MERCED CAPITAL, L.P.

Merced Capital Background and Ownership Merced Capital, L.P. (“Merced Capital” or the “Firm”) was formed in 1988 by three executives from the Cargill Inc. financial trading business. The three founders retired in 1998, 2005 and 2013. Merced Capital is owned by the senior members of management of Merced Capital, none of whom owns 25% or more of the Firm. The general partners of the various Merced Capital-managed funds described below are also owned by members of Merced Capital’s senior management. Merced Capital provides discretionary advisory service to privately offered pooled investment vehicles (the “Funds”) that invest in a variety of asset types. See Item 4 – Advisory Business - Investment Philosophy and Strategy below. The Funds are limited partnerships and other investment vehicles that are exempt from registration under the U.S. Investment Company Act of 1940, as amended, and whose interests will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”). In addition, Merced Capital provides certain administrative, management and advisory services with respect to the ongoing management and operations of other assets held through one or more private investment vehicles (collectively, “Other Accounts”). The Funds and Other Accounts are sometimes individually referred to as a “Client,” and collectively as “Clients.” Merced Capital manages each Client based on specific investment objectives, strategies, investment guidelines and restrictions set forth in the offering documents, partnership agreement, limited liability company operating agreement, and/or investment management agreements applicable to that Client (as amended and supplemented from time to time) (collectively, the “Governing Documents”). Investment restrictions are permitted to be waived in certain cases in accordance with the Governing Documents. See Item 8 - Methods of Analysis, Investment Strategies and Risk of Loss. All of the Fund general partners are owned and controlled by senior management of Merced Capital, and all have entered into written management agreements with Merced Capital pursuant to which Merced Capital provides investment advisory services to the Funds and other Clients of which they are general partner or managing member. (References in this brochure to the “general partner” of a Client includes the managing member of such client where applicable.) None of the Fund general partners, other than Merced Capital, has any employees. Interests in Clients are not offered to the public generally and Merced Capital and its Client historically have not engaged in a general solicitation. Merced Capital does not provide investment advice to separately managed accounts nor does it provide investment advice to individual investors in any Client (each, an “Investor”). In

accordance with common industry practice, a Fund or its general partner may from time to time enter into a “side letter” or similar agreement with an investor pursuant to which the Fund or its general partner grants the investor specific rights, benefits or privileges that are not generally made available to all Fund investors. The Firm has entered into agreements, commonly known as “side letters,” with certain investors under which the Firm has agreed to waive or modify certain investment terms for those Clients, without obtaining the consent of any other Clients or underlying investors. Such agreements typically provide more favorable terms with respect to (i) opting out of particular investments; (ii) reporting obligations of the Client; (iii)

transfers to affiliates; (iv) co-investment opportunities; (v) withdrawal rights due to adverse tax or regulatory events; and (i) consent rights to certain Governing Document amendments. Investment Philosophy and Strategy Merced Capital focuses on trading in debt and equity securities and other obligations of financially distressed entities, high yield, below investment-grade or unrated debt securities, leveraged loans, special and control situation transactions, and other trades deemed appropriate by Merced Capital. In addition, Clients invest in real estate, aircraft and aircraft leases, equipment, renewable energy, insurance-linked securities, natural resources, and other types of assets. The Governing Documents typically give Merced Capital wide discretion to determine the investment strategy for the Clients, except in cases where the Client was established to pursue a very specific strategy. The investment strategy and objective of each Client is set forth in the Client’s Governing Documents. Merced Capital may expand its areas of expertise in response to market conditions or other external factors. A brief explanation of the primary strategies employed by Merced Capital follows:

Financially distressed entities are those financially troubled entities on the verge or in the process of a major financial restructuring and involve deteriorating as well as defaulted securities. Restructuring of distressed entities is the process of re-balancing assets and liabilities in a more financially prudent fashion. This process can take place either through a formal bankruptcy proceeding or restructuring outside of a court’s supervision. This process creates opportunities to trade in different types of securities or obligations with different risk-reward profiles at different times in an entity’s restructuring cycle. This cycle can last anywhere from a month to five years or longer.

High yield, below investment-grade or unrated securities involve situations in which there is speculative credit risk and where the debtor is unlikely to obtain credit from traditional sources, such as banks.

“Special situation” transactions are those assets that may be acquired at a discount to their inherent value. Typically, these situations arise because the assets lack transparency or liquidity. Some of these trades may arise as a result of Merced Capital’s role as advisor to other entities. Trades in this area include equipment, real estate and non-operator interests in oil and natural gas wells.

In the past the Clients have not used borrowed money (leverage) at the Client level, and have used leverage at the asset-level on a highly selective basis in limited circumstances (for example, in leveraged aircraft sale-leaseback transactions or commercial property acquisitions). However, this policy is continuously reviewed, and the Clients may employ leverage of Client capital in the future. In addition, to the extent the Clients own and control private operating companies, those companies may use debt as a part of their capital structure. The Clients are permitted to engage in short selling of securities, which involves borrowing securities and then selling them. A Client’s activities include, but are not limited to purchasing, short selling or spread trading any or all of the securities within different companies’ capital structure. These securities may be publicly or privately traded. Merced Capital has traditionally limited the number of trades made outside the United States and, accordingly, the Clients have incurred limited foreign exchange risk. Certain Clients are not precluded from trading in foreign assets or from incurring foreign exchange risk – and do currently invest in foreign real estate, operating and financial assets Merced Capital employs various

strategies to hedge foreign exchange risk, including entering into forward purchase contracts with respect to currencies in which investments are denominated. Conflicts of Interest While Merced Capital believes that its interests, and the interests of its other affiliates, with respect to the success of the Clients are aligned with the interests of the Investors, it is possible that conflicts of interest between the Client and Merced Capital or its affiliates will arise. Merced Capital, its affiliates, and their respective members, managers, directors, officers, partners, shareholders, employees and agents may exercise investment responsibility, or otherwise engage, directly or indirectly, in any other business, irrespective of whether any such business is similar to, or identical with, the business of the Clients, which may include purchasing, selling, holding or otherwise dealing with investments that would be suitable for the Clients. Merced Capital, its affiliates, and their respective members, general partners, managers, directors, officers, partners, shareholders, employees and agents manage multiple Clients that have overlapping investment mandates. In addition, a Client is permitted to take a position that is adverse to the interests of another Client. Merced Capital and its principals and personnel are in no way prohibited from spending, and intend to spend, substantial business time in connection with other businesses and activities, including, but not limited to, managing investments, advising or managing vehicles or accounts whose investment objectives are the same as or overlap with those of the Clients, participating in actual or potential investments of the Clients, providing consulting, M&A, structuring or financial advisory services, including with respect to actual, contemplated or potential investments of the Clients or acting as a director, officer or creditors’ committee member of, adviser to or participant in, any corporation, partnership, trust or other business entity. Merced Capital and its principals and personnel are permitted to, in their sole and absolute discretion, engage in any other business and furnish asset management and advisory services to Clients with overlapping investment mandates and which may own securities or other investments of the same class, or which are the same type, as other Clients’ investments. Merced Capital and its principals and personnel shall be free, in their sole discretion, to make recommendations to others, or effect transactions on behalf of themselves or for others, which may be the same as or different from those recommended or effected with respect to the Clients, or offer certain investments to Clients that it or they manage or advise concurrently with or in addition to offering those investments to the Clients. No Investor has any right to participate in any of these activities or to the income or profits derived from these activities. The records of any personal accounts will not be made available to Investors. A Client may, in Merced Capital’s sole and absolute discretion, require the services of a prime broker for certain investments. The Firm has selected prime brokers (the “Prime Brokers”) for each Client, as required. If Merced Capital selects a Prime Broker and custodians, the Firm will seek to obtain best price and best execution and will take into account such relevant factors as (i) price, (ii) the Prime Broker’s and custodian’s facilities, reputation, reliability, creditworthiness and financial responsibility, (iii) research and other services provided by such Prime Broker and custodian to the Firm and (iv) ancillary services such as capital introduction. Accordingly, Merced Capital is permitted to, in its sole and absolute discretion, cause a Client to pay a Prime Broker and custodian that provides brokerage or research services (either directly or through third-party relationships) an amount of commission or transaction cost in excess of that which another Prime Broker and custodian would have charged, if the Firm determines in good faith that such commission or

transaction cost is reasonable in relation to the value of brokerage, research or other services provided. The Clients are not required to allocate either a stated dollar or stated percentage of its transactions to any Prime Broker and custodian for any minimum time period, and will review such relationships from time to time. The existence of incentive compensation may create an incentive for Merced Capital and its affiliates to approve and cause the Clients to make riskier or more speculative investments than it would otherwise make in the absence of such performance-based compensation. In addition, the terms of the incentive compensation could give Merced Capital and its affiliates an incentive to make determinations regarding the timing and structure of realization transactions that are not applicable to the interests of the Investors. Allocation, Aggregation and Brokerage Because Merced Capital manages multiple Clients, Merced Capital and its affiliates, and their respective members, managers, directors, officers, partners, shareholders, employees and agents may advise one or more of the Clients to invest in the same assets or asset class. To the extent a particular investment is suitable for more than one Client, Merced Capital uses good faith efforts to allocate such investments among the Funds in a fair and reasonable manner, and in accordance with its allocation policy. A copy of Merced Capital’s allocation policy is available to Investors upon request. As a general rule, if two or more Clients have substantially similar or overlapping investment objectives and strategies and other factors being equal, allocation of a particular position will be based upon the relative size of the Clients. However, Merced Capital also take into account any one or more of the following factors in allocating investments among Clients:

Client’s investment objective and strategies (determined by reference to the investment objectives and strategies outlined in Governing Documents);

Client’s tax status, and tax status of Investors;

any restrictions placed on a Client’s portfolio under its Governing Documents or by virtue of federal or state law (such as the Employee Retirement Income Security Act of 1974, as amended);

total portfolio invested position;

available capital and available cash in the Client, taking into account any anticipated subscriptions and redemptions and any other reasonably foreseeable cash requirements of the Client;

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The fees, compensation, and expenses applicable to the Clients are set forth in detail in the respective Governing Documents. Merced Capital or its affiliate receives a management fee from Clients in exchange for investment advisory services provided. Management fees are typically a specific percentage of each Investor’s aggregate capital commitment, invested capital or net asset value in the applicable Client, but are sometimes a flat fee. The percentages on which Merced Capital’s management fee is based typically range from 0.90% to 1.5% per annum, as set forth in the applicable Governing Documents. In some cases, Merced Capital and its affiliates do not receive a management fee. Generally, a Client’s management fee will typically be payable monthly or quarterly in advance and may be paid by disposition proceeds, income from investments, capital contributions from a Client’s Investors or a Client’s credit facility, as well as Client-level reserves as set forth in the applicable Governing Documents.

Merced Capital, or its affiliates, is permitted to elect, in its discretion, to reduce, waive, or defer all or a portion of any payment of its management fee with respect to any Client or Investors in any Client. In addition to management fees, Merced Capital or its affiliate receives performance-based compensation either (a) in the form of a percentage of profits from the Clients or a participation right in the profits of a Client (commonly referred to as “Carried Interest”) based on the distributed cash proceeds generated by Client’s investments, typically subject to a preferred return to applicable Investors, or (b) in the form of a percentage of the net realized and unrealized appreciation in the value of the Client’s assets (commonly referred to as an “Incentive Fee”). Merced Capital, or its affiliate, is permitted to, in its sole discretion, reduce, waive, or defer the distributions or payments of Carried Interest or Incentive Fees with respect to any Client or Investors in any Client. Carried Interest is generally paid out as proceeds attributable to dispositions of Clients’ investments are distributed to Investors. Generally, no payouts are made until a Client has first received invested capital together with a preferred return in accordance with the Client’s Governing Documents. Incentive Fees are typically allocated to Merced Capital or its affiliate on an annual basis. Merced Capital sets the value of each Client’s portfolio. In the case of Clients that pay an Incentive Fee, there is the risk that Merced Capital could increase its management and annual incentive fees by overstating the increase in value of the Client’s assets. To protect against this risk, Merced Capital has established a valuation policy to assure that its investment valuations reflect fair value. Merced Capital’s valuation policy is available to Investors in its Clients upon request. Valuation methods include, as appropriate, financial models, appraisals, reference to sales of comparable assets, bids or other valuations received from third parties, and other methods that Merced Capital determines are likely to be reliable. Except to the extent required by applicable law, Merced Capital is not required to have valuations independently determined. In addition to paying management fees, Carried Interest and Incentive Fees, the Clients reimburse Merced Capital and its affiliates for certain expenses. These expense reimbursement items vary by Client, but typically include tax advice and preparation expenses, accounting expense, custodial fees, brokerage commissions, legal, and other operational expenses. In some cases, Clients reimburse Merced Capital and its affiliates for customary and routine overhead expenses, including compensation of all personnel. If any reimbursable expenses are incurred for the account of more than one Client, then Merced Capital charges a Client only that portion of the expense that Merced Capital in its discretion deems equitable under the circumstances, taking into account such factors as Merced Capital and its affiliates deem appropriate in the circumstances. The Clients incur brokerage and other transaction costs. See Item 12 – Brokerage Practices for information regarding Merced Capital’s practices with respect to these costs. Under certain circumstances specified in the Governing Documents, the Clients are generally obligated to indemnify Merced Capital and its affiliates and other identified persons and entities as described in the relevant Governing Documents (together, the “Indemnified Persons”), in each instance, for costs arising out of or in connection with the Clients’ business and affairs, except for any such costs that have resulted from certain bad acts of the Indemnified Person seeking indemnification as detailed in the applicable Client’s Governing Documents. In terms of co-investment opportunities, until a co-investor has irrevocably committed in writing to participate in an investment opportunity alongside the Clients, such co-investor may not be obligated to bear any portion of the due diligence or broken-deal expenses associated with a

potential transaction. As a result, in some cases, despite the fact that a co-investor may be offered an opportunity to participate in a potential investment alongside a Client, the Client may ultimately bear all of the associated due diligence expenses and costs associated with an unconsummated investment. Merced Capital or its affiliate will pay (either directly or by offset to its management fees) all organizational expenses in excess of the limit set forth in the applicable Governing Documents and placement compensation, to the extent not borne by the Clients. Merced Capital and its supervised persons do not receive (directly or indirectly) any compensation from the purchase or sale of securities or investments for the Clients. Merced Capital and its supervised persons do not receive (directly or indirectly) sales commissions in connection with sales of interests in the Clients.

Methods of Analysis and Investment Strategies A portfolio approach to trading is employed, so that risk to the Clients is mitigated by avoiding significant concentrations in a limited number of investments. However, at times individual positions may be material. The strategy used in any individual situation will be affected by the types of financial instruments and assets involved and the desired risk-reward profile. Merced Capital takes a fundamental approach to analyzing an investment, taking into account the fair value of an investment, downside protection, and expected cash flows. Merced Capital investment personnel rigorously review all aspects of a proposed investment, taking into account both factors specific to the investment as well as factors affecting the particular industry and the economy as a whole. Merced Capital strives to diversify investments in number, industry focus, and geographic region. However, none of the Clients is precluded from investing a substantial amount of its capital in a single holding, industry, or geographic area. Certain Clients are permitted to invest outside the United States and, therefore, could incur foreign exchange or political risk, and they may enter into hedging arrangements with the intent to protect against foreign exchange risks. Merced Capital expects to control and be actively involved in the stewardship of many of the companies and assets in which the Clients invest. Merced Capital intends to seek out investments wherein strong management and attentive ownership add meaningful value. However, a Client may own interests in companies and assets that it does not control and over which it has little, if any, influence. Merced Capital uses a wide variety of sources to find investments. Investments are evaluated by Merced Capital by thorough in-house analysis and assessment of the multitude of financial, legal, market, operational, industry and other factors that impact credit profile, business prospects, and asset and enterprise value. Merced Capital also retains outside legal, tax, industry-specific and other advisors to help it analyze the potential downside and upside of an investment. Risk Factors An investment in the Clients managed by Merced Capital involves various risks, including the risk that an Investor may lose part or all of its capital.* While Merced Capital attempts to attain a Client’s investment objectives through its research and portfolio management skills, there is no guarantee of successful performance, that the investment objective can be reached, or that a positive return will be achieved. As a general rule, Investors should expect that investments with higher return potential will also have higher potential of risk of loss to capital and/or income. In addition, the Clients’ investments may fluctuate in market value from day to day and, therefore, the value of an investment in the Clients could decrease as well as increase. The Clients, individually or taken together, do not constitute a balanced investment program for purposes of an Investor’s portfolio diversification needs and, therefore, Investors should consult with their own financial advisers for

*

For purposes of the discussion of the risks of investing in a fund managed by Merced Capital, we have assumed that any fund formed after the date of this brochure will employ most if not all of the same strategies employed by existing funds, and that the risks of investing in any such fund will be similar. A prospective investor in any fund managed by Merced Capital should carefully read and understand the offering memorandum for the fund. Investors should also consult with their professional advisors.

the appropriateness of an investment in one or more of the Clients for their overall investment program. Investing involves risk of loss that an Investor should be prepared to bear. A prospective Investor should consider the following factors and other considerations. The following risk factors do not purport to be a complete examination of all of the risks involved in investments typically considered by Merced Capital, particularly with respect to Clients whose investments are concentrated within specific investment strategy. Additional risk factors with respect to the Clients are outlined in further detail in their respective offering documents. General Risks General Economic Conditions and Market Risks. All investments risk the loss of capital and are subject to investment-specific price fluctuations as well as to macroeconomic, market and industryspecific conditions, including but not limited to national and international economic conditions, domestic and international financial policies and performance, conditions affecting particular investments such as the financial viability, sales and product lines of corporate issuers, national and international politics and governmental events, and changes in income tax and other laws and regulations. No guarantee or representation is made that investments recommended by Merced Capital will be successful. Investments recommended by Merced Capital to the Clients may involve, without limitation, risks associated with limited diversification and significant concentration, investments in speculative assets and financial instruments and the use of speculative investment strategies and techniques, interest rates, volatility, tracking risks in hedged positions, credit deterioration or default risks, systems risks and other risks inherent in the Clients’ activities. Certain investment techniques of Merced Capital can, in certain circumstances, magnify the impact of adverse market moves to which the Clients may be subject. In addition, the Clients’ investments may be materially affected by conditions in financial and other markets and overall economic conditions occurring globally and in particular markets where the Clients may invest their assets. Merced Capital may not accurately predict future risk exposures relating to the Clients. Risk management techniques are based in part on the observation of historical market behavior, which may not predict market divergences that are larger than historical indicators. Also, information used to manage risks may not be accurate, complete or current, and such information may be misinterpreted. Inflation. The U.S. and other economies have recently begun to experience higher-than-normal inflation rates. It remains uncertain whether substantial inflation in the U.S. and other economies will be sustained over an extended period of time and/or have a significant adverse effect on the U.S. and other economies. In particular, Inflation could affect the Clients' investments adversely in a number of ways. The market value of such investments is also subject to decline in value in times of higher inflation rates. Therefore, it should be noted that Inflation and rapid fluctuations in inflation rates have had in the past, and will likely in the future have, negative effects on both U.S. and non-U.S. economies as well as financial markets as a whole and not just on the Firm.” Uncertainty in the U.S. and Global Financial Markets. Similar to the upheavals in the United States and global financial markets that began in 2008 illustrated, the recent banking crisis has the possibility of extraordinary and unprecedented uncertainty and instability in such markets. There can be no assurances that conditions in the global financial markets will not adversely affect one or more of a Client’s portfolio investments, its access to capital or leverage, or its overall performance. Bank Deposits Risk. Deposits maintained at an FDIC-insured bank are covered up to $250,000 per depositor, per insured bank, for each account ownership category, in the event of a bank failure.

Any deposits over $250,000 in cash at a single bank may be lost in the event the bank fails. Any deposit in excess of the maximum amount insured by the FDIC is an uninsured deposit. Diversifying banking relationships or minimizing cash balances could serve to minimize the potential uncertainty and destabilizing effect on the Firm’s operations because of concern regarding the financial viability of a single banking institution. Counterparty Risk - The Firm and its Clients could be subject to credit and liquidity risk with respect to their counterparties. Exposure to credit and liquidity risk from counterparties can occur through a wide range of activities when dealing with, including but not limited to, service providers, banks, brokers, insurance providers, trading counterparties or other entities. Should a counterparty become bankrupt or otherwise fail to perform its obligations under a contract due to financial difficulties, there could be significant delays in obtaining any or limited recovery under a contract in a bankruptcy court or other reorganization proceeding. The lack of any independent evaluation of such counterparties’ financial capabilities, and the absence of a regulated market to facilitate settlement or provide access to capital will increase the potential for losses by the Firm and its Clients, especially during unusually adverse market conditions. No Assurance of Investment Return. Each Client’s task of identifying investment opportunities, managing such investments and realizing a significant return for Investors is difficult. The Clients are dependent upon the relationships and activities of the investment professionals of Merced Capital, and loss of one or more of those individuals could have a significant adverse impact on the business of the Clients and their financial performance. While the Clients’ investments offer the opportunity for significant capital gains, they also involve a high degree of risk that may result in substantial losses. Many organizations operated by persons of competence and integrity have been unable to make, manage and realize such investments successfully. There is no assurance that the Clients will be able to invest their capital on attractive terms, correctly evaluate the nature and magnitude of the various factors that could affect the value of such investments or generate returns for its Investors. Prices of the investments may be volatile, and a variety of other factors that are inherently difficult to predict, such as domestic or international economic and political developments, may significantly affect the results of the Clients’ activities. There is no assurance that the Clients’ investments will be profitable and there is a risk that the Clients’ losses and expenses will exceed its income and gains. As such, there is no assurance of any distribution to Investors prior to, or upon, liquidation of a Client. A prospective Investor should not invest in any Client unless such Investor is able to withstand a total loss of its investment. Risks Related to Electronic Communications. Client general partners provide to Investors statements, reports and other communications relating to the Client and/or the Investors’ interests in the Client in electronic form, such as email or via a password-protected website (“Electronic Communications”). Electronic Communications may be modified, corrupted or contain viruses or malicious code and may not be compatible with an Investor’s electronic system. In addition, reliance on Electronic Communications involves the risk of inaccessibility, power outages or slowdowns for a variety of reasons. These periods of inaccessibility may delay or prevent receipt of reports or other information by the Investors. Cybersecurity Breaches. Merced Capital and its affiliates depend heavily upon computer systems to perform necessary business functions. Although the Firm has implemented a variety of security measures, these computer systems could be subject to cyber-attacks and unauthorized access, such as physical and electronic break-ins or unauthorized tampering. Like other companies, Merced Capital and its affiliates may experience threats to their respective data and systems, including malware and computer virus attacks, unauthorized access, system failures and disruptions. If one or more of these events occurs, it could potentially jeopardize the confidential, proprietary and other information processed and stored in and transmitted through, such computer systems and networks, or otherwise cause interruptions or malfunctions in Merced Capital’s, the Clients’ or

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Merced Capital provides discretionary investment advisory services to Funds and Other Accounts. The Clients are typically limited partnerships and other investment vehicles that are exempt from registration under the US. Investment Company Act of 1940, as amended, and whose interests will not be registered under the Securities Act. The minimum investment into the Clients is outlined in each Client’s’ Governing Documents, subject to waiver by Merced Capital or its affiliate. Investors in the Clients include public and private pension funds, foundations, endowment funds, “funds of funds”, high net worth individuals and family offices.

Merced Capital manages Clients that pay performance-based compensation as described in Item 5 - Fees and Compensation above. The fact that Merced Capital or its affiliate is compensated based on the success of investments held by the Clients may create an incentive for Merced Capital to make investments that are riskier or more speculative than those that it may otherwise recommend in the absence of such compensation and may create an incentive for Merced Capital to disproportionately allocate time, services or functions to Clients paying such amounts at a higher rate. Merced Capital has adopted policies and procedures that, among other things, seek to ensure that investment opportunities are allocated in a manner that it believes is consistent with the relevant Governing Documents and otherwise fair and reasonable over time, considering such factors as it deems relevant. See Item 5 – Fees and Compensation and Item 11 – Code of Ethics, Participation or Interest in Client Transactions & Personal Trading for additional information relating to how we generally address conflicts of interest. With respect to co-investment opportunities, a co-investor will typically invest on economic terms at the investment level substantially no more favorable than those on which the Clients invest; and neither the Clients nor the co-investor will be entitled to a preference over the other in receipt of distributions at the investment level, or the ability to dispose of all or any portion of a jointly-held investment, in each case, subject to certain exceptions set forth in a Client’s Governing Documents. Merced Capital charges carried interest, management fees and other fees to certain co-investors, with respect to any co-investment, which may be different than the Carried Interest, Incentive Fees, management fees and other economic terms applicable to the Clients.

Neither Merced Capital nor any of its affiliates is registered under any financial regulatory authority outside the United States. None of Merced Capital’s employees is a registered broker or affiliated with any such securities broker or dealer. Merced Capital’s sole business is management of private investment funds.

Trading

Code of Ethics, Participation or Interest in Client Transactions and Personal

Merced Capital has adopted a Code of Ethics pursuant to SEC Rule 204A-1. Upon request, Merced Capital will provide the Code of Ethics to any Investor (or prospective Investor) in any Client managed by Merced Capital. The Code of Ethics requires that Merced Capital employees disclose information regarding their personal securities accounts, and that they refrain from trading in securities about which they possess material, non-public information. However, the Firm reserves the right to refine and modify the Code of Ethics and its other policies and procedures over time. No investor or prospective investor should invest with the Firm on the basis of, or otherwise rely on, the provisions thereof, and any such refinements or modifications have the potential materially to affect the investments available to the Funds or the expenses borne thereby. Merced Capital employees are not permitted to invest in equity securities in which the Clients invest.

Merced Capital maintains relationships with a large number of executing brokers. Merced Capital considers a variety of factors in selecting executing brokers, including ability to locate inventory, speed and reliability of execution, cost, and asset type. Executing brokers do not have access to or custody of assets of the Clients. Each of the Funds maintains a custodial account with a large, super-regional national bank with an office in Minneapolis, and each Fund maintains bank accounts with another super-regional national bank. Merced Capital does not receive so-called “soft dollar” benefits from any broker, other than various forms of research received from time to time, including brokers’ own research reports on companies, industries and the economy as well as research prepared by third parties and made available to Merced Capital by brokers that execute Client transactions. The research provided by executing brokers benefits Merced Capital in the sense that it does not have to produce or pay for the research itself, which creates an incentive for Merced Capital to select a broker based on this benefit rather than on Merced Capital’s obligation to seek best execution on behalf of the Clients. However, Merced Capital does not “pay up” for such research and the receipt of any such research is not a material factor in the selection of brokers to execute Client transactions.

Merced Capital monitors the Clients’ bank and custodial accounts on a daily basis and reconciles cash and securities on a daily basis. Merced Capital also monitors the safety and soundness of its bank and custodian and takes appropriate action to assure that cash balances are invested in a secure manner. Certain of the Funds maintain accounts with prime brokers, but their activity in those accounts is not material in relation to the overall activities of the Clients. The Clients may enter into additional prime brokerage arrangements if Merced Capital determines that it would be beneficial to the Clients. From time to time, Merced Capital may aggregate Client orders for the purchase and sale of securities. See Item 4 – Advisory Business – Allocation, Aggregation and Brokerage for more information.

Merced Capital does not pay any third party for client referrals and has never retained a placement agent or other type of capital raising firm.

Except as described below, there are no legal or disciplinary events involving Merced Capital or its employees that are related to Merced Capital’s business or the Clients. From time to time the Clients and Merced Capital are parties to litigation involving investments by the Client. There is currently no material litigation involving Merced Capital or the Clients.

Merced Capital monitors Client investments on a daily, weekly, monthly or quarterly basis, depending on the nature of the investment. Quoted securities are tracked and monitored daily. Less liquid, longer-term investments (such as equipment, real estate or operating companies) are monitored weekly or monthly, unless there is a change or potential disposition pending. Investors in certain Funds receive a monthly statement showing the Investor’s capital account and gain or loss for the year to date. Investors in other Client receive quarterly statements. Each of the Clients is audited following the close of each calendar year. Ernst & Young LLP has been the auditor of all Clients since Merced Capital was founded. Audited financial statements are provided to all Investors in March of each year.

Pursuant to Rule 206(4)-2 under the Advisers Act (the “Custody Rule”), Merced Capital is deemed to have custody over the assets of the Client. In accordance with the Custody Rule, a qualified custodian will not be required to deliver quarterly account statements to the Client or their respective investors as long as (i) the Client is audited by an independent public accountant that is registered with, and subject to inspection by, the Public Company Accounting Oversight Board, (ii) the Client’s audited financial statements are prepared in accordance with U.S. generally accepted accounting principles, and (iii) Merced Capital delivers such annual audited financial statements to investors within 120 days after the end of the Client’s fiscal year.

As noted above, the Governing Documents for the Clients give Merced Capital and its affiliates broad discretion to make investment decisions on behalf of the Clients. No Investor has any authority to direct or manage the investment of the Client’s assets.

As adviser to the Clients, Merced Capital is responsible for voting all proxies and bankruptcy claims with respect to investments held by the Clients. Merced Capital votes proxies in the best interests of each particular Client, which may result in different voting results for proxies for the same issuer. Merced Capital believes that voting proxies in accordance with the following guidelines is in the best interests of its Clients:

Generally, Merced Capital votes in favor of routine corporate housekeeping proposals, including election of directors (where no corporate governance issues are implicated), selection of auditors, and increases in or reclassification of common stock.

Generally, Merced Capital votes against proposals that make it more difficult to replace members of the issuer’s board of directors, including proposals to stagger the board, cause management to be overrepresented on the board, introduce cumulative voting, introduce unequal voting rights, and create supermajority voting.

For other proposals, Merced Capital determines whether a proposal is in the best interests of its clients and may take into account the following factors, among others:

whether the proposal was recommended by management and Merced Capital’s opinion of management;

whether the proposal acts to entrench existing management; and

whether the proposal fairly compensates management for past and future performance.

Merced Capital maintains a record of all votes. Current and prospective Clients and Investors can obtain a copy of Merced Capital’s proxy voting policies and procedures, including proxy voting record (if applicable), upon request by contacting the Firm at (952) 476-7200.

Merced Capital does not solicit the prepayment of fees from clients six months or more in advance. The Firm is not aware of any financial condition that is reasonably likely to impair Merced Capital’s ability to meet its contractual commitments to the Clients. Merced Capital has never been the subject of a bankruptcy petition.