Due Diligence Questionnaire

A. Investment Advisor Legal name of management company
Place of incorporation
Company type
Mailing address
Primary business number
Primary fax number
Primary e-mail address
Website
Primary contact person

B. Service Providers On-shore Investment Company
Off-shore Investment Company
On-shore Fund Administrator
Off-shore Fund Administrator
Auditor
Prime Broker
Legal Advisor
Functions Outsourced

C. Management Company Overview Company History: include inception date, number of partners, number of employees (front and back office personnel) and location of headquarters and other offices.
Company Ownership

Delegation of responsibilities Portfolio manager CIO
Compliance
CFO

Corporate Culture
Competitive differentiation
Assets undermanagement

Goals for assets under management 1 Year
3 Years
5 Years

Disclosure of positions allowed
Trading for the company account
Company premises
Company Information Systems
Fund Discontinuation
States of registration
Disaster contingency for natural disaster
Future hiring plans
Personnel that have left the company
Lawsuits, regulatory and tax issues
Other business involvement
Personal account trading
Compensation
Front office/back office personnel
Conflicts of interests
Investment in research
Key personnel (covered by key man insurance)
Resignation of key people

D. Investment Company/Portfolio Manager Name
Biography: include background education and business management experience and credentials.
Capital invested $+% of net worth and liquid assets
Personal investment ideology
Direct portfolio management experience prior to launching the fund
Bear market experience
Managers greatest strength
Reason fund was started
References
Telephone number
E-mail Address

Other Managing Partners Name
Biography: include background education and credentials.
Capital invested $+% of net worth and liquid assets
Primary Responsibility
Telephone number
Fax number
Mobile number
E-mail Address
References

Office Personnel Name
Biography: include background education and credentials.
Capital invested $+% of net worth and liquid assets
Primary Responsibility
Telephone number
Fax number
Mobile number
E-mail Address
References

E. The Fund Description of investment and fund structure
Investment bias
Target return
Target standard deviation of returns
Investment policy
Investment objective
Stock selection process
-Investment Process
Investment strategy: describe strategies for bull, bear and sideways market movements.
Single most important belief that translates into success with the strategy
Quantitative tools used to support the investment process
Qualitative tools used to support the investment process
Investment discipline
Greatest strengths
Greatest failure
Beneficial market environments
Difficult market conditions

Explain effect on strategy of: -Rising interest rates
-Falling interest rates
-Steepening yield curve
-Flattening yield curve
-Widening credit spreads
-Tightening credit spreads
-Rising stock market
-Falling/crashing stock market
-Interest rate volatility
-Inflationary environment
- Deflationary environment
-Weak foreign exchange
-Strong Foreign exchange
-Rising commodity price
-Falling commodity prices

Time horizon for investments
Trading around positions
Source of investment ideas
Competitive differentiation
-Portfolio Construction
Portfolio concentrations
Number of positions in the portfolio
Average trades per day
Maximum sector allocation

Investment bias Balance sheet structure
-Average gross
-Average net long
-Average total gross

Industries favored
Industries avoided
Portfolio turnover per year
Tax efficiency of portfolio
Average number of trades per day
Time horizon for securities in portfolio
Subcontracting parts of portfolio
Position building
Current position holding period in days
Sell side discipline
Average level of free capital
Days to unwind the portfolio without any market impact
Days to unwind portfolio in adverse conditions
Criteria to add a long position
Securities borrowing
Leverage used

Amount of leverage -Current
-Average
-High

Highest net short position
-Performance (please see attached sheet for monthly numbers)
Average annual performance
Performance as a function of capacity (How scalable is your strategy)
Maximum capacity
Evaluation and monitoring
Maximum drawdown
Reasons for drawdown
Maximum draw down to be expected
Action taken during bear market
Lessons learned during bear market
Performance in a bear market

Performance during stress periods a. Nov 2000
b. Feb 2001
c. Sept 2001
d. Sept 2002

Number of profitable months since inception
Number of down months since inception
Number of down months fund outperformed index
$ Amount invested at fund inception and today
Cash management philosophy/tools used
Performance audit
Frequency of performance reporting
Provider of prices
Marking of OTC products
Provider of OTC prices
Independency of pricing (Pricing policy)

F. Risk Management Discuss risk management strategy
Position size
Sector exposure
Mental stop points
Walk into or scale into positions
Discuss liquidity of securities
Discuss quantitative tools to support risk management
Asset breakdown
Geographical exposure
Main return drivers
Strategy risks
Monitoring and evaluating risk
Derivatives used in strategy
Non-contributing risks

Risk management techniques Risk of loss:
Diversification:
Liquidity:
Position limits:
Correlation analysis:
Loss cutting rules and target exit prices:
Stress testing:

Scenario testing:
Scenario analysis:

Hedging of other risks Interest risk:
Credit spread risk:
Systematic risk:
Currency risk:
Event risk:
Credit risk on derivatives:

Liquidity Profile
Non-liquid assets
Portfolio transparency

G. Fund Terms Subscription Frequency
Subscription day
Notice period for Subscriptions
Minimum initial investment
Minimum additional investment
Front end load
Redemption fee
Redemption Payments
Redemption day
Notice period for redemption
Redemption stop
Initial pay-out ratio
Initial Period
Lock up period
Annual management fee
Performance fee
Frequency of charges
High water mark
Hurdle rate
Other fees or hidden costs
Sponsor
Side letters
Frequency of NAV
Timing of NAV calculation
Subscription and assets gained over the last 12 months
Maximum capacity
Managed accounts
Difference in fee structure

H. Investors and prospective investors Number of investors in the fund(s)
Investor Profile
% HNW
% Foundations and endowments
% Family Offices
% Banks
% Institutions Investors
% Other fund managers
Oldest account
Clients lost over the last 12 months
Largest withdrawal
Current Assets Under Management

Fund Open a. New investors
b. Existing investors
c. U.S. investors
d. Offshore investors