Stieven Capital Advisors, L.P.: investment adviser

The Investment Adviser serves as the management company with discretionary trading authority to private pooled investment vehicles (each, a “Fund” and, collectively, the “Funds”). The Funds include (1) Stieven Financial Investors, L.P., a Delaware limited liability partnership (the “U.S. Fund”), and (2) Stieven Financial Offshore Investors, Ltd., a Cayman Islands exempted company (the “Offshore Fund”). Stieven Capital GP, LLC, a limited liability company organized under the laws of the State of Delaware and affiliated with the Investment Adviser serves as the general partner of the U.S. Fund (the “Fund General Partner”). The interests in the U.S. Fund are offered on a private placement basis, pursuant to Section 3(c)(7) of the Investment Company Act of 1940, as amended (the “1940 Act”), to persons who are “accredited investors” as defined under the Securities Act of 1933, as amended (the “Securities Act”) and “qualified purchasers” as defined under the 1940 Act, and subject to certain other conditions, which are fully set forth in the offering documents for the U.S. Fund. Shares in the Offshore Fund are offered on a private placement basis to persons who are not “U.S. Persons”, as defined under Regulation S of the Securities Act and U.S. tax-exempt entities (or substantially composed of U.S. tax-exempt entities), and subject to certain other conditions, which are fully set forth in the offering documents for the Offshore Fund. This Brochure generally includes information about the Investment Adviser and its relationships with its clients and affiliates. While much of this Brochure applies to all such clients and affiliates, certain information included herein applies to specific clients or affiliates only. Description of Advisory Services. Please see Item 8. Availability of Customized Services for Individual Clients. The Investment Adviser’s investment decisions and advice with respect to each Fund are subject to each Fund’s investment objectives and guidelines, as set forth in its offering documents.

Assets Under Management. The Investment Adviser manages approximately $563,449,338 as of December 31, 2025 on a discretionary basis. As of December 31, 2025, the Investment Adviser does not manage any assets on a non-discretionary basis.

In addition, a pro rata portion of the management fee will be paid out of any capital contributions made by new or existing limited partners on any date that does not fall on the first day of a fiscal quarter, based on the number of months remaining in such partial fiscal quarter following such capital contribution. A pro rata portion of the management fee will be reimbursed to a limited partner that withdraws from the U.S. Fund, in whole or in part, on any date that does not fall on the last day of a fiscal quarter, based on the number of months remaining in such partial fiscal quarter following such withdrawal. If a limited partner has completely withdrawn from the U.S. Fund except for its interest in one or more Special Investment accounts, the Investment Adviser will send an annual statement to the withdrawn limited partner providing for the payment of the management fee with respect to its interest in such Special Investment accounts. The Management Fee payable by such withdrawn investor will be due within 15 days of receiving such notice. The Investment Adviser may, in its discretion, elect to reduce or waive the management fee with respect to any limited partner, including, but not limited to, any principal, employee or affiliate of the Fund General Partner or the Investment Adviser, or any family member of such person. Incentive Allocation. Generally, at the end of each fiscal year of the U.S. Fund, 20% of the net realized and unrealized capital appreciation (taking into account appreciation or depreciation with respect to realized or deemed realized Special Investments) allocated to each capital account of each limited partner for such fiscal year over the management fee debited to such capital account will be reallocated to the capital account of the Fund General Partner (the “Incentive Allocation”), subject to a loss carryforward mechanism. For purposes of determining allocations, including the Incentive Allocation and the balance resulting from the loss carryforward mechanism, any taxes withheld from the U.S. Fund or paid by the U.S. Fund, directly or indirectly, with respect to or on behalf of a limited partner (and including

interest, penalties and/or any additional amounts with respect thereto), will be deemed distributed from each capital account of each limited partner and will not be deemed to be expenses. The Incentive Allocation will be calculated separately with respect to each capital contribution made by a limited partner. Accordingly, it is possible that an Incentive Allocation may be made with respect to a limited partner even though the capital accounts of the limited partner, in the aggregate, did not achieve profits during a year. In the event that a limited partner’s partial or complete withdrawal of a capital account occurs other than at a fiscal year-end, the Incentive Allocation, if any, will be determined through the withdrawal date. The Fund General Partner may, in its discretion, elect to reduce or waive the Incentive Allocation with respect to any limited partner, including, but not limited to, any principal, employee or affiliate of the Fund General Partner or the Investment Adviser, or any family member of such person. Offshore Fund Management Fee. With respect to the Offshore Fund, the Offshore Fund pays to the Investment Adviser a quarterly fixed management fee, in advance, equal to 0.25% (1.0% on an annualized basis) of the net asset value of each Series of Class A Shares (“Class A Shares”), and Class S Shares (“Class S Shares”, and collectively with the Class A Shares, the “Shares”), as of the beginning of each quarter. Any portion of the management fee attributable to a shareholder’s Class S Shares in the Offshore Fund (which holds Special Investments) will be debited against the net asset value of the corresponding Series of Shares from which such Class S Shares had been issued. In calculating the management fee, Special Investments are valued at their fair value. In addition, a pro rata portion of the management fee will be paid if a series of Shares is created on any date that does not fall on the first day of a fiscal quarter, based on the number of months remaining in such partial fiscal quarter following the creation of such series of Shares. A pro rata portion of the management fee will be reimbursed to a redeeming shareholder that redeems its Class A Shares, in whole or in part, on any date that does not fall on the last day of a fiscal quarter, based on the number of months remaining in such partial fiscal quarter following such redemption. If a shareholder owns Class S Shares, but no longer owns Class A Shares, the Investment Adviser will send an annual statement to such shareholder providing for the payment of the management fee with respect to such Class S Shares. The management fee payable by such shareholder will be due within 15 days of receiving such notice. In the sole discretion of the Investment Adviser, the management fee may be reduced or waived with respect to any shareholder, including, but not limited to, any principal, employee or affiliate of the Investment Adviser, or any family member of such person.

Incentive Fee. The Offshore Fund also pays to the Investment Adviser an incentive fee (the “Incentive Fee”), generally on an annual basis on the last day of each fiscal year of the Offshore Fund, equal to 20% of the net realized and unrealized appreciation in the net asset value of each series of Class A Shares, including appreciation or depreciation from realized (or deemed realized) Special Investments (which were held through Class S Shares and then converted into Class A Shares), during the respective year (adjusted for any redemptions and accruals of the Incentive Fee made during the year (the “Adjusted Net Asset Value”)); provided, however, that an Incentive Fee is only paid with respect to the net realized and unrealized appreciation in the Adjusted Net Asset Value of a series of Class A Shares in excess of the Prior High NAV (as defined below) of such series of Class A Shares. The “Prior High NAV” for each series of Class A Shares is the prevailing net asset value (“NAV”) of that series of Class A Shares as of the first business day immediately following the date the last Incentive Fee with respect to such series of Class A Shares was determined (or if no Incentive Fee has been determined with respect to such series of Class A Shares, the NAV of such series of Class A Shares immediately following its initial offering). If Class A Shares of a particular series are redeemed during a year, the Prior High NAV of such series of Class A Shares will be reduced in the same proportion as the reduction in the NAV of that series of Class A Shares caused by such redemption. In the event of a redemption by a shareholder other than as of the end of a fiscal year, an Incentive Fee will be determined and paid as of the redemption date with respect to the realized and unrealized appreciation, if any, in the Adjusted Net Asset Value of the redeemed Class A Shares through the redemption date. In the sole discretion of the Investment Adviser, the Incentive Fee may be reduced or waived with respect to any shareholder, including, but not limited to, any principal, employee or affiliate of the Investment Adviser, or any family member of such person. Payment of Fees. Fees and compensation paid to the Investment Adviser or its affiliates by the Funds are generally deducted from the assets of such clients. As discussed above, management fees are generally deducted on a quarterly basis and performance compensation is generally deducted on an annual basis. Additional Fees and Expenses. Each client bears its own operating expenses, including, but not limited to, investment expenses (e.g., brokerage commissions, expenses relating to short sales, clearing and settlement charges, custodial fees, interest expenses, research expenses), professional fees (including, without limitation, expenses of consultants and experts’ fees relating to particular investments), expenses related to the purchase and sale of illiquid securities and Special Investments, travel expenses related to investments (including, without limitation, travel, lodging and meal expenses), legal expenses, fees and expenses of the administrator, the management fees, incentive fees, internal and external accounting, audit and tax preparation expenses, fees and expenses of the board of directors and the Offshore Fund officers (including Anti-Money Laundering officers), professional liability insurance

(including costs relating to directors’ and officers’ liability insurance and errors and omissions insurance), costs of printing and mailing reports and notices, entity-level taxes (for the Offshore Fund), taxes (for the U.S. Fund), corporate licensing, regulatory expenses (including filing fees), expenses relating to the offer and sale of interests or shares, and extraordinary expenses. Solely with respect to the U.S. Fund, generally, all expenses borne by the U.S. Fund, other than the U.S. Fund management fee and any expenses that the Fund General Partner determines should be allocated to a particular limited partner or limited partners (investor-related taxes and expenses related to a special investment), will be debited to all U.S. Fund limited partner capital accounts on a pro rata basis. To the extent that expenses to be borne by the U.S. Fund are paid by the Fund General Partner or the Investment Adviser, the U.S. Fund will reimburse such party for such expenses. Solely with respect to the Offshore Fund, expenses generally will be allocated pro rata among the classes and series of shares; provided, however, that the Offshore Fund will specially allocate expenses related to Special Investments to the Class S Shares of the shareholders participating therein. Prepayment of Fees. Please see “Payments of Fees” discussed above. Additional Compensation and Conflicts of Interest. Not applicable.

financial institutions, the long-term consolidation in the financial industry could lead to a portfolio holding of the Funds being acquired by a non-U.S. financial institution. In such a case, and if a stock-for-stock exchange is offered, the Investment Adviser will evaluate the investment merits of maintaining a position in the acquiring foreign institution. The Investment Adviser primarily seeks long positions in the securities of companies with solid management teams and healthy long-term earnings growth potential. The Investment Adviser also seeks positions in the undervalued securities of turnaround situations, young and start-up companies, and companies having limited analyst coverage. In addition, the Investment Adviser pursues investment opportunities that allow the Funds to participate in the ongoing consolidation of the financial services industry. The Investment Adviser expects continued acquisition activity over the next several years as larger and/or stronger institutions expand their franchises. Factors contributing to the consolidation include the need for and cost of adopting new technology due to competitive factors, pressures to gain operating efficiencies and increased regulatory burdens. Macroeconomic conditions, market forces and individual corporate events may occasionally also present opportunities for shorting securities in the Funds’ portfolios. At any point in the business cycle, the portfolio weightings of long positions versus short positions may vary widely based on numerous factors. However, the Funds’ long positions typically exceed their short positions by a substantial margin. Investments by the Investment Adviser, on behalf of the Funds, are typically concentrated in the securities of companies with common equity market capitalizations of $200 million to $25 billion. However, the Investment Adviser, on behalf of the Funds, may invest a portion of the Funds’ assets in securities of companies with larger market capitalizations when relative valuations appear attractive. A particular investment focus of the Investment Adviser, on behalf of the Funds, is regional bank and thrift companies (defined as institutions typically with assets between $3 billion and $300 billion and market capitalizations of $200 million to $25 billion). In the Investment Adviser’s view, this segment of the financial services sector should provide attractive investment opportunities over the next several years for the following reasons: first, the Investment Adviser believes many regional financial institutions are trading at attractive valuations on a relative and absolute basis based on several measures compared to long-term history; second, while the volatile interest rate environment and an uncertain economic outlook have resulted in a period of relatively low earnings and tangible book value growth over the recent past, the Investment Adviser believes there is the potential

for a rebound in earnings growth and tangible book value growth once interest rates stabilize and economic conditions improve; third, many financial institutions have sound balance sheets with strong regulatory capital levels and allowances for credit losses, potentially allowing for rapid opportunistic expansion and/or improved capital returns; and fourth, as seen in previous cycles, the Investment Adviser expects healthy continued consolidation activity. The Investment Adviser focuses on five key fundamental areas when valuing the stocks of financial institutions. Typically, companies with a higher percentage of these key items will trade at higher valuations than those with fewer. In the Investment Adviser’s view, in-depth knowledge of companies, their management teams, and how the securities of these types of companies performed in previous cycles should benefit the investment decision process. The five key fundamental areas are listed below: 1. Earnings per share. The Investment Adviser believes that earnings per share are the most important driver of financial stock performance. The Investment Adviser examines the growth rate, consistency and predictability of earnings per share as well as the subsequent impact of earnings on the company’s tangible book value per share. To further differentiate between companies with similar earnings growth rates, the Investment Adviser identifies, analyzes, and ranks, in order of importance, the following factors: revenues, expense controls and capital management. The market typically assigns higher valuations to the stocks of companies with superior revenue growth rates. Furthermore, investors typically favor companies with a higher percentage of fee-based revenues, which are viewed as more predictable. 2. Asset quality and the control of risk. In the Investment Adviser’s opinion, asset quality and risk management are key to assessing an institution’s financial health and its earnings outlook. Asset quality control encompasses both origination and monitoring of loans and investment securities. Numerous other areas requiring sound risk management controls include: interest rates, liquidity and fraud. High performing institutions generally have well diversified loan portfolios with top-quartile loan quality ratios and high quality, liquid investment portfolios. 3. Balance sheet strength. Companies with the best long-term track records typically exhibit strong balance sheets, which provides stability in periods of economic weakness and allows for opportunistic expansion. 4. Management’s track record. This is typically a function of corporate culture, which is set by senior management’s example. In the Investment Adviser’s view, the corporate culture is a key determinant in the long-term success of a financial institution. 5. Franchise value. While this term is overused in the merger and acquisition arena, it remains an important component of the valuation process. A company’s franchise value includes its customer base, lines of business, and management’s ability to execute its business plan. This is a very important aspect of the consolidation process for financial institutions. In the Investment Adviser’s opinion, there are three primary characteristics of high performing financial companies. The first is corporate culture. Most successful companies have a strong commitment to shareholders and corporate excellence. Second,

high performing financial institutions typically have a stable core funding profile that fuels profitability. The third characteristic of high performing financial institutions is strong asset quality and risk management procedures. In most situations, the Investment Adviser places an emphasis on maintaining open dialogue with members of the senior management teams of the companies in which the Funds are invested. Many of these professional relationships have been developed by the Investment Adviser’s key officers over long periods of time. Consistent dialogue may aid the Investment Adviser’s understanding of the company’s strategy and benefit the investment decision-making process. The Investment Adviser looks to take advantage of short-term trading opportunities created by factors including market volatility, bulk sales by holders, and misperceptions or erroneous information related to companies in the financial sector. Furthermore, the Investment Adviser expects to participate in the ongoing consolidation of the financial services industry. While merger activity within the financial sector often attracts headlines, it is important to note that when making most investment decisions the Investment Adviser prefers to focus on company fundamentals. The Investment Adviser primarily concentrates on long investment positions. Macroeconomic conditions, market forces, and individual corporate events may also present opportunities for shorting securities in the Funds’ portfolios. At any point in the business cycle, the portfolio weightings of long positions versus short positions may vary widely based on numerous factors. However, the Funds’ long positions typically exceed their short positions by a substantial margin. When shorting an individual stock, the Investment Adviser typically looks for a catalyst that may negatively impact valuation. The catalyst may include fundamental factors, such as earnings and asset quality trends, or adverse market perceptions. The Investment Adviser analyzes bank and thrift institutions based on a sizable array of metrics. In addition to its financial analysis, the Investment Adviser maintains communication with management teams, which provide deeper insight into the company’s business focus and execution strategy. The Investment Adviser believes that its dual-pronged research methodology aids its understanding of trends within the regional bank and thrift industries and should play a key role in the Funds’ performances. The Investment Adviser applies a similar research methodology to the nonbank financial universe. The changing regulatory landscape, emerging technologies and evolving behavioral trends within the financial ecosystem can present attractive investment opportunities within non-bank financial companies. The Investment Adviser is focused on finding well-capitalized financial-related companies with management teams possessing specific expertise in areas with attractive investment and growth opportunities. Accurately identifying and evaluating the specific strategic differences and risks involved in financialrelated companies could be important to the Funds’ investment results. Investments may include long and short positions in equity and equity-related securities, fixed income securities, exchange traded funds and other financial instruments, including derivative instruments such as options (including bank index options) and, for hedging purposes, forward agreements. The Funds have the power to borrow and may do so when deemed appropriate by the Investment Adviser. Portfolio leverage may be used to enhance the Funds’ returns, make investments or meet withdrawal requests that would

otherwise result in the premature liquidation of investments. Each Fund’s maximum gross exposure through leverage will not exceed 200% of such Fund’s net assets. The decision to use leverage will be based upon numerous factors. Key factors may include the valuations of financial stocks relative to the broad market and valuation disparities between the different asset sizes of financial institutions. Each Fund generally will not acquire any investment that would result in a single class of security of a single issuer (a “Single Position”) comprising more than 15% of the net asset value of such Fund, determined at the time of acquisition of such investment. If, subsequent to the time of acquisition, any Single Position comprises more than 15% of the net asset value of a Fund, the Investment Adviser will use commercially reasonable efforts to reduce the Fund’s exposure to a Single Position to 15% of the net asset value of the Fund. In addition, with the exception of investment vehicles used to facilitate investments of cash or cash equivalents, a Fund will not invest in another private pooled investment vehicle that pays management fees or incentive fees unless such fees are offset on a dollar-for-dollar basis against the fees paid at the Fund level. As part of its investment program, the Investment Adviser may pursue opportunities in more illiquid investments and may acquire assets or securities that the Investment Adviser believes either lack a readily assessable market value or should be held until the resolution of a special event or circumstance (i.e., Special Investments). The descriptions set forth in this Brochure of specific advisory services that the Investment Adviser offers to clients, and investment strategies pursued and investments made by the Investment Adviser on behalf of its clients, should not be understood to limit in any way the Investment Adviser’s investment activities. The Investment Adviser may offer any advisory services, engage in any investment strategy and make any investment, including any not described in this Brochure, that the Investment Adviser considers appropriate, subject to each client’s investment objectives and guidelines. The investment strategies the Investment Adviser pursues are speculative and entail substantial risks. Clients should be prepared to bear a substantial loss of capital. There can be no assurance that the investment objectives of any client will be achieved. Material, Significant or Unusual Risks Relating to Investment Strategies. The following risk factors do not purport to be a complete list or explanation of the risks involved in an investment in the clients advised by the Investment Adviser. These risk factors include only those risks the Investment Adviser believes to be material, significant or unusual and relate to particular significant investment strategies or methods of analysis employed by the Investment Adviser. Additional risks are detailed in each Fund’s offering documents. Banking Supervision and Regulation. Banks and thrifts and their holding companies (collectively, “banking organizations”) are subject to an extensive framework of federal and/or state laws and regulations and pervasive supervision by one or more federal and/or state regulators. Such regulatory framework has only increased in complexity and pervasiveness under the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Pursuant to this framework, the federal and/or state banking agencies have broad investigatory powers over banking organizations, including the authority to require detailed periodic reports and to conduct extensive periodic examinations, as well as

broad enforcement powers, including the power to impose substantial fines and other significant penalties (up to, and including, seizure of a depository institution) for violations of law or unsafe and unsound practices. The impact of this regulatory environment often puts banks and thrifts at a competitive disadvantage compared to less regulated competitors such as finance companies, mortgage banking companies and leasing companies. For example, under the Dodd-Frank Act’s Volcker Rule, banking organizations and their affiliates are generally prohibited from engaging in proprietary trading and sponsoring or investing in private investment funds, subject to certain exceptions. Moreover, the supervision and regulation of banking organizations is intended primarily for the protection of depositors, the deposit insurance fund of the Federal Deposit Insurance Corporation (“FDIC”) and the banking system as a whole, but not for the protection of the banking organization’s shareholders. Accordingly, the regulatory environment to which banking organizations are subject may negatively impact the value of a shareholder’s investment in several ways, including, but not limited to, those set forth below: Activity Restrictions. Banking organizations are subject to significant activity and investment restrictions. Most banking organizations are not permitted to engage in, directly or indirectly, any activity that is not “closely related” or “incidental” to banking, as defined by applicable law. Banking organizations that qualify as “financial holding companies” under the regulations of the Board of Governors of the Federal Reserve System (“Federal Reserve Board”) are permitted to engage in additional activities, defined as “financial in nature”, under applicable law. However, even this broader category is significantly limited compared to the range of activities in which a non-banking entity may engage. Even within the areas in which banking organizations may act, their actions are often subject to prior approval by the applicable banking regulator. Dividend Restrictions. The ability of a banking organization to pay dividends or make capital distributions is limited by federal and/or state laws, by regulations of applicable bank regulatory agencies, and by principles of prudent bank management. As a result, banking organizations have less latitude to issue dividends than nonbanking entities. Capital Requirements. Banking organizations are subject to strict regulatory capital requirements, which require the organization to maintain certain core capital and riskbased capital ratios and limit the type of assets that qualify as capital. These regulatory capital requirements have become more stringent in recent years with the implementation of the standards set forth in the Basel Committee on Banking Supervision’s 2010 capital and liquidity reform package known as “Basel III.” While these regulatory capital requirements protect the financial security of banking organizations, they may also cause organizations to forgo growth and potentially profitable opportunities because of the impact (real or potential) on their capital ratios. Reserve and Liquidity Requirements. In addition to the capital requirements, banking organizations that are depository institutions are required to comply with (i) reserve requirements that require an institution to maintain cash reserves at least equal to a certain percentage of the total value of all its transactional accounts and non-personal

time deposits, and (ii) liquidity requirements that require an institution to maintain cash and other liquid assets at least equal to a certain percentage of the total value of its net withdrawable deposit accounts and borrowings payable in one year or less. These requirements have become more stringent in recent years with the implementation of the liquidity standards set forth in Basel III (which apply not only to depository institutions, but to all large banking organizations). While these new standards only apply to large banking organization, it is possible that smaller institutions may experience a “trickle-down” effect, as the minimum requirements for large organizations may be viewed by banking examiners as “best practices” for smaller organizations. As with the capital requirements described above, these reserve and liquidity requirements could also cause depository institutions to forgo potentially profitable opportunities because of the impact (real or potential) on their reserve or liquidity ratios. Community Reinvestment Act. Federal law requires all FDIC-insured depository institutions to demonstrate that they are meeting the credit needs of low- and moderate-income borrowers in their communities, as well as investing in, and providing services to, low and moderate income level neighborhoods. Covered institutions that are deemed by an applicable banking regulator to have failed to satisfy these requirements may face significant difficulty in securing approval for new activities or acquisitions. Thus, covered institutions are subject to community service requirements that are not applicable to other businesses. Restrictions on Investments. An investor that is deemed to hold a “controlling” investment in a banking organization will ordinarily become subject to certain federal and/or state banking laws and regulations, including, but not limited to, the restrictions and requirements set forth above. As a result, the Investment Adviser, on behalf of a Fund, plans to make only “non-controlling” investments in banking organizations. To do so, the Investment Adviser, on behalf of a Fund, will need to restrict all such investments to less than 25% of any class of the banking organization’s voting securities (and to less than one-third of its total equity). 1 In most cases, the Funds may have to restrict a particular investment even further (for example, below 10%, or even 5%, of any class of voting securities) in order to avoid being deemed to “control” a banking organization. Thus, in order to avoid becoming subject to the aforementioned banking laws and regulations, the Funds may need to forgo taking full advantage of potentially profitable investment opportunities. Moreover, in order to avoid a particular investment being deemed to be “controlling,” the Funds may also need to agree to certain “passivity commitments” with one or more regulators. Such commitments would restrict the Funds’ involvement with, and influence over, the management and policies of the target banking organization. Thus, where the Funds are required to make such commitments, the Funds would not have the same ability to wield influence over the target and its management as another similar investor that is not subject to any such commitments. In conjunction with making such commitments, the Funds may be required to provide certain detailed information to the Federal Reserve Board or other regulatory authority. The

In the case of investments in savings and loan holding companies and savings associations, determinations of control are slightly different than that of bank holding companies and banks. The Funds will need to restrict all such investments in a savings and loan holding company or savings association to less than 25% of its total equity (as compared to one-third).

information requested from the Funds in this regard may include the identity of any investor which holds as low as 5% or more of the voting interests of a Fund or onethird or more of the total equity of such Fund. 2 Potential Regulation of a Fund Itself. As discussed above, the Investment Adviser, on behalf of a Fund, plans to restrict a Fund’s investments below certain thresholds of the voting securities and total equity of any banking organization in which it invests. If, however, the Funds were to acquire a greater interest, or were to end up with such greater ownership through actions beyond its control, the Funds may become subject to certain federal and/or state banking laws and regulations, including, but not limited to, the restrictions and requirements set forth above. Moreover, in the event that the Funds become subject to such laws and regulation, it is possible that any investor which holds 5% or more of the voting interests of a Fund or one-third or more of the total equity of such Fund 3 may also become subject to the same laws and regulation. Potential Changes in the Law. The laws, regulations and regulatory practices affecting banking organizations undergo continuous change and may undergo significant changes in light of recent events in the financial services industry. It is impossible to predict either what changes will occur or what effect such changes could have on any of the foregoing regulatory issues or on an organization’s profitability or financial condition. Thus, the potential for changes in the regulatory system governing banking organizations may impair the ability of a shareholder to predict the future value of an investment. Banking Organizations’ Market Conditions. Beginning in 2008, the market for securities related to banking organizations experienced a period of unprecedented volatility and extreme devaluation coinciding with numerous failures by financial institutions. Since that time, the market for such securities has changed dramatically. As a result, many of the risks facing the Funds’ investments in securities of banking organizations are unusually difficult to predict. The performance of such investments will be affected by, among other things, macroeconomic factors, including factors that may not have existed prior to 2008. Recent Bank Failures. On March 10, 2023, Silicon Valley Bank (“SVB”) was closed by the California Department of Financial Protection and Innovation (“DFPI”), which appointed the Federal Deposit Insurance Corporation (“FDIC”) as receiver. On March 12, 2023, Signature Bank was closed by the New York State Department of Financial Services, which also appointed the FDIC as receiver. On March 12, 2023, the FDIC, the Department of Treasury and the Federal Reserve Board issued a joint statement indicating that actions would be taken to complete the FDIC’s resolution of SVB and Signature Bank in a manner that protects depositors pursuant to the systemic risk exception (which also required consultation with the President). The FDIC transferred all the deposits and substantially all of the assets of these banks to newly-formed bridge banks and the bridge banks were opened by the FDIC on March 13, 2023, with customers having full access to their deposits as at the time of the closure of SVB and Signature Bank. On March 20, 2023, the FDIC entered into a purchase and assumption agreement (“PAA”) for substantially all deposits and certain loan portfolios of Signature Bridge Bank, National Association with Flagstar Bank, National Association.

In the case of investments in savings and loan holding companies and savings associations, the total equity threshold is 25%.

See prior footnote.

On March 26, 2023, the FDIC entered into a PAA for all deposits and loans of Silicon Valley Bridge Bank, National Association with First Citizens Bank & Trust Company. On May 1, 2023, First Republic Bank was closed by the California DFPI, which appointed the FDIC as receiver. To protect depositors, on the same day, the FDIC entered into a PAA with JPMorgan Chase Bank, National Association to assume all of the deposits and substantially all of the assets of First Republic Bank. Although the joint statement by the FDIC, the Department of the Treasury and the Federal Reserve Board indicated that all depositors of SVB and Signature Bank would have access to all of their money after only one business day of closure, including funds held in uninsured deposit accounts, it is not certain that the Department of the Treasury, Federal Reserve Board or FDIC will treat future bank failures similarly. Further, there is no guarantee, in the absence of the systemic risk exception being invoked, that a healthy bank will purchase and assume all deposits, including uninsured deposits, of a failed bank. There is still uncertainty in the markets regarding the stability of banks and the safety of deposits in excess of the insured deposit limits. The ultimate outcome of these events, and whether further regulatory actions will be taken, cannot be predicted. Additionally, while the Federal Reserve Board created a new Bank Term Funding Program as an additional source of liquidity available to depository institutions that are in generally sound financial condition offering loans of up to one year and providing up to $25 billion of credit protection to the Federal Reserve Board Banks in connection with the program, widespread demands for customer withdrawals or other liquidity needs of financial institutions for immediate liquidity may exceed the capacity of such program, and there is no guarantee that such program will be sufficient. The closure of these banks triggered a surge in deposit outflows and resulted in decreased confidence in regional banks among deposit customers, investors, and other counterparties and has caused significant disruption, volatility and reduced valuations of equity and other securities of regional banks in the capital markets. These events occurred during a period of rapidly rising interest rates, which, among other things, has resulted in unrealized losses in regional banks’ available for sale debt securities portfolios and increased competition for bank deposits and have, and could continue to have, adverse impacts on the market price and volatility of regional bank stock. Further, these events could also lead to increases in regional bank’s interest expense, as they have raised and may continue to raise interest rates paid to depositors in order to compete with other banks, and in an effort to replace deposits, seek borrowings which carry higher interest rates. In response to the recent bank failures, the United States government, particularly the Department of the Treasury, the Federal Reserve Board, the Office of the Comptroller of the Currency, the FDIC and/or the U.S. Congress, is expected to adopt a variety of measures and new regulations designed to strengthen capital and liquidity standards and otherwise restore confidence in financial institutions. These reforms are expected to modify liquidity, long-term debt, and capital requirements and enhance existing stress testing frameworks as well as include special assessments to recover losses to the Deposit Insurance Fund. Even without revisions to the regulatory framework, an enhanced level of scrutiny and escalation from regulators could negatively impact business activities at banks as regulators perform reviews of, among other things, liquidity, capital, stress testing and risk management programs and may require banks to enhance liquidity position and take other steps regarding risk management. These actions could limit banks’ business activities (including lending) and banks’ ability to expand organically or through acquisitions.

Any of these impacts, or any other impacts resulting from the events described above or other related or similar events, could have a material adverse effect on a Fund. Regional Bank Risk. The performance of securities of small and mid-sized regional banks may involve greater risk, more volatility and less trading volume than customarily is associated with the securities of larger, more established banks. Regional bank securities may have returns that vary, sometimes significantly, from the overall securities market or the overall financials sector. The regional banking industry is highly competitive and failure to maintain or increase market share may result in a decline in market value. The performance of regional banks may be adversely impacted by many factors, including, among others, changes in government regulations, local or regional economic conditions, interest rate fluctuations, credit rating downgrades, adverse public perception and decreased liquidity in credit markets. To the extent that certain regulatory requirements are relaxed for regional banks, there could be increased risk taking by affected banks, which may result in greater overall risk in the U.S. banking and financial industry. The impact of changes in capital requirements and the regulation of banking activities by U.S. prudential authorities may also adversely impact the value of the securities included in the regional bank sector. Regional banks may be more susceptible to losses in connection with defaults on commercial real estate loans. Potential Impact of Interest Rates. Interest rates have increased over the last several years. The net income of financial related companies (including banks, thrifts and finance REITs) depends to a large extent upon the level of net interest income. Changes in interest rates can increase or decrease net interest income and net income. Net interest income is the difference between the interest income earned on loans, investments and other interest-earning assets, and the interest these companies pay on interest-bearing liabilities (including deposits and other borrowings). Net interest income is affected by changes in market interest rates, primarily because different types of assets and liabilities may react differently, and at different times, to market interest rate changes. When interest-bearing liabilities mature or reprice more quickly than interest-earning assets, an increase in market interest rates could reduce net interest income. At the same time, when interest-earning assets mature or reprice more quickly than interest-bearing liabilities, falling interest rates could reduce net interest income. Additionally, changes in market interest rates are affected by many factors beyond these companies’ control, including: inflation, unemployment, money supply, international events and events in world financial markets. These companies attempt to manage these risks from changes in market interest rates by adjusting the rates, maturity, repricing and balances of the different types of interest-earning assets and interestbearing liabilities. Furthermore, companies may choose to use many different types of assetliability management and hedging techniques, which could include the use of derivative securities. However, interest rate risk management techniques are not exact and may have an adverse financial impact if rates move in an unanticipated way. Uncertainty of the U.S. and global economy, and sensitivity of interest rates to changes in U.S. government and other nations’ monetary and fiscal policies, including changes in the federal funds rate, create a risk that interest rates may be volatile. Interest rate volatility is difficult to predict and may cause the value of any assets sensitive to interest rates, including fixed income instruments, held by the Funds to decrease, which may result in substantial withdrawals from the Funds that, in turn, force the Funds to liquidate such instruments at disadvantageous prices negatively impacting the performance of the Funds.

Equity Securities. The Funds’ investment portfolios primarily include long and short positions in equity securities of U.S. listed financial institutions. Equity securities fluctuate in value in response to many factors, including, among others, the activities and financial condition of individual companies, geographic markets, industry market conditions, interest rates and general economic environments. In addition, events such as the domestic and international political environments, terrorism and natural disasters, may be unforeseeable and contribute to market volatility in ways that may adversely affect investments made by the Funds. Short Selling. The Investment Adviser, on behalf of the Funds, engages in short selling as a fundamental component of its investment program. Short selling involves selling securities which are not owned by the short seller and borrowing them for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. Short selling allows the seller to profit from a decline in market price to the extent such decline exceeds the transaction costs and the costs of borrowing the securities. A short sale creates the risk of a theoretically unlimited loss, in that the price of the underlying security could theoretically increase without limit, thus increasing the cost to the Funds of buying those securities to cover the short position. There can be no assurance that the Funds will be able to maintain the ability to borrow securities sold short. In such cases, the Funds can be “bought in” (i.e., forced to repurchase securities in the open market to return to the lender). There also can be no assurance that the securities necessary to cover a short position will be available for purchase at or near prices quoted in the market. Purchasing securities to close out a short position can itself cause the price of the securities to rise further, thereby exacerbating the loss. Small and Medium Capitalization Companies. The Investment Adviser, on behalf of the Funds, may take long and short positions in the equity securities of financial institutions with small- to medium-sized market capitalizations. These stocks, particularly small-capitalization stocks, may involve higher risks in some respects than do investments in securities of larger companies. For example, prices of small-capitalization and even mediumcapitalization securities are often more volatile than prices of large-capitalization securities and the risk of bankruptcy or insolvency of many smaller companies (with the attendant losses to investors in the case of long positions) is higher than for larger, “blue-chip” companies. In addition, due to thin trading in the securities of some small-capitalization companies, an investment in those companies may be less liquid. Illiquid Investments. The Investment Adviser, on behalf of the Funds, may invest in illiquid investments and may acquire assets or securities that the Investment Adviser believes either lack a readily assessable market value or should be held until the resolution of a special event or circumstance. The market prices, if any, for such securities tend to be volatile and may not be readily ascertainable, and the Investment Adviser may not be able to sell them when it desires to do so or to realize what it perceives to be their fair value in the event of a sale. The sale of restricted and illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. The Investment Adviser, on behalf of the Funds, may not be able to readily dispose of such illiquid investments and, in some cases, may be contractually prohibited from disposing of such investments for a specified period of time. Restricted securities may sell at a price lower than similar securities that are not subject to restrictions on resale. In addition, the limited liquidity of these investments may subject them to more

extensive fluctuations in value and may impair the ability of the Investment Adviser to exit such investments in times of adversity. Furthermore, there may be limited information available about the assets of the issuers of the illiquid investments, which may make valuation of such illiquid investments difficult or uncertain. It also should be noted that, even those markets which the Investment Adviser expects to be liquid can experience periods, possibly extended periods, of illiquidity. An investment in the Funds is suitable only for certain sophisticated investors who do not require immediate liquidity for their investments. Real Estate-Related Securities. The Investment Adviser, on behalf of the Funds, may invest in securities issued by entities which invest in real estate such as REITs. Real estate investments generally will be subject to the risks incident to the ownership and operation of commercial real estate and/or risks incident to the making of nonrecourse mortgage loans secured by real estate. Such risks include, without limitation, the risks associated with both the domestic and international general economic climates; local real estate conditions; risks due to dependence on cash flow; risks and operating problems arising out of the absence of certain construction materials; changes in supply of, or demand for, competing properties in an area (as a result, for instance, of over-building); the financial condition of tenants, buyers and sellers of properties; changes in availability of debt financing; energy and supply shortages; changes in the tax, real estate, environmental, and zoning laws and regulations; various uninsured or uninsurable risks; natural disasters; and the ability of the Funds or third-party borrowers to manage the real properties. In addition, the Funds may incur the burdens of ownership of real property, which include the paying of expenses and taxes, maintaining such property and any improvements thereon, and ultimately disposing of such property. Special Purpose Acquisition Companies. The Investment Adviser, on behalf of the Funds, may invest in a special purpose acquisition company (a “SPAC”). A SPAC is a publicly traded company formed for the purpose of raising capital through an initial public offering to fund the acquisition, through a merger, capital stock exchange, asset acquisition or other similar business combination, of one or more undervalued operating businesses. Following the acquisition of a target company, a SPAC typically would exercise control over the management of such target company in an effort to increase the value of such target company. Capital raised through the initial public offering of securities of a SPAC is typically placed into a trust until the target company is acquired or a predetermined period of time elapses. Investors in a SPAC would receive a return on their investment in the event that a target company is acquired and such target company’s value increased. In the event that a SPAC is unable to locate and acquire target companies by the deadline, the SPAC would be forced to liquidate its assets, which may result in losses due to the expenses and liabilities of the SPAC. Investors in a SPAC are subject to the risk that, among other things, (i) such SPAC may not be able to locate or acquire target companies by the deadline, (ii) assets in the trust may be subject to third-party claims against such SPAC, which may reduce the per share liquidation price received by the investors in the SPAC, (iii) such SPAC may be exempt from the rules promulgated by the SEC to protect investors in “blank check” companies, such as Rule 419 promulgated under the Securities Act, so that investors in such SPAC may not be afforded the benefits or protections of those rules, (iv) such SPAC may only be able to complete one business combination, which may cause it to be solely dependent on a single business, (v) the value of any target company may decrease following its acquisition by such SPAC, (vi) the value of the funds invested and held in the trust decline, (vii) the inability to redeem due to the failure to hold the securities in the SPAC on the record date or the failure to vote against the acquisition and (viii) if the SPAC is unable to consummate a business

combination, public stockholders will be forced to wait until the deadline before liquidating distributions are made. In addition, most SPACs are illiquid and have a concentrated shareholder base that tends to be comprised of hedge funds (at least at inception). The Investment Adviser, on behalf of the Funds, may invest in a SPAC that, at the time of investment, has not selected or approached any prospective target businesses with respect to a business combination. In such circumstances, there may be limited basis for the Investment Adviser to evaluate the possible merits or risks of such SPAC’s investment in any particular target business. To the extent that a SPAC completes a business combination, it may be affected by numerous risks inherent in the business operations of the acquired company or companies. For these and additional reasons, investments in SPACs are speculative and involve a high degree of risk. Investment in Payments Companies. The Investment Adviser, on behalf of the Funds, may invest in companies in the payments sector, which may include entities that facilitate or are involved in the movement of funds and which may not be chartered banking institutions. Companies in the payments sector may provide consumer-facing products and services, products targeted to business customers, and back-end processing for other financial institutions. Many of the areas in which payments businesses compete evolve rapidly with changing and disruptive technologies, shifting user needs, and frequent introductions of new products and services. The global payments industry is highly competitive, rapidly changing, highly innovative, and increasingly subject to regulatory scrutiny. The cost of compliance or the failure of a payments company to comply with a series of complex regulations in this sector could have an adverse impact on such payments company, and thus the Funds’ investment therein. Since the payments sector is a heavily and increasingly regulated sector, all participants in the space face costs and risks associated with compliance with applicable federal, state, and local laws and regulations, including those related to licensing and supervision, anti-money laundering, the Bank Secrecy Act, financial privacy and cybersecurity and data security. Such regulatory costs and risks include the direct cost of compliance as well as risks and costs related to noncompliance, including, for example, litigation and regulatory proceedings, monetary fines, and prohibitions and restrictions on current and future products and services as well as on the business relationships used to provide such products and services. Leverage; Interest Rates; Margin. The Investment Adviser, on behalf of the Funds, may leverage its investment positions by borrowing funds from securities brokerdealers, banks or others and may also invest in derivatives and other financial instruments that are inherently leveraged. From time to time, the Investment Adviser, on behalf of the Funds, may leverage its investment positions to take advantage of perceived opportunities. The amount of the Funds’ borrowings and the interest rates on those borrowings, which will fluctuate, may have a significant adverse effect on the Funds’ profitability. To the extent that gains derived by the Funds from investments purchased with borrowed funds is greater than the cost of borrowing, the Funds’ gains will be greater than if borrowing had not been used. Conversely, if the gains from investments purchased with borrowed funds are not sufficient to cover the cost of borrowing, the gains of the Funds will be less than if borrowing had not been used, and the amount available for ultimate distribution to the shareholders will be reduced. The extent to which the gains and losses associated with leveraged investing are increased will generally depend on the degree of leverage employed. Each Fund’s maximum gross exposure through leverage will not exceed 200% of such Fund’s net assets.

While leverage presents opportunities for increasing the Funds’ total returns, it has the effect of potentially increasing losses as well. Accordingly, any event that adversely affects the value of an investment would be magnified to the extent the Funds are leveraged. The cumulative effect of the use of leverage by the Funds in a market that moves adversely to the Funds’ investments could result in substantial losses to the Funds, which would be greater than if the Funds were not leveraged. Leverage will increase the exposure of the Funds to adverse economic factors such as significantly rising interest rates, severe economic downturns or deterioration in the condition of the Funds’ investments or their corresponding markets. In transactions involving margin borrowings and derivative instruments, counterparties and lenders will likely require the Funds to post investments and assets as collateral to support its obligations. Should the instruments and other assets pledged as collateral decline in value, or should brokers increase their maintenance margin requirements (i.e., reduce the percentage of a position that can be financed), the Funds could be subject to a “margin call”, pursuant to which it must either deposit additional funds with the broker or suffer mandatory liquidation of the pledged assets to compensate for the decline in value. The Funds might not be able to liquidate assets quickly enough to pay off the margin debt or provide additional collateral and may suffer mandatory liquidation of positions in a declining market at relatively low prices, thereby incurring substantial losses. Furthermore, secured counterparties and lenders generally will have the right to sell, pledge, charge, hypothecate, assign, use or otherwise dispose of collateral posted by the Funds. This could increase exposure to the risk of a counterparty default since, under such circumstances, the Funds may be unable to recover the posted collateral promptly or may be unable to recover all of the posted collateral. The occurrence of defaults may trigger crossdefaults under the Funds’ agreements with other brokers, lenders, clearing firms or other counterparties, creating or increasing a material adverse effect on the performance of the Funds. When the Funds purchase an option in the United States, there is no margin requirement because the option premium is paid for in full. The premiums for certain options traded on non-U.S. exchanges may be paid for on margin. Whether any margin deposit will be required for over-the-counter (“OTC”) options and other OTC instruments, will depend on the credit determinations and specific agreements of the parties to the transaction, which are individually negotiated. Regulation in the Derivatives Industry. There are many rules related to derivatives that may negatively impact the Funds, such as requirements related to recordkeeping, reporting, portfolio reconciliation, central clearing, minimum margin for uncleared OTC instruments and mandatory trading on electronic facilities, and other transaction-level obligations. Parties that act as dealers in swaps, are also subject to extensive business conduct standards, additional “know your counterparty” obligations, documentation standards and capital requirements. All of these requirements add costs to the legal, operational and compliance obligations of the Investment Adviser and the Funds, and increase the amount of time that the Investment Adviser spends on non-investment-related activities. Requirements such as these also raise the costs of entering into derivative transactions, and these increased costs will likely be passed on to the Funds.

These rules are operationally and technologically burdensome for the Investment Adviser and the Funds. These compliance obligations require employee training and use of technology, and there are operational risks borne by the Investment Adviser, on behalf of the Funds, in implementing procedures to comply with many of these additional obligations. These regulations may also result in the Investment Adviser, on behalf of the Funds, forgoing the use of certain trading counterparties (such as broker-dealers and futures commission merchants (“FCMs”)), as the use of other parties may be more efficient for Funds, from a regulatory perspective. However, this could limit the trading activities of the Funds, create losses, preclude the Funds from engaging in certain transactions or prevent the Funds from trading at optimal rates and terms. Many of these requirements were implemented pursuant to the Dodd-Frank Act, the European Union Regulation on OTC Derivatives, Central Counterparties and Trade Repositories (known as the European Market Infrastructure Regulation, or “EMIR”) and similar regulations globally. In the United States, the Dodd-Frank Act divides the regulatory responsibility for derivatives between the SEC and the Commodity Futures Trading Commission (“CFTC”), a distinction that does not exist in any other jurisdiction. The SEC has regulatory authority over “security-based swaps” and the CFTC has regulatory authority over “swaps”. EMIR is being implemented in phases through the adoption of delegated acts by the European Commission. As a result of the SEC and CFTC bifurcation and the different pace at which the SEC, the CFTC, the European Commission and other international regulators have promulgated necessary regulations, different transactions are subject to different levels of regulation. Though many rules and regulations have been finalized, there are others, particularly SEC regulations with respect to security-based swaps, that are still in the proposal stage or are expected to be introduced in the future. The following describes derivatives regulations that may have the most significant impact on the Investment Adviser, on behalf of the Funds: Reporting. Most swap transactions have become subject to anonymous “real time reporting” requirements, meaning that information relating to transactions entered into by the Funds will become visible to the market in ways that may impair the ability of the Funds to enter into additional transactions at comparable prices or could enable competitors to “front run” or replicate the Funds’ strategies. Central Clearing. In order to mitigate counterparty risk and systemic risk in general, various U.S. and international regulatory initiatives, including EMIR, are underway to require certain derivatives to be cleared through central clearinghouses. In the United States, clearing requirements have been implemented as part of the Dodd-Frank Act. The CFTC imposed its first clearing mandate on December 13, 2012 affecting certain interest rate and credit default swaps. The CFTC and the SEC may introduce clearing requirements for additional classes of derivatives in the future. EMIR also requires OTC derivatives contracts meeting specific criteria to be cleared through central counterparties. While such clearing requirements may be beneficial for the Funds, in many respects (for instance, they may reduce the counterparty risk to the dealers to which the Funds would be exposed under non-cleared derivatives), the Funds could be exposed to new

risks, such as the risk that an increasing percentage of derivatives will be required to be standardized and/or cleared through central clearinghouses, and, as a result, the Funds may not be able to hedge their risks or express an investment view as well as the Investment Adviser would have been able to had it used customizable derivatives available in the over-the-counter markets. The Investment Adviser may have to split the Funds’ derivatives portfolios between centrally cleared and over-the-counter derivatives, which may result in operational inefficiencies and an inability to offset risk between centrally cleared and over-the counter positions, and which could lead to increased costs. Another risk is that the Funds may be subject to more onerous and more frequent (daily or even intraday) margin calls from both the Funds’ FCM and the clearinghouse. Virtually all margin models utilized by the clearinghouses are dynamic, meaning that unlike traditional bilateral swap contracts where the amount of initial margin posted on the contract is typically static throughout the life of the contract, the amount of the initial margin that is required to be posted in respect of a cleared contract will fluctuate, sometimes significantly, throughout the life of the contract. The dynamic nature of the margin models utilized by the clearinghouses and the fact that the margin models might be changed at any time may subject the Funds to an unexpected increase in collateral obligations by clearinghouses during a volatile market environment, which could have a detrimental effect on the Funds. Clearinghouses also limit collateral that they will accept to cash, U.S. treasuries and, in some cases, other highly rated sovereign and private debt instruments, which may require the Funds to borrow eligible securities from a dealer to meet margin calls and raise the costs of cleared trades to the Funds. In addition, clearinghouses may not allow the Funds to portfolio-margin their positions, which may increase the Funds’ costs. Although standardized clearing for derivatives is intended to reduce counterparty risk (for instance, it may reduce the counterparty risk to the dealers to which the Funds would have been exposed under OTC derivatives), it does not eliminate risk. Derivatives clearing may also lead to concentration of counterparty risk, namely in the clearinghouse and the Funds’ FCM, subjecting the Funds to the risk that the assets of the FCM are insufficient to satisfy all of the FCM’s payment obligations, leading to a payment default. The failure of a clearinghouse or FCM could have a significant impact on the financial system. Even if a clearinghouse does not fail, large losses could force significant capital calls on FCMs during a financial crisis, which could lead FCMs to default and thus worsen the crisis. Swap Execution Facilities. In addition to the central clearing requirement, certain swap transactions are required to trade on regulated electronic platforms such as swap execution facilities (“SEFs”), which require the Funds to subject themselves to regulation by these venues and subject the Funds to the jurisdiction of the CFTC. The EU regulatory framework governing derivatives is set not only by EMIR but also a legislative package known as a recast of the Markets in Financial Instruments Directive (“MiFID II”). Among other things, MiFID II requires transactions in derivatives to be executed on regulated trading venues. The SEC has yet to finalize rules related to security-based swap execution facilities.

It is not clear whether these trading venues will benefit or impede liquidity, or how they will fare in times of market stress. Trading on these trading venues may increase the pricing discrepancy between assets and their hedges as products may not be able to be executed simultaneously, therefore increasing basis risk. It may also become relatively expensive for the Funds to obtain tailored swap products to hedge particular risks in their portfolios due to higher collateral requirements on bilateral transactions as a result of these regulations. Margin Requirements for Non-Cleared Swaps. Rules issued by U.S., EU and other regulators globally (the “Margin Rules”) impose various margin requirements on all swaps that are not centrally cleared, including the establishment of minimum amounts of initial margin that must be posted, and, in some cases, the mandatory segregation of initial margin with a third-party custodian. Although the Margin Rules are intended to increase the stability of the derivatives market, the overall amount of margin that the Investment Adviser, on behalf of the Funds, will be required to post to swap counterparties may increase by a material amount, and as a result the Funds may not be able to deploy capital as effectively. Additionally, to the extent the Funds are required to segregate initial margin with a third party custodian, additional costs will be incurred by the Funds. Necessity for Counterparty Trading Relationships; Counterparty Risk. The Investment Adviser, on behalf of the Funds, has established relationships to obtain financing, derivative intermediation and prime brokerage services that permit the Investment Adviser, on behalf of the Funds, to trade in any variety of markets or asset classes over time. However, there can be no assurance that the Investment Adviser, on behalf of the Funds, will be able to maintain such relationships or establish new relationships. An inability to establish or maintain such relationships could limit the Investment Adviser’s trading activities, create losses, preclude the Investment Adviser from engaging in certain transactions or prevent the Investment Adviser from trading at optimal rates and terms. Moreover, a disruption in the financing, derivative intermediation and prime brokerage services provided by any such relationships could have a significant impact on the Funds’ business due to the Funds’ reliance on such counterparties. The Investment Adviser, on behalf of the Funds, may effect transactions in the “over-the-counter” or “OTC” derivatives markets. The stability and liquidity of OTC derivatives transactions depends in large part on the creditworthiness of the parties to the transactions. In the OTC markets, the Investment Adviser, on behalf of the Funds, enters into a contract directly with dealer counterparties which may expose the Funds to the risk that a counterparty will not settle a transaction in accordance with its terms because of a solvency or liquidity problem with the counterparty. Delays in settlement may also result from disputes over the terms of the contract (whether or not bona fide). In addition, the Funds may have concentrated risk in a particular counterparty, which may mean that if such counterparty were to become insolvent or have a liquidity problem, losses would be greater than if the Funds had entered into contracts with multiple counterparties. Certain OTC derivative contracts require that the Funds post collateral. If there is a default by a counterparty, the Funds under most normal circumstances will have contractual remedies pursuant to the agreements related to the transaction. However, exercising such contractual rights may involve delays or costs which could result in the net asset value of the Funds being less than if the Funds had not entered

into the transaction. Furthermore, there is a risk that any of such counterparties could become insolvent and/or the subject of insolvency proceedings. In such case, the recovery of the Funds’ securities from such counterparty or the payment of claims therefor may be significantly delayed and the Funds may recover substantially less than the full value of the securities entrusted to such counterparty. Collateral that the Funds post to their counterparties that is not segregated with a third party custodian may not have the benefit of customer-protected “segregation” of such funds. In the event that a counterparty were to become insolvent, the Funds may become subject to the risk that they may not receive the return of their collateral or that the collateral may take some time to return. In addition, the Funds may use counterparties located in jurisdictions outside the United States. Such local counterparties usually are subject to laws and regulations in non-U.S. jurisdictions that are designed to protect customers in the event of their insolvency. However, the practical effect of these laws and their application to the Funds’ assets are subject to substantial limitations and uncertainties. Because of the range of possible factual scenarios involving the insolvency of a counterparty and the potentially large number of entities and jurisdictions that may be involved, it is impossible to generalize about the effect of such an insolvency on the Funds and their assets. Investors should assume that the insolvency of any such counterparty would result in significant delays in recovering the Funds’ securities from or the payment of claims therefor by such counterparty and a loss to the Funds, which could be material. Swap Agreements. The Investment Adviser, on behalf of the Funds, may enter into swap agreements and options on swap agreements (“swaptions”). These agreements can be individually negotiated and structured to include exposure to a variety of different types of investments, asset classes or market factors. The Investment Adviser, on behalf of the Funds, for instance, may enter into swap agreements with respect to interest rates, credit defaults, currencies, securities, indexes of securities and other assets or other measures of risk or return. Depending on their structure, swap agreements may increase or decrease the Funds’ exposure to, for example, equity securities, long-term or short-term interest rates, foreign currency values, credit spreads or other factors. Swap agreements can take many different forms and are known by a variety of names. The Funds are not limited to any particular form of swap agreement if consistent with the Funds’ investment objectives. Whether the Funds’ use of swap agreements or swaptions will be successful will depend on the Investment Adviser’s ability to select appropriate transactions for the Funds. Swap agreements can shift the Funds’ investment exposure from one type of investment to another (for example, a currency swap in which payments in a foreign currency are exchanged for payments in U.S. dollars), or can be utilized to obtain exposure to the performance of an investment on a leveraged basis (for example, a total return swap in which payments at a fixed or floating rate are exchanged for the total return, positive or negative, of a specified investment). The most significant factor in the performance of swap agreements is the change in the specific interest rate, currency, individual equity or index values or other factors that determine the amounts of payments due to and from the Funds. If the Funds default under a swap agreement that calls for payments by the Funds in connection with such default, the Funds must be prepared to make such payments when due. In addition, if a counterparty’s creditworthiness declines, the value of swap agreements with such counterparty can be expected to decline, potentially resulting in losses by the Funds. Swap

transactions may be highly illiquid and may increase or decrease the volatility of the Funds’ portfolio. Moreover, the Funds bear the risk of loss of the amount expected to be received under a swap agreement in the event of the default or insolvency of its counterparty. The Funds will also bear the risk of loss related to swap agreements, for example, for breaches of such agreements or the failure of the Funds to post or maintain required collateral. Many swap markets are relatively new and still developing. It is possible that developments in the swap markets, including potential government regulation, could adversely affect the Funds’ ability to terminate existing swap transactions or to realize amounts to be received under such transactions. Other Derivative Instruments. The Investment Adviser, on behalf of the Funds, may take advantage of opportunities with respect to certain other derivative instruments that are not presently contemplated for use or that are currently not available, but that may be developed, to the extent such opportunities are both consistent with the investment objectives of the Funds and legally permissible. Special risks may apply to instruments that are invested in by the Investment Adviser, on behalf of the Funds, in the future that cannot be determined at this time or until such instruments are developed or invested in by the Funds. Certain swaps, options and other derivative instruments may be subject to various types of risks, including market risk, liquidity risk, the risk of nonperformance by the counterparty, including risks relating to the financial soundness and creditworthiness of the counterparty, legal risk and operations risk. Call Options. The Funds may incur risks associated with the sale and purchase of call options. The seller (writer) of a call option which is covered (i.e., the writer holds the underlying security) assumes the risk of a decline in the market price of the underlying security below the purchase price of the underlying security less the premium received, and gives up the opportunity for gain on the underlying security above the exercise price of the option. The seller of an uncovered call option assumes the risk of a theoretically unlimited increase in the market price of the underlying security above the exercise price of the option. The securities necessary to satisfy the exercise of an uncovered call option may be unavailable for purchase, except at much higher prices, thereby reducing or eliminating the value of the premium. Purchasing securities to cover the exercise of an uncovered call option can cause the price of the securities to increase, thereby exacerbating the loss. The buyer of a call option assumes the risk of losing its entire premium investment in the call option. The Funds currently do not intend to sell uncovered call options. Put Options. The Funds may incur risks associated with the sale and purchase of put options. The seller (writer) of a put option which is covered (i.e., the writer has a short position in the underlying security) assumes the risk of an increase in the market price of the underlying security above the sales price (in establishing the short position) of the underlying security plus the premium received, and gives up the opportunity for gain on the underlying security if the market price falls below the exercise price of the option. The seller of an uncovered put option assumes the risk of a decline in the market price of the underlying security below the exercise price of the option. The buyer of a put option assumes the risk of losing its entire investment in the put option. The Funds currently do not intend to sell uncovered put options. Futures Contracts. The Investment Adviser, on behalf of the Funds, may trade in futures contracts (and options on futures). The value of futures depends upon the price of the financial instruments, such as commodities, underlying them. The prices of futures are

highly volatile, and price movements of futures contracts can be influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, and national and international political and economic events and policies. In addition, investments in futures are also subject to the risk of the failure of any of the exchanges on which the Funds’ positions trade or of their clearing houses or counterparties. Futures positions may be illiquid because, for example, most U.S. commodity exchanges limit fluctuations in certain futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits”. Under such daily limits, during a single trading day no trades may be executed at prices beyond the daily limits. Once the price of a contract for a particular future has increased or decreased by an amount equal to the daily limit, positions in the future can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. Futures contract prices on various commodities or financial instruments occasionally have moved the daily limit for several consecutive days with little or no trading. Similar occurrences could prevent the Investment Adviser, on behalf of the Funds, from promptly liquidating unfavorable positions and subject the Funds to substantial losses. In addition, the Investment Adviser, on behalf of the Funds, may not be able to execute futures contract trades at favorable prices if trading volume in such contracts is low. It is also possible that an exchange or a regulator (such as the SEC or the CFTC) may suspend trading in a particular contract, order immediate liquidation and settlement of a particular contract or order that trading in a particular contract be conducted for liquidation only. In addition, the CFTC and various exchanges impose speculative position limits on the number of positions that may be held in particular commodities. Trading in commodity futures contracts and options are highly specialized activities that may entail greater than ordinary investment or trading risks. Furthermore, low margin or premiums normally required in such trading may provide a large amount of leverage, and a relatively small change in the price of a security or contract can produce a disproportionately larger profit or loss. Non-U.S. Investments. The Investment Adviser, on behalf of the Funds, may take long and short positions in securities of non-U.S. financial institutions which are traded in non-U.S. markets. Such investments involve certain considerations not usually associated with investing in securities of U.S. companies or U.S. markets, including: political and economic considerations, such as greater risks of expropriation and nationalization, confiscatory taxation, the potential difficulty of repatriating funds, general social, political and economic instability and adverse diplomatic developments; the possibility of imposition of withholding or other taxes on dividends, interest, capital gain or other income; the small size of the securities markets in such countries and the low volume of trading, resulting in potential lack of liquidity and in price volatility; fluctuations in the rate of exchange between currencies and costs associated with currency conversion; and certain government policies that may restrict the portfolio’s investment opportunities. In addition, accounting and financial reporting standards that prevail in such countries generally are not equivalent to U.S. standards and, consequently, less information is available to investors in companies located in such countries than is available to investors in companies located in the U.S. There is also less regulation, generally, of the securities markets in such countries than there is in the U.S. Diversification. Since the Funds’ portfolios will be concentrated in the financial services industry and the portfolio may not be widely diversified among issuers, the

investment portfolio of the Funds may be subject to more rapid change in value than would be the case if the Funds were required to maintain a wide diversification among companies or industry groups. Fixed Income Securities. The Investment Adviser, on behalf of the Funds, may invest in bonds or other fixed income securities, including, without limitation, bonds, notes and debentures issued by corporations; debt securities issued or guaranteed by the U.S. Government or one of its agencies or instrumentalities; and commercial paper. Fixed income securities pay fixed, variable or floating rates of interest. The value of fixed income securities in which the Funds invest will change in response to fluctuations in interest rates. In addition, the value of certain fixed-income securities can fluctuate in response to perceptions of creditworthiness, political stability or soundness of economic policies. Fixed income securities are subject to the risk of the issuer’s inability to meet principal and interest payments on its obligations (i.e., credit risk) and are subject to price volatility due to such factors as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity (i.e., market risk). Hedging Transactions. The Investment Adviser, on behalf of the Funds, may utilize financial instruments, both for investment purposes and for risk management purposes in order to: (i) protect against possible changes in the market value of the Funds’ investment portfolios resulting from fluctuations in the securities markets and changes in interest rates; (ii) protect the Funds’ unrealized gains in the value of the Funds’ investment portfolios; (iii) facilitate the sale of any such investments; (iv) enhance or preserve returns, spreads or gains on any investment in the Funds’ portfolios; (v) hedge against a directional trade, interest rate, credit or currency exchange rate on any of the Funds’ liabilities or assets; (vi) protect against any increase in the price of any securities the Investment Adviser, on behalf of the Funds, anticipates purchasing at a later date; or (vii) for any other reason that the Investment Adviser deems appropriate. The success of the Investment Adviser’s hedging strategy will depend, in part, upon the Investment Adviser’s ability to correctly assess the degree of correlation between the performance of the instruments used in the hedging strategy and the performance of the portfolio investments being hedged. Since the characteristics of many securities change as markets change or time passes, the success of the Funds’ hedging strategies will also be subject to the Investment Adviser’s ability to continually recalculate, readjust and execute hedges in an efficient and timely manner. While the Investment Adviser, on behalf of the Funds, may enter into hedging transactions to seek to reduce risk, such transactions may result in a poorer overall performance for the Funds than if it had not engaged in such hedging transactions. For a variety of reasons, the Investment Adviser may not seek to establish a perfect correlation between the hedging instruments utilized and the portfolio holdings being hedged. Such an imperfect correlation may prevent the Funds from achieving the intended hedge or expose the Funds to risk of loss. The Investment Adviser may not hedge against a particular risk because it does not regard the probability of the risk occurring to be sufficiently high as to justify the cost of the hedge, or because it does not foresee the occurrence of the risk. The successful utilization of hedging and risk management transactions requires skills complementary to those needed in the selection of the Funds’ portfolio holdings. Banking Relationship. The Funds will hold cash and other assets in accounts with one or more banks, custodians or depository or credit institutions (collectively, “Banking

Institutions”), which may include both U.S. and non-U.S. Banking Institutions from time to time. The Funds may also enter into credit facilities and have other relationships with Banking Institutions as contemplated elsewhere in this Brochure and in a Fund’s offering documents. The distress, impairment, or failure of, or a lack of investor or customer confidence in, any of such Banking Institutions may limit the ability of the Investment Adviser, on behalf of a Fund, to access, transfer or otherwise deal with its assets, draw upon a credit facility, or rely upon any of such other relationships, in a timely manner or at all, and may result in other market volatility and disruption, including by affecting other Banking Institutions. All of the foregoing could have a negative impact on the Funds. For example, in such a scenario, the Funds could be forced to delay or forgo an investment or a distribution, including in connection with a withdrawal, or could be forced to generate cash to fund such investment or distribution from other sources (including by disposing of other investments or making other borrowings) in a manner that it would not have otherwise considered desirable. Furthermore, in the event of the failure of a Banking Institution, access to a depository account with that institution could be restricted and FDIC protection may not be available for balances in excess of amounts insured by the FDIC (and similar considerations may apply to Banking Institutions in other jurisdictions not subject to FDIC protection). In such a case, the Funds may not recover all or a portion of such excess uninsured amounts and could instead have an unsecured or other type of impaired claim against the Banking Institution (alongside other unsecured or impaired creditors). The Investment Adviser does not expect to be in a position to reliably identify in advance all potential solvency or stress concerns with respect to the Funds’ banking relationships, and there can be no assurance that the Investment Adviser will be able to easily establish alternative relationships with and transfer assets to other Banking Institutions in the event a Banking Institution comes under stress or fails. Cybersecurity Risk. As part of its business, the Investment Adviser processes, stores and transmits large amounts of electronic information, including information relating to the transactions of the Funds and personally identifiable information of the investors. Similarly, service providers of the Investment Adviser or the Funds, especially the administrator, may process, store and transmit such information. The Investment Adviser has procedures and systems in place to protect such information and prevent data loss and security breaches. However, such measures cannot provide absolute security. The techniques used to obtain unauthorized access to data, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time. Hardware or software acquired from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Network connected services provided by third parties to the Investment Adviser may be susceptible to compromise, leading to a breach of the Investment Adviser’s network. The Investment Adviser’s systems or facilities may be susceptible to employee error or malfeasance, government surveillance, or other security threats. On-line services provided by the Investment Adviser to the investors may also be susceptible to compromise. Breach of the Investment Adviser’s information systems may cause information relating to the transactions of the Funds and personally identifiable information of the investors to be lost or improperly accessed, used or disclosed. The service providers of the Investment Adviser and the Funds are subject to the same electronic information security threats as the Investment Adviser. If a service provider fails to adopt or adhere to adequate data security policies, or in the event of a breach of its networks, information relating to the transactions of the Funds and personally

identifiable information of the investors may be lost or improperly accessed, used or disclosed. The loss or improper access, use or disclosure of the Investment Adviser’s or the Fund’s proprietary information may cause the Investment Adviser or the Funds to suffer, among other things, financial loss, the disruption of its business, liability to third parties, regulatory intervention or reputational damage. Any of the foregoing events could have a material adverse effect on the Funds and the investors’ investments therein. Assumption of Catastrophe Risks. The Funds may be subject to the risk of loss arising from direct or indirect exposure to various catastrophic events, including the following: hurricanes, earthquakes and other natural disasters; war, terrorism and other armed conflicts; social or political unrest; cyberterrorism; major or prolonged power outages or network interruptions; and public health crises, including infectious disease outbreaks, epidemics and pandemics. To the extent that any such event occurs and has a material effect on global financial markets or specific markets or issuers in which the Funds invest (or has a material negative impact on the operations of the Investment Adviser or its service providers), the risks of loss can be substantial and could have a material adverse effect on the Funds and the investors’ investments therein. Furthermore, any such event may also adversely impact one or more individual investor’s financial condition, which could result in substantial withdrawal requests by such investor as a result of their individual liquidity situations and irrespective of the Funds’ performance. Climate Change-Related Risks. The environmental effects of climate change, including rising temperatures, extreme weather, fires, flooding, erratic weather fluctuations, agricultural failures and displacement and destabilization of human populations, could have materially adverse effects on the investments held by the Funds. The Investment Adviser believes that such risks may increase over time, although the time period over which these consequences might unfold is difficult to predict. In addition to the physical, economic and geo-political risks associated with climate change, there are transition risks. The willingness of certain governments, industries and businesses, especially those that profit from, or have a reliance on, fossil fuels, to adapt to climate change or transition to sustainable practices may also adversely affect the Funds’ investments. Regulatory changes and divestment movements tied to concerns about climate change could adversely affect the value of certain industries whose activities or products are seen as accelerating climate change, or ill-positioned in light of the economic and social demands imposed by climate change. In recent years, certain investors have incorporated the business risks of climate change and the adequacy of companies’ responses to climate change as part of their investment theses. These shifts in investing priorities may result in adverse effects on the trading price of investments if investors determine that a company has not made sufficient progress on climate change and environmental sustainability matters whether or not climate change proves to be as severe as predicted or preventable. The values of the Funds’ investments whose performance is linked to assets and revenue streams that are exposed to climate change risk, may readily be affected by both long-term, systemic effects of climate change, as well as severe environmental events whose occurrence is inherently unpredictable.

and responsibility must be avoided; employees must not take any inappropriate advantage of their positions; information concerning the identity of securities and financial circumstances of the Funds, including the Funds’ investors, must be kept confidential; and independence in the investment decision-making process must be maintained at all times. Investors in the Funds may request a copy of the Code by contacting the Investment Adviser at the address or telephone number listed on the first page of this document. The Investment Adviser also maintains insider trading policies, procedures and protection of material, non-public information about securities/investment recommendations (the “Insider Trading Policies”) that are designed to prevent the misuse of material, non-public information. The Investment Adviser’s Insider Trading Policies prohibit the Investment Adviser and its personnel from trading for the Funds or themselves, or recommend trading, in securities of a company while in possession of material, non-public information (“Inside Information”) about the company, and from disclosing such information to any person not entitled to receive it. By reason of its various activities, the Investment Adviser may have access to Inside Information or be restricted from effecting transactions in certain investments that might otherwise have been initiated. The Investment Adviser has designed and implemented policies and procedures reasonably designed to shield its investment professionals in most cases from access to Inside Information so that investment decisions may be made on the basis of public information only. Among other things, such policies seek to control and monitor the flow of Inside Information to and within the Investment Adviser, as well as prevent trading based on Inside Information. Accordingly, the Investment Adviser may not have access to Inside Information that other market participants or counterparties are eligible to receive. Notwithstanding such policies and procedures, there may be certain cases where the Investment Adviser either may receive Inside Information due to its various activities on behalf of itself or the Funds or may be restricted in acting for the Funds, resulting in limited liquidity or using such information for the benefit of certain clients in specific securities. The Investment Adviser seeks to minimize those cases whenever possible, consistent with applicable law and its Insider Trading Policies, but there can be no assurance that such efforts will be successful and that such restrictions will not occur. The Investment Adviser’s personnel are required to certify to their compliance with the Code, including the Insider Trading Policies, on a periodic basis.

Securities that the Investment Adviser or a Related Person Has a Material Financial Interest. Cross Trades If the Investment Adviser determines that it would be in the best interests of the applicable Funds to transfer a security from one Fund to another (each such transfer, a “Cross Trade”) for any reason, including, without limitation, tax purposes, liquidity purposes, to rebalance the Funds’ respective portfolios, or to reduce transaction costs that may arise in an open market transaction, the Investment Adviser will take steps to ensure that the transaction is consistent with the duty to obtain best execution for each of those Funds. By its subscription to a Fund, each investor is deemed to have consented to such Cross Trades. If the Investment Adviser were to execute a Cross Trade, it would generally execute such Cross Trade with the assistance of a broker-dealer who executes and books the transaction at the close of the market on the day of the transaction. Alternatively, a Cross Trade between two Funds may occur as an “internal cross”, where the Investment Adviser instructs the relevant custodian for the Funds to book the transaction at the price determined in accordance with the Investment Adviser’s valuation policy. If the Investment Adviser effects a Cross Trade, the Investment Adviser will not receive any fee in connection with the completion of the Cross Trade. In all cases, the Investment Adviser will only be acting in an agency basis and not as principal. Prior to effecting any Cross Trade, the Chief Compliance Officer, in consultation with outside counsel, will review and approve the proposed Cross Trade. Principal Transactions To the extent that Cross Trades may be viewed as principal transactions due to the ownership interest in a Fund by the Investment Adviser or its personnel, the Investment Adviser will comply with the requirements of Section 206(3) of the Investment Advisers Act of 1940, as amended (the “Advisers Act”). It can be challenging to determine whether a transaction should be considered a principal transaction and how the disclosure and consent process should be addressed. Accordingly, the Investment Adviser’s senior trader must identify any potential principal transaction, including any Cross Trade between two Funds, prior to effecting the transaction and must contact the Chief Compliance Officer prior to effecting the trade. The Chief Compliance Officer, in consultation with outside counsel, will determine whether or not the trade would constitute a principal transaction that is subject to the requirements of Section 206(3), and if so, that all required notice and consent requirements of the Advisers Act are satisfied. The Chief Compliance Officer will then inform the senior trader whether or not to proceed with the trade. As a general matter, the Investment Adviser will not act as a principal in a trade with any Fund, but if it does, it will only do so in a matter consistent with its fiduciary obligations to the Fund and the requirements of the Code. Investing in Securities that the Investment Adviser or a Related Person Recommends to Clients. The Code also addresses personal trading by the employees of the Investment Adviser. In particular, the Code requires all of the Investment Adviser’s employees to: (1) submit to the Chief Compliance Officer, or a designee, initial reports, annual reports and

transaction reports disclosing all personal securities holdings and (2) obtain pre-approval before making any personal investments in any covered security. The Code also contains specific restrictions on short term trading in mutual funds. Employees of the Investment Adviser will be required to acknowledge that they have received the Code and each subsequent amendment, that they comprehend the Code, and that they have complied and will comply with the Code. Investment holdings or transactions in publicly-traded covered securities issued by business entities whose primary operations are in the bank, thrift or financial REIT industries are not permitted in the personal accounts of the Investment Adviser’s employees, except in cases in which these holdings were initiated through a previous private or subscription offering. Employees with prohibited security holdings in the financial sectors named above will have 60 calendar days after becoming employees to liquidate such holdings, subject to prior trading approval from the Chief Compliance Officer.

Brokers and dealers may provide other services that are beneficial to the Investment Adviser and/or certain Funds, but not beneficial to all Funds. Subject to best execution, in selecting brokers and dealers (including prime brokers) to execute transactions, provide financing and securities on loan, hold cash and short balances and provide other services, the Investment Adviser may consider, among other things, the following: quality of execution - accurate and timely execution, clearance and error/dispute resolution; reputation, financial strength and stability; block trading and block positioning capabilities; willingness to execute difficult transactions; willingness and ability to commit capital; quality of facilities; access to underwritten offerings and secondary markets; ongoing reliability; overall costs of a trade (i.e., net price paid or received) including commissions, mark-ups, mark-downs or spreads in the context of the Investment Adviser’s knowledge of negotiated commission rates currently available and other current transaction costs; nature of the security and the available market makers; desired timing of the transaction and size of trade; confidentiality of trading activity; market intelligence regarding trading activity; and the receipt of brokerage or research services. In connection with fixed income trades, the Investment Adviser will select broker-dealers for principal fixed income trades, using the factors listed above, excluding agency commissions. Spreads, mark-ups and mark-downs will be evaluated at the time of trade in the context of the overall price of the particular transaction. Accordingly, the commission rates and other transaction costs, (which may include dealer markups and markdowns) charged to the Funds by brokers or dealers in the foregoing circumstances may be higher than those charged by other brokers or dealers who may not offer such services. The Investment Adviser need not solicit competitive bids and does not have an obligation to seek the lowest available commissions or other transaction costs. Generally, neither the Investment Adviser nor the Funds separately compensate any broker or dealer for any of these other services. If the Investment Adviser decides, based on the factors set forth above, to execute OTC transactions on an agency basis through Electronic Communications Networks (“ECNs”), it will also consider the following factors when choosing to use one ECN over another: the ease of use, the flexibility of the ECN compared to other ECNs, and the level of care and attention that will be given to smaller orders.

The Investment Adviser maintains policies and procedures to review the quality of executions, including periodic reviews and meetings by its investment professionals. Research and Other Soft Dollar Benefits. place.

The Investment Adviser currently has no written soft dollar arrangements in

From time to time, the Investment Adviser may pay a broker-dealer commissions (or markups or markdowns with respect to certain types of riskless principal transaction) for effecting Fund transactions in excess of that which another broker-dealer might have charged for effecting the transaction in recognition of the value of the brokerage and research services provided by the broker-dealer. The Investment Adviser will effect such transactions, and receive such brokerage and research services, only to the extent that they fall within the safe harbor provided by Section 28(e) of the Securities Exchange Act of 1934, as amended. The Investment Adviser believes it is important to its investment decisionmaking processes to have access to independent research. Also, consistent with Section 28(e), research products or services obtained with “soft dollars” generated by one or more Funds may be used by the Investment Adviser to service one or more other Funds, including clients that may not have paid for the soft dollar benefits. The Investment Adviser does not seek to allocate soft dollar benefits to client accounts in proportion to the soft dollar credits the client accounts generate. Where a product or service obtained with soft dollars provides both research and non-research assistance to the Investment Adviser (i.e., a “mixed use” item), the Investment Adviser will make a reasonable allocation of the cost which may be paid for with soft dollars. In making good faith allocations of costs between administrative benefits and research and brokerage services, a conflict of interest may exist by reason of the Investment Adviser’s allocation of the costs of such benefits and services between those that primarily benefit the Investment Adviser and those that primarily benefit the Funds. When the Investment Adviser uses Fund brokerage commissions (or markups or markdowns) to obtain research or other products or services, the Investment Adviser receives a benefit because it does not have to produce or pay for such products or services. The Investment Adviser may have an incentive to select or recommend a broker-dealer based on the Investment Adviser’s interest in receiving research or other products or services, rather than on a Fund’s interest in receiving most favorable execution. Within the last fiscal year, the Investment Adviser or its related persons received the following types of products and services from broker dealers where the client pays brokerage commissions (or markups or markdowns): research services provided by broker-dealers including research reports on particular industries and companies, economic surveys and analyses, recommendations as to specific securities, quantitative analytics relevant to stock selection and risk control, and other products and services providing lawful and appropriate assistance to the Investment Adviser in the performance of its investment decision-making responsibilities. Such research services were received primarily in the form of written reports, telephone contacts and personal meetings with security analysts. In addition, such research services are generally provided in the form of access to various computer-generated data, broker-sponsored events, as well as meetings arranged with corporate and industry spokespersons, economists, academicians and government

representatives. In some cases, research services were generated by third parties but were provided to the Investment Adviser by or through broker-dealers. At least annually, the Investment Adviser considers the amount and nature of research and research services provided by broker-dealers, as well as the extent to which such services are relied upon, and attempts to allocate a portion of the brokerage business of its clients on the basis of that consideration. Broker-dealers sometimes suggest a level of business they would like to receive in return for the various products and services they provide. Actual brokerage business received by any broker-dealer may be less than the suggested allocation, but can (and often does) exceed the suggested level, because total brokerage is allocated on the basis of all of the considerations described above. In no case will the Investment Adviser make binding commitments as to the level of brokerage commissions it will allocate to a broker-dealer, neither will it commit to pay cash if any informal targets are not met. A broker-dealer is not excluded from receiving business because it has not been identified as providing research products or services. Brokerage for Client Referrals. From time to time, brokers (including Goldman, Sachs & Co., the Funds’ prime broker (“Prime Broker”)) may assist the Funds in raising additional funds from investors, and representatives of the Investment Adviser may speak at conferences and programs sponsored by prime brokers for investors interested in investing in hedge funds. Through such “capital introduction” events, prospective investors in the Funds would have the opportunity to meet with the Investment Adviser. Neither the Investment Adviser, an affiliate, nor the Funds will compensate any broker for organizing such events or for any investments ultimately made by prospective investors attending such events. While such services provided by a broker may influence the Investment Adviser in deciding whether to use such broker in connection with brokerage, financing and other activities of the Funds, the Investment Adviser will not commit to allocate a particular amount of brokerage to a broker in any such situation. Directed Brokerage. The Investment Adviser does not recommend, request or require that a client direct the Investment Adviser to execute transactions through a specified broker-dealer. Allocations of Transactions and Aggregations of Trade. The Investment Adviser may at times determine that certain investments may be suitable for acquisition for more than one Fund. Investment capacity available to one or more Funds may be limited. Consequently, the Investment Adviser is permitted by the terms of a Fund’s offering documents, to allocate such limited availability among one or more Funds, even though the Investment Adviser may have a conflict of interest in doing so, such as receiving a higher fee with respect to one Fund over another, thereby incentivizing the Investment Adviser to allocate more profitable investments to the higher fee paying Fund. In making its allocation decision, the Investment Adviser will consider numerous factors, including, without limitation, the risk exposure and portfolio mix of a particular Fund, the size of the Fund’s portfolio and the cash available to the Fund at the time of the investment.

In managing the Funds, the Investment Adviser will generally aggregate trades in order to obtain best execution for all its Funds. Aggregation of trades generally arises when the Investment Adviser has determined to purchase or sell a particular security based on each Fund’s investment objective and other factors. The Investment Adviser may aggregate orders when doing so will result in better overall prices for all Funds whose orders are being aggregated. The Investment Adviser will generally execute Fund transactions on an aggregated basis when the Investment Adviser believes that to do so will allow it to obtain best execution for the Funds and to negotiate more favorable commission rates or other transaction costs that might have otherwise been paid had such orders been placed independently. When aggregating orders all Funds will be treated in a fair and equitable manner. The following procedures will apply to all aggregated transactions: •

Obtain Best Execution. The Investment Adviser will not aggregate orders unless aggregation is consistent with its duty to obtain best execution for the Funds and the terms of the investment guidelines and restrictions of each Fund for which trades are being aggregated.

•

Fair Treatment. No Fund will be favored over any other Fund; each Fund that participates in an aggregated order will participate at the average price for all of the transactions in that security on a given business day for all Funds, with transaction costs shared pro rata based on each Fund’s participation in the transaction.

•

Submission of Input to Prime Broker. In connection with an aggregated order, the Investment Adviser will provide input to the Prime Broker regarding the allocation to be made between the Funds.

•

Partial Fills. On occasion, the Investment Adviser will not be able to purchase or sell all of the securities ordered as part of an aggregated order in a single day. If the order is partially filled, it will generally be allocated pro rata in proportion to the size of the orders placed for each Fund to the extent practicable based on the Investment Adviser’s allocation guidelines.

•

Deviations from Allocation Policy. Notwithstanding the foregoing, an aggregated order may be allocated on a basis different from the Investment Adviser’s allocation guidelines if all Funds receive fair and equitable treatment and only with the prior approval of the Chief Compliance Officer. Reasons for allocating on a basis different from that specified in the Investment Adviser’s allocation guidelines include: a Fund’s investment guidelines and restrictions, available cash, liquidity requirements, tax or legal reasons, and to avoid odd-lots or in cases when a pro rata allocation would result in a de minimis allocation to one or more Funds.

•

Records Maintenance. The Investment Adviser’s books and records will separately reflect, for each Fund, all aggregated orders in which the Fund participated and all securities held by, and bought and sold for, that Fund.

•

Safeguarding Portfolio Assets. Each Fund’s assets will be deposited with one or more qualified custodians, as required by the rules promulgated under the Advisers Act, and the Fund’s assets will not be comingled with other assets any longer than is necessary to settle the purchase or sale in question; Cash or securities held collectively for Funds will be delivered to the applicable qualified custodian as soon as practicable following settlement.

•

No Additional Compensation. The Investment Adviser will receive no additional compensation of any kind as a result of an aggregated order.

•

Provide Individual Advice. Individual investment advice and treatment will be accorded to each Fund.

With respect to allocations of limited investment opportunities, such as privately placed securities, the Investment Adviser will determine which Funds are eligible to participate in those opportunities. Limited investment opportunities will generally be allocated among all eligible Funds in proportion to their relative capital balances in accordance with the procedures set forth above. Funds without sufficient available capital will not participate. In certain circumstances, the Investment Adviser may give added weight to those Funds whose investment programs are responsible for obtaining the investment opportunity when allocating limited investment opportunities.

The timing of the review could be daily or weekly (e.g., in the case of a Fund’s poor performance, change in leverage or style drift) or monthly or quarterly (e.g., in the case of changes to service providers or offering documents of a Fund). The Investment Adviser will also monitor each Fund to ensure such Fund complies with its investment objective and guidelines. Content and Frequency of Account Reports to Clients. Investors in the Funds receive, either electronically via e-mail or through a secure internet delivery site, a monthly statement from the administrator and a quarterly letter from the Investment Adviser documenting the performance of their Fund, although, if permitted by law, the Investment Adviser may provide certain investors with information on a more frequent basis if agreed to by the Investment Adviser. In addition, the Investment Adviser issues investors tax reports and audited financial statements concerning their respective Funds within 120 days of the end of each Fund’s fiscal year.

Funds and investors are urged to carefully review Client Statements that are received from the administrator and to compare such Client Statements with any statements or representations of performance results that are received directly from the Investment Adviser or its affiliates. Annual audited financial statements, prepared in accordance with the U.S. generally accepted accounting principles, are sent to investors in each Fund within 120 days after such Fund’s calendar year end.

To meet obligations under this rule, the Investment Adviser has adopted written Proxy Voting Policies and Procedures, which are as follows: The Investment Adviser has retained the services of Institutional Shareholder Services, Inc. (“ISS”) to vote proxies for securities in the Funds. The CEO, any of the Portfolio Managers or the Chief Compliance Officer may override any vote intended to be cast by ISS for such securities when it deems such an act to be in the best interest of a Fund. A Portfolio Manager will review the proxy votes cast by ISS with respect to the Funds quarterly. These policies and procedures are reasonably designed to ensure that the Investment Adviser votes proxies in the best interest of the Funds and addresses how the Investment Adviser will resolve any conflict of interest that may arise when voting proxies. The Chief Compliance Officer is responsible for ensuring that the Investment Adviser provides investors with (i) a description of Investment Adviser’s proxy voting policies and procedures and how investors may, upon request, obtain a copy of the Investment Adviser’s proxy voting policies and procedures; and (ii) instructions about how investors may obtain information from the Investment Adviser on how the Investment Adviser voted with respect to their Fund’s securities. The Chief Compliance Officer is responsible for responding to requests from investors regarding how the Investment Adviser voted proxies. Clients and investors in the Funds may request a copy of the policies, as well as the proxy voting record for their respective Fund by contacting the Investment Adviser at the address or telephone number listed on the first page of this document. Further, clients and investors in the Funds can find more information about the Investment Adviser’s proxy votes on Form N-PX as filed with the Investment Adviser.