or shares of another UCITSpursuing a similar investment policy and managed by the Management Company or by anyother company with which the Management Company is linked by common management orcontrol, or by a substantial direct or indirect holding, in accordance with the Law of 2010.This right will become effective from the moment that the unitholders of the merging UCITSand those of the receiving UCITS have been informed of the proposed merger in accordancewith the Law of 2010 and will cease to exist five working days before the date for calculatingthe exchange ratio for the merger. Any legal, advisory or administrative costs associatedwith the preparation and the completion of the merger shall neither be charged to the Fundnor to its Unitholders.

25. GENERAL INFORMATION

25.1 Applicable Law and Jurisdiction

The Management Regulations are governed by the laws of Luxembourg and any disputearising between the Unitholders, the Management Company and the Depositary will besubject to the jurisdiction of the District Court of Luxembourg.

The claims of the Unitholders against the Management Company or the Depositary willlapse five years after the date of the event which gave rise to such claims.

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25.2 Material Contracts

The following contracts, not being contracts in the ordinary course of business, were or maybe entered into by the Management Company on behalf of the Fund or a Sub-Fund and areor may be material and are available for inspection by Unitholders at the office of theAdministrator:

25.2.1 the Depositary Agreement;

25.2.2 the Standard Agreement (re: information sharing between theManagement Company and the Depositary);

25.2.3 the Administration Agreement;

25.2.4 the Investment Management Agreement; and

25.2.5 the Prime Broker Agreement (if applicable).

25.3 Documents Available for Inspection by Unitholders

Copies of the following documents will be available for inspection exclusively byUnitholders of the relevant Sub-Fund at the registered office of the Management Companyand at the office of the Administrator during usual business hours on any Business Day:

25.3.1 the Prospectus;

25.3.2 the Management Regulations;

25.3.3 the Articles;

25.3.4 the KIIDs;

25.3.5 the material contracts referred to in section 25.2 (to the extent applicable);and

25.3.6 the latest available audited annual and unaudited semi-annual reports ofthe Fund.

25.4 Definition of U.S. Person

A U.S. Person for purposes of this Prospectus is a person who is in either of the followingtwo categories: (a) a person included in the definition of U.S. Person under Rule 902 ofRegulation S under the 1933 Act or (b) a person excluded from the definition of a Non-United States Person as used in CFTC Rule 4.7. For the avoidance of doubt, a person isexcluded from this definition of U.S. Person only if he or it does not satisfy any of thedefinitions of U.S. Person in Rule 902 and qualifies as a Non-United States Person underCFTC Rule 4.7.

U.S. Person under Rule 902 includes the following:

25.4.1 any natural person resident in the United States;

25.4.2 any partnership or corporation organized or incorporated under the lawsof the United States;

25.4.3 any estate of which any executor or administrator is a U.S. person;

25.4.4 any trust of which any trustee is a U.S. person;

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25.4.5 any agency or branch of a non-U.S. entity located in the United States;

25.4.6 any non-discretionary account or similar account (other than an estate ortrust) held by a dealer or other fiduciary for the benefit or account of a U.S.person;

25.4.7 any discretionary account or similar account (other than an estate or trust)held by a dealer or other fiduciary organized, incorporated or (if anindividual) resident in the United States; and

25.4.8 any partnership or corporation if:

(a) organized or incorporated under the laws of any non-U.S.jurisdiction; and

(b) formed by a U.S. person principally for the purpose of investing insecurities not registered under the 1933 Act, unless it is organized orincorporated, and owned, by accredited investors (as defined inRule 501(a) of Regulation D under the 1933 Act) who are not naturalpersons, estates or trusts.

Notwithstanding the preceding paragraph, U.S. Person under Rule 902 does not include:(i) any discretionary account or similar account (other than an estate or trust) held for thebenefit or account of a non-U.S. Person by a dealer or other professional fiduciary organized,incorporated, or (if an individual) resident in the United States; (ii) any estate of which anyprofessional fiduciary acting as executor or administrator is a U.S. Person, if (A) an executoror administrator of the estate who is not a U.S. Person has sole or united investmentdiscretion with respect to the assets of the estate, and (B) the estate is governed by non-United States law; (iii) any trust of which any professional fiduciary acting as trustee is aU.S. Person if a trustee who is not a U.S. Person has sole or united investment discretionwith respect to the trust assets and no beneficiary of the trust (and no settlor if the trust isrevocable) is a U.S. Person; (iv) an employee benefit plan established and administered inaccordance with the law of a country other than the United States and customary practicesand documentation of such country; (v) any agency or branch of a U.S. Person locatedoutside the United States if (A) the agency or branch operates for valid business reasons,and (B) the agency or branch is engaged in the business of insurance or banking and issubject to substantive insurance or banking regulation, respectively, in the jurisdiction wherelocated; and (vi) certain international organizations as specified in Rule 902(k)(2)(vi) ofRegulation S under the 1933 Act, including their agencies, affiliates and pension plans.

CFTC Rule 4.7 currently provides in relevant part that the following persons are considered“Non-United States persons”:

25.4.9 a natural person who is not a resident of the United States or an enclave ofthe U.S. government, its agencies or instrumentalities;

25.4.10 a partnership, corporation or other entity, other than an entity organizedprincipally for passive investment, organized under the laws of a non-U.S.jurisdiction and which has its principal place of business in a non-U.S.jurisdiction;

25.4.11 an estate or trust, the income of which is not subject to United Statesincome tax regardless of source;

25.4.12 an entity organized principally for passive investment such as a pool,investment company or other similar entity, provided, that units of

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participation in the entity held by persons who do not qualify as Non-United States persons or otherwise as qualified eligible persons (as definedin CFTC Rule 4.7(a)(2) or (3)) represent in the aggregate less than 10% ofthe beneficial interest in the entity, and that such entity was not formedprincipally for the purpose of facilitating investment by persons who donot qualify as Non-United States persons in a pool with respect to whichthe operator is exempt from certain requirements of Part 4 of the CFTC’sregulations by virtue of its participants being Non-United States persons;and

25.4.13 a pension plan for the employees, officers or principals of an entityorganized and with its principal place of business outside the UnitedStates.

26. CONFLICTS OF INTEREST

Various potential and actual conflicts of interest may arise from the overall investmentactivities of the Management Company and its affiliates for their own accounts and theaccounts of others. To the extent consistent with applicable law, the Management Companyand its affiliates may invest for their own accounts and for the accounts of clients in variousinstruments that are senior, pari passu or junior to, or have interests different from or adverseto, the instruments that are owned by the Fund. Furthermore, the Management Company andits affiliates serve as management company or investment manager to other funds and maymake investment decisions for their own accounts and for the accounts of others, includingother funds that may be different from those that will be made by the Management Companyon behalf of the Fund. When making investment decisions where a conflict of interest mayarise, the Management Company will endeavour to act in a fair and equitable manner asbetween the Fund and other clients. The Management Company may at certain times(subject to applicable law) be simultaneously seeking to purchase (or sell) investments fromthe Fund and sell (or purchase) the same investment for a similar entity, including otherfunds, for which it serves as asset manager now or in the future, or for its clients or affiliates.In addition, the Management Company and its affiliates may buy securities from or sellsecurities to the Fund if permitted by applicable law. These other relationships may alsoresult in securities laws restrictions on transactions in these instruments by the Fund andotherwise create potential conflicts of interest for the Management Company.

Although the principals and employees of the Management Company will devote as muchtime to the Fund as the Management Company deems appropriate, the principals andemployees may have conflicts in allocating their time and services among the Fund and theother accounts now or hereafter advised by the Management Company and/or its affiliates.In addition, the Management Company, in connection with its other business activities, mayacquire material non-public confidential information that may restrict the ManagementCompany from purchasing securities or selling securities for itself or its clients (includingthe Fund) or otherwise using such information for the benefit of its clients or itself.

The Management Company, the Administrator and the Depositary may from time to timeact as investment manager, administrators or depositaries in relation to, or otherwise beinvolved with, other companies established by parties other than the Fund. Such companiesmay have similar objectives to the Fund. Should a conflict of interest arise, the ManagementCompany will endeavour to ensure that it is resolved fairly.

Conflicts of interest also exist in the structure and operation of the Fund and the Fund’sbusiness. The management fee and any service fee which the Management Companyreceives may not have been set by “arm’s length” negotiations and may be higher than thefee which another management company may have charged. Investors in the Fund mayinclude, if permitted by applicable law, the Management Company and its affiliates as well

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as client accounts or other funds over which the Management Company or its affiliatesexercise investment discretion. Investments by such investors may be substantial in relationto the overall assets of the Fund, are not obligated to be made or to be maintained in theFund for any minimum period of time except in accordance with the Fund’s offering termsand may be withdrawn, in whole or in part, at any time without notice to investors. TheManagement Company or its affiliates may receive fees both from the Fund and such clientaccounts or other funds.

The above is not necessarily a comprehensive list of all potential conflicts of interest.

27. RISK FACTORS

An investment in the Fund carries risks including, but not limited to, the risks referred tobelow. No assurance can be given that Unitholders will realize a profit on their investment.Moreover, Unitholders may lose some or all of their investment.

The risks referred to below are not exhaustive. Potential investors should review thisProspectus carefully and in its entirety and consult with their professional advisors beforemaking an application for Units.

27.1 General Risk Factors

27.1.1 General Economic and Market Conditions

The success of a Sub-Fund’s activities will be affected by general economic andmarket conditions, such as interest rates, availability of credit, inflation rates,economic uncertainty, changes in laws, trade barriers, currency exchangecontrols and national and international political circumstances. These factorsmay affect the level and volatility of securities’ prices and the liquidity of a Sub-Fund’s investments. Volatility or illiquidity could impair a Sub-Fund’sprofitability or result in losses.

Equity market risk is the possibility that stock prices overall will decline overshort or even extended periods. Equity markets are volatile and tend to move incycles, with periods of rising and falling stock prices. This volatility in stockprices means that the value of an investor’s holding in a Sub-Fund may go downas well as up and an investor may not recover the amount invested. Equities arerepresentatives of companies’ capital and expose the investor at the economicrisk of the enterprise, so the investor is exposed to the risk of losing completelythe money invested in equities.

Where a Sub-Fund’s assets are invested in narrowly-defined markets or sectorsof a given economy, risk is increased by the inability to broadly diversifyinvestments and thereby subjecting the Sub-Fund to greater exposure topotentially adverse developments within those markets or sectors.

Since 2008 world financial markets have experienced extraordinary marketconditions, including, among other things, extreme volatility in securitiesmarkets and the failure of credit markets to function. When such conditions arise,decreased risk tolerance by investors and significantly tightened availability ofcredit may result in certain securities becoming less liquid and more difficult tovalue, and thus harder to dispose of. Such conditions may be exacerbated by,among other things, uncertainty regarding financial institutions and other marketparticipants, increased aversion to risk, concerns over inflation, instability inenergy costs, complex geopolitical issues, the lack of availability and higher costof credit and declining real estate and mortgage markets. These factors,

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combined with variable commodity pricing, declining business and consumerconfidence, increased unemployment and diminished expectations forpredictable global financial markets, may lead to a global economic slowdownand fears of a global recession. Neither the duration and ultimate effect of anysuch market conditions, nor the degree to which such conditions may worsen canbe predicted. The continuation or further deterioration of any such marketconditions and continued uncertainty regarding markets generally could result infurther declines in the market values of potential investments or declines inmarket values. Such declines could lead to losses and diminished investmentopportunities for a Sub-Fund, could prevent a Sub-Fund from successfullymeeting their investment objectives or could require a Sub-Fund to dispose ofinvestments at a loss while such unfavourable market conditions prevail. Whilesuch market conditions persist, a Sub-Fund would also be subject to heightenedrisks associated with the potential failure of brokers, counterparties andexchanges, as well as increased systemic risks associated with the potentialfailure of one or more systemically important institutions.

In reaction to these events since 2008, regulators and lawmakers in the UnitedStates and several other countries have taken unprecedented regulatory actionsand enacted programs to stabilise the financial markets. Some of the programsenacted during this period have terminated; however, the U.S. government andregulators in many other jurisdictions continue to consider and implementmeasures to stabilise U.S. and global financial markets. Despite these efforts andthe efforts of regulators of other jurisdictions, global financial markets remainextremely volatile. It is uncertain whether regulatory actions will be able toprevent losses and volatility in securities markets, or to stimulate the creditmarkets.

Unpredictable or unstable market conditions may result in reduced opportunitiesto find suitable investments to deploy capital or make it more difficult to exit andrealise value from a Sub-Fund's existing investments.

The economies of non-U.S. countries may differ favourably or unfavourablyfrom the U.S. economy in such respects as growth of gross domestic product,rate of inflation, currency depreciation, asset reinvestment, resource self-sufficiency and balance of payments position. Further, certain non-U.S.economies are heavily dependent upon international trade and, accordingly, havebeen and may continue to be adversely affected by trade barriers, exchangecontrols, managed adjustments in relative currency values and other protectionistmeasures imposed or negotiated by the countries with which they trade. Theeconomies of certain non-U.S. countries may be based, predominantly, on onlya few industries and may be vulnerable to changes in trade conditions and mayhave higher levels of debt or inflation.

27.1.2 Cyber Security Risk

The Fund and its service providers are susceptible to operational and informationsecurity and related risks of cyber security incidents. In general, cyber incidentscan result from deliberate attacks or unintentional events. Cyber security attacksinclude, but are not limited to, gaining unauthorized access to digital systems(e.g., through "hacking" or malicious software coding) for purposes ofmisappropriating assets or sensitive information, corrupting data or causingoperational disruption. Cyber attacks also may be carried out in a manner thatdoes not require gaining unauthorized access, such as causing denial-of-serviceattacks on websites (i.e., efforts to make services unavailable to intended users).

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Cyber security incidents affecting the Fund, the Management Company and itsdirectors, Investment Manager, Administrator or Custodian or other serviceproviders such as financial intermediaries have the ability to cause disruptionsand impact business operations, potentially resulting in financial losses,including by interference with the Fund's ability to calculate its NAV or the NAVof a Sub-Fund; impediments to trading for the Sub-Fund's portfolio; the inabilityof Unitholders to transact business with the Sub-Fund; violations of applicableprivacy, data security or other laws; regulatory fines and penalties; reputationaldamage; reimbursement or other compensation or remediation costs; legal fees;or additional compliance costs. Similar adverse consequences could result fromcyber security incidents affecting issuers of securities in which a Sub-Fundinvests, counterparties with which the Fund engages in transactions,governmental and other regulatory authorities, exchange and other financialmarket operators, banks, brokers, dealers, insurance companies and otherfinancial institutions and other parties. While information risk managementsystems and business continuity plans have been developed which are designedto reduce the risks associated with cyber security, there are inherent limitationsin any cyber security risk management systems or business continuity plans,including the possibility that certain risks have not been identified.

27.1.3 Competition

A Sub-Fund may invest in equities, credit and fixed income securities,instruments, leveraged acquisitions and reorganisations. These markets arehighly competitive. Competition for investment opportunities includes non-traditional participants, such as hedge funds, public funds including businessdevelopment companies, and other private investors, as well as more traditionallending institutions. Some of these competitors may have access to greateramounts of capital and to capital that may be committed for longer periods oftime or may have different return thresholds than a Sub-Fund, and thus thesecompetitors may have advantages not shared by a Sub-Fund. In addition, theidentification of attractive investment opportunities is difficult and involves ahigh degree of uncertainty. A Sub-Fund may incur significant expenses inconnection with identifying investment opportunities and investigating otherpotential investments which are ultimately not consummated, including expensesrelating to due diligence, transportation, legal expenses and the fees of other thirdparty advisors.

27.1.4 Purchases of Securities and Other Obligations of Financially DistressedCompanies

A Sub-Fund may directly or indirectly purchase securities and other obligationsof issuers that are experiencing significant financial or business distress(“Distressed Companies”), including issuers involved in bankruptcy or otherreorganisation and liquidation proceedings. These investments are consideredspeculative. Although such purchases may result in significant returns, theyinvolve a substantial degree of risk and may not show any return for aconsiderable period of time, if ever. In fact, many of these instruments ordinarilyremain unpaid unless and until the issuer reorganises and/or emerges frombankruptcy proceedings, and as a result may have to be held for an extendedperiod of time. The level of analytical sophistication, both financial and legal,necessary for successful investment in issuers experiencing significant businessand financial distress is unusually high. There is no assurance that a Sub-Fundwill correctly evaluate the nature and magnitude of the various factors that couldaffect the prospects for a successful reorganisation or similar action. In any

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reorganisation or liquidation proceeding relating to an issuer, a Sub-Fund maylose its entire investment or may be required to accept cash or securities with avalue less than its original investment. In addition, distressed investments mayrequire active participation by the Investment Manager and its representatives.This may expose a Sub-Fund to litigation risks or restrict a Sub-Fund’s ability todispose of its investments. Under such circumstances, the returns generated froma Sub-Fund’s investments may not compensate Unitholders adequately for therisks assumed.

27.1.5 Public Securities

In the event that a Sub-Fund acquires fixed income securities and/or equitysecurities that are publicly traded, the Sub-Fund will be subject to the risksinherent in investing in public securities. In addition, in such circumstances theSub-Fund may be unable to obtain financial covenants or other contractual rightsthat it might otherwise be able to obtain in making privately-negotiated debtinvestments. Moreover, a Sub-Fund may not have the same access to informationin connection with investments in public securities, either when investigating apotential investment or after making an investment, as compared to a privately-negotiated investment. Furthermore, a Sub-Fund may be limited in its ability tomake investments, and to sell existing investments, in public securities if theInvestment Manager or an affiliate has material, non-public informationregarding the issuers of those securities. The inability to sell securities in thesecircumstances could materially adversely affect the investment results of a Sub-Fund.

27.1.6 Insolvency Considerations With Respect to Issuers of Securities

Various laws enacted for the protection of creditors may apply to the securitiesheld by a Sub-Fund. Insolvency considerations will differ with respect to issuerslocated in different jurisdictions. If a court in a lawsuit brought by an unpaidcreditor or representative of creditors of an issuer of a loan and/or bond, such asa trustee in bankruptcy, were to find that the issuer did not receive fairconsideration or reasonably equivalent value for incurring the indebtednessconstituting such loan or bond and, after giving effect to such indebtedness, theissuer (i) was insolvent, (ii) was engaged in a business for which the remainingassets of such issuer constituted unreasonably small capital or (iii) intended toincur, or believed that it would incur, debts beyond its ability to pay such debtsas they mature, such court could determine to invalidate, in whole or in part, suchindebtedness as a fraudulent conveyance, to subordinate such indebtedness toexisting or future creditors of the issuer or to recover amounts previously paidby the issuer in satisfaction of such indebtedness. The measure of insolvency forpurposes of the foregoing will vary. Generally, an issuer would be consideredinsolvent at a particular time if the sum of its debts were then greater than all ofits property at a fair valuation or if the present fair saleable value of its assetswere then less than the amount that would be required to pay its probableliabilities on its existing debts as they became absolute and matured. There canbe no assurance as to what standard a court would apply in order to determinewhether the issuer was "insolvent" after giving effect to the incurrence of theindebtedness constituting the securities or that, regardless of the method ofvaluation, a court would not determine that the issuer was "insolvent" upongiving effect to such incurrence. In addition, in the event of the insolvency of anissuer of a loan or bond, payments made on such loan or bond could be subjectto avoidance as a "preference" if made within a certain period of time beforeinsolvency.

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In general, if payments on securities may be avoidable, whether as fraudulentconveyances or preferences, such payments can be recaptured either from theinitial recipient (such as a Sub-Fund) or from subsequent transferees of suchpayments (such as the Unitholders). To the extent that any such payments arerecaptured from a Sub-Fund, the resulting loss will be borne by the Unitholdersof a Sub-Fund at that time pro rata. However, a court in a bankruptcy orinsolvency proceeding would be able to direct the recapture of any such paymentfrom a Unitholder only to the extent that such court has jurisdiction over suchholder or its assets. Moreover, it is likely that avoidable payments could not berecaptured directly from a Unitholder that has given value in exchange for itsUnits, in good faith and without knowledge that the payments were avoidable.

Many of the events within a bankruptcy case are adversarial and often beyondthe control of the creditors. While creditors generally are afforded an opportunityto object to significant actions, there can be no assurance that a bankruptcy courtwould not approve actions which may be contrary to the interests of a Sub-Fund.

Generally, the duration of a bankruptcy case can only be roughly estimated. Thereorganisation of a company usually involves the development and negotiationof a plan of reorganisation, plan approval by creditors and confirmation by thebankruptcy court. This process can involve substantial legal, professional andadministrative costs to the Sub-Fund and the Fund; it is subject to unpredictableand lengthy delays; and during the process, the company's competitive positionmay erode, key management may depart and the company may not be able toinvest adequately. In some cases, the company may not be able to reorganise andmay be required to liquidate assets. The debt of companies in financialreorganisation will, in most cases, not pay current interest, may not accrueinterest during reorganisation and may be adversely affected by an erosion of theissuer's fundamental values. Such investments can result in a total loss ofprincipal.

U.S. bankruptcy law permits the classification of "substantially similar" claimsin determining the classification of claims in a reorganisation for purpose ofvoting on a plan of reorganisation. Because the standard for classification isvague, there exists a significant risk that a Sub-Fund's influence with respect toa class of securities can be lost by the inflation of the number and the amount ofclaims in, or other gerrymandering of, the class. In addition, certainadministrative costs and claims that have priority by law over the claims ofcertain creditors (for example, claims for taxes) may be quite high.

Furthermore, there are instances where creditors and equity holders lose theirranking and priority such as when they take over management and functionaloperating control of a debtor. In those cases where a Sub-Fund, by virtue of suchaction, is found to exercise "domination and control" over a debtor, a Sub-Fundmay lose its priority if the debtor can demonstrate that its business was adverselyimpacted or other creditors and equity holders were harmed by a Sub-Fund.

A Sub-Fund may invest in companies based in the OECD countries and othernon-U.S. countries. Investment in the debt of financially distressed companiesdomiciled outside the United States involves additional risks. Bankruptcy lawand process may differ substantially from that in the United States, resulting ingreater uncertainty as to the rights of creditors, the enforceability of such rights,reorganisation timing and the classification, seniority and treatment of claims. Incertain developing countries, although bankruptcy laws have been enacted, theprocess for reorganisation remains highly uncertain.

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The Investment Manager, on behalf of a Sub-Fund, may elect to serve oncreditors' committees, equity holders' committees or other groups to ensurepreservation or enhancement of a Sub-Fund's positions as a creditor or equityholder. A member of any such committee or group may owe certain obligationsgenerally to all parties similarly situated that the committee represents. If theInvestment Manager concludes that its obligations owed to the other parties as acommittee or group member conflict with its duties owed to a Sub-Fund, it mayresign from that committee or group, and in such case the relevant Sub-Fund maynot realise the benefits, if any, of participation on the committee or group. Inaddition and also as discussed above, if a Sub-Fund is represented on a committeeor group, it may be restricted or prohibited under applicable law from disposingof or increasing its investments in such company while it continues to berepresented on such committee or group.

A Sub-Fund may purchase creditor claims subsequent to the commencement ofa bankruptcy case. Under judicial decisions, it is possible that such purchase maybe disallowed by the bankruptcy court if the court determines that the purchaserhas taken unfair advantage of an unsophisticated seller, which may result in therescission of the transaction (presumably at the original purchase price) orforfeiture by the purchaser.

Reorganisations can be contentious and adversarial. It is by no means unusualfor participants to use the threat of, as well as actual, litigation as a negotiatingtechnique. It is possible that the Fund, a Sub-Fund, the Management Companyor Investment Manager could be named as defendants in civil proceedings. Theexpense of defending against claims by third parties and paying any amountspursuant to settlements or judgments would generally be borne by the Fund andthe relevant Sub-Funds and would reduce net assets.

27.1.7 Investments which are not Liquid

Certain investments and types of investments are subject to restrictions on resale,may trade in the over-the-counter market or in limited volume, or may not havean active trading market. Illiquid securities may trade at a discount fromcomparable, more liquid investments and may be subject to wide fluctuations inmarket value. It may be difficult for a Sub-Fund to value illiquid securitiesaccurately. Also, a Sub-Fund may not be able to dispose of illiquid securities orexecute or close out a derivatives transaction readily at a favourable time or priceor at prices approximating those at which the Fund currently values them. Illiquidsecurities also may entail registration expenses and other transaction costs thatare higher than those for liquid securities. Any use of the efficient portfoliomanagement techniques described in the relevant Supplement, may alsoadversely affect the liquidity of a Sub-Fund’s portfolio and will be considered bythe Investment Manager in managing the Sub-Fund’s liquidity risk.

From time to time, the counterparties with which a Sub-Fund effects transactionsmight cease making markets or quoting prices in certain of the instruments inwhich a Sub-Fund has invested. In such instances, a Sub-Fund might be unableto enter into a desired transaction or to enter into any offsetting transaction withrespect to an open position, which might adversely affect its performance.

27.1.8 Country Risks

Investments in securities of issuers of different nations and denominated incurrencies other than the Base Currency present particular risks. Such risksinclude changes in relative currency exchange rates; political, economic, legal

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and regulatory developments; taxation; the imposition of exchange controls;confiscation and other governmental restrictions (including those related toforeign investment currency repatriation) or changes in policy. Investment insecurities of issuers from different countries offers potential benefits notavailable from investments solely in securities of issuers from a single country,but also involves certain significant risks that are not typically associated withinvesting in the securities of issuers located in a single country.

Issuers of foreign investments are generally subject to different accounting,auditing and financial reporting standards, practices and requirements indifferent countries throughout the world. The volume of trading, the volatility ofprices and the liquidity of securities may vary in the markets of differentcountries. In addition, the level of government supervision and regulation ofsecurities exchanges, securities dealers and listed and unlisted companies isdifferent throughout the world. The laws of some countries may limit a Sub-Fund’s ability to invest in securities of certain issuers located in those countries.

Different markets also have different clearance and settlement procedures.Delays in settlement could result in temporary periods when a portion of theassets of a Sub-Fund is uninvested and no or limited return is earned thereon.The inability of a Sub-Fund to make intended investment purchases due tosettlement problems could cause a Sub-Fund to miss attractive investmentopportunities. The inability of a Sub-Fund to dispose of its investments due to afailed trade settlement could result in losses to the relevant Sub-Fund due tosubsequent declines in the value of its investments or, if the Sub-Fund hasentered into a contract to sell the investments, in a possible liability to thepurchaser. There may also be a danger that, because of uncertainties in theoperation of settlement systems in individual markets, competing claims mayarise in respect of securities held by, or to be transferred to, the Sub-Fund.

With respect to certain countries, there is a possibility of expropriation,confiscatory taxation, limitations on the removal of funds or other assets of aSub-Fund, political or social instability or diplomatic developments that couldaffect investments in those countries. An issuer of securities may be domiciledin a country other than the country in whose currency such securities aredenominated. Furthermore, the ability to collect or enforce obligations may varydepending on the laws and regulations of the issuer / borrower’s jurisdiction.

Investments may be adversely affected by the possibility of expropriation orconfiscatory taxation, imposition of withholding taxes on dividend or interestpayments or other income, limitations on the removal of funds or other assets ofa Sub-Fund, political or social instability or diplomatic developments. An issuerof securities or obligations may be domiciled in a country other than the countryin whose currency the instrument is denominated. The values and relative yieldsof investments in the securities markets of different countries, and theirassociated risks, are expected to change independently of each other.

As a Sub-Fund may invest in markets where custodial and/or settlement systemsare not fully developed, the assets of a Sub-Fund which are traded in suchmarkets and which have been entrusted to sub-custodians, in circumstanceswhere the use of sub-custodians is necessary, may be exposed to risk incircumstances where the Custodian will have no liability.

27.1.9 Investing in Emerging Market Securities

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All securities investing and trading activities risk the loss of capital. While theInvestment Manager attempts to moderate these risks, there can be no assurancethat a Sub-Fund’s investment and trading activities will be successful or thatinvestors will not suffer significant losses. Investing in emerging marketsinvolves heightened risks (some of which could be significant) and specialconsiderations not typically associated with investing in other more establishedeconomies or securities markets. Such risks may include, but are not limited to:(a) greater social, economic and political uncertainty including war; (b) higherdependence on exports and the corresponding importance of international trade;(c) greater risk of inflation; (d) increased likelihood of governmentalinvolvement in and control over the economies; (e) governmental decisions tocease support of economic reform programs or to impose centrally plannedeconomies; (f) certain considerations regarding the maintenance of a Sub-Fund'ssecurities and cash with non-U.S. brokers and securities depositories; (g) greatervolatility, less liquidity and smaller capitalisation of markets; (h) greatervolatility in currency exchange rates; (i) greater controls on foreign investmentand limitations on realisation of investments, repatriation of invested capital andon the ability to exchange local currencies for US Dollars; (j) differences inauditing and financial reporting standards which may result in the unavailabilityof material information about issuers; (k) less extensive regulation of themarkets; (l) longer settlement periods for transactions and less reliable clearanceand custody arrangements; (m) less developed corporate laws regarding fiduciaryduties of officers and directors and the protection of investors; (o) risk ofnationalisation or expropriation of assets or confiscatory taxation; (p) highertransaction costs generally; and (q) difficulty in enforcing contractual obligationsand judgments. The following discussion sets forth additional risks associatedwith investing in the securities of emerging markets:

(a) General Economic and Market Conditions

The success of a Sub-Fund’s activities will be affected by generaleconomic and market conditions, such as interest rates, availability ofcredit, inflation rates, economic uncertainty, changes in laws, tradebarriers, currency exchange controls and national and internationalpolitical circumstances. These factors may affect the level andvolatility of securities’ prices and the liquidity of the Sub-Fund’sinvestments. Volatility or illiquidity could impair a Sub-Fund’sprofitability or result in losses.

The economies of individual emerging markets may differ favourablyor unfavourably from developed economies in such respects asgrowth of gross domestic product, rate of inflation, currencydepreciation, asset reinvestment, resource self-sufficiency andbalance of payments position. Further, the economies of emergingmarkets generally are heavily dependent upon international trade and,accordingly, have been and may continue to be adversely affected bytrade barriers, exchange controls, managed adjustments in relativecurrency values and other protectionist measures imposed ornegotiated by the countries with which they trade. These economiesalso have been and may continue to be adversely affected byeconomic conditions in the countries with which they trade. Theeconomies of certain of these countries may be based, predominantly,on only a few industries and may have higher levels of debt orinflation.

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With respect to certain countries, there is the possibility ofnationalisation, expropriation, confiscatory taxation, imposition ofwithholding or other taxes on dividends, interest, capital gains orother income or gross sale or disposition proceeds, limitations on theremoval of funds or other assets of a Sub-Fund, political changes,government regulation, social instability or diplomatic developments(including war), any of which could affect adversely the economiesof such countries or the value of the Sub-Fund’s investments in thosecountries.

Where a Sub-Fund’s assets are invested in narrowly-defined marketsor sectors of a given economy, risk is increased by the inability tobroadly diversify investments thereby subjecting the Sub-Fund togreater exposure to potentially adverse developments within thosemarkets or sectors.

(b) Volatility

Emerging markets are more likely than developed markets toexperience periods of extreme volatility. Such volatility could resultin substantial losses for a Sub-Fund.

(c) Securities Markets

Securities markets in emerging market countries may havesubstantially less volume of trading and are generally more volatilethan securities markets of developed countries. In certain periods,there may be little liquidity in such markets. There is often lessgovernment regulation of stock exchanges, brokers and listedcompanies in emerging market countries than in developed marketcountries. Commissions for trading on emerging markets stockexchanges are generally higher than commissions for trading ondeveloped market exchanges. In addition, settlement of trades insome non-U.S. markets is much slower and more subject to failurethan in U.S. markets. Furthermore, some of a Sub-Fund’s investmentsmay not be listed on any stock market.

(d) Exchange Rate Fluctuations; Currency Considerations

The assets of a Sub-Fund that are invested in emerging markets maybe invested in non-U.S. Dollar denominated securities, and anyincome or capital received by such Sub-Fund from these investmentsmay be denominated in the local currency of investment.Accordingly, changes in currency exchange rates (to the extent onlypartially or fully unhedged) between the currency of the relevantemerging market and the currency in which a Class is denominatedmay affect the value of the Units. As the currency exchange rates ofemerging market countries tend to be more volatile than those of moredeveloped economies, the effect of changes in exchange rates on thevalue of Units in a Sub-Fund that are invested in emerging marketsmay be more pronounced than it would be for a fund that invests inmore developed markets.

Foreign currency exchange rates are determined by forces of supplyand demand in foreign exchange markets. These forces are, in turn,affected by international balance of payments and other economic

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and financial conditions, government intervention, speculation andother factors. Foreign currency exchange rates may also be affectedby affirmative government policies of intervention in the foreignexchange markets, and certain currencies may be affirmativelysupported relative to the dollar by their or other governments.Changes in government policy, including a cessation of currencysupport intervention, may result in abrupt devaluations of suchcurrencies.

Currency exchange dealers realise a profit based on the differencebetween the prices at which they are buying and selling variouscurrencies. Thus, a dealer normally will offer to sell currency to aSub-Fund at one rate, while offering a lesser rate of exchange shouldthe Sub-Fund desire immediately to resell that currency to the dealer.Due to the relatively small size of the markets for currencies ofemerging market countries, the spread between a dealer’s sell andoffer prices for such currencies may be greater than that for thecurrencies of more developed economies, which may result inrelatively higher currency exchange costs for a Sub-Fund. A Sub-Fund will conduct its currency exchange transactions either on a spot(i.e., cash) basis at the spot rate prevailing in the currency exchangemarket, or through entering into forward or options contracts topurchase or sell non-U.S. currencies.

(e) Emerging Markets Legal and Regulatory Risk

Many of the laws that govern private and non-US investment,securities transactions and other contractual relationships in emergingmarkets are new and largely untested. As a result, a Sub-Fund maybe subject to a number of unusual risks, including inadequate investorprotection, contradictory legislation, incomplete, unclear andchanging laws, ignorance or breaches of regulations on the part ofother market participants, lack of established or effective avenues forlegal redress, lack of standard practices and confidentiality customscharacteristic of developed markets and lack of enforcement ofexisting regulations. Furthermore, it may be difficult to obtain andenforce a judgment in certain of the emerging markets in which assetsof a Sub-Fund are invested. There can be no assurance that thisdifficulty in protecting and enforcing rights will not have a materialadverse effect on the relevant Sub-Fund and its operations. Inaddition, the income and gains of a Sub-Fund may be subject towithholding taxes imposed by non-US governments for whichshareholders may not receive a full non-US tax credit.

Regulatory controls and corporate governance of companies inemerging markets usually confer little protection on minorityshareholders. Anti-fraud and anti-insider trading legislation is oftenrudimentary. Disclosure and regulatory standards in emergingmarkets are in many respects less stringent than those in otherinternational securities markets, with a low level of monitoring andregulation of the market and market participants, and limited anduneven enforcement of existing regulations. Consequently, the pricesat which a Sub-Fund may acquire investments may be affected byother market participants' anticipation of the Sub-Fund's investingand by trading by persons with material non-public information.

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There may be less publicly available information about an issuer inan emerging market than would be available in a non-emergingmarket, and the issuer may not be subject to accounting, auditing andfinancial reporting standards comparable to those of companies innon-emerging markets. Balance sheet and income statement dataappearing in the financial statements of emerging markets issuersmay not reflect the financial position or results of operations of suchissuers in the same way as financial statements prepared inaccordance with generally accepted accounting principles in theUnited States, Western Europe or Japan. Emerging markets issuersthat operate in certain inflationary economies may be required to keeprecords according to inflation accounting rules that require thatcertain balance sheet assets and liabilities be restated annually inorder to express such items in terms of currency of constantpurchasing power. This process may indirectly generate losses orprofits. As a result, traditional investment measurements, such asprice/earnings ratios, may not be useful in certain emerging markets.

Some emerging markets prohibit or impose substantial restrictions oninvestments in their capital markets by foreign entities such as a Sub-Fund. Certain emerging markets require governmental approval priorto investment by foreign persons, limit the amount of such investmentin a particular company or limit such investment to only a specificclass of securities, which may have less advantageous terms thansecurities available for purchase by nationals.

Substantial limitations may exist in certain emerging markets withrespect to the ability to repatriate income, capital or the proceeds ofsales of securities by foreign investors. In addition, if there is adeterioration in a country's balance of payments or for other reasons,an emerging market may impose restrictions on foreign capitalremittances abroad. A Sub-Fund could be adversely affected bydelays in, or a refusal to grant, any required governmental approvalfor repatriation of capital, as well as by the application to the Sub-Fund of any restrictions on investments. Finally, the concept offiduciary duty to shareholders by officers and directors is also limitedwhen compared to such concepts in developed markets. In certaininstances management may take significant actions without theconsent of shareholders and anti-dilution protection also may belimited.

27.1.10 Quantitative Investment Risk

The success of a Sub-Fund’s quantitative investment models is heavilydependent on the mathematical models used by the Investment Manager inattempting to exploit short-term and long-term relationships among prices andvolatility. The Investment Manager may select models that are not well-suited toprevailing market conditions. Models that have been formulated on the basis ofpast market data may not be predictive of future price movements. Models maynot be reliable if unusual events specific to particular issuers, or major eventsexternal to the operations of markets, cause extreme market moves that areinconsistent with the historic correlation and volatility structure of the market.Models also may have hidden biases or exposure to broad structural or sentimentshifts. Furthermore, the effectiveness of such models tends to deteriorate over

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time as more traders seek to exploit the same market inefficiencies through theuse of similar models.

27.1.11 Concentration Risk

A Sub-Fund will generally seek to diversify portfolio investments; however, asignificant percentage of the Fund's or a Sub-Fund’s assets may be invested fromtime to time in groups of issuers deriving significant revenues from the samemarket, region or industry. To the extent a Sub-Fund makes such investments,the exposure to equity, credit and market risks associated with such market,region or industry will be increased.

27.1.12 Correlation of Performance Across Investments and Strategies

The Investment Manager may invest in securities in a manner which is intendedto provide some degree of portfolio diversification. However, there can be noassurance that the performance of its investments will not be correlated. Forexample, in periods of illiquidity such as those experienced in 2008, assets incertain market sectors which historically did not show a high degree ofcorrelation became correlated due to the sharp decrease in liquidity available toinvestors and the loss of systemically important institutions that affected all suchinvestments. Similarly, there can be no assurance that the strategy employed bythe Investment Manager will be uncorrelated with other investment strategies inthe future.

27.1.13 Execution of Orders; Electronic Trading

A Sub-Fund's investment strategies and trading strategies depend on its ability toestablish and maintain an overall market position in a combination of financialinstruments selected by the Investment Manager. A Sub-Fund's trading ordersmay not be executed in a timely and efficient manner due to variouscircumstances, including, without limitation, trading volume surges or systemsfailures attributable to a Sub-Fund, the Investment Manager, a Sub-Fund'scounterparties, brokers, dealers, agents or other service providers. In such event,a Sub-Fund might only be able to acquire or dispose of some, but not all, of thecomponents of such position, or if the overall position were to need adjustment,the Fund might not be able to make such adjustment. As a result, a Sub-Fundwould not be able to achieve the market position selected by the InvestmentManager, which may result in a loss. In addition, a Sub-Fund relies heavily onelectronic execution systems (and may rely on new systems and technology inthe future), and such systems may be subject to certain systemic limitations ormistakes, causing the interruption of trading orders made by a Sub-Fund.

27.1.14 Trading on Exchanges

A Sub-Fund may trade, directly or indirectly, futures and securities on exchangeslocated anywhere. Some exchanges, in contrast to those based in the UnitedStates, for example, are “principals’ markets” in which performance is solely theindividual member’s responsibility with whom the trader has entered into acommodity contract and not that of an exchange or its clearinghouse, if any. Inthe case of trading on such exchanges, a Sub-Fund will be subject to the risk ofthe inability of, or refusal by, a counterparty to perform with respect to contracts.Moreover, in certain jurisdictions there is generally less government supervisionand regulation of worldwide stock exchanges, clearinghouses and clearing firmsthan, for example, in the United States. A Sub-Fund is also subject to the risk ofthe failure of the exchanges on which its positions trade or of their clearinghouses

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or clearing firms and there may be a higher risk of financial irregularities and/orlack of appropriate risk monitoring and controls.

27.1.15 No Investment Guarantee Equivalent to Deposit Protection

Investment in a Sub-Fund is not in the nature of a deposit in a bank account andis not protected by any government, government agency or other guaranteescheme which may be available to protect the holder of a bank deposit account.Furthermore, unlike a deposit in a bank account, the principal invested in a Sub-Fund is capable of fluctuation.

27.1.16 Fund’s Liabilities

The Fund and each Sub-Fund will be responsible for paying its fees and expensesregardless of its level of profitability. Pursuant to Luxembourg law, the Fundshould not be liable as a whole to third parties and there should not be thepotential for cross contamination of liabilities between Sub-Funds. However,there can be no categorical assurance that, should an action be brought againstthe Fund in the courts of another jurisdiction, the segregated nature of a Sub-Fund will necessarily be upheld.

27.1.17 Third Party Litigation

A Sub-Fund's investment activities subject it to the normal risks of becominginvolved in litigation by third parties. The expense of defending against any suchclaims and paying any amounts pursuant to settlements or judgments wouldgenerally be borne by such Sub-Fund and would reduce its net assets.

27.1.18 Substantial Charges

Each Sub-Fund is subject to substantial charges, and must generate profits andincome which exceed their fixed costs in order to avoid depletion of its assets.The Fund (and each Sub-Fund) is required to pay the service provider fees,expenses and commissions regardless of its performance.

27.1.19 Substantial Subscriptions

The Investment Manager may not be able to invest all net subscription proceedsimmediately following the Dealing Day. To the extent that a Sub-Fund’s assetsare not invested immediately following the relevant Dealing Day, there could bea negative impact on the performance of a Sub-Fund, as the Fund will not bepursuing its investment objective in respect of the portion of its assets held incash or other liquid assets.

27.1.20 Substantial Redemptions

Substantial redemption requests by Unitholders in a concentrated period of timecould require a Sub-Fund to liquidate certain of its investments more rapidly thanmight otherwise be desirable in order to raise cash to fund the redemptions andachieve a portfolio appropriately reflecting a smaller asset base. This may limitthe ability of the Investment Manager to successfully implement the investmentpolicy of a Sub-Fund and could negatively impact the value of the Units beingredeemed and the value of Units that remain outstanding. In addition, followingreceipt of a redemption request, a Sub-Fund may be required to liquidate assetsin advance of the applicable Dealing Day, which may result in a Sub-Fundholding cash or highly liquid investments pending such Dealing Day. During any

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such period, the ability of the Investment Manager to successfully implement theinvestment policy of a Sub-Fund may be impaired and the Sub-Fund’s returnsmay be adversely affected as a result.

Moreover, regardless of the time period over which substantial redemptionrequests are made, the resulting reduction in the NAV of a Sub-Fund could makeit more difficult for the Sub-Fund to generate profits or recover losses.Unitholders will not receive notification of substantial redemption requests inrespect of any particular Dealing Day from a Sub-Fund and, therefore, may nothave the opportunity to redeem their Units or portions thereof prior to or at thesame time as the redeeming Unitholders.

The risk of substantial redemption requests in a concentrated period of time maybe heightened in the event that a Sub-Fund accepts investments related directlyor indirectly to the offering of structured products including, without limitation,in connection with the hedging of positions under such structured products,particularly those structured products with a fixed life. A Sub-Fund may or maynot accept such investments, as determined by the Fund in its sole discretion, andsuch investments could, at any time, make up a significant portion of the Fund’sor a Sub-Fund’s NAV.

27.1.21 Limited Liquidity of Units: Redemptions

An investment in a Sub-Fund is of limited liquidity since Units may be subjectto certain restrictions. Subject to limited redemption rights, each Unitholder mustbe prepared to bear the economic risk of an investment in the Fund for anindefinite period. Units are subject to the restrictions on transfer. Redemptionrights may be limited or postponed under certain circumstances.

A distribution in respect of a redemption may be made in kind, at the discretionof the Management Company in consultation with the Investment Manager;provided that where the redemption request represents less than 5% of the NAVof a Sub-Fund, the Unitholder's consent is required. The investments sodistributed may not be readily marketable or saleable and may have to be heldby such Unitholder for an indefinite period of time.

An investment in a Sub-Fund is therefore suitable only for certain sophisticatedinvestors that can bear the risks associated with the limited liquidity of theirUnits. There is no independent market for the purchase or sale of Units, and noneis expected to develop.

27.1.22 Adjustments

If at any time the Fund determines, in its sole discretion, that an incorrect numberof Units was issued to a Unitholder because the NAV in effect on the DealingDay was incorrect, the Fund will implement such arrangements as it determines,in its sole discretion, are required for an equitable treatment of such Unitholder,which arrangements may include redeeming a portion of such Unitholder'sshareholding for no additional consideration or issuing new Units to suchUnitholder for no consideration, as appropriate, so that the number of Units heldby such Unitholder following such redemption or issuance, as the case may be,is the number of Units as would have been issued at the correct NAV. In addition,if at any time after a redemption of Units (including in connection with anycomplete redemption of Units by a Unitholder) the Fund determines, in its solediscretion, that the amount paid to such Unitholder or former Unitholder pursuantto such redemption was materially incorrect (including because the NAV at

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which the Unitholder or former Unitholder purchased such Units was incorrect),the Fund will pay to such Unitholder or former Unitholder any additional amountthat the Fund determines such Unitholder or former Unitholder was entitled toreceive, or, in the Fund’s sole discretion, seek payment from such Unitholder orformer Unitholder of (and such Unitholder or former Unitholder will be requiredto pay) the amount of any excess payment that the Fund determines suchUnitholder or former Unitholder received, in each case without interest. In theevent that the Fund elects not to seek the payment of such amounts from aUnitholder or former Unitholder or is unable to collect such amounts from aUnitholder or former Unitholder, the NAV will be less than it would have beenhad such amounts been collected.

27.1.23 Limited Disclosure of Certain Information Relating to Securities

It is not anticipated that the Fund, the Management Company, the Administrator,the Custodian or the Investment Manager will provide any information to anypurchasers of Units relating to any securities held by a Sub-Fund. Other than asincluded in the periodic reports of the Fund, the Administrator, the Custodian,the Management Company and the Investment Manager will not be required toprovide the Unitholders with financial or other information (which may includematerial non-public information) they receive pursuant to the securities held bya Sub-Fund and related documents.

27.1.24 Limited Operating History; No Reliance on Past Performance

A Sub-Fund may have limited or no operating history upon which prospectiveinvestors can evaluate its likely performance. The success of a Sub-Fund dependsin substantial part upon the skill and expertise of the personnel of the InvestmentManager and the ability of the Investment Manager to develop and successfullyimplement the investment policy of the Sub-Fund. No assurance can be giventhat the Investment Manager will be able to do so. Moreover, decisions made bythe Investment Manager may cause a Sub-Fund to incur losses or to miss profitopportunities on which it may otherwise have capitalised. Unitholders are notpermitted to engage in the active management and affairs of a Sub-Fund. As aresult, prospective investors will not be able to evaluate for themselves the meritsof investments to be acquired by a Sub-Fund prior to their being required to payfor Units of a Sub-Fund. Instead, such investors must rely on the judgment of theInvestment Manager to conduct appropriate evaluations and to make investmentdecisions. Unitholders will be relying entirely on such persons to manage theassets of the relevant Sub-Fund. There can be no assurance that any of the keyinvestment professionals will continue to be associated with the InvestmentManager throughout the life of a Sub-Fund.

27.1.25 Management Risk

For any given Sub-Fund, there is a risk that investment techniques or strategiesare unsuccessful and may incur losses for the Sub-Fund. Unitholders will haveno right or power to participate in the day-to-day management or control of thebusiness of the Fund or the relevant Sub-Fund, nor an opportunity to evaluate thespecific investments made by the Investment Manager or the terms of any of suchinvestments.

The nature of and risks associated with the Fund’s or a Sub-Fund’s futureperformance may differ materially from those investments and strategieshistorically undertaken by the Investment Manager. There can be no assurance

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that the Investment Manager will realise returns comparable to those achieved inthe past or generally available on the market.

27.1.26 Diverse Unitholders

The Unitholders may have conflicting investment, tax and other interests withrespect to their investments in a Sub-Fund. The conflicting interests of individualUnitholders may relate to or arise from, among other things, the nature ofinvestments made by the Fund or a relevant Sub-Fund, the structuring or theacquisition of investments and the timing of disposition of investments. As aconsequence, conflicts of interest may arise in connection with decisions madeby the Investment Manager that may be more beneficial for one Unitholder thanfor another Unitholder, especially with respect to any Unitholder's individual taxsituation.

In selecting and structuring investments appropriate for the relevant Sub-Fund,the Investment Manager will consider the investment objective of such Sub-Fund.

27.1.27 Interest Rate Risk

Interest rate risk is the risk that Fixed Income Instruments and other instrumentsin the Fund’s portfolio will decline in value because of an increase in interestrates. As nominal interest rates rise, the value of certain Fixed IncomeInstruments held by the Fund or a relevant Sub-Fund is likely to decrease. Anominal interest rate can be described as the sum of a real interest rate and anexpected inflation rate. Fixed Income Instruments with longer durations tend tobe more sensitive to changes in interest rates, usually making them more volatilethan securities with shorter durations. The values of equity and other non-FixedIncome Instruments may also decline due to fluctuations in interest rates.Inflation-indexed bonds, including Treasury Inflation-Protected Securities,decline in value when real interest rates rise. In certain interest rate environments,such as when real interest rates are rising faster than nominal interest rates,inflation indexed bonds may experience greater losses than other Fixed IncomeInstruments with similar durations. Variable and floating rate securities generallyare less sensitive to interest rate changes but may decline in value if their interestrates do not rise as much, or as quickly, as interest rates in general. Conversely,floating rate securities will not generally increase in value if interest rates decline.Inverse floating rate securities may decrease in value if interest rates increase.Inverse floating rate securities may also exhibit greater price volatility than afixed rate obligation with similar credit quality. When the Fund holds variable orfloating rate securities, a decrease (or, in the case of inverse floating ratesecurities, an increase) in market interest rates will adversely affect the incomereceived from such securities and the net asset value of the Fund’s units.

27.1.28 Credit Risk

The Fund could lose money if the issuer or guarantor of a Fixed IncomeInstrument (including a security purchased with securities lending collateral), orthe counterparty to a derivatives contract, redemption agreement or a loan ofportfolio securities, is unable or unwilling, or is perceived (whether by marketparticipants, ratings agencies, pricing services or otherwise) as unable orunwilling, to make timely principal and/or interest payments, or to otherwisehonor its obligations. The downgrade of the credit of a security held by the Fundmay decrease its value. Securities are subject to varying degrees of credit risk,which are often reflected in credit ratings. Municipal bonds are subject to the risk

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that litigation, legislation or other political events, local business or economicconditions, or the bankruptcy of the issuer could have a significant effect on anissuer’s ability to make payments of principal and/or interest.

27.1.29 Asset-Backed Securities Risk

Asset-backed securities represent interests in “pools” of assets, such asmortgages, consumer loans or receivables held in trust. Asset-backed securitiesare subject to certain additional risks. Rising interest rates tend to extend theduration of these securities, making them more sensitive to changes in interestrates. As a result, in a period of rising interest rates, these securities may exhibitadditional volatility. This is known as extension risk. In addition, these securitiesare subject to prepayment risk, which is the risk that when interest rates declineor are low but are expected to rise, borrowers may pay off their debts sooner thanexpected. This can reduce the returns of the relevant Sub-Fund because the Fundwill have to reinvest such prepaid funds at the lower prevailing interest rates.This is also known as contraction risk. These securities also are subject to risk ofdefault on the underlying assets, particularly during periods of economicdownturn.

27.1.30 Issuer Risk

The value of a security may decline for a number of reasons which directly relateto the issuer, such as management performance, financial leverage and reduceddemand for the issuer’s goods or services, as well as the historical andprospective earnings of the issuer and the value of its assets.

27.1.31 Derivatives Risk

Derivatives are financial contracts whose value depends on, or is derived from,the value of an underlying asset, reference rate or index. The Fund or a relevantSub-Fund will typically use derivatives as a substitute for taking a position in theunderlying asset and/or as part of a strategy designed to reduce exposure to otherrisks, such as interest rate or currency risk. The Fund’s use of derivativeinstruments involves risks different from, or possibly greater than, the risksassociated with investing directly in securities and other traditional investments.Derivatives are subject to a number of risks described elsewhere in this section,such as liquidity risk, interest rate risk, market risk, credit risk and managementrisk. They also involve the risk of mispricing or improper valuation and the riskthat changes in the value of the derivative may not correlate perfectly with theunderlying asset, rate or index. The Sub-Fund investing in a derivativeinstrument could lose more than the principal amount invested. Also, suitablederivative transactions may not be available in all circumstances and there canbe no assurance that the Fund or a relevant Sub-Fund will engage in thesetransactions to reduce exposure to other risks when that would be beneficial.

27.1.32 Debt Securities Risk

Debt securities, such as notes and bonds, are subject to credit risk and interestrate risk. Credit risk is the possibility that an issuer of an instrument will beunable to make interest payments or repay principal when due. Changes in thefinancial strength of an issuer or changes in the credit rating of a security mayaffect its value. Interest rate risk is the risk that interest rates may increase, whichtends to reduce the resale value of certain debt securities. Debt securities withlonger maturities are generally more sensitive to interest rate changes than thosewith shorter maturities. Changes in market interest rates do not affect the rate

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payable on an existing debt security, unless the instrument has adjustable orvariable rate features, which can reduce its exposure to interest rate risk. Changesin market interest rates may also extend or shorten the duration of certain typesof instruments, thereby affecting their value and the return on an investment inthe Fund.

27.1.33 Economic Dislocation Risk

The financial sector may experience periods of substantial dislocation and theimpacts of that dislocation are difficult to predict. Imbalances in trade andfinance may lead to sudden shocks. Moreover, the evolution of economies andfinancial systems may result in the shifting of the perceived risks in recenthistorical periods, for example between what have been seen as emerging anddeveloped markets. For example, the failure Lehman Brothers was seen by manyas unlikely, and the impact of that failure was not generally well understood inadvance. More recently, European financial markets have experienced volatilityand have been adversely affected by concerns about high government debt levels,credit rating downgrades, and possible default on or further restructuring ofgovernment debt. Holders of Euro-denominated sovereign debt, including banksand other financial institutions, could be adversely affected by weakness insovereign borrowers, which in turn may have less ability to support the financialsystem. It is possible that countries that have already adopted the Euro couldabandon the Euro and return to a national currency or that the Euro will cease toexist as a single currency in its current form. The effects of voluntary orinvoluntary abandonment of the Euro on that country, the rest of the countriesusing the Euro, and global markets are unknown, but are likely to be negative. Inaddition, under these circumstances, it may be difficult to value investmentsdenominated in Euro or in a replacement currency.

27.1.34 Global Investment Risk.

Securities of certain jurisdictions may experience more rapid and extremechanges in value. The value of such securities may be affected by uncertaintiessuch as international political developments, changes in government policies,changes in taxation, restrictions on foreign investment and currency repatriation,currency fluctuations and other developments in the laws and regulations ofcountries in which an investment may be made. The securities markets of manycountries are relatively small, with a limited number of companies representinga small number of industries. Additionally, issuers in many countries may besubject to a high degree of regulation. Furthermore, the legal infrastructure andaccounting, auditing and reporting standards in certain countries in whichinvestment may be made may not provide the same degree of investor protectionor information to investors as would generally apply in major securities markets.Adverse conditions in a certain region can adversely affect securities of othercountries whose economies appear to be unrelated.

27.1.35 Management Risk

The Fund and each Sub-Fund is subject to management risk because it is anactively managed investment portfolio. The Management Company and/or theInvestment Manager will apply investment techniques and risk analyses inmaking investment decisions for the Fund and Sub-Fund, but there can be noguarantee that these decisions will produce the desired results. Additionally,legislative, regulatory, or tax restrictions, policies or developments may affectthe investment techniques available to the Management Company and eachindividual portfolio manager in connection with managing the Fund and the

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relevant Sub-Fund and may also adversely affect the ability of the Fund and therelevant Sub-Fund to achieve its investment objectives.

27.1.36 Short Sale Risk

A short sale involves the sale by a Sub-Fund of a security that it does not ownwith the hope of purchasing the same security at a later date at a lower price. ASub-Fund may also enter into a short position through a forward commitment ora short derivative position through a futures contract or swap agreement. If theprice of the security or derivative has increased during this time, then the relevantSub-Fund will incur a loss equal to the increase in price from the time that theshort sale was entered into plus any premiums and interest paid to the third party.Therefore, short sales involve the risk that losses may be exaggerated, potentiallylosing more money than the actual cost of the investment. Also, there is the riskthat the third party to the short sale may fail to honor its contract terms, causinga loss to the relevant Sub-Fund.

27.1.37 Business Dependent Upon Key Individuals

The success of the each Sub-Fund is significantly dependent upon the expertiseof key people within the Investment Manager as well as within any investmentadvisor and investment committee that the Investment Manager may engagefrom time to time. As a consequence, any future unavailability of their servicescould have an adverse impact on the relevant Sub-Fund’s performance.

27.1.38 Certain Affiliated Funds

Certain investment funds which are promoted, managed and/or advised by anentity of the DMS Group may invest in an underlying investment. Such funds orentities may receive access to information or data (including with respect to theunderlying investment’s performance) without additional consideration andwhich may be used to benefit other clients of the Investment Manager or theManagement Company or of any other entity of the DMS Group. Suchinformation may affect the decision of any fund or entity of the DMS Group torequest a redemption of Units or a subscription for additional Units, which couldadversely impact other investors in the underlying investment.

27.1.39 Lack of Operating History

The Fund has no operating history upon which prospective investors may basean evaluation of the likely performance of the Fund or any Sub-Fund. The pastperformance of the Management Company or its affiliates is no guarantee as tofuture performance. There can be no assurance that the Fund or any Sub-Fundwill achieve its investment objectives.

27.1.40 Business and Regulatory Risks

Legal, tax and regulatory changes could occur during the term of the Fund or anySub-Fund that may adversely affect the Fund and the relevant Sub-Fund. Inaddition, the securities and future markets are subject to comprehensive statutes,regulations and margin requirements. Regulators and self-regulatoryorganizations and exchanges are authorized to take extraordinary actions in theevent of market emergencies. The regulation of derivatives transactions andinvestment companies that engage in such transactions is an evolving area of lawand is subject to modification by governmental and judicial action. Any future

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legal or regulatory change could substantially and adversely affect the Fund anda relevant Sub-Fund.

27.1.41 Financial Fraud

Instances of fraud and other deceptive practices committed by seniormanagement of certain companies in which the Fund or a Sub-Fund may investmay undermine its due diligence efforts with respect to such companies, and ifsuch fraud is discovered, may negatively affect the valuation of the Fund’s andthe relevant Sub-Fund’s investments. In addition, when discovered, financialfraud may contribute to overall market volatility which can negatively impact theFund’s investment program.

27.1.42 Legal Risk

Many of the laws that govern private and foreign investment, equity securitiestransactions and other contractual relationships in certain countries, particularlyin developing countries, are new and largely untested. As a result the Fund maybe subject to a number of unusual risks, including inadequate investor protection,contradictory legislation, incomplete, unclear and changing laws, ignorance orbreaches of regulations on the part of other market participants, lack ofestablished or effective avenues for legal redress, lack of standard practices andconfidentiality customs characteristic of developed markets, and lack ofenforcement of existing regulations. Furthermore, it may be difficult to obtainand enforce a judgment in certain countries in which assets of the Fund areinvested. There can be no assurance this difficulty in protecting and enforcingrights will not have a material adverse effect on the Fund and its operations. Inaddition, the income and gains of the Fund may be subject to withholding taxesimposed by foreign governments for which Unitholders may not receive a fullforeign tax credit.

Regulatory controls and corporate governance of companies in some developingcountries may confer little protection on minority Unitholders. Anti-fraud andanti-insider trading legislation is often rudimentary. The concept of fiduciaryduty to Unitholders by officers and directors is also limited when compared tosuch concepts in western markets. In certain instances management may takesignificant actions without the consent of investors and anti-dilution protectionmay also be limited.

27.1.43 Calculation of Net Asset Value

The Net Asset Value per Unit of each Class is expected to fluctuate over timewith the performance of the relevant Sub-Fund’s investments. Consequently, theaccuracy of the Net Asset Value per Unit may be affected by the frequency of orthe ability to obtain valuations of such securities. The method of valuation ofassets will depend on the valuation principles described under the heading“Determination of the Net Asset Value” and may result in prices being valuedby reference to valuation models rather than by reference to market prices. Suchprices may not reflect those which could be obtained by selling the assets of theFund. Where there is any conflict between international financial accountingstandards and the valuation principles referred to above, in calculating the NetAsset Value per Unit the latter principles will take precedence. A Unitholder maynot fully recover his initial investment when he chooses to redemption his Unitsor upon compulsory redemption if the Net Asset Value per Unit of the relevantClass at the time of such redemption is less than the subscription price paid bysuch Unitholder.

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27.1.44 Effects of Redemptions

Large redemptions of Units within a limited period of time could require theFund and the relevant Sub-Fund to liquidate positions more rapidly than wouldotherwise be desirable, adversely affecting the value of both the Units beingredeemed and the outstanding Units. In addition, regardless of the period of timeover which redemptions occur, the resulting reduction in the Fund’s Net AssetValue could make it more difficult for the Management Company and/or therelevant Investment Manager to generate profits or recover losses.

27.1.45 Fees and Expenses

Whether or not the Fund or a Sub-Fund is profitable, it is required to meet certainfixed costs, including start-up and organizational expenses, ongoingadministrative and operating expenses and advisory fees.

27.1.46 Cross-Class Liability

The Sub-Funds of the Fund and the Classes within Sub-Funds are not separatelegal entities. Thus all of the assets of a Sub-Fund are available to meet all theliabilities of the Sub-Fund, regardless of the Class to which such assets orliabilities are attributable. In practice cross-class liability will only arise whereany Class becomes insolvent and is unable to meet all its liabilities. In this case,all of the assets of the relevant Sub-Fund attributable to other Classes may beapplied to cover the liabilities of the insolvent Class.

27.1.47 Terrorist Action

There is a risk of terrorist attacks causing significant loss of life and propertydamage and disruptions in global markets. Economic and diplomatic sanctionsmay be in place or imposed on certain states and military action may becommenced. The impact of such events is unclear, but could have a materialeffect on general economic conditions and market liquidity.

27.1.48 Investment Strategies

No assurance can be given that the strategies to be used will be successful underall or any market conditions. The Fund will consist of a variety of Sub-Funds anddifferent Investment Managers may be appointed. The Sub-Funds will pursue arange of different strategies and will generally be managed by the InvestmentManagers. As a consequence, some Sub-Funds may invest take opposing viewsand/or positions at any time.

Identification and exploitation of the investment strategies to be pursued by theFund involves a high degree of uncertainty.

27.1.49 Hedging

The Fund and the underlying investment vehicles in which it may invest mayutilise a variety of financial instruments, such as derivatives, options, interest rateswaps, caps and floors, futures and forward contracts, to seek to hedge againstdeclines in the values of their positions as a result of changes in currencyexchange rates, certain changes in the equity markets and market interest ratesand other events. Hedging against a decline in the value of positions does noteliminate fluctuations in the values of such positions or prevent losses if thevalues of such positions decline, but establishes other positions designed to gain

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from those same developments, thus offsetting the decline in the positions’ value.Such hedging transactions also limit the opportunity for gain if the value of thepositions should increase. It may not be possible for an investment vehicle tohedge against a change or event at a price sufficient to protect its assets from thedecline in value of its positions anticipated as a result of such change. In addition,it may not be possible to hedge against certain changes or events at all.

To the extent that hedging transactions are effected, their success is dependenton each manager’s ability to correctly predict movements in the direction ofcurrency or interest rates, the equity markets or sectors thereof or other eventsbeing hedged against. In addition, the degree of correlation between pricemovements of the instruments used in hedging strategies and price movementsin the position being hedged may vary. Moreover, for a variety of reasons, amanager may not seek to establish a perfect correlation between such hedginginstruments and the positions being hedged. Such imperfect correlation mayprevent the Management Company from achieving the intended hedge or exposean investment vehicle to additional risk of loss.

27.1.50 Counterparty Risk

The Fund will be subject to the risk of the inability of any counterparty to performwith respect to transactions, whether due to insolvency, bankruptcy or othercauses. In particular, it should be noted that transactions may not always bedelivery versus payment and this may expose the relevant Sub-Fund(s) to greatercounterparty risk.

27.1.51 Convertible Securities.

Some of the Sub-Funds may invest in so called contingent convertiblesinstruments (“CoCos”). CoCos are debt instruments convertible into equity if apre-specified trigger event occurs. Many of the larger financial institutions havelately embraced the use of CoCos as a cost effective way of meeting the level ofgoing-concern capital required by Regulation (EU) No 575/2013 on prudentialrequirements for credit institutions and investment firms (the “CreditRequirement Regulation” or “CRR”) in addition to the Common Equity Tier 1capital (as defined in the CRR; “CET1”). The CRR allows a financial institutionto issue Additional Tier 1 (“AT1”) securities in non-CET1 capital but in the formof CoCos. To qualify as AT1s the CoCos need to be able to be written down orconverted into equity when a certain trigger CET1 is reached or when therelevant regulatory authority deems the issuer being non-viable under the BankRecovery and Resolution Directive.

Investors should fully understand and consider the risks of CoCos.

CoCos entail a valuation risk. To correctly value the instruments the Companyneeds to evaluate the probability of activating the trigger, the extent andprobability of any losses upon trigger conversion (not only from write-downs oftheir principal value but also from unfavourably timed conversion to equity) andthe likelihood of cancellation of coupons. These risks may be highly challengingto model. Though certain risk factors are transparent, e.g., trigger level, couponfrequency, leverage, credit spread of the issuer, and rating of instrument, if any,other factors are discretionary or difficult to estimate, e.g. individual regulatoryrequirements relating to the capital buffer, the issuers’ future capital position,issuers’ behaviour in relation to coupon payments on AT1 CoCos, and any risksof contagion. Importantly, as one descends down the capital structure to sub-

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investment grade where the majority of CoCos sit, the level of precision inestimating value when compared to more highly rated instruments, deteriorates.

Investors should also take into account that the trigger levels differ and determineexposure to conversion risk depending on the CET1 distance to the trigger level.Furthermore, coupon payments on AT1 instruments are entirely discretionaryand may be cancelled by the issuer at any point, for any reason, and for any lengthof time. Contrary to classic capital hierarchy, CoCo investors may suffer a lossof capital when equity holders do not. AT1 CoCos are issued as perpetualinstruments, callable at predetermined levels only with the approval of thecompetent authority. The structure of CoCo instruments is innovative yetuntested.

CoCos may entail a liquidity risk, meaning that under certain conditions it maybe difficult to sell them. If the relevant market for a specific CoCo is illiquid, itmay not be possible to liquidate a position at all or at an acceptable price. Thisrisk generally increases the more likely it gets that the pre-specified trigger eventof a given CoCo occurs.

Finally, when CoCos are written down, the NAV of the relevant Sub-Fund maysignificantly decrease.

27.1.52 Misconduct of Employees and of Third Party Service Providers.

Misconduct by employees or by third party service providers (including to theFund) could cause significant losses to the Fund. Employee misconduct mayinclude binding the Fund to transactions that exceed authorized limits or presentunacceptable risks and unauthorized trading activities or concealing unsuccessfultrading activities (which, in either case, may result in unknown and unmanagedrisks or losses). Losses could also result from actions by third party serviceproviders, including, without limitation, failing to recognize trades andmisappropriating assets. In addition, employees and third party service providersmay improperly use or disclose confidential information, which could result inlitigation or serious financial harm, including limiting the Fund’s businessprospects or future marketing activities. Although the Management Companywill adopt measures to prevent and detect employee misconduct and to selectreliable third party providers, such measures may not be effective in all cases.

27.1.53 Concentrated Investor Risk.

Unitholders should note that a Sub-Fund may have a concentrated investor basewhere large institutional type clients (such as pension funds, insurancecompanies or other collective investment schemes, including those which maybe managed by DMS Group affiliated entities) hold a significant portion of theassets of a Sub-Fund. This exposes other Unitholders in that Sub-Fund to certainrisks. These risks include the risk that a large portion of the assets of a Sub-Fundmay be redeemed on any day which could impact the overall viability of thatSub-Fund or could impact the ability of other investors, who have not submittedredemption requests on that day, to redeem from that Sub-Fund e.g. in times ofabnormal market conditions where it may be necessary to impose a redemptiongate.

27.1.54 Appropriate Investment.

The Fund may not be suitable for investors who are more concerned withminimizing possible short term losses than maximizing long term returns.

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27.2 Fixed Income Risks

27.2.1 Debt Securities Generally

Debt securities are subject to the risk of an issuer’s or a guarantor’s inability tomeet principal and interest payments on the obligation (credit risk) and may alsobe subject to price volatility due to such factors as interest rate sensitivity, marketperception of the creditworthiness of the issuer and general market liquidity(market risk).

In respect of structured securities, they may also be more volatile and less liquidthan less complex securities. The timing of purchase and sale transactions in debtobligations may result in capital appreciation or depreciation because the valueof debt obligations generally varies inversely with prevailing interest rates.

27.2.2 Corporate Debt

Bonds, notes and debentures issued by corporations may pay fixed, variable orfloating rates of interest, and may include zero-coupon obligations. Corporatedebt instruments may be subject to credit ratings downgrades. Other instrumentsmay have the lowest quality ratings or may be unrated. In addition, a Sub-Fundmay be paid interest in kind in connection with its investments in corporate debtand related financial instruments (e.g., the principal owed to the Fund inconnection with a debt investment may be increased by the amount of interestdue on such debt investment). Such investments may experience greater marketvalue volatility than debt obligations that provide for regular payments of interestin cash and, in the event of a default, the Fund may experience substantial losses.

27.2.3 Investment in Fixed Income Securities and Risks of Interest and ExchangeRate Fluctuations

The Net Asset Value of the Units of a Sub-Fund invested in fixed incomesecurities will change in response to fluctuations in interest rates and currencyexchange rates. Except to the extent that values are independently affected bycurrency exchange rate fluctuations, when interest rates decline, the value offixed income securities generally can be expected to rise and when interest ratesrise, the value of fixed income securities generally can be expected to fall. Theperformance of investments in fixed income securities denominated in a specificcurrency will also depend on the interest rate environment in the country issuingthe currency.

27.2.4 Zero Coupon, Deferred Interest Bonds and Payment in Kind Bonds

A Sub-Fund may invest in zero coupon bonds and deferred interest bonds, whichare debt obligations issued at a significant discount from face value. The originaldiscount approximates the total amount of interest the bonds will accrue andcompound over the period until maturity or the first interest accrual date at a rateof interest reflecting the market rate of the security at the time of issuance. ASub-Fund may also invest in payment in kind bonds, which are debt obligationswhere interest is paid in the form of the issue of additional bonds. While zerocoupon bonds and payment in kind bonds do not require the periodic payment ofinterest, deferred interest bonds generally provide for a period of delay beforethe regular payment of interest begins. Such investments benefit the issuer bymitigating its initial need for cash to meet debt service and some also provide ahigher rate of return to attract investors who are willing to defer receipt of suchcash. Such investments experience greater volatility in market value due to

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changes in interest rates than debt obligations which provide for regularpayments of interest, and a Sub-Fund may accrue income on such obligationseven though it receives no cash.

27.2.5 Floating Rate Debt Instruments

Floating rate debt securities present more complex types of interest rate risks.For example, range floaters are subject to the risk that the coupon will be reducedbelow market rates if a designated interest rate floats outside of a specifiedinterest rate band or collar. Dual index or yield curve floaters are subject to lowerprices in the event of an unfavourable change in the spread between twodesignated interest rates.

27.2.6 Risks of Investing in Non-Investment Grade Fixed Income Securities

Non-investment grade fixed income securities are considered predominantlyspeculative by traditional investment standards. In some cases, these obligationsmay be highly speculative and have poor prospects for reaching investment gradestanding. Non-investment grade fixed income securities and unrated securities ofcomparable credit quality (commonly known as “high yield bonds”) are subjectto the increased risk of an issuer’s inability to meet principal and interestobligations. These securities, also referred to as high yield securities, may besubject to greater price volatility due to such factors as specific corporatedevelopments, interest rate sensitivity, negative perceptions of the high yieldbond markets generally and less secondary market liquidity.

Non-investment grade fixed income securities are often issued in connectionwith a corporate reorganisation or restructuring or as part of a merger,acquisition, takeover or similar event. They are also issued by less establishedcompanies seeking to expand. Such issuers are often highly leveraged andgenerally less able than more established or less leveraged entities to makescheduled payments of principal and interest in the event of adversedevelopments or business conditions.

The market value of non-investment grade fixed income securities tends toreflect individual corporate developments to a greater extent than that of higherrated securities which react primarily to fluctuations in the general level ofinterest rates. As a result, where a Sub-Fund invests in such securities its abilityto achieve its investment objective may depend to a greater extent on theInvestment Manager’s judgement concerning the creditworthiness of issuers thanfunds which invest in higher-rated securities. Issuers of non-investment gradefixed income securities may not be able to make use of more traditional methodsof financing and their ability to service debt obligations may be more adverselyaffected than issuers of higher-rated securities by economic downturns, specificcorporate developments or the issuer’s inability to meet specific projectedbusiness forecasts. Negative publicity about the high yield bond market andinvestor perceptions regarding lower rated securities, whether or not based onfundamental analysis, may depress the prices for such securities.

A holder’s risk of loss from default is significantly greater for non-investmentgrade fixed income securities than is the case for holders of other debt securitiesbecause such non-investment grade securities are generally unsecured and areoften subordinated to the rights of other creditors of the issuers of such securities.Investment by a Sub-Fund in defaulted securities poses additional risk of lossshould non-payment of principal and interest continue in respect of such

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securities. Even if such securities are held to maturity, recovery by a Sub-Fundof its initial investment and any anticipated income or appreciation is uncertain.

The secondary market for non-investment grade fixed income securities isconcentrated in relatively few market makers and is dominated by institutionalinvestors, including mutual funds, insurance companies and other financialinstitutions. Accordingly, the secondary market for such securities is not as liquidas, and is more volatile than, the secondary market for higher-rated securities. Inaddition, market trading volume for high yield bonds is generally lower and thesecondary market for such securities could contract under adverse market oreconomic conditions, independent of any specific adverse changes in thecondition of a particular issuer. These factors may have an adverse effect on themarket price and a Sub-Fund’s ability to dispose of particular portfolioinvestments. A less liquid secondary market also may make it more difficult fora Sub-Fund to obtain precise valuations of the high yield bonds in its portfolio.

Credit ratings issued by credit rating agencies are designed to evaluate the safetyof principle and interest payments of rated securities. They do not, however,evaluate the market value risk of non-investment grade securities and, therefore,may not fully reflect the true risks of an investment. In addition, credit ratingagencies may or may not make timely changes in a rating to reflect changes inthe economy or in the conditions of the issuer that affect the market value of thesecurity. Consequently, credit ratings are used only as a preliminary indicator ofinvestment quality.

27.2.7 Risks of Spread Transactions

Where a Sub-Fund enters into spread transactions, it is subject to the risk that theprices of the currencies underlying the positions comprising such spreads willnot fluctuate in the same direction or to the same extent during the period inwhich the spread position is maintained. Under such circumstances, the Sub-Fund could sustain losses on one or both legs of the spread position.

27.2.8 Euro and Euro Zone Risk

The ongoing deterioration of the sovereign debt of several countries, in particularGreece, together with the risk of contagion to other, more stable, countries,particularly France and Germany, has exacerbated the global economic crisis.This situation has also raised a number of uncertainties regarding the stabilityand overall standing of the European Economic and Monetary Union and mayresult in changes to the composition of the Euro zone.

As a result of the credit crisis in Europe, in particular in Greece, Italy, Ireland,Portugal and Spain, the European Commission created the European FinancialStability Facility (the “EFSF”) and the European Financial Stability Mechanism(the “EFSM”) to provide funding to Euro zone countries in financial difficultiesthat seek such support. In March 2011, the European Council agreed on the needfor Euro zone countries to establish a permanent stability mechanism, theEuropean Stability Mechanism (the “ESM”), which will be activated by mutualagreement, to assume the role of the EFSF and the EFSM in providing externalfinancial assistance to Euro zone countries after June 2013.

Despite these measures, concerns persist regarding the growing risk that otherEuro zone countries could be subject to an increase in borrowing costs and couldface an economic crisis similar to that of Greece, Italy, Spain and Portugal,together with the risk that some countries could leave the Euro zone (either

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voluntarily or involuntarily), and that the impact of these events on Europe andthe global financial system could be severe which could have a negative impacton the market.

Furthermore, concerns that the Euro zone sovereign debt crisis could worsen maylead to the reintroduction of national currencies in one or more Euro zonecountries or, in more extreme circumstances, the possible dissolution of the Euroentirely. The departure or risk of departure from the Euro by one or more Eurozone countries and/or the abandonment of the Euro as a currency could havemajor negative effects on the Fund and the Sub-Funds. Should the Euro dissolveentirely, the legal and contractual consequences for holders of Euro-denominatedUnits would be determined by laws in effect at such time. These potentialdevelopments, or market perceptions concerning these and related issues, couldadversely affect the value of the Units. It is difficult to predict the final outcomeof the Euro zone crisis. Investors should carefully consider how changes to theEuro zone may affect their investment in the Sub-Funds.

27.2.9 Systemic Risk

Credit risk may also arise through a default by one or several large institutionsthat are dependent on one another to meet their liquidity or operational needs, sothat a default by one institution causes a series of defaults by the otherinstitutions. This is sometimes referred to as a "systemic risk" and may adverselyaffect financial intermediaries, such as clearing agencies, clearing houses, banks,securities firms and exchanges, with which a Sub-Fund interacts on a daily basis.

27.2.10 Mortgage-Backed and Asset-Backed Securities

A Sub-Fund may invest in securities that represent an interest in a pool ofmortgages (“mortgage-backed securities”) and, subject to applicable law, creditcard receivables, auto loans or other types of loans (“asset-backed securities”).Payments of principal and interest on the underlying loans are passed through tothe holders of such securities over the life of the securities. Most mortgage-backed and asset-backed securities are subject to early prepayment of principal,which can be expected to accelerate during periods of declining interest rates.Such prepayments can usually be reinvested only at the lower yields thenprevailing in the market. Therefore, during periods of declining interest rates,these securities are less likely than other fixed income obligations to appreciatein value and less effective at locking in a particular yield. On the other hand,mortgage-backed and asset-backed securities are subject to substantially thesame risk of depreciation during periods of rising interest rates as other fixedincome securities.

Asset-backed securities present certain credit risks that are not presented bymortgage-backed securities because asset-backed securities generally do nothave the benefit of a security interest over the collateral that is comparable tomortgage assets. There is the possibility that, in some cases, recoveries onrepossessed collateral may not be available to support payments on thesesecurities.

27.2.11 Structured Notes

A Sub-Fund may invest in structured notes. The values of the structured notes inwhich a Sub-Fund will invest may be linked to equities or debt instruments(“reference instruments”). These notes differ from other types of debt securitiesin several respects. The interest rate or principal amount payable at maturity may

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vary based on changes in the value of the reference instruments. A structurednote may be positively or negatively indexed; that is, its value or interest ratemay increase or decrease if the value of the reference instrument increases.Similarly, its value may increase or decrease if the value of the referenceinstrument decreases. Further, the change in the principal amount payable withrespect to, or the interest rate of, a structured note may be a multiple of thepercentage change (positive or negative) in the value of the underlying referenceinstrument(s). Investments in structured notes involve certain risks, including thecredit risk of the issuer and the normal risks of price changes in response tochanges in interest rates. Further, in the case of certain structured notes, a declineor increase in the value of the reference instrument may cause the interest rate tobe reduced to zero, and any further declines or increases in the referenceinstrument may then reduce the principal amount payable on maturity. Finally,these securities may be less liquid than other types of securities, and may be morevolatile than their underlying reference instruments.

27.3 Derivatives Risks

27.3.1 Derivative Instruments Generally

A Sub-Fund may make extensive use of derivatives in its investment policy.Derivatives are financial instruments that derive their performance, at least inpart, from the performance of an underlying asset, index, or interest rate.Examples of derivatives include, but are not limited to, swap agreements, futurescontracts, options contracts, and options on futures contracts. A futures contractis an exchange-traded agreement between two parties, a buyer and a seller, toexchange a particular financial instrument at a specific price on a specific date inthe future. An option transaction generally involves a right, which may or maynot be exercised, to buy or sell a financial instrument at a particular price on aspecified future date.

A Sub=Fund’s use of derivatives involves risks different from, or possiblygreater than, the risks associated with investing directly in securities or moretraditional investments, depending upon the characteristics of the particularderivative and the overall portfolio of the Sub-Fund as a whole. Derivativespermit an investor to increase or decrease the level of risk of its portfolio, orchange the character of the risk to which its portfolio is exposed, in much thesame way as an investor can increase or decrease the level of risk, or change thecharacter of the risk, of its portfolio by making investments in specific securities.

Derivatives may entail investment exposures that are greater than their costwould suggest, meaning that a small investment in derivatives could have a largepotential impact on a Sub-Fund’s performance. If a Sub-Fund invests inderivatives at inopportune times or judges market conditions incorrectly, suchinvestments may lower the relevant Sub-Fund’s return or result in a loss, whichcould be significant. Derivatives are also subject to various other types of risk,including market risk, liquidity risk, structuring risk, counterparty financialsoundness, credit worthiness and performance risk, legal risk and operations risk.In addition, a Sub-Fund could experience losses if derivatives are poorlycorrelated with its other investments, or if the Fund is unable to liquidate itsposition because of an illiquid secondary market. The market for manyderivatives is, or suddenly can become, illiquid. Changes in liquidity may resultin significant, rapid, and unpredictable changes in the prices for derivatives.

Engaging in derivative transactions involves a risk of loss to a Sub-Fund thatcould materially adversely affect the Sub-Fund’s NAV. No assurance can be

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given that a liquid market will exist for any particular contract at any particulartime.

27.3.2 Derivatives with Respect to High-Yield and Other Indebtedness

A Sub-Fund may engage in trading of derivatives with respect to high yield andother debt. In addition to the credit risks associated with holding high yield debtsecurities, with respect to derivatives involving high yield and other debt, theFund and/or the relevant Sub-Fund will usually have a contractual relationshiponly with the counterparty of the derivative, and not with the issuer of theindebtedness. Generally, a Sub-Fund will have no right to directly enforcecompliance by the issuer with the terms of the derivative nor any rights of set-off against the issuer, nor have any voting rights with respect to the indebtedness.A Sub-Fund will not directly benefit from the collateral supporting theunderlying indebtedness and will not have the benefit of the remedies that wouldnormally be available to a holder of the indebtedness. In addition, in the event ofthe insolvency of the counterparty to the derivative, the Fund and the relevantSub-Fund will be treated as a general creditor of such counterparty, and will nothave any claim with respect to the underlying indebtedness. Consequently, theFund will be subject to the credit risk of the counterparty as well as that of theissuer of the indebtedness. As a result, concentrations of such derivatives in anyone counterparty may subject the Fund to an additional degree of risk withrespect to defaults by such counterparty as well as by the issuer of the underlyingindebtedness.

27.3.3 Futures

A Sub-Fund may use futures as part of its investment program. Futures positionsmay be illiquid because certain commodity exchanges limit fluctuations incertain futures contract prices during a single day by regulations referred to as“daily price fluctuation limits” or “daily limits.” Under such daily limits, duringa single trading day no trades may be executed at prices beyond the daily limits.Once the price of a particular futures contract has increased or decreased by anamount equal to the daily limit, positions in that contract can neither be taken norliquidated unless traders are willing to effect trades at or within the limit. It isalso possible that an exchange may suspend trading in a particular contract, orderimmediate liquidation and settlement of a particular contract, or order thattrading in a particular contract be conducted for liquidation only. Thecircumstances described above could prevent the Investment Manager fromliquidating unfavourable positions promptly and subject a Sub-Fund tosubstantial losses. These circumstances could also impair the Fund’s ability towithdraw its investments in order to satisfy redemption requests by Unitholdersin a timely manner. An investment in a Sub-Fund is therefore suitable only forcertain sophisticated investors that will not be materially impacted bypostponements of the Fund’s normal redemption dates.

The successful use of futures for speculative purposes is subject to the ability topredict correctly movements in the direction of the relevant market, and, to theextent the transaction is entered into for hedging purposes, to ascertain theappropriate correlation between the transaction being hedged and the pricemovements of the futures contract.

27.3.4 Forward Contracts

A Sub-Fund may enter into forward contracts and options thereon which are nottraded on exchanges and are generally not regulated. There are no limitations on

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daily price moves of forward contracts. Banks and other dealers with whom aSub-Fund may maintain accounts may require the Fund to deposit margin withrespect to such trading, although margin requirements are often minimal or non-existent. The Fund’s and a Sub-Fund’s counterparties are not required tocontinue to make markets in such contracts and these contracts can experienceperiods of illiquidity, sometimes of significant duration. There have been periodsduring which certain counterparties have refused to continue to quote prices forforward contracts or have quoted prices with an unusually wide spread (thedifference between the price at which the counterparty is prepared to buy andthat at which it is prepared to sell). Arrangements to trade forward contracts maybe made with only one or a few counterparties, and liquidity problems thereforemight be greater than if such arrangements were made with numerouscounterparties. The imposition of credit controls by governmental authoritiesmight limit such forward trading to less than that which the Investment Managerwould otherwise recommend, to the possible detriment of a Sub-Fund. Inaddition, disruptions can occur in any market traded by a Sub-Fund due tounusually high trading volume, political intervention or other factors. Marketilliquidity or disruption could result in major losses to a Sub-Fund. In addition, aSub-Fund may be exposed to credit risks with regard to counterparties withwhom it trades as well as risks relating to settlement default. Such risks couldresult in substantial losses to such Fund.

27.3.5 When-Issued and Forward Commitment Securities

A Sub-Fund may purchase securities on a “when-issued” basis and may purchaseor sell securities on a “forward commitment” basis in order to hedge againstanticipated changes in interest rates and prices or for speculative purposes. Thesetransactions involve a commitment by the Sub-Fund to purchase or sell securitiesat a future date (ordinarily at least one or two months later). The price of theunderlying securities, which is generally expressed in terms of yield, is fixed atthe time the commitment is made, but delivery and payment for the securitiestakes place at a later date. No income accrues on securities that have beenpurchased pursuant to a forward commitment or on a when-issued basis prior todelivery to the Fund. There is a risk that securities purchased on a when-issuedbasis may not be delivered and that the purchaser of securities sold by the Fundon a forward basis will not honour its purchase obligation. In such cases, therelevant Sub-Fund may incur a loss.

27.3.6 Call Options

A Sub-Fund may directly or indirectly sell or purchase call options. There arerisks associated with the sale and purchase of call options. The seller (writer) ofa call option which is covered (i.e., the writer holds the underlying security)assumes the risk of a decline in the market price of the underlying security belowthe purchase price of the underlying security less the premium received, andgives up the opportunity for gain on the underlying security above the exerciseprice of the option. The seller of an uncovered call option assumes the risk of atheoretically unlimited increase in the market price of the underlying securityabove the exercise price of the option.

The buyer of a call option assumes the risk of losing his entire investment in thecall option. If the buyer of the call sells short the underlying security, the loss onthe call will be offset in whole or in part by any gain on the short sale of theunderlying security.

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27.3.7 Put Options

A Sub-Fund may directly or indirectly sell or purchase put options. There arerisks associated with the sale and purchase of put options. The seller (writer) ofa put option which is covered (i.e., the writer has a short position in theunderlying security) assumes the risk of an increase in the market price of theunderlying security above the sales price (in establishing the short position) ofthe underlying security plus the premium received, and gives up the opportunityfor gain on the underlying security below the exercise price of the option. If theseller of the put option owns a put option covering an equivalent number ofshares with an exercise price equal to or greater than the exercise price of the putwritten, the position is “fully hedged” if the option owned expires at the sametime or later than the option written. The seller of an uncovered put optionassumes the risk of a decline in the market price of the underlying security belowthe exercise price of the option.

The buyer of a put option assumes the risk of losing his entire investment in theput option. If the buyer of the put option holds the underlying security, the losson the put option will be offset in whole or in part by any gain on the underlyingsecurity.

27.3.8 Swap Agreements

A Sub-Fund may enter into swap agreements. Swap agreements are derivativeproducts in which two parties agree to exchange payment streams that may becalculated in relation to a rate, index, instrument, or certain securities and aparticular “notional amount.” Swaps may be subject to various types of risks,including market risk, liquidity risk, structuring risk, tax risk, and the risk of non-performance by the counterparty, including risks relating to the financialsoundness and creditworthiness of the counterparty. Swaps may be structured toinclude exposure to a variety of different types of investments or market factors.Depending on their structure, swaps may increase or decrease a Sub-Fund’sexposure to equity or debt securities, long-term or short-term interest rates (inthe United States or abroad), foreign currency values, mortgage-backedsecurities, corporate borrowing rates, or other factors such as security prices,baskets of securities, or inflation rates and may increase or decrease the overallvolatility of the Fund’s or a Sub-Fund’s portfolio. Swap agreements can takemany different forms and are known by a variety of names. A Sub-Fund is notlimited to any particular form of swap agreement if the Investment Managerdetermines that other forms are consistent with the Sub-Fund’s investmentobjective and policies.

The most significant factor in the performance of swaps is the change inindividual equity values, specific interest rate, currency or other factors thatdetermine the amounts of payments due to and from the counterparties. If a swapcalls for payments by a Sub-Fund, the Sub-Fund must have sufficient cashavailable to make such payments when due. In addition, if a counterparty’screditworthiness declines, the value of a swap agreement would be likely todecline, potentially resulting in losses to the Sub-Fund.

Swaps may be individually negotiated transactions in the over-the-countermarket in which a Sub-Fund assumes the credit risk of the other counterparty tothe swap and is exposed to the risk of loss of the amount expected to be receivedunder a swap agreement in the event of the default or insolvency of the swapcounterparty. Such over-the-counter swap transactions may be highly illiquidand may increase or decrease the volatility of a Sub-Fund's portfolio. If there is

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a default by a counterparty, a Sub-Fund under most normal circumstances willhave contractual remedies pursuant to the swap agreement; however, exercisingsuch contractual rights may involve delays or costs which could result in the netasset value of the Sub-Fund being less than if the Sub-Fund had not entered intothe transaction. Furthermore, there is a risk that a swap counterparty couldbecome insolvent and/or the subject of insolvency proceedings, in which eventthe recovery of the collateral posted by the Sub-Fund with such counterparty orthe payment of claims under the swap agreement may be significantly delayedand the Sub-Fund may recover substantially less than the full value of thecollateral entrusted to such counterparty or of the Sub-Fund's claims.

A Sub-Fund will also bear the risk of loss if it breaches the swap agreement or ifit fails to post or maintain required collateral. Recent changes in law andregulation require certain types of swap agreements to be transacted onexchanges and/or cleared through a clearinghouse, and will in the future requireadditional types of swap agreements to be transacted on exchanges and/or clearedthrough a clearinghouse. See "The EU Regulation on OTC derivatives, centralcounterparties and trade repositories" and "Changes to US Securities Law -Derivatives Regulation."

27.3.9 Credit Default Swaps

A Sub-Fund may enter into credit default swap transactions. The "protectionbuyer" or "buyer" in a credit default contract is obligated to pay the "protectionseller" or "seller" a periodic stream of payments over the term of the contractprovided that no credit event (as defined in the applicable contract) on anunderlying reference obligation has occurred. If a credit event occurs, the sellermay be required to transfer substantial value in cash or securities. A Sub-Fundmay be either the buyer or seller in a credit default swap transaction. If a Sub-Fund is a buyer and no credit event occurs, the Sub-Fund will lose its investmentand recover nothing. However, if a credit event occurs, the Sub-Fund (as buyer)may receive the full notional value of the reference obligation even if thereference obligation has little or no value. As a seller, a Sub-Fund generallyreceives a fixed rate of income throughout the term of the contract, whichgenerally is between six months and ten years (depending on the maturity of theunderlying reference obligation), provided that there is no credit event. If a creditevent occurs, a Sub-Fund (as seller) will be required to pay the full notional valueof the reference obligation. Credit default swap transactions may involve greaterrisks than if a Sub-Fund had invested in the reference obligation directly.

A Sub-Fund may also purchase credit default swap contracts in order to hedgeagainst the risk of a credit event with respect to debt securities it holds. Thiswould involve the risk that the credit default swap may expire worthless andwould only generate income in the event of an actual credit event by the issuerof the underlying reference obligation. It would also involve credit risk—that theseller may fail to satisfy its payment obligations to the Sub-Fund in the event ofa credit event.

Selling credit default protection creates a synthetic "long" position which mayreplicate the terms of credit exposure to the referenced cash-market security orindex. However, there can be no assurance that the price relationship betweenthe cash-market security or index and the credit derivative will remain constant,and events unrelated to the underlying security or index (such as those affectingavailability of borrowed money and liquidity, or the creditworthiness of acounterparty) can cause the price relationship to change. This risk is known as

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"basis risk." Basis risk may cause a Sub-Fund to realise a greater loss on aninvestment in synthetic form than might otherwise be the case with a cash-marketsecurity. To the extent a Sub-Fund purchases credit default swap protection tohedge risk, basis risk may cause the hedge to be less effective or ineffective.

27.3.10 Hedging Transactions

Hedging techniques used by the Investment Manager may involve a variety ofderivative transactions, including futures contracts, exchange-listed and over-the-counter put and call options on securities, financial indices, forward foreigncurrency contracts, and various interest rate transactions (collectively, “HedgingInstruments”). Hedging techniques involve unique risks. In particular, thevariable degree of correlation between price movements of Hedging Instrumentsand price movements in the position being hedged creates the possibility thatlosses on the hedge may be greater than gains in the value of a Sub-Fund’spositions. In addition, certain Hedging Instruments and markets may not beliquid in all circumstances. As a result, in volatile markets a Sub-Fund may notbe able to close out transactions in certain of these instruments without recurringlosses substantially greater than the initial deposit. Although the contemplateduse of these instruments should tend to minimise the risk of loss due to a declinein the value of the hedged position, at the same time they tend to limit anypotential gain which might result from an increase in the value of such position.The ability of a Sub-Fund to hedge successfully will depend on the InvestmentManager’s ability to predict pertinent market movements, which cannot beassured. A Sub-Fund is not required to hedge and there can be no assurance thathedging transactions may be available or, even if undertaken, will be effective.In addition it is not possible to hedge fully or perfectly against currencyfluctuations affecting the value of securities denominated in non-U.S. currenciesbecause the value of those securities is likely to fluctuate as a result ofindependent factors not related to currency fluctuations. Furthermore, over-hedged or under-hedged positions may arise due to factors beyond the control ofthe Fund.

27.3.11 Position Limits

"Position limits" imposed by various regulators and/or counterparties may alsolimit a Sub-Fund's ability to effect desired trades. Position limits are themaximum amounts of net long or net short positions that any one person or entitymay own or control in a particular financial instrument. All positions owned orcontrolled by the same person or entity, even if in different accounts, may beaggregated for purposes of determining whether the applicable position limitshave been exceeded. Thus, even if a Sub-Fund does not intend to exceedapplicable position limits, it is possible that different accounts managed by theInvestment Manager and its affiliates may be aggregated. If at any time positionsmanaged by the Investment Manager were to exceed applicable position limits,the Investment Manager would be required to liquidate positions, which mightinclude positions of a Sub-Fund, to the extent necessary to come within thoselimits. Further, to avoid exceeding the position limits, a Sub-Fund might have toforego or modify certain of its contemplated trades.

27.3.12 Necessity for Counterparty Trading Relationships

Participants in the over-the-counter markets typically enter into transactions onlywith those counterparties which they believe to be sufficiently creditworthy,unless the counterparty provides margin, collateral, letters of credit or othercredit enhancements. While it is anticipated that a Sub-Fund will be able to

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establish the necessary counterparty business relationships to permit the Fund toeffect transactions in the over-the-counter commodities markets and othercounterparty markets, including the swaps market, there can be no assurance thatit will be able to do so or, if it does, that it will be able to maintain suchrelationships. An inability to continue existing or establish new relationshipscould limit the Fund’s activities and would require the Fund to conduct a moresubstantial portion of such activities in the futures markets. Moreover, thecounterparties with which a Sub-Fund expects to establish such relationships willnot be obligated to maintain the credit lines extended to the Fund and/or therelevant Sub-Fund, and such counterparties could decide to reduce or terminatesuch credit lines at their discretion.

27.3.13 Failure of Brokers, Counterparties and Exchanges

A Sub-Fund will be exposed to the credit risk of the counterparties with which,or the brokers, dealers and exchanges through which, the Sub-Fund deals,whether it engages in exchange-traded or off-exchange transactions. A Sub-Fundmay be subject to risk of loss of its assets on deposit with a broker in the eventof the broker’s bankruptcy, the bankruptcy of any clearing broker through whichthe broker executes and clears transactions on behalf of the Sub-Fund, or thebankruptcy of an exchange clearing house. A Sub-Fund may also be subject torisk of loss of its funds on deposit with brokers who are not required by their ownregulatory bodies to segregate customer funds. A Sub-Fund may be required topost margin for its foreign exchange transactions either with the InvestmentManager or other foreign exchange dealers who are not required to segregatefunds (although such funds are generally maintained in separate accounts on theforeign exchange dealer’s books and records in the name of the Sub-Fund).

In the case of a bankruptcy of the counterparties with which, or the brokers,dealers and exchanges through which, a Sub-Fund deals, or a customer loss asdescribed in the foregoing paragraph, the Fund might not be able to recover anyof its assets held, or amounts owed, by such person, even property specificallytraceable to the Sub-Fund, and, to the extent such assets or amounts arerecoverable, the Fund might only be able to recover a portion of such amounts.Further, even if the Fund is able to recover a portion of such assets or amounts,such recovery could take a significant period of time. Prior to receiving therecoverable amount of the Sub-Fund’s property, the Sub-Fund may be unable totrade any positions held by such person, or to transfer any positions and cash heldby such person on behalf of the Sub-Fund. This could result in significant lossesto the Sub-Fund.

A Sub-Fund may effect transactions on “over-the-counter” or “interdealer”markets. Participants in these markets are typically not subject to creditevaluation and regulatory oversight as are members of “exchange based”markets. To the extent a Sub-Fund invests in swaps, derivatives or syntheticinstruments, or other over-the-counter transactions in these markets, the Sub-Fund may take a credit risk with regard to parties with which it trades and alsomay bear the risk of settlement default. These risks may differ materially fromthose involved in exchange-traded transactions, which generally arecharacterised by clearing organisation guarantees, daily marking-to-market andsettlement, and segregation and minimum capital requirements applicable tointermediaries. Transactions entered into directly between two counterpartiesgenerally do not benefit from these protections, which, in turn, may subject theFund and/or the relevant Sub-Fund to the risk that a counterparty will not settlea transaction in accordance with agreed terms and conditions due to, among other

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things, a dispute over the terms of the contract or a credit or liquidity problem.Such “counterparty risk” is increased for contracts with longer maturities whenevents may intervene to prevent settlement. The inability of the Fund to transactbusiness with any one or any number of counterparties, the lack of anyindependent evaluation of the counterparties or their financial capabilities, andthe absence of a regulated market to facilitate settlement, may increase thepotential for losses to the Sub-Fund.

A Sub-Fund may engage in direct or indirect trading of securities, currencies,derivatives (including swaps, forward contracts, futures, options and repurchaseand reverse repurchase agreements) and other instruments (as permitted by itsinvestment policy) on a principal basis. As such, a Sub-Fund as transferee orcounterparty could experience both delays in liquidating the underlying security,future or other investment and losses, including those arising from: (i) the risk ofthe inability or refusal to perform with respect to such transactions on the part ofthe principals with which the Fund or a Sub-Fund trades, including withoutlimitation, the inability or refusal to timely return collateral posted by the Fundor the Sub-Fund; (ii) possible decline in the value of any collateral during theperiod in which the Fund seeks to enforce its rights with respect to suchcollateral; (iii) the need to re-margin or repost collateral in respect of transferred,assigned or replaced positions; (iv) reduced levels of income and lack of accessto income during such period; (v) expenses of enforcing its rights; and (vi) legaluncertainty concerning the enforceability of certain rights under swapagreements and possible lack of priority against collateral posted under the swapagreements. Any such failure or refusal, whether due to insolvency, bankruptcyor other causes, could subject the Fund and the relevant Sub-Fund to substantiallosses. A Sub-Fund will not be excused from performance on any suchtransactions due to the default of third parties in respect of other trades in whichits trading strategies were to have substantially offset such contracts.

27.4 Equities Risks

27.4.1 Equity and Equity-Related Securities and Instruments

A Sub-Fund may, directly or indirectly, purchase equity-related securities andinstruments, such as convertible securities, warrants, stock options andindividual stock futures. The value of equity securities varies in response to manyfactors. Factors specific to an issuer, such as certain decisions by management,lower demand for its products or services, or even loss of a key executive, couldresult in a decrease in the value of the issuer’s securities. Factors specific to theindustry in which the issuer participates, such as increased competition or costsof production or consumer or investor perception, can have a similar effect. Thevalue of an issuer’s stock can also be adversely affected by changes in financialmarkets generally, such as an increase in interest rates or a decrease in consumerconfidence, that are unrelated to the issuer itself or its industry. In addition,certain options and other equity-related instruments may be subject to additionalrisks, including liquidity risk, counterparty credit risk, legal risk and operationsrisk, and may involve significant economic leverage and, in some cases, besubject to significant risks of loss. These factors and others can cause significantfluctuations in the prices of the securities in which a Sub-Fund invests and canresult in significant losses.

27.4.2 Investment in Small Capitalisation Companies

The investment risk associated with emerging companies is higher than thatnormally associated with larger, older companies due to the greater business risks

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associated with small size, the relative age of the company, limited product lines,distribution channels and financial and managerial resources. Further, there istypically less publicly available information concerning smaller companies thanfor larger, more established ones. The securities of small companies are oftentraded only over-the-counter and may not be traded in the volumes typical oftrading on national securities exchange. Nonetheless, a Sub-Fund will not investmore than 10% of its net assets in securities traded over the counter as providedin the “Investment Restrictions” section. As a result, in order to sell this type ofholding, a Sub-Fund may need to discount the securities from recent prices ordispose of the securities over a long period of time. The prices of this type ofsecurity may be more volatile than those of larger companies which are oftentraded on a national securities exchange.

27.4.3 Preferred Stock, Convertible Securities and Warrants

A Sub-Fund may invest directly or indirectly in preferred stock, convertiblesecurities and warrants. The value of preferred stocks, convertible securities andwarrants will vary with the movements in the equity market and the performanceof the underlying common stock, in particular. Their value is also affected byadverse issuer or market information. Thus, for example, as the value of theunderlying common stock of an issuer fluctuates, the value of the preferred stockof such issuer would also be expected to fluctuate. With respect to warrants, theirvalue may decrease or may be zero and thus not be exercised if the market priceof the underlying securities remains lower than the specified price at whichholders of warrants are entitled to buy such securities, resulting in a loss to theSub-Fund of the purchase price of the warrant (or the embedded warrant price inthe case of securities issued with warrants attached).

With respect to convertible securities, as with all fixed income securities, themarket value of such securities tends to decline as interest rates increase and,conversely, to increase as interest rates decline. However, when the market priceof the common stock underlying a convertible security exceeds the conversionprice, the convertible security tends to reflect the market price of the underlyingcommon stock. As the market price of the underlying common stock declines,the convertible security tends to trade increasingly on a yield basis and thus, maynot decline in price to the same extent as the underlying common stock.Convertible securities rank senior to common stock in an issuer’s capitalstructure and consequently entail less risk than the issuer’s common stock. Inevaluating a convertible security, the Investment Manager will give primaryemphasis to the attractiveness of the underlying common stock. If a convertiblesecurity held by a Sub-Fund is called for redemption, the Fund will be requiredto permit the issuer to redeem the security, convert it into the underlying stockor sell it to a third party. Any of these actions could have an adverse effect on aSub-Fund’s ability to achieve its investment objective.

27.4.4 Voting Rights

The Investment Manager may in its discretion exercise or procure the exerciseof all voting or other rights which may be exercisable in relation to investmentsheld by a Sub-Fund, including Units held by a Sub-Fund in another Sub-Fund.In relation to the exercise of such rights the Investment Manager may establishguidelines for the exercise of voting or other rights and the Investment Managermay, in its discretion, elect not to exercise or procure the exercise of such votingor other rights.

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27.4.5 Depository Receipts

A Sub-Fund may purchase sponsored or unsponsored American DepositoryReceipts (“ADRs”), European Depository Receipts (“EDRs”) and GlobalDepository Receipts (“GDRs”) (collectively “Depository Receipts”) typicallyissued by a bank or trust company which evidence ownership of underlyingsecurities issued by a foreign corporation. EDRs and GDRs are typically issuedby banks or trust companies and evidence ownership of underlying securitiesissued by a corporation.

Generally, Depository Receipts in registered form are designed for use in theU.S. securities market and Depository Receipts in bearer form are designed foruse in securities markets outside the United States. Depository Receipts may notnecessarily be denominated in the same currency as the underlying securities intowhich they may be converted. Depository Receipts may be issued pursuant tosponsored or unsponsored programs. In sponsored programs, an issuer has madearrangements to have its securities traded in the form of Depository Receipts. Inunsponsored programs, the issuer may not be directly involved in the creation ofthe program. Although regulatory requirements with respect to sponsored andunsponsored programs are generally similar, in some cases it may be easier toobtain financial information from an issuer that has participated in the creationof a sponsored program. Accordingly, there may be less information availableregarding issuers of securities underlying unsponsored programs and there maynot be a correlation between such information and the market value of theDepository Receipts.

27.5 Other Securities Risks

27.5.1 Real Estate Investment Trusts

A Sub-Fund may purchase interests in Real Estate Investment Trusts (“REITs”).REITs are trusts that invest primarily in commercial real estate or real estate-related loans. The value of interests in REITs may be affected by the value of theproperty owned or the quality of the mortgages held by the trust. The ability totrade REITs in the secondary market can be more limited than other shares orsecurities. The liquidity of REITs on the major U.S. stock exchanges is onaverage less than the typical stock quoted on the S&P 500 Index.

27.5.2 Investment in Collective Investment Schemes

Each Sub-Fund will bear its proportionate share of any fees and expenses paidby collective investment schemes in which the relevant Sub-Funds may invest(including funds affiliated with the relevant Investment Manager, other than aSub-Fund of the Fund), in addition to all fees and expenses payable by each Sub-Fund. Investments in funds affiliated with the Investment Manager will besubject to the Investment Manager’s fiduciary obligations to a Sub-Fund and willbe made on an arm’s length basis. Where a Sub-Fund invests in units of acollective investment scheme managed by the Investment Manager or itsaffiliates, and the Investment Manager or its affiliate, as the case may be, isentitled to receive a preliminary charge for its own account in respect of aninvestment in such fund, the Investment Manager or the affiliate, as appropriate,will waive the preliminary charge. Where the Investment Manager receives anycommission by virtue of investing in a fund advised or managed by theInvestment Manager, such commission will be paid into the assets of the relevantFund.

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27.5.3 Exchange Traded Funds (“ETFs”)

ETFs are investment companies whose shares are bought and sold on a securitiesexchange. ETFs invest in a portfolio of securities designed to track a particularmarket segment or index. ETFs, like mutual funds, have expenses associatedwith their operation, including advisory fees. When a Sub-Fund invests in anETF, in addition to directly bearing expenses associated with its own operations,it will bear a pro rata portion of the ETF’s expenses. Such ETF’s expenses maymake owning shares of the ETF more costly than owning the underlyingsecurities directly. The risks of owning shares of an ETF generally reflect therisks of owning the underlying securities the ETF is designed to track, althoughlack of liquidity in an ETF could result in its value being more volatile than theunderlying portfolio of securities.

27.5.4 Restricted Securities

A Sub-Fund may invest in securities that are not registered under the 1933 Actor under the laws of any non-U.S. jurisdiction pursuant to an exemptionthereunder ("Restricted Securities"). Restricted Securities may be sold in privateplacement transactions between issuers and their purchasers and may be neitherlisted on an exchange nor traded in other established markets. In many cases,privately placed securities may not be freely transferable under the laws of theapplicable jurisdiction or due to contractual restrictions on resale. As a result ofthe absence of a public trading market, privately placed securities may be lessliquid and more difficult to value than publicly traded securities. To the extentthat privately placed securities may be resold in privately negotiated transactions,the prices realised from the sales, due to illiquidity, could be less than thoseoriginally paid by the relevant Sub-Fund or less than their fair market value. Inaddition, issuers whose securities are not publicly traded may not be subject tothe disclosure and other investor protection requirements that may be applicableif their securities were publicly traded. If any privately placed securities held bya Sub-Fund are required to be registered under the securities laws of one or morejurisdictions before being resold, a Sub-Fund may be required to bear theexpenses of registration. A Sub-Fund's investments in private placements mayconsist of direct investments and may include investments in smaller, lessseasoned issuers, which may involve greater risks. These issuers may havelimited product lines, markets or financial resources or they may be dependenton a limited management group. In making investments in such securities, a Sub-Fund may obtain access to material non-public information, which may restricta Sub-Fund's ability to conduct portfolio transactions in such securities.

27.5.5 Stripped Securities

Stripped securities are created when the issuer separates the interest and principalcomponents of an instrument and sells them as separate securities. In general,one security is entitled to receive the interest payments on the underlying assets(the interest only or “IO” security) and the other to receive the principal payments(the principal only or “PO” security). Some stripped securities may receive acombination of interest and principal payments. The yields to maturity on IOsand POs are sensitive to the expected or anticipated rate of principal payments(including prepayments) on the related underlying assets, and principal paymentsmay have a material effect on yield to maturity. If the underlying assetsexperience greater than anticipated prepayments of principal, a Sub-Fund maynot fully recoup its initial investment in IOs. Conversely, if the underlying assetsexperience less than anticipated prepayments of principal, the yield on POs could

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be adversely affected. Stripped securities may be highly sensitive to changes ininterest rates and rates of prepayment.

27.6 Currency Risks

27.6.1 Currency Transactions

A Sub-Fund may engage in a variety of currency transactions. In this regard, spotand forward contracts and over-the-counter options are subject to the risk thatcounterparties will default on their obligations. Since a spot or forward contractor over-the-counter option is not guaranteed by an exchange or clearing house, adefault on the contract would deprive a Sub-Fund of unrealised profits,transaction costs and the hedging benefits of the contract or force a Sub-Fund tocover its purchase or sale commitments, if any, at the current market price. Tothe extent that a Sub-Fund is fully invested in securities while also maintainingcurrency positions, it may be exposed to greater combined risk. The use ofcurrency transactions is a highly specialised activity which involves investmenttechniques and risks different from those associated with ordinary Fundsecurities transactions. If the Investment Manager is incorrect in its forecasts ofmarket values and currency exchange rates, the investment performance of aSub-Fund would be less favourable than it would have been if this investmenttechnique were not used.

A Sub-Fund may incur costs in connection with conversions between variouscurrencies. Currency exchange dealers realise a profit based on the differencebetween the prices at which they are buying and selling various currencies. Thus,a dealer normally will offer to sell currency to a Sub-Fund at one rate, whileoffering a lesser rate of exchange should the Fund sell to the dealer.

27.6.2 Currency Risks

As a result of investment in obligations involving currencies of various countries,the value of the assets of a Sub-Fund as measured in a Sub-Fund’s Base Currencywill be affected by changes in currency exchange rates, which may affect a Sub-Fund’s performance independent of the performance of its securitiesinvestments. A Sub-Fund may or may not seek to hedge all or any portion of itsforeign currency exposure. However, even if a Sub-Fund attempts such hedgingtechniques, it is not possible to hedge fully or perfectly against currencyfluctuations affecting the value of securities denominated in non-Base Currenciesbecause the value of those securities is likely to fluctuate as a result ofindependent factors not related to currency fluctuations.

Currency exchange rates may fluctuate significantly over short periods of timecausing, along with other factors, a Sub-Fund’s Net Asset Value to fluctuate aswell. Currency exchange rates generally are determined by the forces of supplyand demand in the currency exchange markets and the relative merits ofinvestments in different countries, actual or anticipated changes in interest ratesand other complex factors, as seen from an international perspective. Currencyexchange rates also can be affected unpredictably by intervention or failure tointervene by governments or central banks or by currency controls or politicaldevelopments throughout the world. To the extent that a substantial portion of aSub-Fund’s total assets, adjusted to reflect a Sub-Fund’s net position after givingeffect to currency transactions, is denominated in the currencies of particularcountries, the Fund will be more susceptible to the risk of adverse economic andpolitical developments within those countries.

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27.6.3 Currency Counterparty Risk

Contracts in the foreign exchange market are not regulated by a regulatoryagency, and such contracts are not guaranteed by an exchange or its clearinghouse. Consequently, there are no requirements with respect to record-keeping,financial responsibility or segregation of customer funds or positions. In contrastto exchange-traded futures contracts, interbank-traded instruments rely on thedealer or counterparty being contracted with to fulfil its contract. As a result,trading in interbank foreign exchange contracts may be subject to more risks thanfutures or options trading on regulated exchanges, including, but not limited to,the risk of default due to the failure of a counterparty with which a Sub-Fund hasa forward contract. Although the Investment Manager intends to trade withcounterparties it believes to be responsible, failure by a counterparty to fulfil itscontractual obligations could expose a Sub-Fund to unanticipated losses.

27.6.4 Share Currency Designation Risk

The Fund may from time to time in its sole discretion, and without notice to theUnitholders, issue multiple Hedged Classes of Units which are designated in acurrency other than the Base Currency of a Sub-Fund. However, a Sub-Fundseeks to achieve its investment objectives in its Base Currency. In order thatinvestors in any Hedged Classes receive a return in the applicable Class Currencysubstantially in line with the investment objectives of the Fund, the InvestmentManager intends to seek to hedge the foreign currency exposure of such intereststhrough foreign exchange transactions. Foreign exchange hedging involves theFund seeking to mitigate the risk of losses caused by adverse exchange ratefluctuations through the use of the efficient portfolio management techniques(including futures and currency forwards) set out in the relevant Supplementwithin the conditions and limits imposed by the CSSF to hedge the foreigncurrency exposure of such Classes into the Base Currency of the relevant Fund.There can be no assurance that foreign exchange hedging will be effective. Forexample, foreign exchange hedging may not take into account the changes inforeign currency exposure resulting from appreciation or depreciation of theassets of a Sub-Fund allocable to Hedged Classes in the periods between DealingDays of the relevant Fund. In addition, foreign exchange hedging may not fullyprotect investors from a decline in the value of the Base Currency against therelevant Class Currency because, among other reasons, the valuations of theunderlying assets of the relevant Sub-Fund used in connection with foreignexchange hedging could be materially different from the actual value of suchassets at the time the foreign exchange hedging is implemented, or because asubstantial portion of the assets of the Sub-Fund may lack a readily ascertainablemarket value. Moreover, while holding Units of a Hedged Class should protectinvestors from a decline in the value of the Base Currency against the relevantClass Currency, investors in a Hedged Class will not generally benefit when theBase Currency appreciates against the relevant Class Currency. The value ofUnits of any Hedged Class will be exposed to fluctuations reflecting the profitsand losses on, and the costs of, the foreign exchange hedging.

While the Investment Manager will seek to limit any foreign exchange hedgingif the liabilities arising from any foreign exchange hedging utilised by a Sub-Fund exceed the assets of the applicable class of interests on behalf of whichsuch hedging activities were undertaken, it could adversely impact the NAV ofother classes in a Sub-Fund. In addition, foreign exchange hedging will generallyrequire the use of a portion of a Sub-Fund’s assets for margin or settlementpayments or other purposes. For example, a Sub-Fund may from time to time be

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required to make margin, settlement or other payments, including in betweenDealing Days of the relevant Fund, in connection with the use of certain hedginginstruments. Counterparties to any foreign exchange hedging may demandpayments on short notice, including intra-day. As a result, a Sub-Fund mayliquidate assets sooner than it otherwise would have and/or maintain a greaterportion of its assets in cash and other liquid securities than it otherwise wouldhave, which portion may be substantial, in order to have available cash to meetcurrent or future margin calls, settlement or other payments, or for otherpurposes. A Sub-Fund generally expects to earn interest on any such amountsmaintained in cash, however, such amounts will not be invested in accordancewith the investment policy of the Sub-Fund, which may materially adverselyaffect the performance of the Sub-Fund (including Base Currency denominatedUnits). Moreover, due to volatility in the currency markets and changing marketcircumstances, the Investment Manager may not be able to accurately predictfuture margin requirements, which may result in a Sub-Fund holding excess orinsufficient cash and liquid securities for such purposes. Where a Sub-Fund doesnot have cash or assets available for such purposes, the Fund may be unable tocomply with its contractual obligations, including without limitation, failing tomeet margin calls or settlement or other payment obligations. If a Sub-Funddefaults on any of its contractual obligations, the Fund and its Unitholders(including holders of Base Currency denominated Units) may be materiallyadversely affected.

There may be circumstances in which the Investment Manager may determinenot to conduct any foreign exchange hedging in whole or in part for a certainperiod of time, including without limitation, where the Investment Managerdetermines, in its sole discretion, that foreign exchange hedging is not practicableor possible or may materially affect a Sub-Fund or any direct or indirect investorstherein, including the holders of Base Currency denominated Units. As a result,foreign currency exposure may go fully or partially unhedged for that period oftime. Unitholders may not receive notice of certain periods for which foreigncurrency exposure is unhedged.

There can be no assurance that the Investment Manager will be able to hedge, orbe successful in hedging, the currency exposure, in whole or in part, of Units ofany Hedged Class. In addition, a Sub-Fund is not expected to utilise foreignexchange hedging during the period when the Sub-Fund’s assets are beingliquidated or the Sub-Fund is being wound up, although it may do so in theInvestment Manager’s sole discretion. The Investment Manager may, in its solediscretion and subject to applicable law, delegate the management of all or aportion of the foreign exchange hedging to one or more of its affiliates.

27.7 Regulatory Risks

27.7.1 Government Investment Restrictions

Government regulations and restrictions may limit the amount and types ofsecurities that may be purchased or sold by a Sub-Fund. The ability of a Sub-Fund to invest in securities of companies or governments of certain countriesmay be limited or, in some cases, prohibited. As a result, larger portions of a Sub-Fund’s assets may be invested in those countries where such limitations do notexist. Such restrictions may also affect the market price, liquidity and rights ofsecurities and may increase Fund expenses. In addition, policies established bythe governments of certain countries may adversely affect each Fund’sinvestments and the ability of a Sub-Fund to achieve its investment objective.

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In addition, the repatriation of both investment income and capital is oftensubject to restrictions such as the need for certain governmental consents, andeven where there is no outright restriction, the mechanics of repatriation mayaffect certain aspects of the operation of a Sub-Fund.

27.7.2 Changes to US Securities Law

Some derivative contracts are currently not regulated by the SEC or the CFTC,or, in some jurisdictions, any comparable regulatory body, and such contracts arenot guaranteed by an exchange or its clearinghouse. However, the regulation ofderivatives has been, and will be, changing as a result of the U.S. Dodd-FrankWall Street Reform and Consumer Protection Act of 2010 (the "Dodd-FrankAct").

In order to mitigate counterparty risk and systemic risk in general, variousregulatory and legislative initiatives are underway to require certain over-the-counter derivatives to be cleared through a clearinghouse. In the United States,clearing requirements were part of the Dodd-Frank Act. The CFTC imposed itsfirst clearing mandate on December 13, 2012 affecting certain interest rate andcredit default swaps. It is expected that the CFTC and the SEC will introduceadditional clearing requirements for other derivatives in the future. While suchclearing requirements may be beneficial for a Sub-Fund in many respects (forinstance, they may reduce the counterparty risk to the dealers to which a Sub-Fund would be exposed under non-cleared derivatives), a Sub-Fund could beexposed to new risks such as the risk that the majority of such derivatives maybe required to be standardised and/or cleared through a clearinghouse, as a resultof which a Sub-Fund may not be able to hedge its risks or express an investmentview as well as it would using customisable derivatives available in the over-the-counter markets. Also, each clearinghouse only covers a limited range ofproducts and a Sub-Fund may have to spread its derivative portfolio acrossmultiple clearinghouses, which in turn reduces the benefits of netting thatderivatives users rely on to mitigate counterparty risk.

Another risk is that a Sub-Fund will likely be subject to more onerous and morefrequent (daily or even intraday) margin calls from both the clearinghouse andthe dealer through which a Sub-Fund will access the clearinghouse, which mayforce a Sub-Fund to use temporary credit facilities of the dealer to meet margincalls related to cleared trades and increase the costs of cleared trades to a Sub-Fund. Clearinghouses also limit collateral that they will accept to cash, U.S.treasuries and, in some cases, other highly rated sovereign and private debtinstruments, which may require a Sub-Fund to borrow eligible securities from adealer to meet margin calls and raise the costs of cleared trades to a Sub-Fund.In addition, clearinghouses may not allow a Sub-Fund to portfolio-margin itspositions, which may cause an increase in the costs to a Sub-Fund. Further,clearinghouses are encouraged to model risks and implement marginrequirements in typical market environments. Many of the risk models, however,are subject to change at any time and, therefore, a Sub-Fund may be subject toan unexpected increase in collateral obligations by clearinghouses during avolatile market environment, which could have a detrimental effect on a Sub-Fund.

Derivatives clearing may also lead to concentration of counterparty risk, namelyin the clearinghouse or any counterparty a Sub-Fund utilises as a clearing agentor broker, subjecting a Sub-Fund to the risk that the assets of the clearing entityare insufficient to satisfy all of the clearing entity's payment obligations, leading

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to a payment default. The failure of a clearinghouse could have a significantimpact on the financial system. Even if a clearinghouse does not fail, large lossescould force significant capital calls on member firms during a financial crisis,which could lead member firms to default and thus worsen the crisis. Becausethese potential clearinghouses are still in the approval stage and are still beinganalysed for bankruptcy risk, it is difficult to speculate what the actual riskswould be to a Sub-Fund related to the default of a clearinghouse. There is no oneinternational standard for clearinghouses; existing clearinghouses bothdomestically and internationally have different waterfalls that apply upon theinsolvency of a clearinghouse or a clearinghouse member and it is possible thata Sub-Fund could be in a worse position if a clearinghouse were to fail than atraditional derivative counterparty. Also, a clearinghouse will likely require thata Sub-Fund relinquish control of its transactions if the clearinghouse were tobecome insolvent, and, therefore, a Sub-Fund would not be able to terminate andclose out of a defaulting clearinghouse's positions, but would become subject toregulators' control over those positions. In such a circumstance, a Sub-Fund maynot be able to take actions that it deems appropriate to lessen the impact of suchclearinghouse default.

Applicable regulations may also require a Sub-Fund to make public informationregarding its swaps volume, position size and/or trades, which coulddetrimentally impact a Sub-Fund's ability to achieve its investment objectives.

The overall impact of the Dodd-Frank Act on the Fund and a Sub-Fund is highlyuncertain and it is unclear how the over-the-counter derivatives markets willadapt to this new regulatory regime or any additional regulations in the future.

27.7.3 The EU Regulation on OTC derivatives, central counterparties and traderepositories:

The EU Regulation on OTC derivatives, central counterparties and traderepositories ("EMIR") introduced uniform requirements covering financialcounterparties, such as investment firms, credit institutions, insurance companiesand managers of alternative investment funds and certain non-financialcounterparties in respect of central clearing of so-called "eligible" OTCderivative contracts through a duly authorised central counterparty, reporting thedetails of derivative contracts to a trade repository and certain risk mitigationrequirements. EMIR requires the adoption of further delegated acts andregulatory technical standards before becoming fully effective. Certain of theEMIR risk mitigation requirements, such as the requirement for parties toformalise portfolio reconciliation and related dispute resolution procedures, havebecome effective. Prospective investors should be aware that the regulatorychanges arising from EMIR may in due course adversely affect a Sub-Fund'sability to adhere to its investment approach and to achieve its investmentobjective.

In January 2014, the European Parliament announced that informal politicalagreement had been reached with the Council of Ministers of the EU on theprinciples to be contained in the proposed MiFID II Directive and the proposedMarkets in Financial Instruments Regulation (“MiFIR”) (together the “MiFID IIProposals”), which will replace and recast the Markets in Financial InstrumentsDirective (“MiFID”). When they come into force, the MiFID II Proposals willapply to investment firms, market operators and service providers providingpost-trade transparency in the EU. The MiFID II Proposals will require that allpurchases and sales of financial instruments in the EU will have to be conducted

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on (i) Regulated Markets (“RMs”) (such as EU stock exchanges), (ii) MultilateralTrading Facilities (“MTFs”), or (iii) Organised Trading Facilities (“OTFs”). Allnon-equities trades in the EU, such as interests in bonds, structured financeproducts, emission allowances or derivatives will have to be conducted on OTFsand all trading in shares in the EU will have to be conducted on organised tradingvenues such as RMs or MTFs. In addition, EU regulators will be empowered tolimit the size of a net position which a person may hold in commodityderivatives, given their potential impact on food and energy prices. Under thenew rules, positions in commodity derivatives (traded on trading venues and overthe counter), would be limited, to support orderly pricing and prevent marketdistorting positions and market abuse. The MiFID II Proposals also introducerules on algorithmic trading in financial instruments. Any EU investment firmengaging in algorithmic trading will be required to have effective systems andcontrols in place, such as “circuit breakers” that stop the trading process if pricevolatility gets too high. To minimise systemic risk, the algorithms used wouldhave to be tested on trading venues and authorised by EU regulators. Records ofall orders placed and cancelled by an EU investment firm’s algorithm will berequired to be stored and made available to the applicable EU regulator uponrequest.

The MiFID II Proposals are still in a preliminary stage of negotiation and manyprovisions will require the adoption of delegated acts by the EuropeanCommission before the MiFID II Proposals become fully effective. Accordingly,it is difficult to predict the precise impact, if any, of the MiFID II Proposals onthe Fund and/or the Sub-Funds. Regulatory changes arising from the MiFID IIProposals may adversely affect the Sub-Funds’ ability to adhere to theirinvestment approach and achieve its investment objectives.

Dodd-Frank Act

On July 21, 2010, President Obama signed into law the Dodd-Frank Act. TheDodd-Frank Act provides a broad framework for regulatory changes that willextend to almost every area of U.S. financial regulation, some of which couldlead to material impacts on the Fund and/or some or all Sub-Funds, including,among other things, the imposition of additional costs on the Fund and/or Sub-Fund or restrictions on the activities of the Fund or Sub-Fund. Among thereforms that could affect the Fund are the "Volcker Rule" (which is described inmore detail below), a new framework for the regulation of derivatives, and newregulations on advisers to private investment and private equity funds.Implementation of the Dodd-Frank Act has resulted in extensive studies andrulemaking over several years by multiple regulators, and uncertainty remainsabout the final details, impact and timing of a number of significant rulemakingsunder the Dodd-Frank Act.

The Volcker Rule

A key Dodd-Frank Act provision, commonly known as the “Volcker Rule”,generally prohibits, with limited exceptions, a “banking entity” (includingaffiliates of depository institutions) from acquiring or retaining any equity,partnership, or other ownership interest in, or sponsoring, a hedge fund, privateequity fund or other private investment fund. The Federal banking agencies, theSEC and the CFTC have adopted regulations implementing the Volcker Rulewhich are effective April 1, 2014. The Federal Reserve Board has issuedguidance governing activities after the effective date, the general effect of whichis to delay enforcement of the Volcker Rule until July 1, 2015.

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27.7.4 European Union’s Taxation of Savings Directive

Under the European Union’s Taxation of Savings Directive, professionalobligations have been outlined to ensure that interest payments made in one EUmember state to individuals resident in another EU member state are subject toeffective taxation in accordance with the laws of their EU member state. As aresult of such provisions, it is necessary to ascertain the tax identification numberor date and place of birth of subscribers. Accordingly subscribers will be requiredto provide their tax identification number to the Fund. Such information will becollected for compliance reasons only and will not be disclosed to unauthorisedpersons.

In March 2014, the Council of the European Union adopted a new directiveamending and broadening the scope of the EU Savings Directive in variousrespects, including extending the EU Savings Directive to non-UCITS and non-UCITS equivalent funds.

On 10 November 2015 the EU Savings Directive (as amended in March 2014)was repealed by the European Council with effect from 1 January 2016. This isbecause the proposed revisions to the Administration Cooperation Directiveproviding for the automatic exchange of financial account information betweenmember states of the EU and the new CRS (referred to below) cover all the areasthat had previously been covered by the EU Savings Directive. The revisedAdministration Cooperation Directive will enter into force on 1 January 2016.

The foregoing is only a summary of the implications of the EU SavingsDirective, the Law of 2005 and the Administration Cooperation Directive, isbased on the current interpretation thereof and does not purport to be completein all respects. It does not constitute investment or tax advice and investorsshould therefore seek advice from their financial or tax adviser on the fullimplications for themselves of the EU Savings Directive, the Law of 2005 andthe Administration Cooperation Directive.

27.7.5 The CRS

Drawing extensively on the intergovernmental approach to implementingFATCA, the OECD developed the CRS to address the issue of offshore taxevasion on a global basis. Aimed at maximizing efficiency and reducing cost forfinancial institutions, the CRS provides a common standard for due diligence,reporting and exchange of financial account information. Pursuant to the CRS,participating jurisdictions will obtain from reporting financial institutions, andautomatically exchange with exchange partners on an annual basis, financialinformation with respect to all reportable accounts identified by financialinstitutions on the basis of common due diligence and reporting procedures. Thefirst information exchanges are expected to begin in 2017. The Grand Duchy ofLuxembourg has committed to implement the CRS. As a result the Fund will berequired to comply with the CRS due diligence and reporting requirements, asadopted by the Grand Duchy of Luxembourg. Investors may be required toprovide additional information to the Fund to enable the Management Companyon behalf of the Fund to satisfy its obligations under the CRS. Failure to providerequested information may subject an investor to liability for any resultingpenalties or other charges and/or mandatory termination of its interest in theFund.

The Management Company on behalf of the Fund may take such action as itconsiders necessary in accordance with applicable law in relation to an investor's

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holding to ensure that any withholding tax payable by the Fund, and any relatedcosts, interest, penalties and other losses and liabilities suffered by the Fund, theAdministrator, the Management Company, the Investment Manager or any otherinvestor, or any agent, delegate, employee, director, officer or affiliate of any ofthe foregoing persons, arising from such investor’s failure to provide therequested information to the Fund, is economically borne by such investor.

27.7.6 Financial Transaction Tax

Eleven European Union Member States are proposing to implement a financialtransaction tax (“FTT”), which is currently being discussed. In its proposed form,the FTT applies to certain transactions in financial instruments involvingfinancial institutions where at least one party to which is located in a participatingMember State, or where the financial instrument is issued in a participatingMember State. The FTT is currently set to be levied at a minimum rate of 0.1%on all transactions other than derivatives which are to be taxed at a minimum rateof 0.01%. The FTT can be charged on both counterparties, depending on thenature of their activities, their location, and the subject matter of the transaction.The current proposals therefore do impact on certain financial institutions locatedoutside the eleven participating Member States, as well as certain financialinstitutions located outside the European Union. The proposed FTT was due totake effect from 1 January 2014, although it is now expected to take effect from1 January 2016, initially with shares and certain derivatives being within thescope of tax. Other instruments, products and derivatives may come within thescope of the tax at a later date.

There are currently eleven participating Member States, which are Belgium,Germany, Estonia, Greece, Spain, France, Italy, Austria, Portugal, Slovenia andSlovakia. The proposal is still being discussed and so the precise timing andultimate form of any legislation and related regulations implementing theproposed FTT are not yet fully known. The UK had launched a challenge inrelation to the FTT, although the Court of Justice of the European Union foundthat challenge to be premature. The European Council's legal service has issueda legal opinion finding that the application of the FTT to a financial institutionestablished outside the participating Member States due to it transacting with aperson established within a participating Member State, is unlawful. However,the European Commission's own legal advisors have since rebutted thatconclusion. As the FTT proposals develop, further challenges may be made.

Any changes to the current framework of the taxation of financial transactionswithin the EU, including changes contemplated by the proposed FTT, couldadversely affect the cost of investment or hedging strategies pursued by the Fundas well as the value and liquidity of certain assets within the Fund and therelevant Sub-Funds, such as securities, derivatives and structured financesecurities. Additionally, the proposed FTT contains certain anti-avoidance ruleswhich would restrict the ability of the Fund to mitigate the impact of thesecharges. It should be noted that a similar tax has already been introduced inFrance and Italy and other EU member states may introduce a similar tax.Participating EU member states which implement the FTT, such as France andItaly, are expected to repeal any similar taxes with effect from theimplementation of the FTT.

27.7.7 Changes in UCITS Regulations

As a UCITS the Fund will be subject to any changes in the UCITS Regulationsand UCITS Notices which may occur from time to time. In particular, the

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European Commission has published a directive introducing amendments to theUCITS regime (colloquially referred to as “UCITS V”) which addresses theeligibility of entities to act as custodian to a UCITS, applies strict liability tocustodians of UCITS for the loss of certain assets and imposes conditions ondelegation of services by managers to UCITS, including new rules in relation toremuneration payable by managers of UCITS. Any changes in the UCITSRegulations or UCITS Notices could have negative consequences for the Fund,whether intended or unintended, such as increasing the operating costs of theFund, limiting its ability to engage in certain investment strategies or to accesscertain markets or hold certain instruments or positions or to appoint certainservice providers on terms favourable to the Fund.

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PART II (SUB-FUND SPECIFIC SUPPLEMENT)

ARVEUS FUND(A SUB-FUND OF DMS UCITS PLATFORM FUND)

1. INVESTMENT MANAGER

Entrepreneur Partners AG is an independent asset and wealth management firm, regulatedby the Swiss Financial Market Supervisory Authority (FINMA) as “Asset Manager ofCollective Investment Schemes” and a member of the Swiss Association of Asset Managers(SAAM) (the “Investment Manager”). Founded and incorporated in 2008, the firm is awealth management boutique focusing on wealthy Swiss entrepreneurs, executives andprivateers. It also offers asset management services to institutional clients includingendowments and pension funds. Entrepreneur Partners has grown steadily into one of thelargest independent asset managers in Switzerland and currently employs 16 peoplemanaging a total of close to USD 2 billion. Entrepreneur Partners AG has been appointedby the Management Company to act as the discretionary portfolio manager of the ArveusFund, a sub fund of DMS UCITS Platform Fund (“Arveus Fund”).

2. PRIME BROKER

The Management Company on behalf of Arveus Fund has set up a prime brokerage accountwith Morgan Stanley & Co. International plc., with registered address at 25 Cabot Square,Canary Wharf, London E14 4QA and registered with the FCA under number 165935 (the“Prime Broker”) to seek prime brokerage services such as having access to tradingtechnology, execution services, as well as to facilitate FDI transactions. Arveus Fund hasentered into several agreements with the Prime Broker to that effect including an ISDAMaster Agreement and a Prime Brokerage Cash Agreement.

Arveus Fund’s counterparty risk exposure to the Prime Broker is limited to 10% of its assetand includes the margin cash collateral account held at the Prime Broker plus any exposuredue to unrealized profits or losses of open swap transactions. The cash collateral with thePrime Broker is the only source of collateral for the Prime Broker.

3. CLASSES

Currently, there are three Classes available for issue to eligible investors (including retailinvestors) in the Arveus Fund:

Classes Currency ofDenomination

Distribution/DividendPolicy

Initial IssuePrice

Class A USD USD Accumulating USD 100

Class A hCHF CHF Accumulating CHF 100

Class A hEUR EUR Accumulating EUR 100

Arveus Fund will use any cash amounts and non-cash considerations received assubscriptions to invest according to its investment objectives as well as for cash and efficientportfolio management and hedging purposes as set out under section 5 below.

Class A hCHF and Class A hEUR will normally seek to be currency-hedged to CHF andEUR respectively with the intent to approximate the Class A USD returns. There can be no

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assurance that the class will be fully hedged at all times or that the Investment Manager willbe successful at employing the currency hedge.

4. BASE CURRENCY

The Base Currency of Arveus Fund is the U.S. Dollar.

5. INVESTMENT OBJECTIVE AND STRATEGY

Arveus Fund aims to provide long-term capital growth by generating positive absolutereturns over any three year holding period and across all market conditions. Arveus Funddoes not use a specific benchmark.

Arveus Fund may take long and (via FDIs) short positions in a select portfolio of equity andequity related securities which it believes offers the best potential for future returns and witha focus on US listed equities and related securities. It is typically diversified across marketcapitalizations, but may also, at any time, hold the majority of its assets in smaller companies(understood as companies trading at a market capitalization of less than USD 2 billion).Arveus Fund will not invest in emerging markets. Notwithstanding the foregoing, ArveusFund may hold investments in emerging market companies if the shares or ADRs are tradedon a recognized developed market stock exchange. Arveus Fund will not actively seek toinvest in equity securities of companies that are under bankruptcy or are in significantfinancial distress and default. Notwithstanding the foregoing, Arveus Fund may to a limitedextent hold investments, even though not actively targeted, that may be deemed or becomedistressed or in default.

Arveus Fund intends to hold a highly diversified portfolio of companies with typicalpositions sizes ranging from 0.1% to 1.5% of the assets and expected maximum exposure ofaround 3% per equity position. In addition to this, the typical sector net exposure in any onesector shall not exceed 40% of the assets and any excessive sector exposure is intended tobe hedged.

In order to achieve the objective, the Investment Manager aims to primarily invest in longpositions in high-quality and/or undervalued companies and (via FDIs) short positions inlow-quality and/or overvalued companies, selected through the application of bothquantitative and qualitative techniques. Investments will be made through direct investmentin equity and equity related securities, or indirectly through the use of financial derivativeinstruments. Arveus Fund may also invest to a limited extent in other securities and otherfinancial instruments including fixed income securities and convertible bonds. Arveus Fundwill not invest in ABS, MBS, CoCos, or any bond securities in distress or default. Forliquidity management, Arveus Fund may hold cash, deposits and money market instruments.Arveus Fund may employ financial derivative instruments for hedging and investmentpurposes. Financial derivative instruments may include options, forwards, futures, warrants,contracts for difference, total return swaps and currency forwards. As a result of itsinvestment strategy, the Arveus Fund may hold significant short positions in equities andequity indices. It is expected that short equity positions will take the form of contracts fordifference or total return swaps and that short index positions will take the form of futures.With respect to the use of FDIs (including total return swaps), the Prime Broker and theDepositary will be the sole counterparties to the Arveus Fund and the relevant counterpartieswill not have any discretion over the composition of the investment portfolio of the ArveusFund or over the underlying of the FDIs and no approval of either of the Prime Broker orthe Depositary is required in relation to any investment portfolio transaction of the ArveusFund.

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At times where it is considered appropriate, prudent levels of liquidity will be maintained,which may be substantial or even represent (exceptionally) 100% of the assets of ArveusFund.

It is generally expected that the Arveus Fund will have a net long equity exposure; however,this may not be the case in adverse market circumstances.

Arveus Fund may invest up to 10% of its assets in open ended investment funds.

6. GLOBAL EXPOSURE CALCULATION METHODOLOGY

6.1 VaR Approach

Arveus Fund employs the absolute Value-at-Risk (VaR) approach to measure its marketrisk. The absolute VaR approach is generally appropriate in the absence of an identifiablereference portfolio or benchmark, for example with absolute return funds. Under theabsolute VaR approach a limit is set as a percentage of the Net Asset Value of the relevantfund. The absolute VaR limit of a fund has to be set at or below 20% of its Net Asset Valueand the absolute VaR limit of Arveus Fund is set at 20% of its Net Asset Value. This limitis based upon a 1 month holding period and a 99% unilateral confidence interval.

6.2 Leverage

The level of leverage for Arveus Fund is typically expected to range from 0% to 350% ofits Net Asset Value. The level of leverage may be higher for example, at times when theInvestment Manager deems it most appropriate to use derivative instruments to alter ArveusFund’s exposure to certain instruments or asset classes with lower expected volatility thanequity markets, when volatility decreases sustainably or when bearish markets are expected.The leverage figure is calculated using the sum of the notionals of the derivatives used.

While leverage presents opportunities for increasing the total return on investments, it hasthe effect of potentially increasing losses as well. Accordingly, any event that adverselyaffects the value of an investment could be magnified to the extent leverage is utilised andmay result in a significant loss being incurred.

6.3 Collateral

Arveus Fund may transfer, mortgage, charge or encumber any assets or cash forming partof its assets for purposes of providing collateral.

7. PROFILE OF A TYPICAL INVESTOR, DISTRIBUTION

The Arveus Fund is intended to serve as a long-term investment and should not be viewedas an appropriate investment vehicle for short-term gain or trading. The Arveus Fund maybe suitable for investors seeking long-term growth of capital through exposure to a widevariety of instruments and markets while maintaining a low to moderate level of volatility.

The Arveus Fund will initially be filed for public distribution in Switzerland and will, shortlythereafter, also be registered for distribution in Germany, Austria and the United Kingdomon the basis of the European passport. The Arveus Fund may, at a later stage, be registeredfor distribution in other countries. Any and all distribution will be made in compliance withapplicable rules and regulations in the relevant countries. The Investment Manager will beresponsible for distribution of the Arveus Fund and may, in future, appoint sub-distributors.

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8. DETERMINATION OF THE NET ASSET VALUE

The Net Asset Value per Unit of Arveus Fund or any Class thereof is calculated by theAdministrator on each Business Day, each a “Calculation Day”.

The Net Asset Value per Unit of each Class will be calculated on the Calculation Day in thecurrency of the relevant Class. It will be calculated by dividing the Net Asset Valueattributable to each Class, being the proportionate value of its assets less its liabilities, bythe number of Units of such Class then in issue. The resulting sum shall be rounded to thenearest two decimal places.

9. SUBSCRIPTIONS

9.1 General

Units will, on the first issuance of the relevant Class (the “Initial Offering Period”) be issuedat the Initial Issue Price and will thereafter be issued at the Net Asset Value per Unit of therelevant Class (as of the preceding Calculation Day) on each Calculation Day.

Investors may apply to subscribe for Units of each Class on a Calculation Day provided theapplication form is received by the Administrator prior to 3.00 p.m. Luxembourg time onthe relevant Calculation Day, subject to the Management Company’s discretion to determineotherwise. Applications for subscriptions received or deemed to be received after 3.00 p.m.will be dealt with on the next following relevant Calculation Day and Units will then beissued at the Subscription Price on that following relevant Calculation Day. TheManagement Company may at its discretion waive this requirement, provided that theprinciple of equal treatment between Unitholders which are in the same situation is compliedwith and that any such subscription will be at an NAV which is not yet known at the relevantcut-off time (i.e. before closure of the relevant market(s) and publication of the relevantNAV).

The full Subscription Price, payable in the currency of denomination of the relevant Class,must be received in immediately available funds by the Depositary or its agent at the latestone Business Days after the relevant Calculation Day (or by such earlier or later date and/ortime as the Management Company may at its discretion determine).

Units will be issued on the Calculation Day on which the duly completed application formis received.

If timely settlement is not made, the subscription may lapse and be cancelled at the cost ofthe applicant or its financial intermediary. Failure to make good settlement by the settlementdate may result in the Management Company bringing an action against the defaultinginvestor or its financial intermediary or deducting any costs or losses incurred by theManagement Company and/or Arveus Fund against any existing holding of the applicant inthe Arveus Fund. In all cases any money returnable to the investor will be held withoutpayment of interest pending receipt of the remittance.

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ClassSubscriptionFrequency

InitialIssuePriceperUnit

Minimuminitial

subscription

Minimumadditional

subscription

Minimum

holding

Class A USD EachCalculation

Day

USD100 1 Unit 1 Unit 1 Unit

Class AhCHF

EachCalculation

Day

CHF100 1 Unit 1 Unit 1 Unit

Class AhEUR

EachCalculation

Day

EUR100 1 Unit 1 Unit 1 Unit

10. REDEMPTIONS

Section 15.7 (“Limitation or Redemption Requests”) of Part I of the Prospectus will notapply to the Arveus Fund.

No application for redemption of any Class will be accepted unless the application isreceived by the Administrator prior to 3.00 p.m. three Business Days preceding the relevantCalculation Day.

Redemption requests must be sent in writing by mail, facsimile or email to, and must bereceived by, the Administrator and must include the names and account number of theUnitholder(s), the Class and number of Units requested to be redeemed and any specialinstructions for dispatch of the redemption proceeds.

Applications for redemptions received or deemed to be received after the relevant cut offtime will be dealt with on the next following relevant Calculation Day. The ManagementCompany may at its discretion waive this requirement, provided that the principle of equaltreatment between Unitholders which are in the same situation is complied with, that anysuch redemption will be at a NAV which is not yet known at the relevant cut-off time (i.e.before closure of the relevant market(s) and publication of the relevant NAV.

A redemption request will always be deemed to relate to the Units that were first issued to aUnitholder in case the Unitholder subscribed several times to Units of the relevant Class.

Redemption proceeds are paid in the reference currency of the relevant Class by or on behalfof the Depositary as soon as reasonably practicable and normally within three (3) BusinessDays after the Calculation Day, unless statutory or legal provisions, such as foreignexchange controls or restrictions on capital movements, or other circumstances beyond thecontrol of the Depositary and Management Company, make it impossible to transfer theredemption amount to the country that the redeeming Unitholder has requested. In thecircumstances mentioned under section 19 of Part I (“Suspension of Determination of theNet Asset Value”) where Arveus Fund is unable to liquidate securities positions in an orderlymanner in order to fund redemptions or where the value of the assets and liabilities of ArveusFund cannot be reasonably determined, Arveus Fund may take longer than three (3) BusinessDays to effect settlements of redemptions or it may even suspend redemptions in accordancewith the aforementioned section.

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ClassRedemptionFrequency

Minimum initialredemption

Minimumadditional

redemptionMinimum

holding

Class A USD EachCalculation

Day

1 Unit 1 Unit 1 Unit

Class A hCHF EachCalculation

Day


Class A hEUR EachCalculation

Day


11. SWITCHES

11.1 Solely with the consent and at the discretion of the Management Company, Unitholders mayswitch their Units from any Class to another Class of Units exclusively within the ArveusFund on any Calculation Day by submitting a switch request to the Administrator prior to3.00 p.m. by no later than three Business Days prior to the relevant Calculation Day, and,should the Investment Manager agree to such switch, the switch will be made at theprevailing Net Asset Value of the relevant Classes on the relevant Calculation Day. Switchesin the Arveus Fund will not be subject to any charge.

12. FEES AND EXPENSES

12.1 Management Company’s Fees

In respect of its provision of management services to the Arveus Fund, the ManagementCompany will receive a management fee (the “Management Fee”) on a sliding scale at amaximum rate of 0.275% per annum of the Net Asset Value of the Arveus Fund. This issubject to an annual minimum fee of €180,000.

The Management Fee will be calculated and will accrue daily at each Calculation Day basedon the NAV of the relevant Class and is paid monthly in arrears together with reasonablevouched out of pocket expenses incurred by the Management Company in the performanceof its duties. As disclosed in the Prospectus, the Management Company is responsible forpaying the fees and expenses of the Board, Administrator, Depositary, Auditors (for theannual audit only) and establishment costs out of the Management Fee.

12.2 Investment Manager’s Fees

The Investment Manager will receive a management fee (the "Investment ManagementFee") in respect of each Class as set out in the table below for management services anddistribution services to the Arveus Fund. The Investment Management Fee is calculated andaccrued daily (on each Calculation Day) and paid out of the assets of the Arveus Fund on amonthly basis and in arrears.

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For purposes of calculating the Investment Management Fee on each Calculation Day, theNAV of the Arveus Fund attributable to a Class is determined by or under the direction ofthe Management Company, based on the Arveus Fund's NAV as of the close of the priorBusiness Day adjusted to reflect any applicable redemptions and subscriptions.

Class Investment Management Fee

Class A USD 1.5% per annum

Class A hCHF 1.5% per annum

Class A hEUR 1.5% per annum

In addition to the Investment Manager’s Fee, the Investment Manager is entitled to aperformance fee paid out of the assets of the Sub-Fund in respect of Units, equal to apercentage of the increase in the Net Asset Value per Unit of the applicable Classoutstanding in respect of each Performance Period subject to a High Water Mark (the“Investment Performance Fee”). The relevant Investment Performance Fee percentage foreach Class is set out in the table below.

“High Water Mark”, the greater of: (i) the Initial Issue Price per Unit of the relevant Classand (ii) the highest Net Asset Value per Unit of the relevant Class on the last day of theprevious Performance Period for which an Investment Performance Fee was paid.

“Performance Period”, the first Business Day through last Business Day in each calendarquarter, with the exception of the first Performance Period for each Class, which shall be theday of the close of the Initial Offering Period of the relevant Class through the last BusinessDay of the relevant calendar quarter.

Class Investment Performance Fee

Class A USD 15%

Class A hCHF 15%

Class A hEUR 15%

The Investment Performance Fee shall be calculated and accrued at each Calculation Dayand shall be taken into account in calculating the Net Asset Value per Unit of the applicableClass at each such time. The payment of an Investment Performance Fee, if any, shall bemade within the calendar month following the end of each Performance Period. TheInvestment Performance Fees paid are subject to adjustment upon completion of the relevantaudit at the financial year end.

No Investment Performance Fee is accrued or paid until the Net Asset Value per Unitexceeds the High Water Mark and any Investment Performance Fee is payable only on theincrease over the High Water Mark.

In the event that a Unitholder redeems Units prior to the end of a Performance Period, anamount equal to any accrued but unallocated Investment Performance Fee in respect of suchUnits will be deducted from the redemption proceeds and such accrued InvestmentPerformance Fee will be re-allocated to the Investment Manager promptly thereafter. The

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Investment Performance Fee in respect of each Performance Period will be calculated byreference to the Net Asset Value before the deduction of any accrued InvestmentPerformance Fee. The Initial Issue Price per Unit or the NAV per Unit at which the Unitswere offered (as the case may be) of the relevant Class is taken as the starting price for thecalculation of any Investment Performance Fee.

If the relevant Class is terminated before the end of a Performance Period, the Dealing Dayon which the final redemption of Units takes place shall serve as the end of that PerformancePeriod. If a Unitholder redeems prior to the end of a Performance Period, the InvestmentPerformance Fee will crystallise on that Dealing Day and will then become payable to theInvestment Manager. For the avoidance of doubt, the High Water Mark is not reset on thoseDealing Days at which the Investment Performance Fee crystallises following theredemption or switch of Units. The Management Company may at its sole discretion, waivethe crystallisation of Investment Performance Fees for switches.

The Investment Performance Fee is based on net realised and net unrealised gains and lossesand as a result, incentive fees may be paid on unrealised gains which may subsequentlynever be realised.

The amount of the Investment Performance Fee will be calculated by the Administrator andverified by the Depositary.

Investors may request additional information on the way in which the InvestmentPerformance Fee calculation works from the Management Company.

The Classes will be charged an Investment Performance Fee which is proportionate to theperformance of the relevant Class as a whole. The Investment Performance Fee is calculatedbased on the Net Asset Value of the relevant Class and no Unitholder level equalisation isundertaken. This may result in inequalities as between Unitholders in a Class in relation tothe payment of Investment Performance Fees (with some Unitholders in the Class payingdisproportionately higher Investment Performance Fees in certain circumstances) and mayalso result in certain Unitholders having more of their capital at risk at any time than others.

Expenses

The Arveus Fund also pays all of its own operating expenses (excluding fees and expensescovered by the Management Fee) which may be incurred by it, the Management Company,the Investment Manager or their respective affiliates, including, but not limited to, thefollowing expenses: (i) external legal, accounting, and other professional expenses; (ii) thecosts of producing the KIIDs, (iii) certain insurance expenses; (iv) research expenses(including research-related travel), (v) fees payable to the prime broker, (vi) sub-custodialfees and expenses, (vii) the cost of valuation services; (viii) the cost of preparing, printing,publishing, translating and distributing (in such languages as may be necessary)prospectuses, supplements, annual reports, financial statements, notices and otherdocuments or information to current and prospective Unitholders (including the costs ofdeveloping and enhancing computer software and electronic transmission techniques todistribute such documents or information), (ix) the expense of publishing price and yieldinformation in relevant media, (x) the costs and expenses of obtaining and / or maintainingbank services; (xi) the costs and expenses of obtaining and / or maintaining authorisationsor registrations with the regulatory authorities in any jurisdiction, including any levy appliedby the CSSF; (xii) marketing and promotional expenses; (xiii) all expenses arising in respectof the termination or liquidation of the Arveus Fund; (xiv) litigation or other extraordinaryexpenses; (xv) investment expenses such as commissions and brokerage fees (including feesrelated to negotiation of commissions and brokerage fees); (xvi) interest on margin accounts

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and other indebtedness; (xvii) taxes, including without limitation, withholding, net income,franchise, valued added, stamp and transfer taxes, along with any interest and penaltiesthereon or other additions to such taxes and (xviii) other expenses related to the purchase,sale, monitoring or transmittal of the Arveus Fund’s assets as will be determined by theManagement Company in its sole discretion.

Sales Charge

A sales charge of up to 3% of the Subscription Price may be charged and deducted from thesubscription capital received at the discretion of the Management Company. The salescharge will be applied for the benefit of the introducing intermediary (including, withoutlimitation, a distributor, sub-distributor, third party marketer, wealth manager or other thirdparty) and will be disclosed to the relevant Investor and reflected on the subscription note.

Redemption Charge

There will be no redemption charge applicable to the Arveus Fund. Notwithstanding the lackof a redemption charge, please note that an Anti-Dilution Levy may apply (see below).

Switch Charge

There will be no conversion/switch charge applicable to the conversion or switch of Unitswithin the Arveus Fund.

Anti-Dilution Levy

The actual cost of purchasing investments may be higher or lower than the value used incalculating the Net Asset Value. These costs may include dealing charges, commission andtransaction charges and the dealing spread and may have a materially disadvantageous effecton a Unitholder’s interest in the Arveus Fund. To prevent this effect, known as “dilution”,the Arveus Fund may charge an anti-dilution levy in the circumstances set out in thefollowing paragraph.

On any Calculation Day where there are net subscriptions or net redemptions, theManagement Company may determine (based on such reasonable factors as they see fit,including without limitation, the prevailing market conditions and the level of subscriptionsor redemptions requested by Unitholders or potential Unitholders in relation to the size ofthe Arveus Fund) to add an anti-dilution levy to the Subscription Price on that CalculationDay or deduct an anti-dilution levy from the redemption payments, in each case not toexceed two percent (2%) of Net Asset Value of the Units being issued or redeemed, in orderto cover dealing costs and to preserve the value of the underlying assets of the Arveus Fund.

13. SUB-FUND SPECIFIC RISKS

13.1 Exchange Rate Risk

As the Net Asset Value per Unit is calculated in the reference currency of each Class/Unit(denominated in USD, CHF or EUR) and in light of the fact that the Base Currency of theArveus Fund is USD, the amount to be realized in CHF or EUR may be less than theprincipal amount denominated in CHF or EUR due to fluctuations in foreign exchange ratewhen investments in Units denominated in a currency other than CHF or EUR is made inCHF or EUR.

Classes hCHF and hEUR

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The assets in which Arveus Fund mainly invests are USD-denominated assets. In principle,Class A hCHF assets are hedged against the CHF and Class A hEUR assets against the EURas a way of seeking to reduce exchange rate risks. However, the exchange rate risk cannotbe wholly eliminated. Investors may incur the cost of hedging due to interest ratedifferentials between the CHF and the EUR interest rate respectively and the USD interestrate. In addition, currency hedging activities cannot be perfect as hedging adjustments willtake place only from time and will not fully consider smaller changes in non-USDdenominated Class assets due to Subscriptions, Redemptions and market valuation changes.

13.2 Smaller Companies Risk

Arveus Fund may invest a majority of its assets in smaller companies (understood ascompanies trading at a market capitalization of less than USD 2 billion) which may fluctuatein value more than mid-sized or larger companies. Smaller companies may offer greateropportunities for capital appreciation than larger companies, but may also involve certainspecial risks. They are more likely than larger companies to have limited product lines,markets or financial resources, or to depend on a small, inexperienced management group.Securities of smaller companies may, especially during periods where markets are falling,become less liquid and experience short-term price volatility and wide spreads betweendealing prices. They may also trade in the OTC market or on a regional exchange, or mayotherwise have limited liquidity. Consequently investments in smaller companies may bemore vulnerable to adverse developments than those in larger companies and the ArveusFund may have more difficulty establishing or closing out its securities positions in smallercompanies at prevailing market prices. Also, there may be less publicly availableinformation about smaller companies or less market interest in the securities, and it may takelonger for the prices of the securities to reflect the full value of the issuers’ earning potentialor assets.

13.3 Style Risk

Arveus Fund may invest in certain securities that may lead to a certain style portfolio tilt,such as a tilt towards value stocks. These may be securities where the Investment Managerbelieves are undervalued for various reasons, including but not limited to as a result ofadverse business, industry or other developments, or are subject to special risks, or limitedmarket understanding of the issuer’s business, that have caused the securities to be out offavor. It may take longer than expected for the prices of these securities to increase to theanticipated value, or they may never increase to that value or may decline. In addition, valuestocks, at times, may not perform as well as other securities or the stock market in general,and may be out of favor with investors for varying periods of time. Further, Arveus Fundmay invest in certain securities that exhibit certain price movements and may lead toportfolio tilts towards trend, momentum or oversold securities. Style risk may cause theArveus Fund’s performance to deviate from the performance of market indices and othermanagers for substantial periods of time and may do so in the future.

14. DISTRIBUTION/DIVIDEND POLICY

The Classes of the Arveus Fund will not declare a distribution and any net income andrealised and unrealised gains net of realised and unrealised losses attributable to such Classeswill be accumulated in the Net Asset Value per Unit of the relevant Class.