Description of Business

Capturing the unique risk-return and cross-correlation characteristics of alternative investment strategies, EaCoFin seeks to construct multi-manager hedge fund programs designed to generate attractive risk-adjusted returns with significant downside protection and low correlation to equity and fixed income markets.

EaCoFin emphasizes the pursuit of measured asset growth consistent with internal resources and the availability of quality hedge fund capacity. We also emphasize later-stage investments in securities of companies that are raising capital in the private markets prior to the point at which they can access the public markets or execute an alternative exit strategy.

We believe that the market is well served in the mainstream equity and fixed income product area by the larger mutual fund companies. However, these funds typically have large, much diversified portfolios that tend to be highly correlated with major market indices. In contrast, the Firm focuses on the development of differentiated products that complement these equity and fixed income funds by offering more "concentrated" portfolios. We believe that superior investment performance can be achieved by (a) investing in fewer companies and/or projects thereby concentrating the portfolio, (b) under/over-weighting industry sectors where appropriate, (c) trading more actively where suitable opportunities exist, and (d) focusing investment on small and mid-cap companies that are the subject of less published analytical research. The Firm intends to introduce additional products to satisfy the needs of its current advisor clientele.

The Firm engages in sales and marketing initiatives targeted at third-party distribution channels rather than the public at large, and in particular, investment advisors and financial planners who recognize the merit of the differentiated products offered by the Firm and the value of access to the Firm's portfolio managers. The Firm uses e-mail, teleconferencing and its website to market new EaCoFin product offerings, to facilitate interviews with specific portfolio managers and research analysts, and to provide independent advice targeted to advisors to assist them in making investment decisions for their clients.

From its inception, the Firm has focused on developing a scalable infrastructure capable of supporting significant growth on an efficient and cost-effective basis. We believe that higher profit margins in the medium to long term can be achieved by performing unitholder record keeping, and other administrative services internally rather than by outsourcing such services to third party service providers, as is often the case with other fund management companies.

Each of the above elements of the Firm's strategy reinforces the continued development of the "EaCoFin Brand" to investment advisors and financial planners. The Firm seeks to create an image and reputation as an independent provider of differentiated, actively-managed portfolios that create added value for client portfolios. It also seeks to develop a reputation as having a portfolio management team that is highly experienced and independent-thinking and provides candid views on companies and portfolios to clients.

Market inefficiencies are often fleeting and in order to exploit them we need a well resourced research effort that can help us identify them.

At EaCoFin both our research and long experience tells us that it is possible to outperform broad market indices through a combination of: