Meritage Group LP: investment adviser

Private Investment Funds Meritage provides discretionary investment management services to private investment funds for which Meritage serves as investment manager and/or investment general partner (each, a “Private Investment Fund” or a “Client” and collectively, the “Private Investment Funds” or the “Clients”). The Private Investment Funds are exempt from registration under the Investment Company Act of 1940, as amended (the “Investment Company Act”). Meritage pursues investment strategies on behalf of the Private Investment Funds that are generally fundamentally-oriented and longer-term in their investment horizon. Such investments are generally in the form of public and private equity, credit, and real estate. As appropriate, positions may be both long and short, and investments may be made both directly and/or indirectly with external managers (“External Managers”). Meritage has broad discretion to invest in other investment instruments and employ other strategies in pursuing the objectives of the Private Investment Funds. Meritage manages the Private Investment Funds pursuant to the investment objectives and restrictions of each such Private Investment Fund. The investment objective and strategy for each Private Investment Fund is described in its respective offering materials. Please see Item 8 for a more detailed description of the strategies pursued by the Private Investment Funds. Ability to Tailor Services and Impose Restrictions Meritage provides investment management services directly to the Private Investment Funds as pooled investment vehicles based on the specific investment objectives and strategies of the Private Investment Funds themselves and not individually to investors in the Private Investment Funds (the “Investors”). Therefore, Meritage does not tailor its advisory services to the individual needs of any of the Investors. The Investors generally may not impose restrictions on investing in certain securities or types of securities.

Management fees are calculated as of the first day or business day of each calendar month or calendar quarter, as the case may be. Fees for each Private Investment Fund are set forth in the offering documents for each such fund, which are available to Investors. Certain Investors, including but not limited to supervised persons of Meritage (collectively, “Supervised Persons”), may be eligible for fee structures that differ from, and are more beneficial than, the standard fee structure, depending on, among other factors, the relationship between Meritage and the Investor. Management fees are generally not refunded to Investors if withdrawals are made prior to the end of a calendar month. In the event Meritage and/or its affiliates receive certain fees from portfolio investments in connection with the purchase, monitoring or disposition of investments or in connection with unconsummated transactions that relate to certain Private Investment Funds’ share of actual or prospective investments, as determined by Meritage in its sole discretion, such fees may be applied to reduce the management fee payable with respect to such Private Investment Funds. As described in Item 6 below, Investors in some of the Private Investment Funds also bear performancebased compensation/allocations. Other Fees and Expenses The Private Investment Funds bear, both directly or indirectly (i) all costs and expenses associated with the offering of interests in such funds, including, without limitation, expenses attributable to negotiating side letter agreements with investors and compliance with anti-money laundering laws and know-your-customer requirements in connection with the offer and sale of such interests; (ii) all transaction costs and investmentrelated expenses incurred in connection with such funds’ investment and trading activities, including any investments that are not ultimately consummated (including with respect to unconsummated transactions intended to involve co-investors and expenses that might have been assumed by such co-investors had such transactions been consummated), including but not limited to brokerage and other execution costs, clearing, settlement, bank loan servicing and custodial expenses, order management system expenses, research expenses, due diligence expenses, research related travel and associated expenses (including the cost of business/first class travel), as well as the costs and fees of investment bankers, legal counsel, finders, any independent accountants or other experts or consultants (including, but not limited to, persons with particular experience or expertise and former, existing or prospective executives of operating and/or portfolio companies, other industry executives and industry experts or other professionals) engaged by Meritage in connection with investment-related research and/or specific transactions, including fees and expenses of expert networks, and expenses including, but not limited to, legal expenses related to investment-related compliance and regulatory issues incurred by Meritage or its affiliates (subject to any limitations, restrictions or conditions imposed by applicable law or regulation); (iii) for Private Investment Funds that are feeders in a master-feeder structure, their proportionate share of the fees, expenses and costs

associated with the operation of the master fund; (iv) subject to any limitations, restrictions or conditions imposed by applicable law or regulation, all expenses incurred in connection with national, state, provincial or local (U.S. or non-U.S.) government registrations and regulatory filings and reports of such Private Investment Funds (including, but not limited to, Form PF, Form D and blue sky filings); (v) costs and expenses related to investments in investment pools managed by External Managers (“Investment Pools”) and managed accounts, which may include subscription or redemption charges, the Private Investment Fund’s proportionate share of the expenses of the External Managers and management and performance charges payable to External Managers, which will typically include a management fee as a fixed percentage of the assets allocated to each External Manager and a performance-based fee or allocation as a percentage of the net increase in the net asset value of such assets; (vi) expenses, including but not limited to legal expenses incurred by the Private Investment Funds or Meritage or any of their respective affiliates in connection with any regulatory inquiry, investigation, or audit or any judicial or administrative proceeding, including but not limited to discovery requests, or arbitration, mediation or similar proceedings arising out of an investment or class of investments held or proposed to be held by the Private Investment Funds (in each case, subject to any limitations, restrictions or conditions imposed by applicable law or regulation); (vii) any fees, expenses and costs payable to External Managers arising out of investments by the Private Investment Funds in Investment Pools and in managed accounts on their own behalf, as well as the Private Investment Funds’ proportionate share of the fees, expenses and costs associated with the formation and operation of the Private Investment Funds and any other investment vehicle formed by Meritage to facilitate investments by the Private Investment Funds; (viii) any fees, expenses and costs payable to External Managers arising out of the liquidation of investments by the Private Investment Funds in Investment Pools and managed accounts on their own behalf, as well as such Private Investment Funds’ proportionate share of the fees, expenses and costs associated with the dissolution of investment vehicles formed by Meritage to facilitate the Private Investment Funds’ investments; (ix) any banking fees, interest, fees and costs of borrowings by or related to the Private Investment Funds; (x) exchange fees; (xi) routine operational costs such as legal, accounting, bookkeeping, auditing, consulting and other professional expenses (including expenses of any registered broker-dealer engaged to provide licensing and regulatory supervision of certain employees of Meritage or an affiliate to facilitate provision of certain capital raising services for “seed capital” or strategic investments), administration (including fees of any third-party administrator to the Private Investment Funds) and tax preparation expenses, the costs of portfolio management services and software, all taxes (if any), interest costs, if any, related to payments to Investors; (xii) costs and expenses related to the valuation of the Private Investment Funds and communications and reporting with Investors, including, but not limited to, valuation, appraisal, analysis and accounting expenses (including costs associated with any third-party independent valuation, data aggregation and warehousing or security master or risk analysis provider to the Private Investment Funds), recordkeeping, administration (including costs associated with any third-party administrator to the Private Investment Funds), fees and expenses relating to investor meetings and conferences, expenses of preparing, publishing, duplicating and transmitting (electronically or otherwise) reports and analysis, tax information and notices to investors and regulatory authorities and expenses for specialized administrative services; (xiii) third-party and out-of-pocket research and market data expenses, as well as Bloomberg and other services including Factset, Thomson. Reuters and S&P Global, and related hardware and software; cost of insurance, if any, incurred in connection with the business of the Private Investment Funds (including, without limitation, acquiring and maintaining D&O and/or E&O insurance for Meritage and/or its directors, shareholders, partners, members, officers, employees, affiliates and/or agents); (xiv) fees and expenses incurred in connection with complying with or monitoring compliance with or amending (including pursuant to “most favored nations” provisions) any side letters or other written agreements between a Private Investment Fund and one or more Investors; (xv) expenses of a Conflicts Reviewer (as hereinafter defined) and (xvi) extraordinary expenses (e.g., litigation costs and indemnification obligations), if any.

Meritage may, in its sole discretion, retain (or cause a Private Investment Fund to retain) the services of one or more or a group of persons with particular experience or expertise as special advisors, as determined by Meritage in its sole discretion (each, a “Special Advisor”). Special Advisors may include former, existing or prospective executives of portfolio companies; industry executives or advisors; research consultants; sourcing consultants; operating executives; subject matter, industry or regulatory experts; other persons acting in a similar capacity; or former officers or employees of Meritage or its affiliates, and the scope of the services to be provided by any Special Advisor may include advice with respect to existing investments and/or potential investments. Unless determined otherwise by Meritage in its sole discretion, any and all compensation paid to Special Advisors will be borne or paid by the Private Investment Fund or portfolio company to which the Special Advisor’s services relate, including in the event a Special Advisor is retained as an employee. Because the fees, costs and expenses associated with the engagement, retainer or employment of Special Advisors will generally not be borne by Meritage or any of their respective affiliates, those entities will have an incentive to engage a prospective employee of Meritage or any of their respective affiliates as a Special Advisor. Meritage intends to make all Special Advisor engagement, retainer or employment decisions in good faith while taking into account factors it considers relevant and appropriate, notwithstanding its interest in the outcome, including the extent to which any such Special Advisor possesses substantial, significant or otherwise relevant experience or expertise, and may make corrective allocations with respect to expenses relating to Special Advisors should it determine that such corrections are necessary or advisable. From time to time, Meritage will be required to decide whether costs and expenses are to be borne by a Private Investment Fund, on the one hand, or Meritage or an affiliate, on the other hand, and/or whether certain costs and expenses should be allocated between or among a Private Investment Fund, on the one hand, and other funds and accounts managed by Meritage, on the other hand. Meritage will make such judgments, which may be based, in certain cases, on good faith estimates, in its fair and reasonable discretion, notwithstanding its interest in the outcome, and may make corrective allocations should it determine that such corrections are necessary or advisable. In addition, Meritage may determine that items of Private Investment Fund expense were paid or withheld on behalf of, or by reason of particular circumstances applicable to, one or more but fewer than all of the investors in such Private Investment Fund and, in such case, Meritage will cause such investors on whose behalf such payments were made or whose particular circumstances gave rise to such payments to bear such expenses. Please see Item 12 below for further information about Meritage’s brokerage practices.

Certain Investors, including but not limited to Supervised Persons of Meritage, may be eligible for performance-based compensation/allocation structures that differ from, and are more beneficial than the standard performance-based compensation/allocation structure, depending on, among other factors, the relationship between Meritage and the Investor. Performance-based compensation/allocation arrangements may create an incentive for Meritage to recommend investments which may be riskier or more speculative than those which would be recommended under a different arrangement. Further, Meritage and its affiliates have significant investments in the Private Investment Funds. As a result, Meritage may have an incentive to favor Clients in which Meritage has a more significant proprietary interest, including in the allocation of investment time and attention. In making determinations regarding the timing of placement of trades for the Private Investment Funds, Meritage may prioritize certain strategies which are pursued by some but not all of the Private Investment Funds. This prioritization may have the effect of impacting (either adversely or positively) the performance of such Private Investment Funds. Meritage has designed and implemented procedures to ensure that where investment opportunities are allocated among the Private Investment Funds, investment opportunities are allocated fairly and equitably, taking into consideration such factors as Meritage deems relevant, which may include the investment objectives and restrictions and the tax characteristics of the Investors in the Private Investment Funds, as well as the availability of such investment opportunities. It is Meritage’s policy to provide individualized treatment to each Private Investment Fund. Thus, given the differing investment objectives and restrictions of the Private Investment Funds, as well as the differing tax characteristics of the Investors in the Private Investment Funds, each Private Investment Fund will not necessarily participate in each transaction in a security or instrument that might be considered within the range of permissible investments. In managing the assets of the Private Investment Funds, from time to time Meritage may engage in transactions with respect to the positions of a “master” Private Investment Fund in a “master fund/feeder fund” structure that are more beneficial to one or more “feeder” Private Investment Funds than to other “feeder” Private Investment Funds (or beneficial to one or more “feeder” Private Investment Funds but not to others). “Feeder” Private Investment Funds may have different tax, regulatory and other concerns and transactions entered into, and investment decisions made, by Meritage on behalf of a “master” Private Investment Fund may impact the “feeder” Private Investment Funds differently. The “master fund/feeder fund” structure may therefore, for example, result in transactions and investment decisions that are less efficient for a “feeder” Private Investment Fund than they would have been if such Private Investment Fund was a “parallel fund” that, in all cases, engaged in transactions directly and where Meritage on behalf of such Private Investment Fund made its own investment decisions. Conflicts of interests may arise in making investment decisions for the “master” Private Investment Funds because transactions that benefit some “feeder” Private Investment Funds more than others or benefit some “feeder” Private Investment Funds but not others may carry certain economic risks to all the “feeder” Private Investment Funds’ assets and because transaction costs are allocated to each of the “feeder” Private Investment Funds pro rata. Further, one Private Investment Fund (either directly or through an affiliated investment vehicle) and another Private Investment Fund may invest in different parts of the capital structure of the same target company (e.g., equity and debt), thus making their interests potentially adverse

to each other or the interest of one Private Investment Fund subordinate to the interest of another Private Investment Fund, such as, if the target company experiences financial distress, undergoes a restructuring or files for bankruptcy. To the extent that a Private Investment Fund holds securities in an issuer with rights, preferences and privileges that are different from those held by one or more other Private Investment Funds in the same issuer, Meritage and its affiliates may be presented with decisions in which the interests of the Private Investment Fund and such other Private Investment Fund are in conflict. Meritage will seek to resolve any conflicts in good faith and with a view to the best interests of all parties, but there can be no assurance that in hindsight Meritage will have made the correct judgment. When buying or selling a security at the same time for one or more Private Investment Funds that pursue overlapping strategies, Meritage will do so in accordance with the applicable offering memoranda of such Private Investment Funds.

The majority of the Private Investment Funds’ investments with respect to this strategy will consist of publicly traded U.S. and non-U.S. equity securities with an expected holding period of over six months. The Private Investment Funds’ investment horizon with respect to other securities and futures is generally expected to be from one month to three years, but could be longer or shorter depending on the circumstances. Meritage also pursues a principally “long-focused” equities investment strategy for certain of its Private Investment Funds. Meritage’s credit strategy involves investments in a variety of credit and credit-related instruments or obligations including, but not limited to, bank loans (whether syndicated or privately sourced and including, but not limited to, assignments and participations), bonds, notes, debentures, bills, trade claims, and other forms of indebtedness or liability (secured, unsecured and subordinated) issued or incurred by corporations and other business entities, municipalities, sovereign nations, governmental agencies and instrumentalities, and other persons. This strategy also includes investing in securities issued as part of structured vehicles, including, but not limited to, collateralized debt obligations, collateralized loan obligations, commercial mortgage-backed securities, residential mortgage-backed securities and other asset-backed securities, and derivative instruments, including, but not limited to, listed and over-the-counter fixed income derivative instruments, credit default swaps and other swaps and options (purchased or written). This strategy may also involve originating loans as well as investing in instruments which have a fixed or floating rate of return and will have various maturity dates, and may also involve the use of sophisticated and often multidimensional financial instruments with debt characteristics, including, without limitation, investments in notes, bonds, preferred stock, debentures and credit facilities. Meritage also pursues a principally credit investment strategy for certain of its Private Investment Funds. Meritage’s private equity strategy involves investments in, and acquisition of, securities or assets of privately-held or publicly-traded companies and are likely to include minority investments and control stakes, opportunistic investments in public and private debt, equity, real estate, hybrid securities, options and warrants as well as participating in “going private” transactions. Such investments could be pursued in companies at an early or mature stage of business development. Meritage believes this strategy is best accomplished by investing in markets where industry knowledge and superior analysis can offer an investing advantage. Meritage has employed, and expects to continue to employ, this strategy primarily in North America and Western Europe, but may make private equity investments in other regions as well. Meritage’s real estate strategy involves investing throughout the capital structures of assets, portfolios and companies in the commercial and residential real estate sectors, including investments in joint-venture equity, preferred equity, mezzanine debt, mortgage-backed securities and bridge lending investments across all asset types, with a focus on investments prone to fundamental analysis. A key component of this strategy

includes forming programmatic joint-ventures to serve as a platform for future growth, and building longterm relationships with operating partners who share Meritage’s investing philosophy, some of which may serve as a sub-adviser (a “Sub-Adviser”) with respect to certain real estate investments. Real estate may also form a component of Meritage’s other investment strategies described above. Meritage is not limited in the investment strategies it may use for the Private Investment Funds and may use any investment strategy or strategies on behalf of the Private Investment Funds not described herein that Meritage considers appropriate under the circumstances. There are no limitations or restrictions on the particular assets that the Private Investment Funds may acquire or employ or the magnitude of any investment by a Private Investment Fund, or on the trading and investment strategies and techniques that Meritage may utilize on behalf of the Private Investment Funds. As further described below, Meritage implements its investment strategies both directly and/or through External Managers. Meritage has the sole discretion to select External Managers to manage the Private Investment Funds’ assets. Meritage considers a variety of factors when selecting External Managers, including the correlation of an External Manager’s strategy with the overall market of the strategies utilized by the External Managers and the correlation among External Managers utilizing the same or similar strategies, as well as correlation with strategies managed by Meritage directly, results of due diligence investigations, the External Manager’s experience, reputation and track record, fees charged, liquidity terms and risk versus return. It should be noted that these factors are general in nature and it should not be assumed that each External Manager will necessarily meet any particular criterion. Due to legal, tax, regulatory, internal investment guideline or portfolio positioning or other considerations, any given investment opportunity may not be appropriate for all of the Private Investment Funds. As a result, Meritage may make certain investments solely on behalf of one or more Private Investment Funds, either directly or through an affiliated investment vehicle at any time in connection with the management of such Private Investment Fund. Meritage will make such allocation determinations, and may undertake rebalancings of such investments (as between a master fund and its feeder funds and as among such feeder funds) in accordance with its allocation policies. Risk of Loss Investing in securities involves risks of loss that Investors should be prepared to bear. Meritage may engage in a wide range of investment strategies on behalf of the Private Investment Funds, some of which are more traditional investment strategies emphasizing investments in stocks and bonds, but many of which are less traditional investment strategies, such as short sales, hedging (including the use of derivatives), option trading and leverage (including margin trading and investing in derivatives). Many of these strategies may involve greater degrees of risk than more traditional strategies. Material risks with respect to these investment strategies include, but are not limited to, the risks set forth below. It should be noted that, to the extent External Managers utilize similar investment strategies, such risks will also apply to the Private Investment Funds’ investments with External Managers.

Equity Securities. The Private Investment Funds invest in equity securities. Prices of equity securities may fluctuate in accordance with changes in the financial condition of their respective issuers and also in accordance with overall market and economic conditions. In addition, the Private Investment Funds may invest in equity securities issued by unseasoned companies and such investments may be highly speculative. The Private Investment Funds’ investments in equity securities may not generate any income or appreciate in value and may lose value.

Short Sales. A short sale will result in a gain if the price of the securities sold short declines between the date of the short sale and the date on which securities are purchased to replace those borrowed. A short sale will result in a loss if the price of the securities sold short increases. Any gain will be decreased, and any loss will be increased, by the amount of any payment, dividend or interest that the Private Investment Funds may be required to pay with respect to the borrowed securities, offset (wholly or partly) or (in very low interest rate environments) exacerbated by short interest credits. In a generally rising market, short positions may be more likely to result in losses because the securities sold short may increase in value. A short sale involves a finite opportunity for appreciation, but a theoretically unlimited risk of loss. In addition, there can be no assurance that securities necessary to cover a short position will be available for purchase. Investors involved in short selling may be materially and adversely affected by so-called “short squeezes”. A short squeeze may occur when a stock’s price moves higher, for any reason, after the stock is heavily shorted, and short sellers must buy shares to exit their positions and mitigate losses. Those purchases further drive up prices and may prompt more short sellers to exit their short positions. As a result, stock price increases accelerate. This risk was most recently highlighted by substantial losses to certain hedge funds and other short sellers in connection with short squeeze rallies caused by retail investors and social media activity involving companies such as Gamestop Corp. If a Private Investment Fund sells stocks short that become the target of a short squeeze, the Private Investment Fund could suffer significant losses as a result of being compelled to replace borrowed securities at extremely disadvantageous times.

Hedging. Hedging strategies in general are intended to limit or reduce investment risk, but can also be expected to limit or reduce the potential for profit. While a Private Investment Fund may (but is not required to) enter into hedging transactions to seek to reduce risk, there is no guarantee that such hedging transactions will do so and such transactions may result in poorer overall performance for a Private Investment Fund than if it had not engaged in any such hedging transaction.

Volatility. Long-only or long-focused strategies may result in a greater level of volatility in comparison to hedge funds that pursue other investment strategies due to fluctuating prices of equity securities and derivative instruments.

Derivatives. Certain Private Investment Funds enter into derivative transactions, which transactions may expose such Private Investment Funds’ investments to increased risk. Derivatives may be used as a primary strategy or as a hedging technique for other strategies, and may expose the Private Investment Funds’ investments to risk of default by the counterparty, premature termination of the transaction, adverse changes in market conditions, and substantial costs for creating and maintaining the transaction. Such derivative transactions may include, but are not limited to, futures, interest rate swaps, currency swaps, credit default swaps, other swap contracts, forward foreign exchange contracts, swaptions, options, caps, collars and floors. The Private Investment Funds will have complete flexibility to invest in any such securities and derivative instruments which may be developed and which may involve additional risks not described herein. There is no liquid secondary market for such derivative transactions. Certain derivatives instruments purchased by the Private Investment Funds are privately negotiated and therefore are not traded on an exchange. The risk of nonperformance by obligors on such instrument may be greater and the ease with which the Private Investment Funds can dispose of or enter into closing transactions with respect to such instruments may be less than in the case of exchange-traded instruments. Significant disparities may exist between “bid” and “ask” prices for such instruments. In these transactions, the Private Investment Funds must rely on the

creditworthiness of their counterparties, and counterparty or credit risk may be affected by the lack of a central clearinghouse.

Futures and Commodities. Certain Private Investment Funds may invest in futures and commodities. Futures contracts are customarily bought and sold on margins which range upward from less than 5% of the purchase price of the contract being traded. Because of these low margins, price fluctuations in futures markets may create profits and losses which are greater than are possible in other forms of investment. The minimum amount of margin required for a particular futures contract is set from time to time by the exchange upon which such futures contract is traded and may be modified by the exchange at any time during the term of the contract. When the market value of a particular position changes to a point where the margin on deposit does not satisfy margin maintenance requirements, the Private Investment Fund will be subject to a margin call from its broker. If the margin call is not met within a reasonable time, usually less than 24 hours, the broker may close out the position.

Fixed Income Investments. Certain Private Investment Funds invest in fixed income financial instruments. The value of such fixed income financial instruments will generally change as interest rates fluctuate in the relevant financial markets, in addition to being affected by such factors as credit risk and financial condition relating to particular issuers. Generally, when interest rates decline, the value of any long fixed income portfolio held by the Private Investment Funds can be expected to rise while that of any short fixed income portfolio can be expected to decline. Conversely, when interest rates rise, the value of a long fixed income portfolio can be expected to decline while that of a short fixed income portfolio can be expected to rise. Adverse interest rate developments, such as interest rate increases, instability, or even increased uncertainty, may be expected to adversely affect the debt markets and render more difficult the achievement of satisfactory returns in such markets.

Credit Securities. Certain Private Investment Funds invest in credit securities, including but not limited to, bonds, notes, debentures, bills, trade claims, and other forms of indebtedness or liability issued or incurred by corporations, municipalities, sovereign nations, governmental agencies and instrumentalities, business entities or other persons. These instruments may be unrated and possess speculative characteristics. An economic recession may severely disrupt the market for credit securities and could adversely impact the value of these securities. The issuers of these securities may face uncertainties which may adversely affect the issuer’s ability to make timely payments of interest and principal.

Bank Loans and Participations. Certain Private Investment Funds may invest in bank loans which take the form of participations or assignments of bank loans. There are special risks associated with these obligations, including the possible invalidation of a transaction as a fraudulent conveyance under creditors’ rights laws, lender-liability claims by the issuer of the obligations, environmental liabilities that may arise with respect to collateral securing the obligations, and limitations on the ability of the Private Investment Funds to directly enforce their rights with respect to participations.

Loan Origination and Syndication. Certain Private Investment Funds may, directly or indirectly through a wholly-owned subsidiary, originate loans, including, but not limited to, (i) senior, second lien and mezzanine loans and other similar investments and (ii) loans to certain related parties. Such Private Investment Funds’ success in this area will depend, in part, on their ability to originate loans on advantageous terms. In making loans, such Private Investment Funds will compete with a broad spectrum of lenders, many of which have substantially greater financial resources and are better known than the Private Investment Funds. Increased competition for, or a diminution in the

available supply of, qualifying loans could result in lower yields on such loans, which could reduce returns to investors. Because such loans will be made to borrowers pursuant to loan agreements, the Private Investment Funds will be subject to the risk that a borrower will not perform its obligations under such agreement, including the payment of interest and the repayment of principal. Although the Private Investment Funds intend to make loans only to borrowers that Meritage believes to be creditworthy, there can be no assurance that a borrower will not default on a loan and that loss on a transaction will not be sustained as a result. Certain Private Investment Funds may originate loans to companies with the intention of selling a portion of their interest in such loans to third parties (including, but not limited to, other investment vehicles managed by Meritage). In the event that a Private Investment Fund does not, or is unable to, sell a portion of a loan as intended, such Private Investment Fund would be forced to retain larger amounts of such loan to maturity than originally intended. In such event, the Private Investment Fund’s investment portfolio could become significantly concentrated in a particular loan or loans.

Mortgage-Backed, Asset-Backed Securities and Other Structured Credits. Investments by the Private Investment Funds in residential mortgage-backed securities (“MBS”) involve the general risks typically associated with investing in traditional fixed income securities (including interest rate and credit risk) and certain additional risks and special considerations (including the risk of principal prepayment and the risk of indirect exposure to real estate markets). In addition, certain Private Investment Funds may also purchase bonds or notes backed by pools of other obligations (“ABS”). There is no limit on the types of obligations that underlie ABS. Common examples of ABS are credit card receivables, auto loans, manufactured-housing contracts, home equity loans and legal settlements. ABS are subject to a variety of risks, including the risk that a change in interest rates may influence the pace of pre-payments of the underlying loans which, in turn, affects yields. The risks of investing in MBS and ABS instruments generally reflect the risks of investing in the underlying assets, including the effect of local and other economic conditions on the underlying assets and the ability of obligors to make payments on the relevant obligations. Certain Private Investment Funds may also invest in other structured products such as collateralized debt obligations, collateralized loan obligations and variable rate MBS and ABS, including adjustable-rate mortgage securities. Certain components of each such investment introduce additional risks for the Private Investment Funds, including risks related to the movements in specific indices or interest rates that may be difficult or impossible to hedge, and that also interact in a complex fashion with prepayment risks. Further, certain investments by the Private Investment Funds in MBS, ABS and other securities and structured products may be subordinate to one or more senior classes. Investments in subordinated securities involve greater credit risk of default than the senior classes of the issue or series.

Credit Ratings. Credit ratings of debt securities are not a guarantee of quality. A credit rating represents only the applicable rating agency’s opinion regarding credit quality based on the rating agency’s evaluation of the safety of the principal and interest payments. In determining a credit rating, rating agencies do not evaluate the risks of fluctuations in market value. As a result, a credit rating may not fully reflect the risks inherent in the relevant security. Rating agencies may fail to make timely changes to credit ratings in response to subsequent events. In addition, to the extent that a rating agency rates a security at the request of an issuer, the rating agency has a conflict of interest in providing such rating.

Municipal Securities. Certain Private Investment Funds may invest in different types of municipal securities, each of which has different kinds and varying degrees of risk. For example, certain types of municipal securities are not direct obligations of any government, and the payment of such obligations is generally dependent on the collection of anticipated revenues from a particular facility or special excise tax. In the event that special revenues backing such obligations are not received, the Private Investment Funds will have no recourse against the issuer or any other party for repayment of such obligations. In the case of general obligations, there is the risk that an issuer of such obligations could become insolvent and default on the obligations. In such case, the Private Investment Funds would be creditors of the issuer and would likely not receive full payment of principal and interest on the obligations.

Cash Equivalent Investments. To the extent the Private Investment Funds hold cash, cash equivalents and other liquid investments, such investments may reduce returns to the Private Investment Funds.

Investments in Non-U.S. Financial Instruments. Certain Private Investment Funds invest in nonU.S. financial instruments. Investing in securities of non-U.S. companies, which are generally denominated in non-U.S. currencies, and utilizing options or derivatives based on non-U.S. indices, involve certain considerations comprising both risk and opportunity not typically associated with investing in U.S. companies. These considerations include a fluctuation in exchange rates of nonU.S. currencies; the possible imposition of an exchange control regulation or a currency blockage; less public information with respect to issuers of securities; less governmental supervision of stock exchanges, securities brokers and issuers of securities; possible securities clearance and settlement problems; lack of uniform accounting, auditing and financial reporting standards; the possible expropriation of assets or confiscatory taxation by a host government; the fact that many non-U.S. markets are not as liquid as those in the U.S.; and the possible imposition of additional taxes. In addition, the Private Investment Funds may invest in financial instruments of emerging market countries, which may expose the Private Investment Funds to significant risks not typically associated with investment in developed countries.

Private Equity Investments. Private equity investments involve a high degree of business and financial risk that can result in substantial losses. Among these are the risks associated with investing in companies (i) that may be in an early-stage of development or with little or no operating history, (ii) operating at a loss or with substantial variations in operating results from period to period, (iii) with unpredictable operating results and limited financial resources, (iv) that may be unable to meet their obligations, and (v) with the need for substantial additional capital to support expansion or to achieve or maintain a competitive position. These companies may face intense competition, including competition from companies with greater financial resources, more extensive development, manufacturing, marketing, and service capabilities, and a larger number of qualified managerial and technical personnel. Private equity investments also may be made in companies in rapidly changing fields, and that may face special risks of obsolescence of their products or services and competition from other companies in the same or related fields. The foregoing factors may, among other things, result in a deterioration of a target company’s equity securities or any collateral or guarantees provided with respect to its debt. Private equity investments may rely heavily on the use of leverage, and the ability to achieve attractive rates of return on these private equity investments may depend on the ability to access sufficient sources of indebtedness at attractive rates. For example, in many private equity investments, indebtedness may constitute a significant portion of a portfolio company’s total debt and equity capitalization, including debt that may be incurred in connection with the investment.

The absence of available sources of sufficient debt financing for extended periods of time could therefore materially and adversely affect such an investment. In addition, an increase in either the general levels of interest rates or in the risk spread demanded by sources of indebtedness could make it more expensive to finance these types of investments. Further, a portion of the indebtedness used to finance private equity investments often includes high-yield debt securities issued in the capital markets. Availability of capital from the high-yield debt markets is subject to significant volatility, and there may be times when Meritage might not be able to access those markets at attractive rates, or at all, when completing an investment. Investments in highly leveraged entities, such as portfolio companies, also are inherently more sensitive to declines in revenue, as well as adverse economic, market and industry developments. Before making private equity investments, Meritage does, and will continue to undertake a due diligence investigation of the target company, and in doing so may be required to evaluate important and complex business, financial, tax, accounting, regulatory, environmental and legal issues. Nevertheless, due diligence investigations may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating the investment opportunity. Moreover, such an investigation will not necessarily result in the investment being successful. Due to legal, tax, regulatory or other considerations, Meritage may make certain private equity investments on behalf of one or more, but not all, Private Investment Funds, or may cause the Private Investment Funds to acquire different assets or entities of a business constituting related private equity investments. To the extent that entities or assets constituting related private equity investments are owned by different Private Investment Funds, Meritage may cause the Private Investment Funds to enter into arrangements with one another to facilitate the company’s business operations. For example, such an arrangement might enable an asset owned by one Private Investment Fund to be used in the business of a related entity owned by another Private Investment Fund. While Meritage intends to cause the Private Investment Funds to enter into such arrangements only when it believes they are in the best interest of each Private Investment Funds and on terms that are fair and reasonable, such arrangements will not be entered into on the basis of an arm’s-length negotiation.

Investments in Real Estate. Certain of the Private Investment Funds make, either directly or indirectly, real estate investments and real estate may be a component of certain other Private Investment Funds’ investments, which will be subject to the risks inherent in the ownership and operation of real estate and real estate-related businesses and assets. Deterioration of real estate fundamentals generally may negatively impact the performance of such investments. There is no assurance that any real estate investment will be profitable or that cash flow will be available for distribution to investors in such Private Investment Funds. Other risks include (a) changes in general economic or local conditions; (b) changes in or promulgation and enforcement of zoning, land use, building, environmental protection, occupational safety and other governmental laws and regulations; (c) changes in operating expenses; (d) changes in real estate tax rates; (e) changes in interest rates and the availability of debt financing; (f) changes in costs and terms of mortgage loans; (g) unavailability of mortgage funds which may render the construction, leasing, sale or refinancing of a property difficult; (h) fluctuations in energy prices and energy and supply shortages; (i) changes in the relative popularity of properties; (j) changes in the number of buyers and sellers of properties and the supply of and demand for competing properties in an area (as a result, for instance, of overbuilding); (k) changes in the financial resources or preferences of borrowers and of tenants, buyers and sellers of property; (l) the imposition of rent controls; (m) the ongoing need for capital improvements; (n) cash‐flow risks; (o) construction risks; (p) natural catastrophes; (q) acts of war, terrorism or civil unrest; (r) various uninsured or uninsurable risks and uninsurable losses; and (s)

other factors that are beyond the control of Meritage. In addition, in acquiring a property, such Private Investment Funds may agree to lock-out provisions that materially restrict it from selling that property for a period of time or that impose other restrictions, such as a limitation on the amount of debt that can be placed on that property. There can be no assurance that there will be a ready market for the resale of real estate investments because such investments will generally not be liquid and this fact may limit a Private Investment Fund’s ability to vary its real estate portfolio promptly in response to changes in economic or other conditions. Illiquidity may result from the absence of an established market for real estate investments, as well as legal or contractual restrictions on their resale by such Private Investment Funds. Additionally, a Private Investment Fund may, in certain instances, be responsible for structural repairs, improvements and general maintenance of real property. No assurance can be given that such Private Investment Fund will have funds available to make such repairs or improvements and the expenditure of any sums in connection therewith beyond those budgeted for by the Private Investment Fund will reduce the cash available for distribution and may require the Private Investment Fund to fund deficits resulting from the operation of a property. These factors and any others that would impede the Private Investment Fund’s ability to respond to adverse changes in the performance of its assets could significantly affect the Private Investment Fund’s financial condition and operating results.

Risks Relating to Investments in Joint Ventures and Other Non-Controlling Investments; Investments with Sub-Advisers. Certain Private Investment Funds intend to co-invest in real estate or other investments with third parties through partnerships, joint ventures or other entities, and may thereby acquire a non-controlling interest in certain investments. In such cases, such Private Investment Funds will be significantly reliant on the management and board of directors of such entities, which may include representation of other financial investors with whom such Private Investment Funds are not affiliated and whose interest may conflict with the interest of such Private Investment Funds. Moreover, in the case where a Private Investment Fund may co-invest, such investments may involve risks not present in investments where a third party is not involved, including the possibility that a third-party partner or co-venturer may have financial difficulties resulting in a negative impact on such investment, may have economic or business interest or goals which are inconsistent with those of such Private Investment Fund, or may be in a position to take (or block) action contrary to the Private Investment Fund’s interests or goals. In addition, such Private Investment Fund may in certain circumstances be liable for the actions of its third-party partners or co-venturers. Investments made with third parties in joint venture or other entities also may involve carried interests and/or other fees payable to such third-party partners or co-venturers. Although such Private Investment Fund may not have control over these investments and, therefore, may have a limited ability to protect its position therein, Meritage generally expects that appropriate minority investor rights will be obtained to protect such Private Investment Fund’s interests to the extent possible. There can be no assurance that such minority investor rights will be available, however, or that such rights will provide sufficient protection of such Private Investment Fund’s interests. In addition, Meritage may engage third parties to act as Sub-Advisers to manage specific real estate investments of certain Private Investment Funds, such as investments in commercial mortgagebacked securities or real estate bonds. In such cases, many of the foregoing risks will be present, including the risk that a Sub-Adviser will have financial or other business interests that conflict with those of the Private Investment Funds, or that the Sub-Adviser’s own financial difficulties, or those of its other clients or investors, will negatively impact such Private Investment Funds’ investments. The success of such investments will depend upon on the skill and expertise of such Sub-Advisers and their principals. The applicable Private Investment Funds will bear fees and expenses in respect of such Sub-Advisers.

Use of Alternative Data. Meritage uses “alternative data” in its investment processes. Alternative data is data from non-traditional sources of data (i.e., data sources other than, e.g., periodicals, sellside research reports, financial statements and press releases). The use of alternative data is subject to increased regulatory scrutiny. While Meritage has policies and procedures to vet new data sources, including alternative data sources, there can be no assurance that its procedures will be effective or deemed sufficient by regulators, which could result in reputational, financial or other harm to Meritage and the Private Investment Funds. In determining which data sources to integrate into its investment processes, Meritage considers such factors as it deems relevant, in its sole discretion, which may include perceived value, cost of data acquisition (including the cost of incorporating such data into its research and trading infrastructure) and the legal, compliance and reputational risks associated with such data. There can be no assurance that Meritage’s selection of data sources will result in the Private Investment Funds achieving their investment objectives. Data providers often provide the same information to other market participants, which may lead to correlation between the Private Investment Funds’ trading and that of other funds and accounts. In addition, data providers may have significant pricing power, which permits them to charge prices which may not be commensurate with the value provided to the Private Investment Funds, or allows them to increase their prices indiscriminately. Finally, although Meritage takes measures designed to protect against the risk that data sources may provide to Meritage material nonpublic information and/or personal data, thereby restricting Meritage in its trading activities on behalf of the Private Investment Funds or subjecting the Private Investment Funds and/or Meritage to additional costs and/or adverse legal or regulatory action, such risks remain.

Investments in the Alcoholic Beverage Industry and other Regulated Industries. Certain of the Private Investment Funds have (directly or indirectly) made, and may make (directly or indirectly) in the future, investments in companies that operate in industries that are subject to extensive regulation by the federal government and/or the states in which they operate, including alcoholic beverage retail and/or distribution businesses. These laws, regulations and ordinances vary from jurisdiction to jurisdiction, but generally concern the responsibility, financial stability and character of the owners, directors, officers, managers and/or key employees of businesses in regulated industries, as well as persons or entities having a financial interest, whether directly or indirectly, in such business. Participants in regulated industries may be subject to the permitting and licensing requirements of such regulators, and regulators may require certain information regarding the Investors in order to obtain such licensing or permit. As such, such Private Investment Funds may need to require an Investor to withdraw its entire capital account balance if such Investor is found unsuitable by the regulators or, alternatively, decline the investment opportunity. Regulatory agencies may conduct investigations into the conduct or associations of a licensee’s directors, officers, key employees or investors, including the Private Investment Funds, Meritage and affiliates of Meritage and their respective employees and limited partners (as the case may be), to ensure compliance with applicable standards. There can be no assurance that participants in regulated industries will not incur material costs or liabilities in connection with their compliance with applicable regulatory requirements. In addition, unsuitable activity by a licensed business or on the part of an affiliate or subsidiary in any jurisdiction could have a negative effect on such licensee’s ability to continue operating in other jurisdictions and could result in fines, or the suspension, loss or revocation of required permits and licenses. If an industry participant in which the Private Investment Funds invest were to become subject to such sanctions, such Private Investment Funds’ performance and results may be adversely impacted.

Limited Liquidity of Investments. Securities in which certain Private Investment Funds invest may be thinly traded and relatively illiquid or may cease to be traded after the Private Investment Funds invest. The Private Investment Funds may also acquire significant positions in particular financial

instruments. In such cases, and in the event of extreme market activity, the Private Investment Funds may not be able promptly to liquidate investments if the need should arise. In addition, the Private Investment Funds’ sale of thinly traded financial instruments could depress the market value of such instrument and thereby reduce the Private Investment Funds’ profitability or increase its losses. Such circumstances or events could materially and adversely affect the amount of gain or loss the Private Investment Funds may realize. The Private Investment Funds invest in restricted securities that are not traded in public markets. Restricted securities generally are difficult or impossible to sell at prices comparable to the market prices of similar securities that are publicly traded. No assurance can be given that any such restricted securities will be eligible to be traded on a public market even if a public market for securities of the same class were to develop. Certain Private Investment Funds may invest in privately held companies whose interests cannot be resold in public securities markets. Such Private Investment Funds may be required to hold such investments for long periods of time. In addition, certain Private Investment Funds may purchase illiquid and/or non-tradable securities on a case-by-case basis if Meritage determines that the potential reward relative to risk assumed is compelling. Such illiquid securities may include investments in private companies and control positions in public companies, among others.

Designated Investments and Follow-up Investments. In the event an Investor participates in an investment that Meritage has designated as a designated investment (a “Designated Investment”) because it has been deemed to be illiquid and/or without a readily ascertainable market value, and requests to withdraw all or part of its capital account prior to the undesignation of the Designated Investment, the Investor making such withdrawal will (i) maintain its interest in such Designated Investment(s) until such Designated Investment is undesignated, and/or (ii) receive an in-kind withdrawal payment of its pro rata portion of the Designated Investment(s), in whole or in part, as determined by the Private Investment Funds’ managers in their sole discretion. For so long as an Investor holds an interest in one or more Designated Investments, that Investor will continue to receive its allocable share of the gains, losses and expenses related to each Designated Investment in which the Investor participates, and, if the Investor has otherwise withdrawn its capital account, the Investor will remain an Investor to the extent, but only to the extent, of its interest in such Designated Investment and, upon the undesignation with respect to each Designated Investment, the interest such Investor has in the Designated Investment will be redeemed, without notice, at the withdrawal price, determined as set forth in the offering documents for the Private Investment Fund. In addition, profits and losses of “follow-up” investments to Designated Investments may be allocated only to the Investors who participated in the original Designated Investment. In connection with any mandatory withdrawal of an Investor’s capital account, Meritage may elect to make withdrawal payments to such Investor with respect to the portion of such Investor’s capital account attributable to a Designated Investment in cash. In such a case, the Investor being mandatorily redeemed will receive liquidity in respect of such Investor’s participation in Designated Investments before other Investors and other Investors’ exposure to such Private Investment Fund’s underlying investments, including Designated Investments, will be reallocated. In such a case, remaining Investors will become more concentrated in the applicable Designated Investment(s) and their investments in such Private Investment Fund may become less liquid.

Systems Risks. The Private Investment Funds depend upon Meritage to develop and implement appropriate systems for their activities. The Private Investment Funds rely extensively on computer programs and systems to evaluate certain securities based on real-time trading information, to

monitor portfolios and to generate risk management and other reports that are critical to oversight of such Private Investment Funds’ activities. In addition, certain of the operations of Meritage interface with or depend on systems operated by third parties, including market counterparties and other service providers, and Meritage may not be in a position to verify the risks or reliability of such third-party systems. These programs or systems may be subject to certain defects, failures, or interruptions, including, but not limited to, those caused by worms, viruses, and power failures. Any such defect or failure could have a material adverse effect on the Private Investment Funds. For example, such failures could cause settlement of trades to fail, lead to inaccurate accounting, recording, or processing of trades, and cause inaccurate reports, which may affect the Private Investment Funds’ ability to monitor its investment portfolio and its risks.

Counterparty Risk. Some of the markets in which the Private Investment Funds may effect their transactions are “over-the-counter” or “interdealer” markets. The participants in such markets are typically not subject to credit evaluation and regulatory oversight as are members of “exchangebased” markets. To the extent the Private Investment Funds invests in swaps, derivative or synthetic instruments, or other over-the-counter transactions, on these markets, the Private Investment Funds may take a credit risk with regard to parties with whom it trades and may also bear the risk of settlement default. These risks may differ materially from those entailed in exchange-traded transactions, which generally are backed by clearing organization guarantees, daily marking-tomarket and settlement, and segregation and minimum capital requirements applicable to intermediaries. Transactions entered into directly between two counterparties generally do not benefit from such protections. Such transactions expose the Private Investment Funds to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions because of a dispute over the terms of the contract (whether or not bona fide) or because of a credit or liquidity problem. In such events, the Private Investment Funds may bear losses in connection with the relevant transaction. Such “counterparty risk” is accentuated for contracts with longer maturities where events may intervene to prevent settlement, or where the Private Investment Funds has concentrated its transactions with a single or small group of counterparties. The Private Investment Funds are not restricted from dealing with any particular counterparty or from concentrating any or all of its transactions with one counterparty. The ability of the Private Investment Funds to transact business with any one or number of counterparties, the lack of any independent evaluation of such counterparties’ financial capabilities and the absence of a regulated market to facilitate settlement may increase the potential for losses by the Private Investment Funds.

Substantial Withdrawals. Certain Investors, including Investors affiliated with Meritage or Renaissance (as defined below), have made substantial investments in the Private Investment Funds. In the event that such Investors withdraw their investments, such withdrawals could have a material adverse effect on such Private Investment Funds. Substantial withdrawals could cause the liquidation of investments at a time that could adversely affect the value of the Private Investment Funds or the risk profile of the remaining investments in the Private Investment Funds. Fluctuations in the Private Investment Funds’ assets under management, including as a result of substantial withdrawals, could limit the availability of certain investment opportunity or otherwise prevent the Private Investment Funds from successfully implementing their investment strategies. In addition, in the event of a substantial withdrawal from the Private Investment Funds, the remaining investors in the Private Investment Funds may experience higher pro rata operating expenses due to the fixed nature of such expenses, thereby producing lower returns. Because a substantial portion of the Private Investment Funds’ interests are held, directly or indirectly, by a limited number of investors, withdrawal of capital by one or only a small number of investors could have a material impact on the Private Investment Funds.

Reliance on Technology. Certain of Meritage investment strategies and critical aspects of its and the Private Investment Funds’ operations will be reliant on technology, including hardware, software and telecommunications systems. Significant parts of the technology used in the management of the Private Investment Funds will be provided by third parties and are therefore beyond Meritage’s direct control. Forecasting, trade execution, data gathering, risk management, portfolio management, IT infrastructure and support, compliance and accounting systems all are designed to depend upon a high degree of automation and computerization. Although Meritage seeks, on an ongoing basis, to ensure adequate backups of software and hardware where possible, and Meritage will attempt to conduct adequate due diligence and monitoring of providers, if such efforts are unsuccessful or inadequate, software or hardware errors or failures may result in errors, data loss and/or failures in trade execution, risk management, portfolio management, compliance or accounting. Errors or failures may also result in the inaccuracy of data and reporting or the unavailability of data or vulnerability of data to the risk of loss or theft. Errors may occur gradually, may be difficult to detect and can potentially affect results over a long period of time. If an unforeseeable software or hardware malfunction or problem is caused by a defect, virus or other outside force, the Fund may be materially adversely affected.

Cybersecurity Threats. Cybersecurity incidents and attacks have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency in the future. Meritage and its service providers’ information and technology systems may be vulnerable to damage or interruption from computer viruses and other malicious code, network failures, computer and telecommunication failures, infiltration by unauthorized persons and security breaches (by physical or electronic means), usage errors by their respective users or service providers, power, communications or other service outages and catastrophic events such as fires, tornadoes, floods, hurricanes and earthquakes. Meritage, the Private Investment Funds or any portfolio company, or any of their service providers, may face cybersecurity incidents, attacks, breaches and other threats to gain unauthorized access to confidential, proprietary or sensitive information, including, without limitation, personal data and other information regarding the investors in the Private Investment Funds and the investment activities of the Private Investment Fund, or to render data, information or systems unusable, any of which could result in significant losses. Any cybersecurity attacks against Meritage, the Private Investment Funds or any portfolio company, or any of their service providers, could lead to the loss of sensitive information essential to such entity’s operations or personal data regarding the investors in the Private Investment Funds and could have a material adverse effect on such entity’s reputation, financial position or cash flows, could lead to financial losses from remedial actions, loss of business, or could lead to potential liability. Cybersecurity attacks are evolving and include, but are not limited to, phishing attacks, malware, ransomware attacks, social engineering, malicious software, attempts to gain unauthorized access to data and information, improper access by employees or service providers, and other electronic security breaches or other similar incidents, including those perpetrated by criminals or nation state actors, any of whom may see their frequency increased and effectiveness enhanced by the use of artificial intelligence (“AI”), that could lead to disruptions in critical systems, unauthorized release of confidential, proprietary, sensitive or otherwise protected information or personal data and corruption of data and information. Cyberattacks may also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on systems or web sites rendering them unavailable. Breaches such as those involving covertly introduced malware, impersonation of authorized users and industrial or other espionage may not be identified even with sophisticated prevention and detection systems, potentially resulting in further harm and preventing it from being addressed appropriately. The controls and procedures, business continuity systems, and data security systems of Meritage, the Private Investment Funds, any portfolio company or

External Manager and each of their respective service providers could prove to be inadequate. These problems may arise in both the internally developed systems of Meritage, the Private Investment Funds, any portfolio company or External Manager or in the systems of third-party service providers and significant resources may be required to fix or replace any inoperable or compromised systems or to modify or enhance Meritage’s or any Private Investment Fund’s controls and procedures.

Artificial Intelligence. The Private Investment Funds, Meritage and any portfolio companies may, or may in the future, incorporate AI, including generative AI, in connection with their respective businesses and operations, including for internal analytical purposes. However, there are significant risks involved in utilizing AI, and no assurance can be provided that such use will enhance such businesses or operations or result in such businesses or operations being more efficient or profitable. For example, AI algorithms and the data, material or content on which they rely could be inaccurate, incomplete, misleading, flawed, insufficient, of poor quality, reflect unwanted forms of bias, or contain other errors or inadequacies, any of which may not be easily detectable. AI has also been known to produce false or “hallucinatory” inferences or outputs, and AI can present ethical issues and subject users to new or heightened legal, regulatory, ethical or other challenges. Inappropriate or controversial data practices by developers and end-users, or other factors adversely affecting public opinion of AI, could impair the acceptance of AI solutions. If the AI solutions that the Private Investment Funds, Meritage or any portfolio companies or any of their respective affiliates create or use are, or are perceived to be, deficient, inaccurate or controversial, they could suffer operational inefficiencies, competitive harm, legal liability, brand or reputational harm or other adverse impacts on their businesses and financial results. If the party using AI does not have sufficient rights to use the algorithms, data or other material or content on which its AI solutions or other AI tools rely, or to use the output of such AI solutions or tools, such party could also incur liability through the violation of applicable laws and regulations, third-party intellectual property, privacy or other rights, or contracts to which they are a party. In addition, regulation of AI is rapidly evolving worldwide as legislators and regulators are increasingly focused on this emerging technology. The technologies underlying AI and its uses are already subject to a variety of laws and regulations, including intellectual property, privacy, data protection, cybersecurity, consumer protection, competition, and equal opportunity laws and regulations, and are expected to be subject to increased regulation and new laws or new applications of existing laws and regulations. AI is the subject of ongoing review by various U.S. and non-U.S. governmental and regulatory agencies, and various U.S. states and other foreign jurisdictions are applying, or are considering applying, their platform moderation, privacy, data protection and cybersecurity laws and regulations to AI, or are considering general legal frameworks for AI. The developing regulatory and legal frameworks around AI may affect how the Private Investment Funds, Meritage and any portfolio companies (or affiliate thereof) may use AI. Furthermore, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational, technological or ethical risks that may arise relating to the use of AI.

Data Protection, Privacy and Cybersecurity Laws and Regulations. The Private Investment Funds and Meritage’s collection, storage, use, maintenance and other processing of personal data, including personal data regarding the Fund’s investors, as well as their reliance on technology, including third-party processors and cloud-based services in connection therewith, imposes legal and regulatory risks. Legal and regulatory requirements relating to the collection, storage, usage, maintenance, transfer and other processing of personal data continue to evolve. The Private Investment Funds and Meritage are and may become subject to existing and new legislation or regulation concerning the information, including personal data, they may store, maintain or

otherwise process. For example, the European Union General Data Protection Regulation (“GDPR”) includes a range of compliance obligations regarding the handling of personal data and significant financial penalties for non-compliance. In addition, following the United Kingdom’s referendum to leave the European Union on June 23, 2016, and the United Kingdom subsequently ceasing to be a member of the European Union on January 31, 2020, the U.K. General Data Protection Regulation (i.e., a version of the GDPR as implemented into U.K. law) went into effect. While the GDPR and U.K. General Data Protection Regulation remain substantially similar for the time being, the U.K. government has announced that it will chart its own path on privacy and data protection and reform its relevant laws, including in ways that may differ from the GDPR. While these developments increase uncertainty with regard to privacy and data protection regulation in the U.K., even in their current, substantially similar form, the GDPR and U.K. General Data Protection Regulation can expose the Private Investment Funds and Meritage to divergent parallel regimes that may be subject to potentially different interpretations and enforcement actions for certain violations. The Private Investment Funds and Meritage intend to comply with any obligations arising out of data protection, privacy and cybersecurity laws and regulations that are applicable to them, but may not be able to accurately anticipate the way in which regulators and courts will apply or interpret such laws and regulations, including their applicability to the Private Investment Funds or Meritage. If any such laws or regulations are implemented, interpreted or applied in a manner inconsistent with the Private Investment Funds or Meritage’s policies or practices, they may be fined or ordered to change their business practices in a manner that increases compliance burdens and costs and adversely impacts their operating results. The Private Investment Funds and Meritage may also be subject to existing and new U.S. federal, state and local data protection, privacy and cybersecurity laws and regulation, such as the Federal Trade Commission Act, the Gramm-Leach-Bliley Act of 1999 (the “GBLA”), the California Consumer Privacy Act, the California Privacy Rights Act, and the New York SHIELD Act, that require enhanced levels of cybersecurity and notification to users and/or regulators in the event of a cybersecurity breach of personal data or other similar incident. In particular, an amendment to Regulation S-P, an implementing regulation promulgated under the GLBA, was adopted by the SEC on May 16, 2024 and requires advisers to, among other things, adopt and implement an incident response program as part of their formal cybersecurity policies and procedures and report data breaches to affected individuals whose sensitive customer information was, or is reasonably likely to have been, accessed or used without authorization within 30 days of becoming aware of such data breach. Compliance with these laws and regulations, including the obligation to timely notify stakeholders in the event of a cybersecurity incident, may divert Meritage’s time and effort and entail substantial expense. Any failure or perceived failure by a Private Investment Fund to comply with these laws and regulations may subject such Private Investment Fund or Meritage to reputational consequences (to the extent such non-compliance is made public) as well as significant costs associated with litigation, settlements, regulatory action, judgments, liabilities and other penalties, for which the Private Investment Funds or Meritage may not have insurance coverage. The cumulative effects of the GDPR, the U.K. General Data Protection Regulation and other recently adopted privacy, data protection and cybersecurity laws and regulations include an increased ability of individuals, relative to companies, to control the collection, monitoring, use, release, maintenance, disclosure and other processing of their personal information; increased obligations of companies to maintain the privacy, security and confidentiality of personal information; and increased exposure to regulatory action, litigation, fines, damages or reputational harm for companies that do not afford individuals their specified privacy rights, that experience

cybersecurity incidents or cyberattacks or that do not maintain privacy, data protection or cybersecurity practices at certain required levels. The global privacy, data protection and cybersecurity landscape continues to be in flux, resulting in possible significant operational costs for internal compliance by the Private Investment Funds and/or Meritage. In the event of regulatory action, litigation, fines, damages or reputational harm due to noncompliance with such privacy, data protection and cybersecurity laws and regulations or a cybersecurity incident or cyberattack, there may be an impact on the Private investment Funds, Meritage and/or their affiliates.

Placement Agents; Compensation of Personnel for Fundraising. Meritage has in the past engaged, and may from time to time in the future engage, one or more third-party placement agents (each, a “Placement Agent”) to offer interests in one or more Private Investment Funds and, in such capacity, a Placement Agent is acting for Meritage and is not acting as an investment advisor to potential investors in connection with the offering of such interests. Potential investors must independently evaluate the offering and make their own investment decisions. To the extent Meritage engages one or more Placement Agents, such Placement Agents would be paid a placement fee which may be based upon the amount of capital raised from the investors that the Placement Agent introduces to Meritage, which fee will be borne by Meritage and not, for the avoidance of doubt, the Private Investment Funds. Potential investors should also note that at various times, a Placement Agent may act as placement agent for other fund sponsors and funds, which may offer interests that are similar to the interests in the Private Investment Funds. Those unaffiliated fund sponsors may pay placement fees on terms different from the fees that the Placement Agent receives from Meritage in connection with such offering, and this difference in fees may influence a Placement Agent’s decision to introduce potential investors to Meritage. A Placement Agent’s participation as placement agent for interests in the Private Investment Funds will be influenced by the potential to receive placement fees, which creates certain conflicts of interest. In addition, differences in the placement fees that are offered by the Private Investment Funds and other third-party fund sponsors for which the Placement Agent acts as placement agent could influence a placement agent’s activities on behalf of such Private Investment Funds. Meritage or its affiliates also expect to retain personnel to provide capital raising and investor relations services for certain Private Investment Funds, and to compensate such personnel in whole or in part with a portion of the fee revenue generated in respect of capital raised by such personnel for such Private Investment Funds. Such compensation in respect of the sale of interests in a Private Investment Fund will be borne by Meritage or an affiliate and, for the avoidance of doubt, not such Private Investment Fund. In order to facilitate the provision of such capital-raising services by personnel of Meritage or its affiliates in compliance with applicable law and regulations, Meritage and its affiliates have retained a limited purpose broker-dealer registered with the SEC to sponsor licensing and regulatory supervision of certain employees of Meritage and its affiliates as registered representatives of the limited purpose broker-dealer. Compensation payable and expenses reimbursable to the limited purpose broker-dealer under such arrangements will be borne by Meritage or an affiliate and, for the avoidance of doubt, not the Private Investment Funds. Employees of Meritage or any of its affiliates involved in the marketing and placement of interests in a Private Investment Fund are not acting as tax, financial, legal or accounting advisors to potential investors in connection with the offering of such interests.

The potential for personnel retained by Meritage or its affiliates to receive compensation in connection with an investor’s purchase of an interest in a Private Investment Fund presents such personnel with a potential conflict of interest in recommending that such investor purchase interests in such Private Investment Fund. Prospective investors should take such payment arrangements into account when considering and evaluating any recommendations relating to the acquisition of

interests in a Private Investment Fund. Potential investors must independently evaluate the offering and make their own investment decisions.

Material Non-Public Information. During the course of the Private Investment Funds’ regular investing activities, Meritage may obtain material non-public information with respect to an issuer, or the Private Investment Funds may become subject to trading restrictions pursuant to Meritage’s internal trading policies or as a result of applicable law or regulations. As a result, the Private Investment Funds may be prohibited for a period of time from purchasing or selling such issuer’s securities and such prohibition may have an adverse effect on the Private Investment Funds.

Margin/Leverage/Other Borrowing. The Private Investment Funds will be entitled to borrow to finance the acquisition of assets from U.S. and non-U.S. sources, and to secure any such borrowings with their assets. Certain Private Investment Funds may, directly and indirectly, be subject to and employ substantial leverage in pursuing their investment objectives. Leveraging amplifies net profits and losses and increases transaction costs. Leverage may be acquired through traditional borrowing transactions, through the use of margin and through derivative transactions, such as options, futures, forward contracts and equity swaps, credit default swaps and other types of swaps, and repurchase agreements that have a similar effect. Such strategies can increase the profit potential of a securities portfolio, but concomitantly increase the risk of loss. Such strategies also can increase the Private Investment Funds’ transaction costs, interest expense and other costs and expenses. Access to capital could be impaired by many factors, including market forces or regulatory changes. If a Private Investment Fund was unable to borrow capital, it may need to liquidate assets in order to meet its liabilities. The level of margin available will generally be limited only by the credit decisions of the relevant prime brokers. There can be no assurance, however, that such prime brokers will either continue existing arrangements or that such prime brokers and other lenders will approve extensions of credit at the levels requested. Any restriction on the availability of credit from such parties could adversely affect investment performance. There can be no assurance that the Private Investment Funds will be able to secure or maintain adequate financing, without which the Private Investment Fund may not continue to be viable. Margin trading requires the pledge of securities as collateral, and margin calls can result in the Private Investment Funds being required to pledge additional collateral or to liquidate securities at substantial losses that would not otherwise be realized. The failure to satisfy a margin call, or the occurrence of other material defaults under margin or other financing agreements, may trigger cross-defaults under the Private Investment Funds’ agreements with other brokers, lenders, clearing firms or other counterparties, multiplying the adverse impact to the Private Investment Funds.

Pandemics and Other Public Health Crises. Pandemics and other widespread public health emergencies, including outbreaks of infectious diseases such as SARS, H1N1/09 flu, avian flu, ebola and the outbreak of COVID-19, have, and in the future may, materially and adversely impact economic production and activity in ways that are impossible to predict, all of which may result in significant losses to the Private Investment Funds. The 2019-2022 outbreak of COVID-19 caused a worldwide public health emergency, straining healthcare resources and resulting in extensive and growing numbers of infections, hospitalizations and deaths. In an effort to contain COVID-19, national, regional and local governments, as well as private businesses and other organizations, took, and some national, regional and local governments continue to take, severely restrictive measures, including instituting local and regional quarantines, restricting travel and movement (including closing certain international borders), prohibiting public activity (including “stay-at-home” and similar orders), and ordering the closure of large numbers of offices, businesses, schools, and other public venues. Restrictive measures may be re-imposed

in the future to address subsequent waves of infection. As a result, COVID-19 significantly diminished global economic production and activity of all kinds and contributed to both volatility and a severe decline in financial markets. Among other things, these unprecedented developments resulted in material reductions in demand across most categories of consumers and businesses, dislocation (or in some cases a complete halt) in the credit and capital markets, labor force and operational disruptions, slowing or complete idling of certain supply chains and manufacturing activity, steep increases in unemployment levels in the U.S. and several other countries, political protests, discourse and turmoil over mitigation efforts, and strain and uncertainty for businesses and households, with a particularly acute impact on industries dependent on travel and public accessibility, such as transportation, hospitality, tourism, retail, sports and entertainment. Certain of these issues are ongoing, and it is unknown whether those that appear to have remediated will resurface. Moreover, while circumstances related to COVID-19 have improved in many parts of the world, there is no guarantee that such conditions will continue. New strains of the coronavirus, which could be more transmissible and/or more lethal, may give rise to future surges of COVID19. Pandemics, other public health emergencies or similar health threats could have a significant adverse impact and result in significant losses to the Private Investment Funds. The extent of the impact on the Private Investment Funds and their portfolio investments’ performance will depend on many factors, all of which are highly uncertain and cannot be predicted. These same factors may limit the ability of the Private Investment Funds to source, diligence and execute new investments and to manage, finance and exit investments in the future, and governmental mitigation actions may constrain or alter existing financial, legal and regulatory frameworks in ways that are adverse to the investment strategy the Private Investment Funds intend to pursue, all of which could adversely affect the Private Investment Funds’ ability to fulfill their investment objectives. In addition, the operations of the Private Investment Funds, their portfolio investments, their general partners and Meritage may be significantly impacted, or even temporarily or permanently halted, as a result of any public health emergencies or similar public health threats or any measures, restrictions on travel and movement, remote-working requirements and other factors related thereto, including its potential adverse impact on the health of any such entity’s personnel. These measures may also hinder such entities’ ability to conduct their affairs and activities as they normally would, including by impairing usual communication channels and methods, hampering the performance of administrative functions such as processing payments and invoices, and diminishing their ability to make accurate and timely projections of financial performance. Armed Conflict. Armed conflict (e.g., the conflict in Ukraine) can result in sanctions and other economic and political measures and market disruptions and can be impossible to predict. Armed conflict can have a severe adverse effect on the region in which it is occurring and collateral effects globally, including significant negative impacts on the global economy and the markets for certain securities and commodities, such as oil and natural gas, as well as other sectors. Such effects and impacts could have a material adverse effect on the Private Investment Funds and their investments. Political Uncertainty, Rise of Populist Political Parties and Protectionism and Changes in Trade Policies. The rise of populist political parties and economic nationalism has led to increasing political uncertainty and unpredictability throughout the world. Among the attendant risks are greater regulatory uncertainty, for example, regarding the posture of governments with respect to taxation, international trade and law enforcement. Negative regulatory developments could have a material adverse effect on the Private Investment Funds and their investments.

In particular, the Trump administration has imposed broad tariffs on imports from foreign countries and has proposed, and continues to propose, additional tariffs. Certain foreign governments have, in turn, imposed retaliatory tariffs on certain U.S. exports and have indicated a willingness to impose additional tariffs on U.S. exports. These actions, as well as any future tariffs, new regulations or other restraints on global trade, may cause escalating responses through the use of import and export laws and regulations, tariffs or other trade policies that impact global trade and supply chains. Global trade and supply chain disruptions, significant introductions of trade barriers and bilateral and multilateral trade frictions, together with any future downturns in the global economy resulting therefrom, could adversely affect the financial performance of the Private Investment Funds. Discontinuation of LIBOR. The publication of all LIBOR settings on a representative basis has now ceased. The current nominated replacement for USD-LIBOR is the Secured Overnight Financing Rate (“SOFR”) and the nominated replacement for British pound sterling-LIBOR is the Sterling Overnight Interbank Average Rate (“SONIA”). With respect to so-called “tough legacy contracts,” which are contracts that did not provide for a clearly defined and practicable replacement benchmark rate, the U.S. enacted federal legislation that replaced USD-LIBOR references in certain U.S. law-governed contracts under certain circumstances with a SOFR-based rate plus a statutory spread adjustment. It is unknown whether SOFR and SONIA will maintain market acceptance as replacements for LIBOR and, because each of SOFR and SONIA differs from LIBOR, there is no assurance that SOFR or SONIA will perform in the same way as LIBOR would have performed at any time. The transition away from LIBOR to one or more alternative benchmark rates is complex and could have an adverse effect on the value of the Private Investment Funds’ investments, including as a result of changes in the (i) business, financial condition and results of operations of the businesses that issue such investments, (ii) pricing and/or availability of investments and/or (iii) negotiations and/or changes to the documentation for certain of such investments and/or prospective investments, as well as the pace of such changes, disputes and other actions regarding the interpretation of current and prospective loan documentation, basis risks between investments and hedges, basis risks within investments (e.g., securitizations), costs of modifications to processes and systems, and/or costs of administrative services and operations, including monitoring of recommended conventions and benchmark rates and the market acceptance thereof, or any component of or adjustment to the foregoing. Material risks to the Private Investment Funds relating to investing with External Managers include, but are not limited to, the following:

Selection of External Managers. All External Managers are selected by Meritage. The Investors have no opportunity to select or evaluate External Managers’ investments or strategies. The likelihood that Investors will realize income or gain will depend in part on the skill and expertise of Meritage in selecting External Managers and the skill of such External Managers. Past performance of an External Manager is not indicative of such manager’s future results.

Fees. The External Managers generally charge fees for their services to the Private Investment Funds or to the funds in which the Private Investment Funds invest. Such fees may be payable irrespective of profitability and may be substantial even during fiscal periods where such funds have suffered losses. A Private Investment Fund may be required to pay performance-based fees to External Managers, or may bear performance allocations, at times when the Private Investment Fund as a whole has not realized a profit. The Investors may lose money if the profits made by the

External Managers are not enough to cover their fees. Meritage may be able to negotiate lower fees and performance allocations for the Private Investment Funds in some cases, but is under no obligation to do so. Performance allocations to be made, or performance fees payable to, the External Managers may create incentives for External Managers to make investments that are riskier than would otherwise be the case. The Private Investment Fund also will pay a management fee to Meritage, which will be paid irrespective of the Private Investment Funds’ profitability.

No Control; Limited or No Transparency. Meritage exercises little or no control over the External Managers. Although Meritage attempts to monitor the performance of each External Manager, the Private Investment Funds must ultimately rely on each External Manager to operate in accordance with the investment strategy or the guidelines laid out by the External Manager and the accuracy of the information provided to the Private Investment Funds by the External Manager. If an External Manager does not operate in accordance with the investment strategy or guidelines, or if the information furnished to the Private Investment Funds is not accurate, the Private Investment Funds might sustain losses with respect to their investment with the External Manager despite Meritage’s attempt to monitor the investment. Meritage will generally not have access to the portfolio positions of External Managers. In addition, Meritage exercises little or no control over the institutions selected by the External Managers for brokerage, clearing, and custody services with respect to the External Managers’ assets. Bankruptcy or fraud at one of these institutions could impair the operational capabilities or the capital position of the External Managers or the Private Investment Funds.

Substantial Positions. Certain Private Investment Funds may from time to time acquire substantial positions with particular External Managers. The External Managers may have restrictions in their governing documents that limit the Private Investment Funds’ ability in whole or in part to withdraw capital from, or invest additional capital with, the External Managers, other than at specified times or in specified amounts. In addition, the External Managers may invest in instruments with limited liquidity. Such restrictions may limit Meritage’s flexibility to reallocate the Private Investment Funds’ assets among the External Managers, or to pay a redemption request by an Investor. Among the actions External Managers may take if they determine it necessary to restrict redemptions are the following: suspension of redemption rights, suspension of the calculation of the Investment Pool’s net asset value, suspension or delay in making redemption payments, creation of “side pockets” for illiquid investments, and/or the imposition of redemption “gates” (which limit the amount of total redemptions on each redemption date to a specified percentage or dollar amount of an Investment Pool’s net assets). There is no uniformity in the External Managers’ ability to take these extraordinary actions or their inclination to do so, whether in whole or in part. During periods of substantial financial markets instability (such as existed during the latter part of 2008 and the first half of 2009), the likelihood of some or all of these measures being taken by one or more of the External Managers increases.

No Coordination. The External Managers do not coordinate their investment strategies with each other or with Meritage, and at times may take positions on behalf of the Private Investment Funds which are the same as, or opposite from, positions taken by other External Managers or by Meritage. As a result, Investors may bear two sets of transaction fees while gaining little or no exposure to a certain position, or may end up with disproportionate exposure to a single position.

Legal Proceedings. The Private Investment Funds or the External Managers may be subject to lawsuits or proceedings by government entities or private parties. Expenses or liabilities of the Private Investment Funds or the External Managers arising from any such suit would be borne, directly or indirectly, by the Private Investment Funds.

Small Operations. Some of the External Managers to whom the Private Investment Funds allocate capital consist of only one or a few principals. If those individuals for any reason ceased to provide services to the External Manager, the Private Investment Funds might sustain substantial losses.

Investments with New External Managers. Certain of the External Managers with which the Private Investment Funds invest, including the start-up External Managers with which the Private Investment Funds make seed investments that entitle the Private Investment Funds to an allocable share greater than the Private Investment Fund’s relative capital contribution, may have little or no operating history. The prior performance of the principal(s) of any External Manager in any similar venture is not a guarantee of future results. There is no assurance that any Investment Pool will achieve its investment objective or that any External Manager will create a profitable investment management business.

Changes of Allocation. Meritage expects from time to time to change the percentage of assets of each Private Investment Fund allocated to specific strategies, or to a particular External Manager. These changes are made in Meritage’s sole discretion and may be made for any reason whatsoever. No assurance can be given that an allocation change will result in increased profits for the Private Investment Funds.

Valuation. Meritage generally relies on the valuations provided by External Managers in calculating the net asset value of the Private Investment Funds and in preparing the Private Investment Funds’ financial statements. There is no assurance that such valuations will be correct or that such information will be received in a timely manner.

Brokerage Firms and Custodians Engaged by External Managers May Fail. The institutions, including the brokers with which the External Managers do business or at which the Investment Pools’ assets are held, may encounter financial difficulties that impair the operational capabilities or the capital position of the External Managers or the Investment Pools. Past events in the financial markets challenged the financial stability of a number of established financial institutions, and led to the bankruptcy of several such institutions. In the event that an External Managers or Investment Pool’s broker becomes bankrupt and/or fails to segregate the External Managers or the Investment Pool’s assets on deposit as required, the External Manager or the Investment Pool may be subject to a risk of loss. In addition, there can be no guarantee in the event of a broker’s insolvency that the pool of customer property held by the broker pursuant to applicable law will be sufficient to satisfy all customer claims, including those of the External Manager or the Investment Pools. Further, even if the External Managers or the Investment Pools do not lose the assets on deposit with one or more brokers, the External Managers or the Investment Pools could incur market losses as a result of financial difficulties at such institutions (including, but not limited to, in situations where an External Manager may be unable to access the assets of the Investment Pool and/or execute transactions through its brokers). In addition, non-U.S. institutions, including non-U.S. brokers, may be subject to different bankruptcy or other regulatory regimes than those applicable to U.S. institutions, and in doing business with such non-U.S. institutions, the External Managers and the Investment Pools may not be afforded certain of the protective measures provided by U.S. laws and regulations. A defaulting financial institution also may have the benefit of disclaimers of liability and limitations on damages that will limit the recourse of a Private Investment Fund absent gross negligence or willful misconduct on the part of the financial institution. Although the External Managers will attempt to minimize their risk in this area, there is no action that they can take which is completely risk-free.

Multiple Levels of Expense. The Private Investment Funds bear their respective direct expenses and management costs, as well as their pro rata share of the expenses and management costs incurred by the External Managers with which such Private Investment Funds invest. It is expected that the External Managers will charge management fees and incentive fees or allocations to their investors, a portion of which will be paid, directly or indirectly, by such Private Investment Funds.

Limited Liquidity. The Private Investment Funds may make additional investments in, or withdrawals from the Investment Pools only at certain times specified in the governing documents of such Investment Pools. In addition, the Private Investment Funds generally may not sell, transfer, exchange, assign, pledge, hypothecate or otherwise dispose of its interest (or any portion thereof) in an Investment Pool without the consent of the applicable general partner or manager. In addition, certain of the Investment Pools may have “lock-up” periods, side pockets or other limits on liquidity where the ability of the Private Investment Funds to make withdrawals from such Investment Pools will be restricted.

Non-Disclosure of Other Arrangements. One or more External Managers may, without notice to the Private Investment Funds, enter into agreements with certain investors granting them, among other things, greater portfolio transparency, fee waivers or reductions, different minimum investment amounts, shares having different voting rights or restrictions, additional rights to reports and other information and other more favorable investment terms, including withdrawal rights, than the terms associated with the Private Investment Funds’ investment. Such External Managers may have no obligation to offer such additional rights, terms or conditions to their other investors, including the Private Investment Funds. Meritage may in its discretion cause the Private Investment Funds to seek “most favored nation” protection in order to obtain the same rights given to another investor if those rights are more favorable than those originally obtained by such Private Investment Funds. However, there can be no assurance that the Private Investment Funds will obtain such protection with respect to any External Manager.

Access to Information from External Managers. Meritage intends to request information from each External Manager regarding such External Manager’s performance and investment strategy. However, Meritage may not always receive such information because certain of this information may be considered proprietary by the External Manager. An External Manager’s use of proprietary investment strategies that are not fully disclosed to Meritage may involve risks under some market conditions that are not anticipated by Meritage. Furthermore, this lack of access to information may make it more difficult for Meritage to select, allocate among and evaluate External Managers or successfully diversify or hedge the Private Investment Funds’ portfolios.

The discussion of risks above is not exhaustive. Investors in a Private Investment Fund should refer to the offering documents of the relevant Private Investment Fund for a more detailed explanation of the risk factors associated with an investment in a Private Investment Fund.

None of Meritage or its management personnel is registered, or have an application pending to register, as a broker-dealer or a registered representative of a broker-dealer. None of Meritage or its management personnel is registered, or have an application pending to register, as a futures commission merchant, commodity pool operator (“CPO”), a commodity trading advisor (“CTA”), or is an associated person of the foregoing entities. With respect to certain Private Investment Funds, Meritage currently qualifies for an exemption from registration as a commodity pool operator on the basis that, among other things (i) such Private Investment Funds invest in other commodity pools; (ii) each investor in such Private Investment Funds is an “accredited investor” as defined under the SEC rules; (iii) the interests in such Private Investment Funds are exempt from registration under the Securities Act of 1933, as amended, and are offered and sold without marketing to the public in the U.S.; (iv) participations in such Private Investment Funds are not marketed as or in a vehicle for trading in the commodity futures or commodity options markets; and (v) such Private Investment Funds are currently in compliance with the de minimis thresholds in Commodity Futures Trading Commission (“CFTC”) Rule 4.13(a)(3)(ii). In the future, Meritage may register with the CFTC as a CPO or may qualify for a different exemption from registration. Nathaniel Simons, the Chairman and a Senior Managing Director of the general partner of Meritage, is a director and minority owner of Renaissance Technologies LLC (“Renaissance”), an SEC-registered investment adviser that is also a registered commodity pool operator and commodity trading advisor, and in his capacity as such, is registered as a listed principal with the National Futures Association. Mr. Simons does not have any active involvement in Renaissance’s investment or trading activities, and his relationship with Renaissance does not create a material conflict of interest with Meritage’s Clients. Renaissance is not an advisory affiliate or otherwise a related person of Meritage. Conflicts of Interest Meritage expects that Investors affiliated with Meritage or with Renaissance (the “Affiliated Investors”) will remain the primary investors in the Private Investment Funds for the foreseeable future. Unaffiliated Investors should note that Meritage may allocate the Private Investment Fund’s capital to External Managers based on the perceived optimal allocation for one or more of such Affiliated Investors. In addition, an Affiliated Investor may be permitted to invest in a Private Investment Fund on more favorable terms than an unaffiliated Investor. Certain Investors, including Affiliated Investors and Investors who Meritage, in its sole discretion, classifies as large, strategic investors, may and do from time to time receive additional reporting and/or enhanced transparency and additional access to portfolio and investment information with respect to the Private Investment Funds’ portfolios, including Investment Pools and the Private Investment Funds’ performance attribution that is not received by other Investors, provided that the Investor signs a non-disclosure agreement prior to the receipt of any such information. Such Investors may be able to make investment decisions (including, without limitation, decisions regarding making additional capital contributions,

making withdrawals and entering into hedging transactions designed to offset such investors’ exposure to investment positions taken by the Private Investment Funds) based on information not made generally available to other Investors. Conflicts Related to Special Investors. Meritage has, and will in the future continue to designate certain Investors as special investors (“Special Investors”). Special Investors have preferential arrangements with the Private Investment Funds with respect to management fees, performance allocations, withdrawals, and may also have preferential arrangements with respect to other aspects of their investments in such Private Investment Funds, or which otherwise differ from those of other investors of such Private Investment Funds. Examples of persons who may qualify as Special Investors are Meritage and its affiliates, as well as their current and former employees, partners, officers and/or directors (and their respective family members), and current and former employees, partners, principals, officers and/or directors of Renaissance and its affiliates (and their respective family members), as well as trusts, vehicles and other entities affiliated or otherwise related to each the foregoing. Furthermore, in their capacity as Special Investors, Meritage, its affiliates and private investment funds managed by Meritage are permitted to make withdrawals from certain Private Investment Funds on a monthly basis (including in respect of amounts attributable to performance allocations or management fees and any appreciation thereon). Fundraising for Seed Capital or Strategic Investments; Services Agreement with Limited Purpose BrokerDealer. Personnel of Meritage or its affiliates are expected, from time to time, to provide capital raising, investor relations and/or related services on behalf of third-party investment managers with which a Private Investment Fund has made “seed capital” or strategic investments (i.e., investments which provide a Private Investment Fund with interests in the revenue streams associated with management fees and incentive compensation generated for such third-party investment managers in respect of the third-party investment managers’ funds and investment vehicles, including those funds and investment vehicles for which a Private Investment Fund has provided seed capital). In general, those Private Investment Funds that have made “seed capital” or strategic investments in such third-party managers benefit from additional capital invested in the third-party managers’ funds and accounts as a result of the potential increase in asset-based fee and performance compensation revenue that such additional capital may generate. In order to facilitate the provision of such capital-raising services by personnel of Meritage or its affiliates in compliance with applicable law and regulations, Meritage and its affiliates have retained a limited purpose broker-dealer to provide limited purpose broker-dealer services, including the licensing and regulatory supervision of certain employees of Meritage and its affiliates as registered representatives of the limited purpose broker-dealer, itself a registered broker-dealer. Compensation payable and expenses reimbursable to the limited purpose broker-dealer under such arrangements will be borne by the applicable Private Investment Fund that participates in the relevant “seed capital” or strategic investments, and such Private Investment Fund’s portion of such expenses, as determined in accordance with Meritage’s expense allocation policies, will be borne by such Private Investment Fund as a fund expense. Personnel of Meritage who provide capital-raising, investor relations and/or related services to third-party investment managers with which a Private Investment Fund has made or will make seed capital and/or strategic investments are expected to be compensated (directly or indirectly through Meritage or an affiliate) by such third-party investment managers based on the amount of capital raised by such personnel for such investment managers’ funds. Such compensation will not be offset against or reduce such Private Investment Fund’s management fees or be shared with such Private Investment Fund or its investors in any manner. Because the overall asset-based fees and performance compensation that may be charged to any fund or investment vehicle of a third-party manager with which a Private Investment Fund will make a seed investment in the future are subject to negotiation by prospective investors based on market terms for such management services, and because the Private Investment Funds, in respect of such seed investments, will generally receive a percentage of such fees and compensation, the existence of compensation to Meritage’s

(and its affiliates’) personnel or the potential therefor may have an adverse effect on the percentages of revenue shares that are negotiated on behalf of such Private Investment Fund in exchange for its future seed investments and therefore an adverse effect on the value of such Private Investment Fund’s seed investments. While compensation paid to the personnel of Meritage and its affiliates described above is expected to be borne by the third-party investment managers out of their own management fees and/or performance based compensation, to the extent any such compensation is ultimately borne by the funds in which a Private Investment Fund has invested seed capital, such expenses would also be expected to reduce investment returns to such Private Investment Fund in respect of such seed investments.

impose limitations on the giving or receiving of gifts and entertainment; and

restrict Supervised Persons’ outside business activities.

Meritage’s Chief Compliance Officer (“CCO”), with assistance from other members of Meritage’s legal/compliance team, monitors compliance with these and all other aspects of the Code of Ethics. Supervised Persons of Meritage may engage in investment and trading activities and may invest with one or more External Managers for their own account, provided that any such investment is subject to Meritage’s Code of Ethics, described above. Any conflict between a Private Investment Fund and a Supervised Person would be addressed in accordance with its Code of Ethics. Meritage is not obligated to devote any specific amount of time to the affairs of the Private Investment Funds nor is it required to accord exclusivity or priority to the Private Investment Funds in the event of limited trading or investment opportunities arising from the application of position limit or other trading restrictions or opportunities. Conflicts of interest are discussed in further detail in the offering documents for the Private Investment Funds. The Code of Ethics provides that, at all times, Supervised Persons must ensure that Meritage meets its fiduciary obligations to Clients. A copy of the Code of Ethics is available to Clients or prospective clients by submitting a request to the CCO. Interest in Client Transactions Meritage invests Private Investment Fund assets in one or more private investment vehicles for which Meritage or its affiliates acts as investment manager; however, in such case Investors do not bear additional layers of management fees or performance allocations. Meritage may, on behalf of a Private Investment Fund, for liquidity, portfolio rebalancing or other reasons, enter into transactions with another Private Investment Fund or other investment and trading account

advised by Meritage. The terms of any such cross transactions will be commercially reasonable and will not be materially less favorable to such Private Investment Fund than those available in the market. Neither Meritage nor its affiliates will receive special fees or other compensation in connection with cross transactions. Expenses incurred in such transactions will be allocated equitably in the sole discretion of Meritage between such Private Investment Fund and the other party to the cross transaction. Similarly, if a transaction is cancelled, any costs incurred will be allocated equitably in the sole discretion of Meritage between such Private Investment Fund and the other party to the cross transaction. With respect to certain Private Investment Funds, Meritage generally undertakes semi-annual rebalancing activities as between a master fund and its feeder funds and as among such feeder funds, but may conduct rebalancings at any time and may modify the methodology for rebalancings in its sole discretion. Any such rebalancings are made in accordance with the applicable offering memoranda of such Private Investment Funds. Meritage also expects, from time to time, to enter into trades on behalf of a Private Investment Fund with affiliated investment vehicles or affiliates of Meritage that are deemed to be principal trades within the meaning of Section 206(3) of the Advisers Act due to the amount of related party capital in such affiliated investment vehicles when Meritage determines that to do so is in the best interests of such Private Investment Fund. In analyzing such principal transactions, Meritage will have a conflict between acting in the best interest of the Private Investment Fund and acting in the interest of itself or its affiliates by selling or purchasing a particular security or other asset. Meritage will only cause a Private Investment Fund to engage in such transactions with an affiliate of Meritage or other principal account to the extent permitted by applicable law and in compliance with Section 206(3) of the Advisers Act, including, if required or appropriate, the making of appropriate disclosure to and receipt of consent from the Private Investment Fund or investors therein. Certain Private Investment Funds have adopted mechanisms for a conflicts reviewer (a “Conflicts Reviewer”) to provide consent for principal transactions on behalf of such Private Investment Fund.

In selecting brokers to execute transactions, Meritage or the External Managers need not solicit competitive bids and do not have an obligation to seek the lowest available commission cost to be charged by the brokers it or they select. Because brokers are selected based on factors other than “execution only” commission rates, a Client may be deemed to be paying for other products and services, including research, provided by the broker which are included in the commission rate. Portfolio transactions for the Private Investment Funds may be allocated to brokers on the basis of obtaining the best overall terms available, which Meritage or each External Manager, as the case may be, will evaluate based on a variety of factors, including the ability to achieve prompt and reliable execution at favorable prices, the operational efficiency with which transactions are effected, the competitiveness of the commission rates, the terms of borrowings available from the broker, the financial strength, integrity and stability of the broker, and the quality, comprehensiveness and frequency of available research and related services considered to be of value. Recognizing the values of these factors, Meritage or the External Managers may select a broker who charges brokerage commissions in excess of that which another broker might have charged for effecting the same transaction. With respect to the selection of brokers for investment strategies managed directly by Meritage, Meritage will make a good faith determination that the amount of commission is reasonable in relation to the value of the brokerage and research services received, viewed in terms of either the specific transaction or Meritage’s overall responsibility to its Clients. Research and Other Soft Dollar Benefits As noted above, Meritage and the External Managers may pay a broker a commission in excess of that which another broker might have charged for effecting the same transaction in recognition of the value of the brokerage, research and related services provided by the broker. Such brokerage practices are often referred to as the use of “soft dollars.” These arrangements allow Meritage and the External Mangers to supplement their own research analysis with the research and information provided by the broker. Such arrangements also provide an incentive for Meritage and the External Managers to direct Client transactions to brokers that provide the research and other services. To the extent that such research products and services are obtained or “soft dollar credits” (which can be used to pay for soft dollar items) are generated, Meritage and/or the External Managers will be receiving a benefit by reason of the direction of commissions because they will not need to produce or pay for the products or services (or charge such expenses to Clients). As a result of the brokerage arrangements utilized by Meritage and the External Managers, conflicts of interest may arise between Meritage or the External Manager, on the one hand and their Clients, on the other hand, because some research and other products and services may not necessarily be used by Meritage or the External Manager, as applicable, in servicing the Clients whose commission dollars provided for the research and Clients may not, in any particular instance, be the direct or indirect beneficiary of the research or other products and services provided.

Section 28(e) of the Securities Exchange Act of 1934, as amended, provides a safe harbor that allows investment managers with discretionary authority over client accounts to pay more than the lowest possible commission in order to obtain “brokerage and research services” without breaching their fiduciary duties to clients. Meritage currently seeks to limit the use of “soft dollar” benefits from brokers to products and services that fall within the safe harbor provided by Section 28(e). Meritage intends to use, and in the past fiscal year has used, research products and services within the Section 28(e) safe harbor. Such products and services generally include, among other things, advice, analyses, reports, publications and writings that furnish advice as to the value of investments, the advisability of investing in, purchasing or selling investments, and the availability of investments, as well as analyses and reports concerning issuers, industries, securities, economic factors and trends, portfolio strategy and the performance of accounts which Meritage determines constitute advice, analysis or reports. Such research services also include, among other things, market data services such as stock quotes, last sale prices, trading volumes and financial and economic data, pre-trade and post-trade analytics, software and other products that depend on market information to generate market research (including research on optimal execution venues and trading strategies), raw data which Meritage can use to prepare its own research analytics, conferences and seminars related to research discussions, meetings with corporate executives to obtain reports on, among other things, the performance of a company, publications targeted at a narrow audience, including, without limitation, publications which are directed to readers with specialized interests in particular products, industries or issuers, and software that provides analyses of investment portfolios. In addition, Meritage intends to acquire, and in the past fiscal year has acquired, certain brokerage services within the Section 28(e) safe harbor. Such services generally include clearance, settlement and short term custody services in connection with trades effected by the broker or dealer, post-trade services incidental to executing a transaction, comparison services that are required by SEC or self-regulatory organization rules, such as the use of electronic confirmation and affirmation of institutional trades, communications services related to execution, clearing and settlement of investment transactions, trading software to route orders to market centers, software that provides algorithmic trading functionalities and software used to transmit orders to direct market access systems. External Managers also may use brokerage and research services within the safe harbor provided by Section 28(e), including those described above. However, they may not necessarily comply with the safe harbor provided by Section 28(e) in all circumstances. Conduct outside the safe harbor afforded by Section 28(e) is subject to the applicable standards of fiduciary duty under applicable law and the Advisers Act. To the extent an External Manager uses commissions to obtain soft dollar credits that would otherwise be an expense of the External Manager, such credits in effect constitute additional compensation to the External Manager. Directed Brokerage Meritage may request External Managers that trade a portion of Private Investment Funds’ assets through managed accounts to direct brokerage transactions to particular brokers, but the External Managers will generally not be under any obligation to do so. Brokerage fees for such managed accounts are paid directly by the Private Investment Funds; brokerage fees for investments by Investment Pools are generally one of the expenses of such Investment Pools.

Aggregation Except in certain circumstances, Meritage generally seeks to aggregate sale and purchase orders of securities held by the Private Investment Funds with similar orders being made simultaneously for other accounts as it is Meritage’s view that aggregating orders is likely to result in an overall economic benefit to one or more Private Investment Funds, such as a relatively better purchase or sale prices, lower commission expenses or beneficial timing of transactions, or a combination of these and other factors. In certain instances, the purchase or sale of securities for one or more Private Investment Funds will be effected simultaneously with the purchase or sale of like securities for another Private Investment Fund. Such transactions may be made at slightly different prices, due to the volume of securities purchased or sold. In such event, the average price of all securities purchased or sold in such transactions may be determined, and at Meritage’s sole discretion, the Private Investment Funds may be charged or credited, as the case may be, the average transaction price. To the extent an aggregated order is only partially filled, it will be allocated pro rata among the relevant Private Investment Funds in the proportions that would have applied had the order been fully filled. Trade Errors It is Meritage’s policy that the utmost care is to be taken in making and implementing investment decisions on behalf of Client accounts. To the extent that any errors occur, they are to be resolved promptly and reported to Meritage’s Chief Financial Officer (the “CFO”) and the CCO, in each case in accordance with Meritage’s policies and procedures.

As soon as practicable following year end, Meritage will send to each Investor in a Private Investment Fund annual tax information needed for the preparation of the Investor’s income tax returns. During the year, Investors will receive at least quarterly unaudited written reports on the applicable Private Investment Fund’s performance.

A decision may be made not to vote a proxy if the analyst(s) and/or portfolio manager(s) responsible for voting determine that not casting a vote is appropriate and in a Private Investment Fund’s best interests. For example, it is Meritage’s policy, generally, that proxies involving rehypothecated securities or securities that have already been sold or for which exposure has otherwise been eliminated will not be voted. It is Meritage’s policy generally to vote in favor of management proposals aimed at effectuating standard and necessary aspects of business operations, such as the election of directors. Each proxy proposal is reviewed on a case-by-case basis by a member of Meritage’s investment team. There may be cases in which proxies are voted differently on the same matter for different Private Investment Funds, if the interests of such Private Investment Funds diverge. In the event of a conflict of interest is identified in connection with voting a particular proxy, the CCO or his or her designee will review all proxy materials where conflicts of interest have been identified and determine whether such conflict is material. Where the CCO or his or her designee determines that there is a potential for a material conflict of interest regarding a proxy, the CCO or his or her designee will consult with the portfolio manager(s) and the CFO and a determination will be made as to the steps to be taken. In the event of a material conflict of interest, the CCO or his or her designee will document the steps taken to evidence that the proxy vote or abstention was in the best interest of the Private Investment Funds and not the product of any material conflict. Meritage has adopted proxy voting policies and procedures in accordance with Rule 206(4)-6 under the Advisers Act. Meritage will ensure that all books and records relating to its proxy voting activities are retained in accordance with the requirements of Rule 204-2(c)(2) under the Advisers Act. Clients may obtain a copy of Meritage’s proxy voting policies and procedures and information about how Meritage voted their securities by contacting the CFO.