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Manager Evaluation TSSP Adjacent Opportunities Contingent Fund

LAST UPDATED: NOVEMBER 2017

1 CONFIDENTIAL – FOR CLIENT USE ONLY. DO NOT DISTRIBUTE WITHOUT PRIOR WRITTEN CONSENT.

STRATEGY BASICS

Asset Class: Private Credit

Sub‐Asset Class: Special Situations/Distressed

Investment Type: Debt

Geography: U.S.

Firm Inception: 2009

Firm AUM: $19 Billion

Target Fund Size: Capped at $4 billion

Target Return: Adjacencies: 10‐15% base case gross IRRs; Special situations: 16‐20% base case gross IRRs; Direct lending: 9‐13% base case gross IRRs

Min. Commitment: $10 Million

Fund Term: Fund will naturally wind down after investment period

Investment Period: 3‐years with ability to recycle during first year

Management Fee: Unfunded Commitment Fee of 1.15%, Invested Capital Fee of 1.50% if commitment < $250 million; Unfunded Commitment Fee of 0.65%, Invested Capital Fee of 1.35% for larger commitment

GP Carried Interest: 18.5% calculated on a deal‐by‐deal basis

Preferred Return: 5%. GP subject to clawback if fund level net return does not exceed the preferred return

Leverage: N/A

Organizational Expenses: No cap specified

GP Commitment: The current GP commitment to TAO 2.0 / 3.0 is $79.6M, which represents 1.1% of total commitments. TSSP expects around $20M incremental GP commitment for TAO 4.0 & TAO Contingent Fund

Firm Background and History

TPG Sixth Street Partners (“TSSP”) was formed in 2009 and is led by CIO Alan Waxman, the former Co‐Head and Chairman of the Investment Committee of the Americas Special Situations Group at Goldman Sachs (“AmSSG”). AmSSG is the proprietary distressed/special situations group within Goldman Sachs, with approximately $8 billion of dedicated balance sheet capital under management by the time Mr. Waxman left Goldman Sachs at the end of 2008. Since establishment of the platform in 2009, TSSP’s investment focus is to continue the strategy employed by Alan Waxman and the TSSP leadership team at AmSSG. Today, TSSP has grown to manage $19 billion in AUM.

TSSP is a multi‐asset class platform dedicated to pursuing special situations, middle market direct lending and credit oriented adjacent opportunities on a global basis, led by Alan Waxman, along with 13 additional Partners, seven of whom previously worked with Mr. Waxman in AmSSG or one of its predecessor business units at Goldman Sachs. It has 167 dedicated professionals primarily based in North America and Europe, focusing on the following businesses:


1. Special Situations Platform – Global special situations and opportunistic credit strategy targeting control‐oriented, illiquid investments

2. Direct Lending Platform – Direct origination strategy targeting opportunities at the top of capital structure with secured first and second lien investments that have control features and inflation / reinvestment protection

3. Adjacencies Platform – “Between the box” investments outside the mandates of the special situations or direct lending funds, as well as participation in larger deals alongside other TSSP platforms

4. Par Liquid Credit Platform – Focuses on investment opportunities in the broadly syndicated leveraged loan, high yield and structured credit markets. TSSP’s management company is privately‐owned, with the substantial majority being owned by the TSSP partners and certain TPG affiliates. A third‐party investor, Dyal Capital Partners, also holds a minority, passive non‐voting interest in TSSP. As part of the TPG family, TSSP leverages TPG’s institutional resources and TSSP’s captive sourcing / servicing platforms to execute deals and manage investments.

Strategy Background

TSSP Adjacent Opportunities Partners (“TAO”) invests in opportunities sourced across the TSSP platform that offer attractive risk/reward characteristics but do not fit the investment mandates of the TPG Opportunities Partners funds (“TOP” or the “TOP Funds”) due to a non‐control orientation, duration or other considerations, or the mandates of TPG Specialty Lending (“TSLX”) and TPG Specialty Lending Europe funds (“TSLE”) due to the nature of the transaction (collectively, “Adjacent Opportunities” or “Adjacent Investments”). Adjacent Opportunities have historically had three primary areas of focus: (i) Defensive Yield, (ii) Stressed Opportunities and (iii) Distressed Non‐Control. TAO also invests in Crossover Opportunities alongside the TOP Funds, TSLX and TSLE. Crossover Opportunities with the TOP Funds may include large, non‐performing loan portfolios, global rescue financings and large cap distressed‐for‐control investments. Crossover Opportunities with TSLX and TSLE may include U.S. and European direct lending investments, respectively. TAO consists of a series of parallel investment funds (collectively, the “TAO Vehicles”) formed to invest in

Adjacent Opportunities and Crossover Opportunities generated by the TSSP platform. TAO seeks to generate attractive returns through the purchase or origination of opportunistic, special situations and middle market direct lending investments across the credit cycle. This strategy represents a continuation and expansion of the investment activities carried out through certain parallel investment funds formed to invest alongside TPG Opportunities Partners II in certain opportunities (“TAO 1.0”); the investment activities conducted to date by the existing TAO Vehicles (“TAO 2.0” and “TAO 3.0,” and collectively, “TAO Global”); The current round of TAO fundraising, including both “regular” and “contingent” capital commitments, is referred to as “TAO 4.0.” TAO’s portfolio is built across three core components: (i) Adjacent Opportunities, (ii) direct lending Crossover Opportunities and (iii) special situations Crossover Opportunities. It is worth noting that TSSP is prohibited from being a control lender to any portfolio companies owned by TPG’s private equity business, to avoid the potential conflict of interest. Adjacent Opportunities Adjacent Opportunities are comprised of attractive risk‐adjusted reward transactions that do not fit the mandate of TSSP’s direct lending or special situations platforms. These include but are not limited to the following situations: (i) selected longer duration opportunities with minimal macroeconomic correlations, (ii) high return but low multiple of money / shorter duration situations and (iii) non‐control opportunities with attractive risk / reward profiles. TSSP has, to date, broadly categorized the Adjacent Opportunities landscape in three categories: Defensive Yield, Stressed Opportunities, and Distressed Non‐Control. ‐ Defensive Yield. Defensive Yield transactions are non‐distressed situations where the outcome, as underwritten in the TSSP base case, has minimal correlation to the macroeconomic environment. These transactions often generate current yield, have a relatively longer duration and are generally sourced through proprietary relationships. ‐ Stressed Opportunities. Stressed Opportunities represent stressed asset and corporate situations where


TSSP believes it has a differentiated angle to find value in industries or assets that are not experiencing full distress. ‐ Distressed Non‐Control. Distressed Non‐Control transactions consist of opportunistic purchases of distressed non‐control investments at a deep discount to fundamental value, where there is a low probability of gaining a control position. While there are currently limited distressed opportunities, particularly in the large‐cap market, TSSP believes this strategy will see substantial activity once the current business and credit cycle turns. Direct Lending Platform Crossover Opportunities TAO invests with the direct lending platform in certain Crossover Opportunities. These include investments with TSLX, subject to the terms of the Exemptive Relief Order received from the SEC on December 16, 2014, and with TSLE. TSLX is a publicly listed (NYSE: TSLX) business development company which began investing in 2011. The primary focus of TSLX is U.S.‐based middle market direct lending transactions. TSLE began investing in 2015 and is focused on European middle market direct lending transactions. TAO typically participates in direct lending Crossover Opportunities after TSLX and TSLE have satisfied their demand. Both TSLX and TSLE focus primarily on top of the capital structure, secured, floating‐rate investments. With respect to TSLX, as of March 31, 2017, the investment portfolio based on fair value consisted of 98.5% first‐lien debt investments, 0.2% second‐lien debt investments, 0% mezzanine debt investments and 1.3% equity and other investments. With respect to TSLE, 100% of the portfolio is first lien debt investments. TSSP expects TSLX and TSLE Crossover Opportunities to reflect a similar mix. Special Situations Crossover Opportunities TAO invests with the TOP Funds in certain special situations Crossover Opportunities. The TOP Funds focus on control situations, or where there is a path to control to influence the outcome and where TSSP can add value by using its operational capabilities. The TOP Funds focus on three hunting grounds: Corporate Distressed‐For‐Control, Asset Special Situations and Corporate Dislocations. TAO

will typically participate in special situations Crossover Opportunities after the TOP Funds have satisfied their demand. ‐ Corporate Distressed‐For‐Control. The TOP Funds seek to invest globally in opportunities throughout the capital structure at a deep discount to intrinsic value where TSSP believes the most attractive risk‐adjusted returns exist. This will often mean that the focus of the TOP Funds’ distressed‐for‐control investments will be in instruments with a high probability of converting into equity following a restructuring. These types of investments can be entered into via single name purchases or larger portfolio transactions. In addition to purchasing investments at discounts to intrinsic value, the TOP Funds seek situations where TSSP believes it can enhance value creation by leading the restructuring process and improving operations post‐restructuring. TSSP believes its differentiated capabilities (sector expertise, local market presence and depth, and ability to create value through active ownership) enhance its credibility to companies and their various stakeholders and often allows it to take the driver’s seat in and following a restructuring process. ‐ Asset Special Situations. Asset Special Situations involve the acquisition of non‐ or subperforming loan portfolios or the acquisition and the development of asset management, servicing and originations businesses, predominantly in the US and Europe. Historically, TSSP has purchased non‐performing loan portfolios directly from commercial banks or financial institutions at discounts to current market values of the underlying assets. TSSP believes that many of these financial institutions have not dedicated adequate staffing to service delinquent and non‐performing loans, particularly with respect to smaller balance assets. The key barriers to entry to being a repeat, credible purchaser in this market are: (i) captive NPL servicing capabilities, (ii) direct sourcing channels into commercial banks, and (iii) tight control of risk management practices from underwriting to value enhancement. Additionally, commercial banks are often incentivized to work with repeat buyers such as TSSP that are fair, efficient, and discreet. TSSP has also purchased and built origination businesses to create asset investments throughout the economic cycle at what TSSP believe to be attractive yields.


‐ Corporate Dislocations. TSSP, through the TOP Funds, seeks to be a solutions provider to companies undergoing some type of distress or dislocation or confronted with an idiosyncratic issue. Dislocations may include, but are not limited to, excessive balance sheet leverage, lack of access to capital, company‐specific operational problems, poor management, and structural changes in an industry caused by innovation, regulatory change, or other macroeconomic factors. TSSP seeks to identify these areas of acute dislocation globally and across core sectors that will enable it to pursue investments from distressed sellers or be a provider of creative, structured solutions. TSSP believes that its ability to identify and execute on these off‐market Corporate Dislocations will enable it to add positively skewed, less economically correlated investments to the TOP portfolio. By its nature, this opportunity set is difficult to define or predict, and will change over time. However, key characteristics of these dislocations include (i) structural changes in a sector that create a large unmet economic need, (ii) flight of traditional capital providers (including banks and hedge funds) creating a supply/demand imbalance due to illiquidity, market shocks, negative perception of sectors, or poor regulatory capital treatment of the asset class, and (iii) complexity in accessing or analyzing the asset class.

Key Investment Professionals

TSSP strives to work under a “one team” construct across the platform, and expects the majority of the adjacency opportunities to arise out of the same sourcing channels it explores across the other TSSP funds. At any given time, TSSP expects the equivalent of 18‐25 team members to be focused on TAO opportunities. The following list reflects TSSP leadership and certain TAO key persons. Alan Waxman – Mr. Waxman is the Managing Partner and the Chief Investment Officer of TSSP based in San Francisco. He is also a member of TPG’s Executive Committee. Prior to founding TSSP, he was a Partner at Goldman Sachs. During his career at Goldman Sachs, he co‐headed AmSSG, which invested Goldman Sachs’ capital in both the public markets and private

transactions in distressed and special situations. AmSSG’s investment strategy focused on investing across the capital structure in undervalued companies, distressed assets, and idiosyncratic opportunities. He also served as Chairman of the Investment Committee for AmSSG and Goldman Sachs Specialty Lending Group. From 2002‐2005, Mr. Waxman authored the business plan and co‐built the Goldman Sachs Specialty Lending Group, which focused on middle market hybrid lending and rescue financing transactions. In 2001, he was a Co‐Portfolio Manager on the Proprietary Distressed Bank Debt Desk and was Head of the Hybrid Lending Group. Mr. Waxman began his career at Goldman Sachs in 1998. He holds a B.A. in International Relations from the University of Pennsylvania. He currently serves on the Board of Overseers for the University of Pennsylvania College of Arts and Sciences, and on the Board of the Boys and Girls Club of the Peninsula. Matt Dillard – Mr. Dillard is a Partner Managing Director of TSSP based in San Francisco, focusing on Corporate Special Situations opportunities. Prior to joining TSSP, Mr. Dillard worked as a distressed credit and equity analyst at Silver Point Capital. Mr. Dillard began his career in the Technology, Media and Telecom Group of Lazard. He received a B.S. in Economics, summa cum laude, from the Wharton School of the University of Pennsylvania. Joshua Easterly – Mr. Easterly is a Partner Managing Director of TSSP and the Co‐Chief Executive Officer of TSLX based in New York. Mr. Easterly serves as Chairman of TSLX’s Board of Directors and its Co‐Chief Executive Officer. Prior to joining TSSP, Mr. Easterly was a Managing Director at Goldman Sachs, where he worked in AmSSG with Alan Waxman and most recently held the position of AmSSG’s Chief Investment Officer. He also held the positions of Head of Distressed Principal Investing and Co‐Head of Goldman Sachs Specialty Lending Group. Other leadership roles during Mr. Easterly’s tenure at Goldman Sachs included Co‐Head of AmSSG Asset Investing and Co‐Head of AmSSG Private Equity. In such positions, Mr. Easterly served on various boards of directors of companies in which AmSSG invested. Prior to joining Goldman Sachs in March 2006, Mr. Easterly was Senior Vice President, Northeast Regional Originations Manager at Wells Fargo Foothill, the $8 billion commercial finance company of Wells Fargo & Co. In this role, he was responsible for all


origination and underwriting efforts in New York and Boston and was a member of the Credit Committee and Senior Management team. Mr. Easterly received a B.S. in Business Administration, magna cum laude, from California State University, Fresno. Michael Fishman – Mr. Fishman is a Partner Managing Director of TSSP and Director and Co‐Chief Executive Officer of TSLX based in San Francisco. Mr. Fishman has been an executive in corporate lending for more than 20 years with senior management experience in credit, portfolio management and primary loan originations. Prior to joining TSSP, Mr. Fishman was the Executive Vice President and National Director of Loan Originations at Wells Fargo Capital Finance, formerly known as Wells Fargo Foothill and Foothill Capital Corporation. In this role, Mr. Fishman sat on the senior investment committee and was responsible for primary and secondary lending, loan distribution and syndications, strategic transactions and new lending products. Mr. Fishman has also sat on the Board of the American Bankruptcy Institute. Mr. Fishman holds a degree in Finance from Rochester Institute of Technology. James Gates – Mr. Gates is a Partner Managing Director of TSSP based in San Francisco, focusing on capital formation and strategic initiatives. Prior to joining TPG, Mr. Gates was a Partner and Executive Vice President of Starwood Capital Group, L.P., a real estate investment firm based in Greenwich, Connecticut. Mr. Gates worked in the Investment Banking Division of Goldman Sachs and served as an Executive Director in its London office beginning in 1987. Prior to 1984, Mr. Gates was associated with the Tax Division of Arthur Andersen LLP in Chicago, specializing in corporate and partnership taxation. Mr. Gates was admitted to the state bars of Illinois and Indiana after graduating with honors from Indiana University School of Law. He received a B.S., with distinction, from DePauw University. Mr. Gates is the Founder and President of the Alopecia Areata Initiative, a scientific research foundation and sits on the board for Akili Interactive Labs. Jennifer Gordon – Ms. Gordon is a Partner Managing Director, Chief Compliance Officer and Deputy Chief Operating Officer of TSSP based in New York. Prior to joining TSSP, Ms. Gordon spent 10 years at Goldman Sachs, where most recently she was a Managing

Director co‐heading Americas Securities Division Compliance, and was a member of the Securities Division Risk Committee, the Securities Division Client and Business Standards Committee and the Global Special Situations Group Investment Committee. Ms. Gordon was previously an associate at the law firm of White & Case LLP. Ms. Gordon received her J.D. from Fordham University School of Law and her B.A. in International Relations from the University of Michigan. Clint Kollar – Mr. Kollar is a Partner Managing Director of TSSP, based in San Francisco, focusing on TSSP’s investment sourcing initiatives. Prior to joining TSSP, Mr. Kollar was the Head Trader for Greywolf Capital for five years. Mr. Kollar began his career at Goldman Sachs in the bank debt capital markets group in 2000. He became a trader on Goldman Sachs’ distressed sell‐side bond desk in 2001. Mr. Kollar spent his last two years at Goldman Sachs as the Head Trader for the Special Situations Investing Group, working with Alan Waxman. Mr. Kollar received an A.B. with honors in Economics from Harvard College. Bornah Moghbel – Mr. Moghbel is a Partner Managing Director of TSSP based in San Francisco, focusing on Corporate Distressed Situations. Prior to joining TSSP, Mr. Moghbel worked as a distressed credit and equity analyst at Silver Point Capital. Mr. Moghbel began his career as an analyst at UBS Investment Bank in the Financial Sponsors Group. He received a B.A. in Economics, with high honors, and a minor in Business Administration from the University of California, Berkeley. Vijay Mohan – Mr. Mohan is a Partner Managing Director of TSSP based in San Francisco, focusing on Corporate Special Situations. Prior to joining TSSP, Mr. Mohan was a Managing Principal at Halcyon Asset Management, a multi‐billion dollar fund based in New York, where he focused on credit and special situations investments. Prior to joining Halcyon in 2005, Mr. Mohan worked in AmSSG at Goldman Sachs with Alan Waxman. Mr. Mohan began his career at Goldman Sachs in the Technology, Media and Telecom Group of the Investment Banking Division. Mr. Mohan received a B.A. in Economics, summa cum laude and Phi Beta Kappa, from Columbia University.


Michael Muscolino – Mr. Muscolino is a Partner Managing Director of TSSP based in London focusing on TSSP’s European investing efforts and Asset Special Situations globally. He serves as a director on the boards of various TSSP‐managed portfolio companies. Prior to joining TSSP, Mr. Muscolino was a Principal at FG Companies, a consumer and commercial finance advisory firm providing strategic consulting and investment banking services to banks, finance companies and their investors. From 1999 to 2007, Mr. Muscolino worked at Goldman Sachs in AmSSG with Alan Waxman and, prior to AmSSG, in the Financial Institutions Group of the Investment Banking Division. Prior to Goldman Sachs, Mr. Muscolino worked in the Financial Services practice of Andersen Consulting providing technology and business process consulting services to financial services clients. Mr. Muscolino earned an M.B.A. with honors from the University of Chicago Booth School of Business and a B.S. with honors in Mechanical Engineering from the University of Illinois at Urbana‐Champaign. Douglas Paolillo – Mr. Paolillo is a Partner Managing Director of TSSP, Portfolio Manager and Head of TPG Institutional Credit Partners based in New York. Prior to joining TSSP, he was an original member of Blackstone Debt Advisors (BDA) with oversight responsibilities for all aspects of the business, including serving as portfolio manager, head of research and a member of BDA’s U.S. and European credit committees during BDA’s growth from inception to $8 billion in global AUM. Following Blackstone’s acquisition of GSO Capital Partners in 2008, he was a member of the GSO Customized Credit Strategies’ Global Management Committee and Investment Committee. As a Senior Portfolio Manager and Investment Committee member he oversaw the management of GSO/Blackstone’s U.S. CLO portfolios. Prior to joining Blackstone in 2002, Mr. Paolillo was a Senior Analyst at Trimaran Advisors and an associate in the Corporate Finance Group at JP Morgan/Chase Manhattan Bank. Mr. Paolillo received a B.S. in Business

Administration from Providence College.

Steven Pluss – Mr. Pluss is a Partner Managing Director and Chief Risk Officer of TSSP based in Dallas. Prior to joining TSSP, Mr. Pluss was Co‐Head and Chief Credit Officer of Goldman Sachs Specialty Lending Group with oversight responsibilities for all aspects of the business. He joined the Goldman Sachs Specialty Lending Group

in 2004 as Chief Underwriting Officer, working with Alan Waxman, and was named Managing Director in 2006. Prior to joining Goldman Sachs, Mr. Pluss was a Founder and Managing Member of RTV Ventures, a commercial finance lending joint venture with Goldman Sachs Credit Partners, from 1999 to 2003. Mr. Pluss has 29 years of experience in credit investing, bankruptcy restructurings, banking and commercial finance, and has been involved in highly leveraged transactions providing debt and equity financing to companies undergoing a turnaround, recapitalization, or rapid growth. Mr. Pluss earned a M.B.A. from Southern Methodist University and a B.B.A. from Texas A&M University. Robert Stanley – Mr. Stanley is a Partner Managing Director of TSSP and President of TSLX based in San Francisco. He is responsible for origination efforts in TSLX. Prior to joining TSSP, Mr. Stanley was with Wells Fargo Capital Finance, a provider of specialized senior secured financing to companies throughout the United States and Canada, from 2000 to 2011. While at Wells Fargo, Mr. Stanley served in multiple roles in an underwriting and origination capacity, including Director of Loan Originations (where he was responsible for lead development and generation of commercial loans ranging from $15 to $500 million) and in multiple credit focused roles, including Vice President responsible for loan underwriting activities. He holds a B.S. in Business Administration with a concentration in Finance from the University of Maine. David Stiepleman – Mr. Stiepleman is a Partner Managing Director and Chief Operating Officer of TSSP based in San Francisco. Prior to joining TSSP, Mr. Stiepleman was a Managing Director and the Deputy General Counsel of Fortress Investment Group, where he was the lead lawyer responsible for the firm’s new business initiatives. Prior to joining Fortress in 2007, Mr. Stiepleman was lead counsel to AmSSG, working with Alan Waxman, and the Mortgages Department at Goldman Sachs. In those roles he served as a member of the AmSSG Investment Committee and the Mortgages Capital Committee. Prior to Goldman Sachs, Mr. Stiepleman was a lawyer at Cleary Gottlieb Steen & Hamilton LLP where he represented corporates, funds and sovereigns in mergers and acquisitions and fund formation in the United States and Europe. Mr. Stiepleman received a J.D. from Columbia University


and B.A. in French and Political Science from Amherst College. He serves on the Board of Directors of Education Through Music, Inc., a non‐profit organization that brings music education to over 25,000 students in underserved communities in New York City. Nils Albert – Mr. Albert is a Managing Director and a member of the TSSP operations team based in London, focusing on Corporate Special Situations in Europe. Prior to joining TSSP, Mr. Albert was a Managing Director at B‐Business Partners Limited, a European venture capital company focused on technology investments. Mr. Albert also spent 13 years at General Electric Company, most recently serving as a Managing Director of GE Capital, CEO of GE Capital European Equipment Finance, and as a member of General Electric Company’s European Chief Executive Council. During his time at General Electric Company, Mr. Albert was a Factory Director for GE Lighting Europe. He began his career as a Senior Audit Manager on the GE Corporate Audit Staff. Mr. Albert holds a B.S. in Industrial Engineering from the University of Illinois. David Bailey – Mr. Bailey is a Managing Director of TSSP based in San Francisco, focusing on macro‐economic analysis. Prior to joining TSSP, Mr. Bailey was a Managing Director and the Global Head of FX Forwards at Jefferies and Co. He spent three years as a Managing Director at Barclays Capital, where he focused on proprietary trading in the Global Macro Group. From 2001 to 2009, Mr. Bailey worked at JP Morgan Chase, first as a Vice President and later as a Managing Director and the Head of the Proprietary Trading Group. Prior to JP Morgan, Mr. Bailey was a Vice President at Chase in Singapore and Sydney. Mr. Bailey began his career at Chemical Bank in London. Mr. Bailey holds a B.Sc. in Accounting and Finance from the London School of Economics. Robert Banack – Mr. Banack is a Managing Director of TSSP based in New York, focusing on opportunistic infrastructure investments. Prior to joining TSSP, Mr. Banack was a Managing Director at Imperial Capital based in New York. Prior to that, Mr. Banack was Vice President, Investment Banking, at Dundee Capital Markets and was an associate in the Distressed Bank Loan Group at Goldman Sachs. Mr. Banack received an L.L.B. from Osgoode Hall Law School, an M.B.A. from Schulich School of Business, and a B.A. in Western Literature from University of Western Ontario.

James Brower – Mr. Brower is a Managing Director of TSSP based in New York, focusing on opportunistic infrastructure investments. Prior to joining TSSP, Mr. Brower was a Portfolio Manager at 40 North Management. Prior to joining 40 North in 2014, Mr. Brower was a Managing Director at Serengeti Asset Management. Mr. Brower began his career in AmSSG at Goldman Sachs. Mr. Brower James received a B.A. in Economics from the University of Pennsylvania. Scott Brubaker – Mr. Brubaker is a Managing Director of TSSP based in San Francisco, and a member of the TSSP operations team. Prior to joining TSSP, Mr. Brubaker was a partner Managing Director of global turnaround and restructuring firm Alvarez & Marsal (A&M), where he served in several interim management roles across a variety of industries. At A&M, Mr. Brubaker led the San Francisco Restructuring practice and was a member of the Executive Committee. Prior to 2002, Mr. Brubaker was a Director in the turnaround and restructuring practice of Arthur Andersen in San Francisco and London. Mr. Brubaker received an M.B.A. from the Wharton School at the University of Pennsylvania and a B.S. in Finance from the University of Illinois. Brian D’Arcy – Mr. D'Arcy is a Managing Director of TSSP and CEO of TSSP BD, LLC, TSSP’s broker dealer, based in San Francisco, focusing on capital formation and strategic initiatives. Mr. D’Arcy joined TPG in 2011 and was responsible for building TPG’s high net worth and wealthy family relationship platform until joining TSSP in 2015. Prior to joining TPG, Mr. D'Arcy worked as a private equity and private real estate specialist in the Alternative Capital Markets Group at Goldman Sachs, Sachs & Co., where he also co‐ran the GS Internal Secondary Private Equity Program. He received a B.A. in Economics and History, magna cum laude and Phi Beta Kappa from the University of Notre Dame. Hillel Drazin – Mr. Drazin is a Managing Director of TSSP based in London, focusing on sourcing investments. Prior to joining TSSP, Mr. Drazin was a Managing Director and Head of Distressed and Special Situations Trading in Europe and the Middle East at Barclays. Mr. Drazin began his career as an Analyst in Municipal Bond Trading at Lehman Brothers. Mr. Drazin received his B.A. in Economics from Yeshiva University.


Michael Feldman – Mr. Feldman is a Managing Director of TSSP based in New York, focusing on opportunistic infrastructure investments. Prior to joining TSSP, Mr. Feldman spent five years as a Managing Director at Goldman Sachs, where most recently he was responsible for energy investing within the AmSSG. His focus was on alternative/renewable and conventional energy in the form of private equity, corporate lending, project finance, and structured investing. Mr. Feldman received a B.A. in Computer Science from Columbia College. Philip Fretwell – Mr. Fretwell is a Managing Director of TSSP and Partner of TSLE based in London. Prior to joining TSSP, Mr. Fretwell was a Managing Director and founding member of Ares Capital Europe, a leading provider of debt financing for European middle market businesses. While at Ares, Mr. Fretwell participated in growing the European direct lending business from inception to approximately €5 billion of assets under management. Mr. Fretwell’s responsibilities at Ares included origination of middle market deal flow from sponsors, advisors, and management teams, overseeing a team of investment professionals through all stages of the deal evaluation and execution process, and actively participating in the investment committee. Prior to Ares, Mr. Fretwell was an Associate Director of Leveraged Finance at Barclays Bank PLC. Prior to this, Mr. Fretwell held various positions in Leveraged Finance and Structured Finance Credit at Scotia Capital and Barclays Bank PLC. Mr. Fretwell received a Joint Honors B.Sc. in Economics and Management from Southampton University in England. Michelle Gill – Ms. Gill is a Managing Director of TSSP, focusing on the U.S. Asset business. Prior to joining TSSP, Ms. Gill spent 14 years at Goldman Sachs, where most recently she was a Partner co‐heading the Structured Finance business, and was a member of the Structured Finance Capital Committee. Prior to Goldman Sachs, Ms. Gill spent three years at Lehman Brothers in the mortgage finance business. Ms. Gill began her career as an attorney at Cadwalader, Wickersham & Taft. Ms. Gill received her J.D. from Cornell Law School and her B.A. in English from the University of California at Los Angeles.

Michael Griffin – Mr. Griffin is a Managing Director of TSSP and a Partner of TSLE based in London. Prior to joining TSSP, Mr. Griffin was a Senior Vice President at Golub Capital where he was responsible for underwriting, executing and managing investments in middle market companies. He graduated with a B.B.A. in Finance from the Tippie College of Business at the University of Iowa. Craig Hamrah – Mr. Hamrah is a Managing Director of TSSP based in New York, responsible for underwriting efforts in TSLX. Prior to joining TSSP, Mr. Hamrah worked at Silver Point Capital, where he was a senior deal underwriter in the private finance group and was responsible for overseeing a multi‐billion dollar private portfolio including valuations, credit monitoring and risk management. Prior to that, Mr. Hamrah was a Senior Vice President at the Royal Bank of Scotland, where he launched an asset finance and structured finance business, and an Executive Vice President at Emigrant Savings Bank where he was responsible for establishing and operating a middle market non‐real estate finance subsidiary. He holds a B.A. in Business Economics from Brown University. Robert Karicod – Mr. Karicod is a Managing Director and Chief Financial Officer of TSSP based in Dallas. Prior to joining TSSP, Mr. Karicod was a Partner and Director of Financial Reporting and Valuation at Cerberus Capital Management. Mr. Karicod began his career as a financial analyst at Ernst and Young and spent over a decade in audit and transaction advisory services roles. Mr. Karicod earned a M.P.A. and B.B.A. from the University of Texas at Austin. Michael Neruda – Mr. Neruda is a Managing Director of TSSP based in San Francisco, focusing on public markets, secondary trading, and liquid investment opportunities. Prior to joining TSSP, Mr. Neruda was a Director at Watershed Asset Management, an pportunistic credit hedge fund, where he led investments in stressed and distressed companies in the retail and energy sectors. Mr. Neruda was previously an investment analyst at MHR Fund Management, Silver Point Capital and Merrill Lynch. He received a B.S. in Management Science and Engineering from Stanford University and is a CFA Charterholder. Mr. Neruda currently serves on the Board of Governors of the Boys & Girls Clubs of San Francisco.


Jeff Pootoolal – Mr. Pootoolal is a Managing Director of TSSP based in San Francisco, focusing on opportunistic healthcare investments. Prior to joining TSSP, Mr. Pootoolal worked at DRI Capital, a drug royalty investment firm, where he was responsible for transaction origination, business development and the firm’s strategy function. Mr. Pootoolal began his career in academic research working at the University of Toronto studying genomics. He received an M.B.A. from the University of Toronto’s Rotman School of Management and both a B.Sc. and M.Sc. in Biochemistry from McMaster University. Adam Salter – Mr. Salter is a Managing Director of TSSP based in Boston, focusing on origination and underwriting efforts. Prior to joining TSSP, Mr. Salter was a Managing Director and the Head of Underwriting and Portfolio Management at Wells Fargo Capital Finance. He spent three years as a Director at GB Merchant Partners, underwriting and managing junior debt investments. From 2005 to 2006, Mr. Salter was a Senior Investment Associate at CapitalSource Finance. In 2002, Mr. Salter began working at Wachovia Capital Finance Corporation, first as a Field Analyst and then as a Vice President. Mr. Salter earned an M.B.A. from Boston College, Carroll School of Management and a B.S. in Finance from Bentley College. Richard Sberlati – Mr. Sberlati is a Managing Director of TSSP based in New York, focusing on opportunistic infrastructure investments. Prior to joining TSSP, Mr. Sberlati was a Vice President at Goldman Sachs, where he was responsible for North American gas, power and oil investing within Goldman’s Commodities Business (J.Aron). Mr. Sberlati received a B.B.A. in accounting and finance from Baruch College. Ian Simmonds – Mr. Simmonds is a Managing Director of TSSP and the Chief Financial Officer of TSLX based in New York. Prior to joining TSSP, Mr. Simmonds was a member of the Financial Institutions Group at Bank of America Merrill Lynch’s Global Investment Bank in New York, most recently as a Managing Director. Prior to BAML, Mr. Simmonds was Managing Director at Principal Global Investors, the asset management unit of The Principal Financial Group, based in Singapore. Mr. Simmonds was also a Senior Vice President at Bankers Trust Australia, and worked in public

accounting at KPMG. Mr. Simmonds received an M.B.A. from the Wharton School of the University of Pennsylvania, a Master of Applied Finance from Macquarie University and a Bachelor of Commerce from the University of New South Wales. He is a Chartered Accountant. Dan Wanek – Mr. Wanek is a Principal and the Director of Operations of TSSP. He previously served as TSSP’s Director of Accounting and Finance. Prior to joining TSSP, Mr. Wanek worked as Director of Accounting for TPG where he had responsibility over accounting and financial reporting for TPG’s parent organization. Mr. Wanek has also served as the SEC reporting director for TSLX since inception. Prior to TPG, Mr. Wanek was an auditor at Deloitte where he served a variety of large, multinational public companies in the manufacturing and consumer industries. Mr. Wanek earned his B.B.A. in Accounting from the University of Wisconsin – Madison. Vanessa Zampiga – Ms. Zampiga is a Principal and Deputy General Counsel of TSSP in London. Prior to joining TSSP, Ms. Zampiga was Executive Director and Assistant General Counsel, and formerly a Senior Lawyer in Credit Products at JPMorgan Chase Bank in London. Ms. Zampiga spent three years with Linklaters LLP as an Associate in the Banking and Finance Department. She began her career at Bell Gully LLP in New Zealand as an Associate in the Banking and Finance Department. Ms. Zampiga holds a Bachelor of Property and a Bachelor of Laws from the University of Auckland and a Masters in Theology from the University of London.

Process

TSSP uses a two‐pronged investment process which separates its sourcing strategy from the decision‐making process. The firm believes it is important to separate each function as they require distinct focus and accountability. Separation of these functions also provides a healthy check on natural enthusiasm for sourced opportunities by subjecting them to the team’s collective critical judgment on whether to execute. TSSP utilizes a wide range of sourcing initiatives to create a broad funnel of independent thematic idea generation and investment opportunities for the


Partnership. Clint Kollar, TSSP’s Head of Sourcing, and Alan Waxman coordinate near‐term as well as longer‐term sourcing initiatives and thematic idea generation with the other senior leaders of TSSP. TSSP’s investment process involves disciplined management of the pipeline, diligence process and TSSP’s Capital Committee. Managing the pipeline requires consistent and responsive feedback, active time management and prioritization of opportunities. This process includes identifying key issues and decisions, bringing global firm resources to bear, facilitating robust debate and collaborating on making investment and sizing decisions. The TSSP Capital Committee is also responsible for actively managing portfolio concentration risks and considering historical sector volatility and general economic cyclical sensitivity. The TSSP Capital Committee is the source of approval for all investment transactions. The Committee is led by Alan Waxman, in conjunction with the thirteen other Partners of the TSSP team. However, it is embedded in TSSP’s investment discipline to create a culture in which all professionals are encouraged to participate in and opine on investment decisions. During the investment review process, TSSP continuously revisits its investment framework to screen and prioritize investment opportunities. Investment teams are expected to provide informal and regular updates at the TSSP Global Cross Platform meeting. These updates in between formal TSSP Capital Committee discussions are critical in allowing the team to continually assess the merits of a particular investment opportunity. TSSP has been introduced to over ~2,000 opportunities over the past twelve months, of which less than ~5% were taken to the full level of diligence required for the TSSP Capital Committee. Early screens are critical to ensure that the team is focusing their efforts on the most differentiated, high quality situations at any given time. Once an investment satisfies the initial investment framework, TSSP investment professionals will begin the full due diligence process and present their detailed findings to the TSSP Capital Committee. Due diligence analysis often includes:

‐ Detailed description and fundamental analysis of business or underlying asset, including sum‐of‐the‐parts analysis for separate divisions or assets

‐ Analysis of industry, competitors, market share and positioning, including key headwinds, tailwinds and volatility expected over life of potential investment

‐ Management meetings

‐ Site visits

‐ Real estate valuations

‐ Technical and operational evaluation

‐ Detailed capital structure

‐ Corporate organization

‐ Historical financial analysis

‐ Projected financial analysis ‐ Detailed cash flow analysis

‐ Detailed bottom‐up valuation analysis, including sensitivity analyses

‐ Terms of credit agreement(s) and/or bond indenture(s) or relevant documents

‐ Analysis of comparables

‐ Key historical events and future catalysts

‐ List of investment risks (including legal, regulatory and tax) and mitigants

‐ Description of process risks

‐ Regulatory diligence

‐ Residential loan specific asset‐level diligence Deal teams prepare TSSP Capital Committee materials and formally present their findings to the group during the TSSP Capital Committee meeting. The merits of each investment are debated openly and intensely by the entire TSSP team and typically conclude with a list of follow up items to be completed and brought back to the next TSSP Capital Committee meeting. The final investment decision is made through consensus by the TSSP Capital Committee. It is important to note that TSSP’s investment review process is not formulaic but rather iterative and inclusive. When the timing of a prospective investment does not allow for the formal presentation of the investment at the TSSP Capital Committee meeting, TSSP holds an ad hoc Capital Committee meeting so that a decision can be made in a timely manner.


After an investment is made, each position is closely monitored by the investment team for any fundamental changes to the underlying business or assets, investment thesis, key industry or secular trends, comparable valuations and potential exit options. On a quarterly basis, TSSP conducts a full review of every core position in the portfolio. For this multi‐day meeting, each investment team is expected to refresh their investment memorandum and be prepared to discuss, among other items, the performance of the investment in the previous quarter, the outlook going forward and thoughts on how to further minimize risk and maximize upside levers of value creation. At the conclusion of the day’s meetings, the TSSP team aggregates thoughts on actions to take going forward for each position. To the extent an investment is performing below expectations, it is added to a watch list. On weekly or twice‐monthly basis, as appropriate, the investment team will be responsible to present an update on the investment during a Watch List call. The senior business leaders attend the call and ensure that the investment team is taking the appropriate steps to maximize the value of the investment. Additionally, the investment team is expected to update the broader group on positive or negative developments in the TSSP Global Cross Platform morning meeting that occurs each Monday. TSSP professionals understand the importance of real‐time updates in minimizing risk within the portfolio, as the team must often weigh the decision to sell out of a position if the situation changes in an unexpected and negative way, or take actions with company/borrower to alter the current course of its asset management strategy.

Risk Management

TSSP considers constant risk mitigation to be a central part of its investment strategy. A culture of risk management is present throughout the TSSP platform at all levels and overseen by Steven Pluss as TSSP’s Chief Risk Officer. TSSP is focused on four facets of risk management: 1. 360‐degree risk management: TSSP focuses on five areas during the investment selection and creation process. These are overarching risk mitigation tools as the team invest. First, TSSP focuses on capital preservation, seeking to avoid taking binary risks by investing in business or assets

with understandable and ascertainable downside protection. TSSP seeks to invest in businesses or assets that have either fundamental value or strategic value to others. TSSP is generally focused on unlevered, first dollar risk. Second, TSSP is focused on structure. While structure will not turn a poorly underwritten or poor performing deal into a good deal, it allows the team to get what it expects by having terms or covenants that mitigate risks, getting it to the negotiating table and putting it in a position to be able to take remedial action. Through structure TSSP can also create investments that generate both appropriate current and upside returns. Third, TSSP is focused on bringing the right resources to bear to ensure it understands in detail the risks and rewards of each investment. TSSP does that by using its own knowledgeable investors who are experienced in various industries and know buyers, sellers, bankers, brokers, management teams, and business models. Additionally, TSSP benefits from the expertise of its partners and servicers such as Capital Crossing. Moreover, TSSP have access to the broader TPG platform and its investment professionals and advisors. Fourth, TSSP is focused on where they are in the business cycle. TSSP tends to skew senior in the capital structure or toward non‐cyclical businesses when it perceives itself late in the business cycle and average asset prices appear to be high. On the other hand, the team tends to skew junior and toward more cyclical assets when it perceives to be early in the business cycle and average asset prices appear to be low. To aid the firm’s understanding of where it is in the business cycle, TSSP tracks over 200 macro‐economic data points in a weekly economic report distributed to all investment professionals. Lastly, TSSP is flexible in its pursuit of good risk‐adjusted returns, migrating across themes and geographies to where it sees the most attractive investments. TSSP can pivot from private to public markets when it sees the right opportunity. Industry teams are responsible for tracking and reviewing public markets on a weekly basis to keep abreast of market fluctuations. 2. Portfolio Construction is focused on three principle themes. First, all investment selection and underwriting is bottom‐up. All underlying assets and cash flows of an investment are stress tested during the underwriting process. During investment review by the TSSP Capital Committee, each transaction is scrutinized with respect to


key underwriting assumptions and findings, as well as structural considerations, risks and weaknesses. Given the team’s current view of where TSSP are in the business cycle, every transaction is subject to the “Lehman Brothers” test (i.e., what would happen to the investment if a Lehman Brothers type of event were to happen again over the life of the investment). Second, TSSP is focused on limiting exposure to any one deal, industry, or jurisdiction in the portfolio by properly sizing positions relative to the perceived risk and return and to the overall commitments of a fund or vintage. Third, TSSP believes it is important to quantify and "stress test" the risk of the overall portfolio. When reviewing existing positions and potential new opportunities during the weekly updates and quarterly portfolio reviews, TSSP maintains focus on identifying outsized portfolio‐wide risk related to specific macroeconomic exposures that, in a "tail event" scenario, could result in outsized losses to the portfolio. Factors such as interest rate risk, commodity pricing, currency risk, geographic or sector concentration and real estate pricing are tracked and monitored closely. TSSP utilizes the weekly risk report to ensure the key business leaders, risk managers, and compliance professionals understand where it stands with respect the forgoing parameters. 3. Investment management after transactions are made: After an investment is made, each position is closely monitored by the investment team for any fundamental changes to the underlying business or assets, investment thesis, key industry or secular trends, comparable valuations and potential exit options. On a quarterly basis, TSSP conducts a full review of every core position in the portfolio. For this multi‐day meeting, each investment team is expected to refresh their investment memorandum and be prepared to discuss, among other items, the performance of the investment in the previous quarter, the outlook going forward and thoughts on how to further minimize risk and maximize upside levers of value creation. At the conclusion of the day’s meetings, the TSSP team aggregates thoughts on actions to take going forward for each position. 4. Managing operational risk is considered critical to avoiding taking risks for which TSSP are not getting paid: TSSP manages operational risk by first setting the right tone at the top of the organization. Everyone in the business knows that risk management is their job. TSSP speaks about it often individually and in group settings. Everyone in the business is responsible for elevating issues

and concerns, syndicating the risk of any individual decision, acknowledging that ongoing dialogue and debate leads to the best decisions, and being transparent internally in all aspects of business. Further, TSSP manages operational risk by having appropriate separation of duties and dual approvals. No investment professionals can execute a trade without the concurrence of a control‐side professional. Control‐side professionals must execute all legal documents, complete all trade settlements, authorize (with dual controls) and effect all wires, and are responsible for managing all service providers relationships such as bank, custodian, prime broker relationships, accountants, and valuation assurance. To ensure appropriate risk management, the business has two partners dedicating their efforts to this area. They manage collectively all aspects of operations, accounting, IT, finance, legal, tax, compliance, and the professionals in these areas.

Potential Concerns

Uncertainty of Capital Deployments: The TAO Contingent

Fund will not call capital or make investments until the

manager activates the Fund in the future (at the

manager’s own discretion). As a result, it is uncertain when

client’s commitment will be called, if at all.

Mitigant: The uncertainty of when/whether the

Contingent Fund will be activated is well understood by all

LPs of the TAO Funds. While the fund is not suitable for

investors who seek near‐term deployment of their capital,

it offers an interesting approach for investors who want to

take advantage of potential market distress in the future,

without the need to pay management fees until the fund

gets activated.

Additionally, investors’ contingent commitment does have

an expiration date, as TSSP has up to 3 years to activate

the Contingent Fund, which helps mitigate the uncertainty

of capital deployments.

Fees are relatively expensive: Once activated, the TAO

Contingent Fund will charge fees on committed (but not

deployed) capital for new investors. Fees on undrawn

commitment are 1.15% (versus 1.5% on drawn capital) for

smaller investors with less than $250 million commitment,

as compared with 0.65% fees for investors who can

commit over $250 million. It’s also worth noting that TPG


allows existing investors to pay the same fee for the

Contingent Fund as these LPs’ legacy fees negotiated for

early TAO Funds, which means some LPs are paying very

substantially less (especially for committed but undrawn

capital) than other LPs. Moreover, TSSP does not

aggregate clients’ commitment based on their consultants,

making it impossible for our smaller clients to take

advantage of fee breaks offered to larger clients.

Mitigant: Management fees are dictated by the market.

The recently closed TAO 4.0 Fund was at its $1.6 billion

hard cap and was over 2x oversubscribed. TSSP is currently

only marketing the TAO Contingent Fund to its existing LPs

and has already soft circled $2 billion ‐ $3 billion of

investor demand, making fee negotiation unlikely to

succeed, especially for smaller investors.

The fee discrepancies across the Fund’s LP base are not a

desirable situation, especially for smaller and newer

investors. At least TSSP is transparent and straightforward

about its practice regarding fees, so new investors can

take it into consideration when trying to make their

investment decisions.

While the manager has sole discretion on how much

commitment it can activate at one time, it has

communicated to all LPs about its intention to activate half

of the commitment at first, making it less expensive for

investors because only activated portion of commitment is

subject to management fees.

Clawback is less than ideal: If the GP fails to generate fund‐

level return that is above the preferred return, the GP is

subject to clawback of the carried interest that they

received in the past. However, there is no escrow account

to hold part of the carried interest. Additionally, carry

participants are severally, but not jointly, guaranteeing the

GP’s payment obligations in this case.

Mitigant: Individuals who participate in large shares of the

carried interest are extremely wealthy, which increases

the likelihood of LPs to recover some of the carried

interest in case of underperformance.

Performance

TAO 1.0 was established in December 2011 and invested

and committed over $300 million of capital. Since

inception, TAO 1.0 has generated a 16.3% Net IRR. TAO

Global was established in February 2014 and has invested

and committed more than $5 billion of capital to date

Since inception, TAO Global has generated an 8.8% Net IRR

(see Appendix 1).

Appendix 2 lists the Public Market Equivalent (PME) net performances for prior TAO Funds, using cash flow data for each fund. TAO global is comprised of both TAO 2.0 and 3.0. Unfortuantely, because the two TAO vehicles are structured as one fund, TSSP only provides cash flows on a combined fund basis. Therefore, we can only report combined PME performances. However, our reference call with existing LPs indicates that TAO 3.0 investments outperforms that of 2.0 by about 1.5%. Net performances of these Funds are compared with performances of Credit Suisse Leveraged Loan index and Merrill Lynch High Yield Index, respectively. As shown in the appendix, the net IRR has handily outperformed the leveraged loan index. While the performance was slightly below that of the high yield index recently for TAO Global, that’s largely due to the recent strong performance of the high yield market. In fact, TAO 1.0 has significantly outperformed the same high yield index in the past. It is also worth noting that investments in TAO tend to be less risky than high yield because TAO focuses on collateralized positions that are higher up in the capital structure. Simply comparing TAO performances with that of high yield index ignores the difference in risk. Appendix 3 further breaks down performances among

realized transactions and unrealized ones. As you can see,

only one realized transaction lost money in the past, which

was a very small foothold investment of $1 million

(compared with an average transaction size of $51

million). That transaction lost $600K.

Recommendation

Verus recommends the approval of TSSP Adjacent

Opportunities Contingent Fund. It is managed by a

seasoned investment team with strong focus on risk

management and downside protection. In addition, it


offers our clients a good approach to take advantage of

future market dislocations/volatilities, as their

commitment can be quickly drawn by TSSP when

attractive opportunities arise.

Secondly, TSSP employs differentiated sourcing channels

and focuses on high barrier to entry off‐market

opportunities. As a result, 65% of TAO’s Investments did

not overlap with any other GP and an additional 18%

overlapped with just one other GP (often a strategic

partner in a specific investment). We expect the overlap

with other GPs in the TAO portfolio to continue to be

limited, which means TAO will be a good complement to

our clients’ existing private credit portfolio.

Last but not least, new investors who commit capital into

TAO contingent fund is more likely to get capacity from

regular TAO vehicles in the future. While regular TAO

vehicles are structured as Evergreen, the products were

often oversubscribed in the past. For regular TAO LPs,

after the expiration of their Minimum Commitment Period

(3.5 years for short‐term LP and 5.5 years for long‐term

LP), the LPs will have periodic opportunities to terminate

their commitment period with respect to all or a portion of

their capital commitment. Specifically, LPs may elect to

terminate their commitment period during a 30‐day

“termination election window” that opens upon the

expiration of the LP’s Minimum Commitment Period and

reopens every two years thereafter. This means LPs can

keep TAO as an evergreen vehicle as long as they choose

to stay invested. Such a potential benefit is particularly

attractive to smaller clients, who may not want the burden

of having to constantly reupping to future fund offerings

by private managers.


(Appendix 1) Performances of TAO Funds

(Appendix 2) Public Market Equivalent Net Performances

(as of 6/30/2017)

TAO Globl

TAO 1.0

CS Levered Loan Index CS Levered Loan Index

2,809,951,903

265,158,266

84,907,931 3,152,223,463

354,158,054 59,957,165

2,979,854,629 172,368,834

-67,108,167 127,065,332

8.85

16.89

5.37 3.48

3.64 13.25

Total: USD 3,075,110,169 439,065,985 3,212,180,628 2,912,746,462 299,434,166 10.30 5.15 5.15

TAO PERFORMANCE AS OF 6/30/2017 VERSUS THOMSON REUTERS C|A BENCHMARK (All U.S. Private Equity) AS OF 6/30/2017

(in millions $) Net Net IRR Net Net TVPI Net Net DPI

Fund IRR Rank Upper Median Lower TVPI Rank Upper Median Lower DPI Rank Upper Median Lower

TAO 1.0 2012 16.89% 2nd 18.5% 11.7% 6.5% 1.6x 1st 1.53x 1.34x 1.17x 1.4x 1st 0.38x 0.19x 0.06x

TAO Global 2014 8.85% 3rd 16.3% 9.1% 1.7% 1.1x 2nd 1.29x 1.13x 1.03x 0.4x 1st 0.10x 0.02x 0.00xSource: Performance per GP data (not reviewed by Verus) and Thomson Reuters C|A Benchmark as of 6/30/2017.

Vintage year per GP data (not reviewed by Verus)

Vintage

Year

Thomson Reuters TVPI Thomson Reuters DPIThomson Reuters IRR

Investment Index Set NameCumulative

Contributions Cumulative

Distributions Adjusted Valuation Valuation ICM

ValuationSpread IRR

1IRR ICM IRR Spread


Global TAO

ML HY Master Fund II Total Return Index

2,809,951,903

84,907,931 3,152,223,463

3,158,536,580 -6,313,117

8.85

8.98 -0.13

Total: USD 3,075,110,169 439,065,985 3,212,180,628

3,092,695,751

119,484,877

10.30

8.30 2.01

Investment Index Set NameCumulative

Contributions Cumulative

Distributions Adjusted Valuation Valuation ICM

ValuationSpread IRR

1IRR ICM IRR Spread

TAO 1.0 ML HY Master Fund II

265,158,266 354,158,054 59,957,165 -65,840,829 125,797,994 16.89 3.83 13.06


(Appendix 3) Realized vs. Unrealized Performances

(as of 6/30/2017)

Realized Investments Realized & Unrealized Investments

Fund Avg Ex‐Hi‐Lo

SD Total >10x 5‐10x

2‐5x 1‐2x <1x Avg Ex Hi‐Lo

SD Total >10x 5‐10x

2‐5x 1‐2x <1x

Tao 1.0 1.7x 1.5x 0.3x 18 0 0 2 16 0 1.6x 1.5x 0.4x 26 0 0 3 22 1

Tao Global 1.2x 1.2x 1.2x 24 0 1 0 22 1 1.1x 1.2x 0.7x 80 0 1 2 67 10

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