Ermitage Group General Creds Usa Q1 2010

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Ermitage introduction

1st Quarter 2010

These presentation materials and the information contained herein, and any oral or other written information disclosed or provided is strictly confidential and may not be reproduced or redistributed, in whole or in part, nor may its contents be disclosed to any other person under any circumstances without the express written consent of Ermitage Asset Management Jersey Limited.

An investment in the Funds is speculative and involve a high degree of risk. The Funds may, through their investments, employ certain trading techniques that may include short selling, options, and the use of leverage which may increase the risk of investment loss. As a result, performance may be volatile and an investor may lose some or all of his or her investment. Furthermore, the ability to withdraw investments or redeem shares or to transfer such shares or interests will be limited. It is anticipated that there will not be a secondary market for interests or shares in the Funds nor is any expected to develop. Fees and expenses may offset trading profits. Please refer to the Confidential Private Offering Memorandum when available for all risks associated with investments in the Funds.

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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� Founded 1975, $1.8bn AUM

� Alternative pioneer – 1st HF investment 1984

� Owned by Caledonia Investments Plc

� 46 staff – Jersey, London, New York

� FoHF’s, Single Funds, Wealth Management

� Macro-driven portfolios, integrating top-down view

with bottom-up selection

� Manage CalPERS customised portfolio

� Edge: Intelligent Portfolio Design

Ermitage profile

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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1984

1st HF Investment

1st FoHF launched

1997

2001

Acquired by Liberty

Group

Ermitage Ltd MBO completed:

Management/Caledonia Investments Plc

2006

2007

OPTICS Portfolio

System launched

Ermitage founded

1975

Ermitage – key milestones

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Specialist teams, aided by innovative systems

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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� Obsessed with ‘market wizards’

� Bundle top managers together

� High market /event correlation

� Low diversification, downside protection

� Designed to deliver specific objectives

� Built to perform in multiple scenarios

� Each manager given portfolio role

� Managed for ‘real world risk’

All FoHF’s are not created equal

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Ermitage – investment philosophy

� Markets are complex & dynamic

…don’t fit Efficient Market model

� Periodic, fundamental changes

� Forecasting near term impact of

market changes is vital

� Not uncorrelated ‘asset class’

� Dynamic, adaptive strategies

� Effected by market environments

� Knowing behaviour pattern key

� Portfolios need clear objectives

� Selecting Q1 managers no guarantee

of reliable future returns

� Selected managers given specific role

� Aim: robust ‘all weather’ portfolio

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Investment process

Manager Selection

� Identify definable edge

� Classification by style / focus

� Forecasts for different scenarios

Portfolio Construction

� Built for varied market scenarios

� Focus on style diversification

� Every manager given specific role

Active Management

� Sub-strategy allocations

� Manager vs. forecast returns

� Portfolio re-tested vs. scenarios

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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� Qualitative evaluation by strategy specialists

� All research stored in proprietary LEWIS system:

LEWIS Qualitative & Quantitative Database

– Statistical analysis on 4500+ funds

– Multiple data feeds (Altvest, Tass, Eurohedge)

– Manager ‘rolodex’, documents, meeting notes

– Operational Due Diligence reports

– Alpha / beta return, performance, risk, correlation analysis

– Benchmark / peer group regression

Hedge fund research – LEWIS

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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� Ermitage’s proprietary system

� Transforms forecasts into effective

portfolios

� Glass box process helps evaluate:

Portfolio construction – OPTICS

– Capital allocation (by strategy / manager)

– Managers’ roles in portfolio

– Portfolio behaviour in different scenarios

– Performance versus objectives

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Portfolio construction – guiding principals

� Be precise about portfolio objectives

� Be specific about beliefs

� Don’t extrapolate the past into the future – the world does change

� Create a clear link between beliefs, objectives, and actions

� Don’t overlook (or downplay) the ‘what-if-we’re-wrong’ scenarios

� Examine the key positions embedded in each portfolio

� Confront reality directly – don't accept what conflicts with common sense

� Use models as guides and recognise their limitations

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Managing ‘investment risk’

� Style diversification (not just by ‘name’)

� Position size limits

� Liquidity risk analysis

� Factor risk analysis (e.g. beta, market cap)

� Flag report / IMC Exception Report

� Continuous scenario testing

� Qualitative assessment by specialist team

� Manager’s ability to perform to potential

� 5 independent references compulsory

� P&L analysis – are returns repeatable?

� Multiple scenario forecasting

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Managing ‘operational risk’

� Specialist Ermitage team, power of veto

� 150+ questions, on-site interviews

� Service provider references

� Backtrack reports - key principals

� COO independent reference

� Monthly surveillance

� Quarterly independent transparency

� Annual accounts review

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Fund solutions – track record of innovation

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Customised portfolios – harnessing HF talent

� Strategy specialists – niche areas

� Opportunities dictated by market

� Environment change leads to

risk/return volatility

� Investment goals driven by

liabilities

� Conservative risk appetite

� Require transparency and

understanding of portfolio

� Risk/return specified by client

� Uses robust, transparent process

and advanced systems

� Designed for multiple scenarios

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Customised portfolios – key benefits

� Control

� Synergy

� Performance

� Flexibility

� Transparency

� Service

… specify strategies, liquidity, risk/return targets, etc

… with client objectives & existing investments

… increased probability of consistent risk adjusted returns

… adaptive to changing environments / circumstances

… manager selection, due diligence, asset allocation

… access to seniors, partnership approach

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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Ermitage – value adding expertise, processes, tools

� Established hedge fund specialist

� Track record of risk-adjusted performance*

� Leading edge systems (OPTICS, LEWIS)

� Intelligent portfolio design approach

� Innovative customised portfolio service

� Proactive, partnership culture

*6 InvestHedge 2009 Award nominations; Winner of PAM and FT/Investor Chronicle 2009 Awards

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Company overview │ Investment approach │ Risk management & ODD │ Client solutions │ Summary

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DISCLAIMER Ermitage Asset Management Jersey Limited ("EAMJL") is registered with the Jersey Financial Services Commission for the conduct of investment business and fund services business and with the U.S.

Securities and Exchange Commission as an investment adviser. Information contained in this publication, where not externally sourced, has been provided by EAMJL. EAMJL has issued this publication which is for

private circulation only, is published solely for information purposes and does not constitute an offer to sell or an invitation to buy any of the securities or funds mentioned herein or any other financial instruments.

Subscriptions will only be received and units or shares issued on the basis of the current offering document (s) for the fund and prospective investors should carefully consider the risk warnings and disclosures for the

fund set out therein. Investors should also consider any other factors that may be relevant to their circumstances. The investor must take an independent assessment of any legal, credit, tax, regulatory and accounting

issues and determine with his or her professional advisors any suitability or appropriateness implications of any transaction contemplated or referred herein. Units or shares in the fund are not for sale in any

jurisdiction in which such sale would be prohibited. Without limiting the generality of the previous statement, with particular reference to the UK, this document may only be distributed to and acted upon by those

persons in the UK pursuant to the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 as amended. None of the funds described herein are regulated under the Financial Services and Markets Act

2000, and for such funds protections provided by the UK regulatory system do not apply, nor are the benefits available under the Financial Services Compensation Scheme. When issued in the UK, this publication is

issued by Ermitage UK Limited, which is authorised by the Financial Services Authority. The Fund will not register as an investment company under the U.S Investment Company Act of 1940, as amended (the “Company

Act”) and, accordingly, the provisions of the Company Act will not be applicable to the Fund. Whilst reasonable efforts have been made to ensure the accuracy of the information herein, which may be based on

proforma, estimated or unaudited figures, the Ermitage Group accepts no responsibility for its accuracy, nor the reasonableness of the conclusions based upon such information. The contents of this document are

believed to be accurate at the date hereof but are subject to change without prior notification. Past performance is not a guarantee of future performance. The price of units or shares can go down as well as up and

may be affected by changes in rates of exchange. An investor may not receive back the amount invested.

Ermitage Asset Management Jersey Ltd

47 The Esplanade, St Helier, Jersey

Channel Islands JE1 9LB

Tel: +44 (0) 1534 615500

Fax: +44 (0) 1534 615520

Ermitage UK Ltd

25 Savile Row, London, W1S 2ES

Tel: +44 (0) 207 333 0900

Fax: +44 (0) 207 333 0443

Ermitage Americas Inc

Suite 917, 9th Floor, 330 Madison Avenue

New York, NY 10017

Tel: +1 646 495 5665

[email protected]

www. ermitagegroup.com