Merewether Investment Management, LP: investment adviser

Merewether provides discretionary investment advice to its Clients through investing in public equities and liquid credit across the energy value chain highlighted by three strategies: long/short, long-only, and liquid credit.. The Adviser provides investment advisory services to the Funds based on the investment objectives and strategies described in each Fund’s confidential offering memorandum and governing documents. Merewether provides its services to the Managed Accounts in accordance with an investment management agreement between Merewether and the respective Managed Account. C. Advisory services are tailored to achieve the investment objectives described in the applicable Client’s confidential offering memorandum and governing documents, including but not limited to an investment management agreement (referred to collectively as “Offering Documents”). Generally, Merewether has the authority to select which and how many securities and other instruments to buy or sell without consultation with the Clients or Fund Investors. Merewether does not tailor its advisory services to the individual needs of Fund Investors and does not accept Fund Investor imposed investment restrictions. The Adviser may tailor its advisory services with respect to the individual needs of its Managed Account Clients. Each advisory agreement with Managed Account Clients was separately negotiated and designed to suit the needs of the respective Client and its respective investment guidelines which may include restrictions on investing in certain securities or types of securities. D. The Adviser will not participate in wrap fee programs. E. As of December 31, 2025, the Adviser managed approximately $6,908,781,626 in regulatory assets under management on a discretionary basis. Merewether does not manage any advisory client assets on a non-discretionary basis.

Set forth below is a description of the fees and expenses paid by the Funds and Managed Accounts, respectively: The Funds In consideration for its services to the Funds, Merewether is entitled to receive a quarterly Management Fee calculated at an annual rate of (i) 1.25-1.5% of each Investor’s Capital Account (a “Capital Account”) attributable to Standard Class Interest and (ii) .75% to 1.0% of each Investor’s Capital Account attributable to any Founders Class Interest (the “Management Fee”). The Management Fee is payable in advance as of the first business day of each calendar quarter. The Management Fee may be waived, reduced or discounted from time to time in the Adviser’s discretion with respect to one or more Investors without consent of the other Investors. Merewether Special Partners, LP, an affiliate of the general partner, is entitled to a Performance Allocation (the “Performance Allocation”) at the end of each calendar year, generally calculated as follows: (i) with respect to any Standard Class Interest, the Performance Allocation is equal to 17.5% of the amount by which the Fund’s net profits allocated to the associated Standard Class Capital Account for such calendar year (after reduction for the Management Fees debited to such Standard Class Capital Account) exceeds the associated loss carryforward; and (ii) with respect to any Founders Class Interest, the Performance Allocation is equal to 15% of the amount by which the Fund’s net profits allocated to the associated Founders Class Capital Account for such calendar year (after reduction for the Management Fees debited to such Founders Class Capital Account) exceeds the associated loss carryforward. Merewether Special Partners, LP may, in its sole discretion, reduce, waive or rebate the Performance Allocation with respect to any Investor, including, without limitation, any affiliated investors, without entitling any other Investor to the same or similar or identical reduction, waiver or rebate, and shall not be required to obtain the consent or approval of, or give notice to, any Investor in connection therewith. Managed Accounts In connection with the advisory services provided to the Managed Accounts, Merewether typically will charge a management fee and a fee based on the performance of the Managed Account (a “Performance Fee” and together with the Performance Allocation, “Performance Compensation”), each negotiated with the Managed Account Client on an account-by-account basis.

B. The Funds pay a management fee quarterly in advance as compensation for the management services to be performed by the Adviser. Such fees are generally deducted from the Investor’s Capital Account. The Adviser has the right to reduce, waive, assign, participate or otherwise share or modify the management fee chargeable with respect to any Investor (including any affiliate of the Fund’s general partner or the Adviser) without the consent of, or notice to, any other Investor. Fees are not automatically deducted from the Managed Accounts. Merewether bills the applicable Managed Account for fees incurred. The Adviser is compensated pursuant to advisory agreements that were individually negotiated with each Managed Account. C. The Funds pay all expenses of the organization of the Fund and the offering of interests, including legal and accounting fees, printing costs, travel, “blue sky” and other regulatory filing fees and expenses, and out-of-pocket expenses, but not including placement fees. Each Fund bears its own operating and other expenses, including but not limited to: (i) costs and expenses related to its investment program, including expenses related to proxies, underwriting and private placements, data feed hardware and software, research, evaluation, due diligence, negotiation, consummation, management, valuation and disposition of investments, trade publications, brokerage commissions, bank service fees, interest on debit balances or borrowings, custody fees, fees assessed by prime brokers, and other third-party service fees, and any taxes (including, but not limited to, withholding and transfer taxes) imposed on the Fund, expenses relating to any short sales, clearing and settlement charges, and travel expenses related to the investment process; (ii) costs and expenses related to operations, portfolio and trading-related software, including trade order management software (i.e., software used to route trade orders and manage the portfolio) and related connectivity costs; (iii) all out-of-pocket costs of the administration of the Fund, including, without limitation, fees and expenses of any Administrator, bookkeeping accounting, audit, tax and tax preparation expenses, legal expenses, costs of any litigation or investigation involving the Fund’s activities, printing and duplication expenses, and costs associated with reporting and providing information to existing and prospective Investors, the costs of holding any meeting of the partners, and any costs of procuring and maintaining insurance for the benefit of the Fund, the Fund’s general partner, and the Adviser; (iv) any governmental, regulatory, licensing, filing or registration fees and expenses (including any fees and expenses associated with any regulatory, operations or compliance consultant) incurred by the Fund, the Fund’s general partner or the Adviser in compliance with the rules of any self-regulatory organization or any federal, state or local or other applicable laws to the extent such fees and expenses directly relate to the Fund’s activities; (v) any withholding, transfer or other taxes imposed on, or payable by, the Fund or any of its partners; (vi) all costs, fees and expenses associated with the ongoing offering of the Interests; (vii) information technology expenses associated with all aspects of the Fund’s operations (including, without limitation, the costs associated with establishing and maintaining investor reporting systems, and information technology and data security programs and other systems designed to manage and control cyber security risk); (viii) expenses of any administrative proceedings undertaken by the Fund’s general partner in its capacity as the Fund’s “partnership representative”; (ix) any costs or expenses associated with the winding up and liquidation of the Fund; (x) such other reasonable expenses necessary to perform the operation of the Fund as determined by the Fund’s general partner in its sole discretion; (xi) all extraordinary expenses of the Fund, including, without limitation, indemnification costs,

litigation costs or damages, trade errors, and costs incurred in connection with any reorganization or restructuring of the Fund); and (xii) the Fund’s pro rata share of any similar expenses incurred at the master fund level. In addition, the Clients may incur brokerage and other transaction costs. Please see the disclosures in Item 12 as it relates to Merewether’s brokerage activities. Greater detail regarding fees and expenses, as well as other important information regarding an investment in a Fund is more fully set forth in its governing documents. Each Managed Account will typically bear its own investment and operating expenses as detailed in its investment management agreement. D. As stated above, management fees are deducted from each Investor’s Capital Account and paid quarterly in advance. The Management Fee is prorated for any period that is less than a full quarter for capital contributions made by new or existing investors and refunded on a prorated basis upon withdrawal or redemption from the Fund prior to quarter-end. Some Managed Account pay Merewether a management fee periodically (e.g., quarterly) in advance based on the account’s net asset value, notional value or similar formula as detailed in its investment management agreement. Such management fees are typically prorated for any period that is less than a full quarter.

Performance-based fees, in general, may create an incentive for Merewether or its supervised persons to make investments that are riskier and more speculative than would be the case in the absence of a performance-based fee. Such fee arrangements may also create an incentive to favor higher fee-paying clients over other clients in the allocation of investment opportunities. To address these conflicts of interest, the Adviser has implemented policies and procedures to ensure that all client accounts receive equitable and fair treatment with respect to the allocation of investment opportunities.

The third is to extract the alpha from the adoption of “new energy” fuel sources. Each new energy fuel source has an associated “value chain.” The Adviser will invest in publicly traded equities across the entire new energy value chain. Such fuel sources include, but are not limited to, wind, solar, hydroelectric, hydrogen, geothermal, renewable diesel or biodiesel, biomass, etc. In pursuit of its investment objectives and in deploying its strategies, the Adviser may invest in financial instruments, such as derivatives, to hedge its exposure, as well as any other financial instruments providing direct or indirect exposure to the energy sector, and such other instruments or interests that the Adviser deems appropriate. The Adviser relies on fundamental analysis to determine specific energy industry trends and identify opportunities created by dislocation in various markets or securities, and may also make investments based on company specific factors or events. The fourth involves leveraging the fundamental analysis conducted in pursuit of the other strategies and applying it to investments in credit-related instruments. Merewether expects this will involve primarily debt securities but may include equities or equity options of capital structures of related companies and other financial instruments that provide direct or indirect exposure to the energy sector or credit markets. Investing in securities and other instruments involves risk of loss that Investors should be prepared to bear, including but not limited to, those described below. The management style offered by Merewether is not intended as a complete investment program and may not be suitable for all investors. It is designed for sophisticated investors who fully understand and are capable of bearing the risk of such an investment. No guarantee or representation is made that the Adviser will achieve its investment objectives or that there will be any return of capital, and investment results may vary substantially on a monthly, quarterly, or annual basis. Although the Adviser seeks to reduce the risks associated with the Clients’ investments, prospective investors should consider carefully, among other factors, the risks described below. Such risk factors are not meant to be an exhaustive listing of all potential risks associated with investments in the Clients.

B. The following is a summary of certain significant risks associated with the Adviser’s investment strategies: General Investment Risks. All investments in financial instruments entail the risk of loss. We advise our Clients to invest in a wide variety of financial instruments, typically including, without limitation, equities, equity-linked securities and equity-related securities, options, futures contracts and other commodity interests, swaps, currencies, fixed income and fixed income related products, all of which involve particular risks. Such investments are subject to investment-specific price fluctuations as well as to macro-economic, market and industryspecific conditions, including, but not limited to, national and international economic conditions, domestic and international financial policies and performance, conditions affecting particular investments such as the financial viability, sales and product lines of corporate issuers, national and international politics and governmental events, and changes in income tax laws. Moreover, we may have only limited ability to vary a Client’s investment portfolio in response to changing economic, financial and investment conditions. No guarantee or representation is made that any Client investment program will be successful, and investment results may vary substantially over time. Trading is Speculative and Volatile. Financial instrument prices may be highly volatile. Price movements of financial instruments in which a Client’s assets are invested are influenced by, among other things, changing supply and demand relationships, weather, agricultural, trade, fiscal, monetary, and exchange control programs and policies of governments, political and economic events and policies, changes in national and international interest rates and rates of inflation, currency devaluations and revaluations, and sentiments of the marketplace. No assurance can be given that a Client’s investments will be profitable or that it will not incur substantial losses. Investments in Securities and Other Assets Believed to Be Undervalued. The Adviser’s investment program contemplates that a portion of a Client’s portfolio may be invested in securities and other assets that the Adviser believes to be undervalued. The identification of such investment opportunities is a difficult task, and there are no assurances that such opportunities will be successfully recognized or acquired. While such investments offer the opportunities for above-average capital appreciation, they also involve a high degree of financial risk and can result in substantial losses. Returns generated from a Client’s investments may not adequately compensate for the business and financial risks assumed. The current severe economic conditions and any future major economic recession can severely disrupt the markets for such investments and significantly impact their value. In addition, it is likely that any such economic downturn could adversely affect the ability of the issuers of such obligations to repay principal and pay interest thereon and increase the incidence of default for such securities. Additionally, there can be no assurance that other investors will ever come to realize the value of some of these investments, and that they will ever increase in price. Furthermore, a Client may be forced to hold such investments for a substantial period of time before realizing their anticipated value. During this period, a portion of a Client’s funds would be committed to the investments made, thus possibly preventing a Client from investing in other opportunities.

Reliance on Fundamental Analysis. The Adviser bases its trading decisions, in whole or in part, on fundamental analysis. Fundamental analysis considers financial instrument-specific factors, including, without limitation, country gross domestic product, monetary policy, inflation expectations, trade balances and geopolitical metrics. The Adviser’s operating belief is that price converges to fundamental value over time, but that price can differ significantly from fundamental value for a variety of temporary reasons. It is this discrepancy the Adviser strives to exploit. The Adviser’s fundamental analysis may be flawed in that it identifies what turns out to be the wrong opportunities and/or its assessment of fundamental value turns out to be incorrect in that the financial instrument does not converge to that valuation. General Economic and Market Conditions. The success of a Client’s investment activities may be affected by general economic and market conditions, such as interest rates, availability of credit, inflation rates, economic uncertainty, climate change, local epidemics and global pandemics, political circumstances (including wars, terrorist acts or security operations) and changes in laws that could have a negative impact on the economy and business activity in any of the regions in which the Client may invest and thereby adversely affect the performance of its investments. A portion of a Client’s assets may be invested in countries where the market economy is relatively less developed. Although the recent general trend in such countries has been towards more open markets and the promotion of private business initiatives, no assurance can be given that the governments of these countries will continue to pursue such policies or that such policies may not be altered significantly. Political instability, economic distress, the difficulties of adjustment to a market economy, social instability, organized crime or other factors beyond the Adviser’s control could have a material adverse effect on the performance of a Client’s account. Financial System Disruption. The Adviser, the Clients and the Clients’ investments are dependent on unaffiliated financial industry participants, including banks, broker-dealers, clearing houses, securities firms, exchanges and other financial institutions, to conduct their business. A disruption or shock in the financial industry or markets (as occurred in the first quarter of 2023 with multiple banks entering receivership or otherwise seeking assistance; such a disruption or shock being a “Financial Disruption Event”) could adversely affect any of these financial institutions, which in turn could have material adverse consequences for the Adviser, the Clients or the Clients’ investments. The severity of this risk could be increased by any exclusive arrangements entered into with these financial institutions. A Financial Disruption Event affecting a bank or financial institution that has custody of Client assets could adversely impact the value or integrity of those assets and the ability to retrieve and secure such assets. A Client may experience delayed access to deposits or other financial assets or an uninsured loss of those deposits or other financial assets. In particular, if the Adviser or an affiliate has a banking relationship (for example, a payroll account) with a bank or other financial institution that experiences a Financial Disruption Event, the Adviser’s ability to manage or operate consistent with past business practices could be negatively impacted, potentially resulting in a disruption in operations.

Assumption of Catastrophe Risks. Clients may be subject to the risk of loss arising from direct or indirect exposure to various catastrophic events, including the following: hurricanes, earthquakes and other natural disasters; war, terrorism and other armed conflicts; cyberterrorism; major or prolonged power outages or network interruptions; and public health crises, including infectious disease outbreaks, epidemics and pandemics. To the extent that any such event occurs and has a material effect on global financial markets or specific markets or issuers in which the Clients invest (or has a material negative impact on the operations of the Adviser or its service providers), the risks of loss can be substantial and could have a material adverse effect on the Clients, the Fund Investors and the Managed Account Clients’ direct or indirect investments therein. The operations of energy companies are subject to many hazards inherent in the exploration for, and development, production, gathering, transportation, processing, storage, refining, distribution, mining or marketing of, coal, natural gas, natural gas liquids, crude oil, refined petroleum products or other hydrocarbons, including damage to production equipment, pipelines, storage tanks or related equipment and surrounding properties caused by hurricanes, tornadoes, floods, fires and other natural disasters or by acts of terrorism; inadvertent damage from construction or other equipment; leaks of natural gas, natural gas liquids, crude oil, refined petroleum products or other hydrocarbons; and fires and explosions. These risks could result in substantial losses due to personal injury or loss of life, severe damage to and destruction of property and equipment and pollution or other environmental damage, and might result in the curtailment or suspension of their related operations. Not all energy companies are fully insured against all risks inherent to their businesses. If a significant accident or event occurs that is not fully insured, it could adversely affect an energy company’s operations and financial condition. Force Majeure. “Force majeure” refers to the legal concept, included in certain commercial and other contracts, whereby a party to a contract may be excused from performing its obligations to a counterparty under such contract where performance is made impossible or highly impracticable as a result of an event that the contract parties could not have anticipated or controlled. Examples of force majeure include earthquakes, floods, national emergencies and potentially (under certain facts and circumstances) government-mandated closures resulting from viral outbreaks like COVID-19. The determination of whether a force majeure event has been triggered under a contract or has otherwise occurred is a mixed factual and legal one, and the Adviser may incur legal costs (which may be significant) in disputes with counterparties regarding whether any such event has occurred, with the likely outcome of any such dispute hard to predict. If the Adviser were unable to enforce a material contract with a service provider as a result of a force majeure event, and/or if it incurred significant legal expenses in a dispute over a force majeure event, the results and prospects of a Client may be adversely affected. Importantly, the Offering Documents do not include a force majeure clause and, as such, neither the general partners or the limited partners of the Funds, a contractual basis for non-performance based on events that may constitute force majeure. Uncertain Economic and Political Environment. The current global economic and political climate is one of uncertainty. Acts of terrorism in the United States and abroad, the threat of additional terrorist strikes and the fear of a prolonged global conflict have exacerbated

volatility in the financial markets and caused consumer, corporate and financial confidence to weaken, increasing the risk of a “self-reinforcing” economic downturn. The climate of uncertainty may reduce the availability of potential investment opportunities and increases the difficulty of modeling market conditions, which in turn reduces the accuracy of the Adviser’s financial projections. Furthermore, the uncertainty may have an adverse effect upon the Clients’ investments. Epidemics and Pandemics. Many countries have been susceptible to epidemics, such as severe acute respiratory syndrome, avian flu, H1N1/09 flu and, COVID-19. The epidemic or pandemic outbreak of an infectious disease in a country or region of the world or globally, together with any resulting restrictions on travel, transportation or production of goods, provision of services or quarantines imposed, could have a negative impact on the U.S., regional or global economy and business activity in any of the countries in which a Client may invest and thereby adversely affect the performance of a Client’s account. Any future outbreak of an infectious disease or any other serious public health concern in a country, region or globally could materially harm a Client’s investments. Any future outbreak of an infectious disease or any other serious public health concern may lead to additional volatility and illiquidity of a Client’s investments. Ongoing Global Conflicts and Crises. Sustained uncertainty about, or worsening of, global geopolitical tensions, including further escalation of war between Russia and Ukraine, further escalation in the armed conflicts and tensions in the Middle East (in particular, between the United States and Iran) or further escalation in the tensions between the United States and Venezuela, could result in a global economic slowdown and long-term changes to global trade. The conflicts between Russia and Ukraine, in the Middle East and between the United States and Venezuela have increased global economic and political uncertainty. It is possible that these conflicts may escalate or expand, and the scope, extent, and duration of the military action, current or future sanctions, and resulting market and geopolitical disruptions could be significant. Any acceleration of a global energy crisis, including as a result of restrictions on Russia’s energy exports or the expansion of the Middle East conflicts, could similarly have an adverse impact on certain of the geographies where Clients invest. The impact that these conflicts may have on the global economy or Clients’ business, financial condition, and operations in the future is not able to be predicted with any certainty. In addition, a number of countries, including the United States and a number in Europe, have imposed sanctions on Russia and business affiliated with that country. The long-term impact of these sanctions is not entirely clear, but they have the potential to limit potential investment opportunities and may impair cash flow that is material to an investment if third parties doing business with a company subject of an investment are sanctioned parties. The regulatory framework of sanctions is often complex and at times counter-intuitive. It is possible that Clients might have exposure to transactions, that directly or indirectly involve sanctioned parties, that may pose liability and compliance risks.

Tariffs. Political leaders in the United States and certain European nations have been elected on protectionist platforms, fueling doubts about the future of global free trade. For example, the U.S. government has indicated its intent to alter its approach to international trade policy and in some cases to renegotiate, or potentially terminate, certain existing bilateral or multilateral trade agreements and treaties with non-U.S. countries. In addition, the U.S. government has imposed tariffs on certain non-U.S. goods, including steel and aluminum and has indicated a willingness to impose tariffs on imports of other products. Some non-U.S. governments, including China, Canada and the EU, have instituted or have announced plans to institute retaliatory tariffs on certain U.S. goods and have indicated a willingness to impose additional tariffs on U.S. products. Governments of other countries have introduced, or may in the future introduce, protectionist and other similar trade policies that could adversely affect free trade. Global trade disruption, significant introductions of trade barriers and bilateral trade frictions, together with any resulting future downturns in the global economy, could adversely affect the financial performance of Clients and their investments. Further, trade disputes may develop between other countries, which may have similar or more pronounced risks and consequences for Clients or their investments. These and similar concerns have contributed, and similar and unforeseeable concerns, may continue to contribute to volatility in global markets. Market Dislocation, Illiquidity and Volatility. Significant dislocations, illiquidity and volatility in the global financial markets have occurred in the past several years (and may occur once again), which had an adverse effect on market liquidity and caused significant market disruption. To the extent that such marketplace events occur again, they may have an adverse impact on the availability of credit to businesses generally and lead to an overall weakening of the U.S. and global economies. Any resulting economic downturn could adversely affect certain of a Client’s investments to greater or lesser extents. Such marketplace events also may restrict the ability of a Client to sell or liquidate investments at favorable times or for favorable prices (although such marketplace events may not foreclose a Client’s ability to hold such investments until maturity). Inflation. Inflation and rapid fluctuations in inflation rates have had in the past, and may in the future have, negative effects on the economies and financial markets, particularly in emerging economies, but also in more developed economies, including in the U.S. economy, which could be experiencing inflation in certain markets. For example, if an investment is unable to increase its revenue in times of higher inflation, its profitability may be adversely affected. Investments may have revenues linked to some extent to inflation, including without limitation, by government regulations and contractual arrangement. As inflation rises, an investment may earn more revenue but may incur higher expenses. As inflation declines, an investment may not be able to reduce expenses commensurate with any resulting reduction in revenue. Furthermore, wages and prices of inputs increase during periods of inflation, which can negatively impact returns on investments. In an attempt to stabilize inflation, countries may impose wage and price controls or otherwise intervene in the economy. Governmental efforts to curb inflation often have negative effects on the level of economic activity. There can be no assurance that inflation will not become a serious problem in the future and have an adverse impact on the Clients’ returns.

Market Inactivity. At various times the market volumes for the financial instruments in which a Client trades may be low by historical standards, thereby reducing the availability of profitable trading opportunities and, therefore, adversely affect a Client’s profit opportunities, reducing its revenues and the rate of growth of its capital. Among other things, it may be more difficult for traders and trading systems to identify and take advantage of market trends or mispricings when market volumes are reduced. Concentration of Holdings. Although the Adviser has adopted informal guidelines on diversification, those guidelines are subject to change by the Adviser, and there are no limits on the Adviser’s investment discretion that require diversification by issuer, industry or market or that impose position size limitations. At any given time, it is therefore possible that the Adviser may select positions that are concentrated in a particular market or industry, or in a limited number or type of securities. Limited diversity could expose a Client to losses disproportionate to general market movements if there are disproportionately greater adverse price movements in those positions. Diversification. Since the Funds’ portfolio will not necessarily be widely diversified, the investment portfolio of the Funds may be subject to more rapid changes in value than would be the case if the Funds were required to maintain a wide diversification among companies, securities and types of securities. Leverage. The Funds may use leverage for investment and other purposes, such as providing the Funds with liquidity. The Funds may obtain its leverage in any manner deemed appropriate by the Adviser, including trading on margin and entering into derivative transactions that have the effect of providing the Funds leveraged exposure to certain assets. The degree of leverage that the Funds may utilize will be subject to applicable legal, regulatory, bank or brokerimposed leverage limitations. The Adviser will employ leverage as it deems appropriate per the Fund’s risk/return and cash management objectives. Investment Judgment; Market Risk. The profitability of a significant portion of a Client’s investment program depends to a great extent upon correctly assessing the future course of the price movements of securities and other investments. There can be no assurance that the Adviser will be able to predict accurately these price movements. With respect to the investment strategy utilized by a Client, there is always some, and occasionally a significant, degree of market risk. Default and Counterparty Risk. The brokers, banks and other financial institutions with which a Client does business or at which the Client’s assets are held may encounter financial difficulties that impair the operational capabilities or the capital position of the Client. Past events in the financial markets have challenged the financial stability of a number of established financial institutions. Should one of the Client’s brokers, banks or other counterparties become bankrupt and/or fail to segregate the Client’s assets on deposit as required, the Client 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 such institution pursuant to applicable law will be sufficient to satisfy all customer claims, including those of the Client. Further, even if the Client does not

lose the assets on deposit with one or more brokers (or other financial institutions with which the Client may deal), the Client could incur market losses as a result of financial difficulties at such institutions (including, but not limited to, in situations where the Client may be unable to access its assets and/or execute transactions through its brokers or other financial institutions in a timely manner). In addition, any non-U.S. financial intermediary may be subject to bankruptcy or other regulatory regimes different from those applicable to U.S. institutions, and in doing business with such non-U.S. financial intermediaries, the Client may not be afforded certain of the protective measures provided by U.S. laws and regulations (e.g., the Bankruptcy Code and the Securities Investor Protection Act of 1970). Although the Adviser will attempt to limit its risk in this area, there is no action that the Adviser can take that can completely eliminate it. Currency and Exchange Rate Risks. We may advise our Clients to invest in financial instruments denominated in currencies other than the U.S. dollar or in financial instruments which are determined with references to currencies other than the U.S. dollar. The Client, however, will generally value its assets in U.S. dollars. The value of the Client’s’ assets will fluctuate with U.S. dollar exchange rates as well as with price changes of its investments in the various local markets and currencies. Thus, an increase in the value of the U.S. dollar compared to the other currencies in which the Client may make investments will reduce the effect of increases and magnify the U.S. dollar equivalent of the effect of decreases in the prices of the Clients’ financial instruments in their local markets. Conversely, a decrease in the value of the U.S. dollar will have the opposite effect of magnifying the effect of increases and reducing the effect of decreases in the prices of the Clients’ non-U.S. dollar financial instruments. Changes in foreign currency exchange rates may also affect the value of dividends and interest earned, gains and losses realized on the sale of financial instruments and net investment income and gains, if any, of the Client. Hedging Transactions. We may advise Clients to utilize financial instruments for investment purposes and for risk management and hedging purposes. Since the characteristics of many financial instruments change as markets change or time passes, the success of the Clients’ strategy will also be subject to the Adviser’s ability to continually recalculate, readjust and execute its strategy in an efficient and timely manner. While the Client may enter into transactions to seek to reduce risk, such transactions may result in a poorer overall performance for the Client than if it had not engaged in any such transactions. Imperfect correlation between positions across the Clients’’ portfolios may prevent the Client from achieving its intended exposure or position size, which may expose the Client to risk of loss. Moreover, it should be noted that the portfolio will always be exposed to certain risks that cannot be mitigated, such as credit risk (relating both to particular financial instruments and counterparties) and “widening” risk. Effectiveness of Risk Reduction Techniques. The Adviser may employ various risk reduction strategies designed to minimize the risk of a Client’s trading positions. A substantial risk remains, nonetheless, that such strategies will not always be possible to implement and when possible will not always be effective in limiting losses. If the Adviser analyzes market conditions incorrectly, or employs a risk reduction strategy that does not correlate well with a Client’s investments, such risk reduction techniques could result in a loss, regardless of whether the intent was to reduce risk or increase return. These risk reduction techniques may

also increase the volatility of a Client and/or result in a loss if the counterparty to the transaction does not perform as promised. Turnover. A Clients’ capital may at times be invested on the basis of short-term market considerations. The portfolio turnover rate of those investments may be significant, potentially involving substantial brokerage commissions, mark-ups and fees. These commissions and fees will reduce the Clients’ profits. Price and Liquidity Fluctuations of Investments. Generally, a Client’s investments will be in publicly-traded securities. However, the market value of a Client’s investments may fluctuate with, among other things, changes in prevailing interest rates, general economic conditions, the condition of financial markets, developments or trends in the securities markets, the financial condition of the issuers of the securities in which a Client invests and certain geopolitical events. During periods of limited liquidity and higher price volatility, a Client’s ability to acquire or dispose of its investments at a price and time that a Client deems advantageous may be impaired. As a result, in periods of rising market prices, a Client may be unable to participate in price increases fully to the extent that it is unable to acquire the desired positions quickly; a Client’s inability to dispose fully and promptly of positions in declining markets will conversely cause its net asset value to decline as the value of unsold positions is marked to lower prices. Exposure to, and Possession of, Material Non-Public Information; Other Trading Restrictions. From time to time, the Adviser may receive material non-public information with respect to an issuer of publicly-traded securities. While the Adviser does not expect the Clients to acquire positions in publicly-traded securities, other funds or accounts that it manages may do so. Additionally, in the event a Client’s assets ultimately include publicly-traded securities in respect of which the Adviser has material non-public information, the Adviser may be prohibited, by law, policy or contract, for a period of time, from (i) unwinding a position in such issuer; (ii) establishing an initial position or taking any greater position in such issuer; and (iii) pursuing other investment opportunities related to such issuer. Moreover, the Adviser may be prohibited from transacting in certain Investments that are related to the issuer of a publicly-traded security to the extent it has material non-public information in respect of such issuer. To the extent the Adviser becomes privy to material non-public information, it will be restricted in its ability to trade the relevant financial instrument on behalf of itself, its affiliates and their respective clients, including the Clients. Additionally, in certain instances, the Adviser might become restricted in its ability to trade financial instruments on behalf of itself, its affiliates and their respective clients, including the Clients, even though the Adviser may not be privy to any material non-public information; such restrictions could be derived from applicable law or internal policies and procedures adopted by the Adviser to mitigate potential conflicts. In such instances, a Client’s ability to trade in the financial instruments may be significantly restricted, which may adversely impact the Client, including by preventing the execution of an otherwise advisable transaction (including, closing or winding-down a position).

From time to time, the Adviser may also be subject to contractual “stand-still” obligations or confidentiality obligations that, in turn, as a result of applicable law or internal policies and procedures, may restrict a Client’s ability to trade in certain financial instruments. There can be no guarantee that the foregoing restrictions would not impair significantly a Client’s ability to trade. Soft Dollars. The Adviser may enter into “soft dollar” arrangements with one or more brokerdealers whereby the Adviser will direct securities transactions to the broker-dealer in return for research products and services from the broker-dealer. Although the Adviser will use the research and services in making investment decisions for its Clients’, the Adviser may use such research or services for other accounts and the Client will generally pay more than the lowest available commissions for execution of these transactions. The Adviser may also enter into “soft dollar” arrangements to cover Client expenses or costs and expenses of the Adviser to the extent such arrangements are permitted by law. Competition. The investment industry is extremely competitive. In pursuing its investment and trading methods and strategies, the Clients will compete with securities, commodities and futures firms, including many of the larger investment advisory and private investment firms, as well as institutional investors and, in certain circumstances, market-makers and brokers. In relative terms, the Clients may have little capital and may have difficulty in competing in markets in which its competitors have substantially greater financial resources, more sophisticated technologies, larger research staffs and more investment professionals than the Adviser has or expects to have in the future. In any given transaction, investment and trading activity by other firms will tend to narrow the spread between the price at which an investment may be purchased by a Client and the price it expects to receive upon consummation of the transaction. Trade Error Risk. Trade errors include, for example, keystroke errors that occur when entering trades into an electronic trading system or typographical or drafting errors related to derivatives contracts or similar agreements. Given the volume and complexity of transactions executed by the Adviser on behalf of the Clients, trade errors may occur, notwithstanding the execution of due care and special procedures designed to prevent such errors. If trading errors do occur in the ordinary course of business, the Adviser will not be responsible for gains or losses resulting from such trade errors, except where such trade error is the result of the Adviser’s willful misconduct, bad faith or gross negligence. Cybersecurity Risks. The Clients, the Adviser, their respective service providers and relevant listing exchanges are susceptible to operational, information security and other cybersecurity risks, both directly and through their respective service providers. Similar types of cybersecurity risks are also present for issuers of securities in which Clients invest, which could result in material adverse consequences for such issuers and may cause the a Clients’ investment in such portfolio companies to lose value. These risks may not be covered by insurance. In general, cybersecurity incidents can result from deliberate attacks or unintentional events. Cyber-attacks include, but are not limited to, gaining unauthorized access to digital systems (e.g., through hacking or use of malicious software coding) for purposes of misappropriating assets or

sensitive information, corrupting data, or causing operational disruption. Cyber-attacks may also be carried out without ever obtaining direct access to the targeted systems, such as through a denial-of-service attack which could result in the target’s network services becoming unavailable to its intended users. Cybersecurity failures by, or breaches of, the systems of any of the Fund’s general partner, Adviser, administrator and other service providers (including, but not limited to, data providers, fund accountants, custodians, transfer agents and attorneys), market makers or the issuers of securities in which the Clientss invest, could cause disruptions and impact business operations, potentially resulting in one or more of the following: material financial losses, interference with the Funds’ ability to calculate its net asset value, unintended disclosure of confidential trading information, material impediments to trading, submission of erroneous trades or redemption orders, the inability of the Funds or its service providers to transact business, violations of applicable privacy and other laws, regulatory fines, penalties, reputational damage, reimbursement or other compensation costs, or additional compliance costs. In addition, cyber-attacks may render inaccessible, inaccurate or incomplete any or all of the records of the Funds’ assets, transactions, ownership of Interests, and other data integral to the functioning of the Funds. Substantial costs may be incurred by the Funds in order to prevent or address cyber-incidents in the future. The Adviser and the Fund’s general partner have established a cybersecurity policy and business continuity procedures to address and mitigate these cybersecurity risks. Despite these efforts, certain risks may not yet have been identified and it is possible that prevention and remediation efforts will be inadequate or unsuccessful. Additionally, because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against the Funds, the Funds may be unable to anticipate these techniques or to implement adequate preventive measures. Furthermore, the Fund’s general partner and Adviser are unable to directly control the cybersecurity procedures and systems of any service providers or portfolio companies, and any of the Clients and the Investors could be materially and adversely impacted as a result. Disaster Recovery and Data Security. In managing the Clients, the Adviser relies on IT and data management systems, which can fail or be subject to interruption or destruction caused by natural or man-made occurrences such as extreme weather, fires, earthquakes, power loss, telecommunications failures, terrorist attacks, hacking, break-ins, sabotage, intentional acts of destruction, vandalism, or similar events or misconduct. Any failure, interruption or destruction of the Adviser’s IT systems or data management systems could have a material adverse impact on the operations of the Adviser and/or the Clients. In addition, a breach in the security of the Adviser’s systems could result in the theft, disclosure or loss of investor, proprietary and other sensitive information relating to the Adviser and/or the Clients, which in turn could lead to litigation in which a Client could incur liability. The Adviser has in place information security, incident response, backup and disaster recovery procedures intended to prevent or mitigate damage if such an event occurs. However, a breach could nevertheless occur, and such procedures could fail or be insufficient to avoid, mitigate or remedy the breach. Moreover, the ever-changing methods and technologies used to obtain unauthorized access to systems through means such as third-party acts, computer error, malicious code, employee error or malfeasance often are not known until used against a potential target. Therefore, the Adviser may be unable to anticipate the destructive or invasive

methods and technologies that could be used against its systems or to implement adequate protections. Computer and Algorithmic Research Tools. Research and creative tools that harness generative artificial intelligence (collectively, “Computer and Algorithmic Research Tools”), as well as other machine learning techniques, will continue to become more accessible to the Adviser, the general partners of the Funds and the service providers of the Clients. Prospective investors should anticipate that the Adviser may utilize Computer and Algorithmic Research Tools in connection with its business activities, including investment activities. The use of Computer and Algorithmic Research Tools brings with it known, anticipated and as-yet-unknown risks and conflicts, including the risk that the Adviser’s compliance and operational policies and procedures will not anticipate every potential issue and conflict, and that the Adviser’s surveillance and control systems might not be sufficient to identify every instance of noncompliance. Among other things, this means that the Adviser’s policies and procedures relating to Computer and Algorithmic Research Tools will continue to evolve rapidly, and without notice to investors. As is the case with all third-party services and products, the Adviser expects to exercise appropriate levels of review and testing before deployment, but the relative novelty of Computer and Algorithmic Research Tools likely will result in more incorrect or unclear inputs into the Adviser’s investment and operations process. This could lead to an increase in interpretative issues, errors of judgement and systems errors, notwithstanding the benefits that deploying new services and products is expected to create. Where appropriate, the Adviser expects to work with providers and vendors to improve or fix licensed services and products, but that will not always be the case. To the extent that the Adviser develops proprietary Computer and Algorithmic Research Tools, similar risks will exist. The Adviser’s use of Computer and Algorithmic Research Tools will be subject to its policies and procedures on cybersecurity, privacy and confidentiality. However, the effectiveness of those policies when using Computer and Algorithmic Research Tools is dependent on the licensor adhering to its contractual commitments and to applicable law, as well as the effectiveness of the licensor’s (and the Adviser’s) cybersecurity, systems and other structural safeguards being effective in design and operation. To the extent that there is breach or failure in any of these safeguards, investors could be harmed by the theft, misappropriation or release of their confidential information, or by an impairment in the value of the Clients’ investments directly or indirectly caused by such breach or failure. Independent of its context of use, certain varieties of Computer and Algorithmic Research Tools are generally highly reliant on the collection and analysis of large amounts of data, and it is not possible or practicable to incorporate all relevant data into the model that Computer and Algorithmic Research Tools utilize to operate. Certain data in such models will inevitably contain a degree of inaccuracy and error – potentially materially so – and could otherwise be inadequate or flawed, which would be likely to degrade the effectiveness of Computer and Algorithmic Research Tools. Such models also are subject to inherent bias (owing to the structure of their initial programming) as well as acquired biases (reflecting the data upon which they were trained). To the extent that the Adviser, the general partners of the Funds and the service providers of the Clients are exposed to the risks of using Computer and Algorithmic

Research Tools, any such inaccuracies or errors could have adverse impacts on the Adviser, the general partners of the Funds and the service providers of the Clients. Failure to Maintain Adequate Business Continuity Plans. Should the Adviser, or any of its critical service providers, experience a significant local or regional disaster or other significant business disruption, the Adviser’s ability to remain operational will depend in part on the safety and availability of the Adviser’s personnel and office facilities, and the proper functioning of the Adviser’s network, telecommunication and other related systems and operations. The Adviser has backup systems and contingency plans, but it cannot ensure that they will be adequate under all circumstances or that material interruptions and disruptions will not occur. Failure by the Adviser, or any of its critical service providers, to maintain up-to-date business continuity plans, including system backup facilities, would impede its ability to operate in the event of a significant business disruption, which could result in financial losses to the Clients. C. The following is a brief summary of sector risks and risks associated with particular securities recommendations: Renewable Energy Sector Risk. Certain Fund investments will be in the renewable energy sector, and therefore will be susceptible to adverse economic, business, social, political, environmental, regulatory or other developments affecting such sector. Investments in renewable energy companies may be more volatile than investments in companies operating in more established industries. Renewable energy companies are subject to specific risks, including, among others: fluctuations in commodity prices and/or interest rates; changes in governmental policies and/or regulations; reduced availability of renewable energy sources or other commodities for transporting, processing, storing or delivering; slowdowns in new construction; seasonal weather conditions, extreme weather or other natural disasters; and threats of attack by terrorists on certain renewable energy assets. Renewable energy companies can be significantly affected by the supply of, and demand for, particular energy products, which may result in overproduction or underproduction. Additionally, changes in the regulatory environment for renewable energy companies may adversely impact their profitability. Obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants and general economic conditions can significantly affect companies operating in the renewable energy sector. Certain investments may be dependent on U.S. and foreign government policies, including tax incentives and subsidies. Cyclicality Risk. The operating results of issuers in the broader energy sector are generally highly cyclical, with fluctuations in commodity prices and demand for commodities driven by a variety of factors. Commodity prices and energy asset values have recently experienced extremely high volatility. The highly cyclical nature of the energy sector may adversely affect the earnings or operating cash flows of the issuers in the energy sector in which the Clients will invest. Supply Risk. The profitability of energy companies, particularly those involved in processing, gathering and pipeline transportation, may be materially affected by the volume of natural gas or other energy commodities available for transportation, processing, storage or distribution. A

significant decrease in the production of natural gas, crude oil, coal or other energy commodities, due to the decline of production from existing resources, import supply disruption, depressed commodity prices or otherwise, would reduce the revenue, operating income and operating cash flows of energy companies and, therefore, their ability to make distributions or pay dividends, which could adversely affect a Client’s performance. Demand Risk. A sustained decline in demand for energy products could adversely affect an energy company’s revenues and cash flows. Factors that could lead to a sustained decrease in market demand include a recession or other adverse economic conditions, an increase in the market price of the underlying commodity that is not, or is not expected to be, merely a shortterm increase, higher taxes or other regulatory actions that increase costs, or a shift in consumer demand for such products. Demand may also be adversely affected by consumer sentiment with respect to global warming and by state or federal legislation intended to promote the use of alternative energy sources. It is impossible to predict whether demand for energy, which has experienced declines in the recent past, could further decline, especially if prices rebound. Commodity Price Risk. Companies operating in the energy sector may be affected by fluctuations in the prices of energy commodities in the short-term and long-term. Fluctuations in energy commodity prices would directly impact companies that own such energy commodities and could indirectly impact companies that engage in transportation, storage, processing, distribution or marketing of such energy commodities. Fluctuations in energy commodity prices can result from changes in general economic conditions or political circumstances (especially of key energy producing and consuming countries); market conditions; weather patterns; domestic production levels; volume of imports; energy conservation; domestic and foreign governmental regulation; international politics; policies of the Organization of Petroleum Exporting Countries; taxation; tariffs; and the availability and costs of local, intrastate and interstate transportation methods. The energy sector as a whole may also be impacted by the perception that the performance of energy sector companies is directly linked to commodity prices. High commodity prices may drive further energy conservation efforts, and a slowing economy may adversely impact energy consumption, which may adversely affect the performance of companies operating in the energy sector. Commodities and Futures. While the Clients do not intend to invest in physical commodities, the Clients’ investment programs contemplate that they may make investments in certain other assets that are regulated as commodity interests. Substantially all trading in commodities and futures has as its basis a contract to purchase or sell a specified quantity of a particular asset for delivery at a specified time, although certain financial instruments, such as market index futures contracts, may be settled only in cash based on the value of the underlying composite index. Futures trading involves trading in contracts for future delivery of standardized, rather than specific, lots of particular assets. (i)

Volatility: Futures prices are highly volatile. Price movements for the futures contracts and options on futures contracts which a Client may trade are influenced by, among other things, changes in supply and demand relationships, weather,

agricultural, trade, fiscal and monetary programs and policies of governments, U.S. and foreign political and economic events and policies, changes in national and international interest rates and rates of inflation, currency controls, devaluations and revaluations and sentiments of the marketplace. Governments from time to time intervene, directly and by regulation, in certain markets, often with the intent to influence prices directly. No assurance can be given that a Client will be profitable or that it will not incur substantial losses. (ii)

Position Limits: The CFTC and certain exchanges have established limits referred to as “speculative position limits” on the maximum net long or net short positions that any person may hold or control in particular commodities. All commodity accounts owned, held, controlled or managed by the Adviser and its principals and affiliates, including accounts of other clients for which the Adviser acts as commodity trading advisor, will be combined for position limit purposes with the positions held by a Client. It is possible that trading decisions of the Adviser may have to be modified and that positions held by a Client could have to be liquidated to avoid exceeding such limits. Certain non-U.S. exchanges are not subject to position limits.

(iii)

Price Limits: U.S. commodity exchanges may limit fluctuations in futures contracts prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” In addition, even if futures prices have not moved beyond the daily limit, the Adviser may not be able to execute futures trades at favorable prices if little trading in such contracts is taking place (i.e., there is a “thin” market).

(iv)

Margin: Futures are typically traded on “margin.” The “margin” is the amount of escrow or performance bond deposit that a Client will have to make and maintain with its futures brokers to secure its future obligation to close out open positions. The initial margin requirements may be satisfied by the deposit of cash (or, in some markets, certain government obligations). The open positions must be “marked to market” daily, requiring additional margin deposits if the position reflects a loss that reduces a Client’s equity below the level required to be maintained and permitting release of a portion of the deposit if the position reflects a gain that results in excess margin equity. The level of margin that must be maintained for a given position is sometimes subject to increase, requiring additional cash outlays. In the futures markets, margin deposits are typically low relative to the value of the futures contracts purchased or sold. Such low margin deposits result in a high degree of leverage. Because margin requirements normally range upward from as little as 2% or less of the total value of the contract, a comparatively small commitment of cash or its equivalent may permit trading in futures contracts of substantially greater value. As a result, price fluctuations may result in a contract profit or loss that is disproportionate to the amount of funds deposited as margin. Such a profit or loss may materialize suddenly, since the prices of futures frequently fluctuate rapidly and over wide ranges, reflecting both supply and demand changes and changes in market sentiment.

(v)

Size of a Client’s Account: Depending upon the size of a Client’s account, it may be difficult or impossible for the Adviser to take or liquidate a position in a particular commodity, method or strategy due to the size of the accounts which may be managed by the Adviser.

Risks Relating to Expansions and Acquisitions. Energy companies utilize a variety of strategies to increase cash flow, including increasing utilization of existing facilities, expanding operations through new construction or development activities, expanding operations through acquisition, or securing additional long-term contracts. Thus, some energy companies may be subject to construction risk, development risk, acquisition risk or other risks arising from their specific business strategies. Energy companies that attempt to grow through acquisitions may not be able to effectively integrate acquired operations with their existing operations. In addition, acquisition or expansion projects may not perform as anticipated. A significant slowdown in merger and acquisition activity in the energy sector could reduce the growth rate of cash flows received by a Client from issuers in the energy sector that grow through acquisitions. Weather Risk. Extreme weather conditions along the gulf coast could result in substantial damage to the facilities of energy companies located in the affected areas and significant volatility in the supply of natural resources, commodity prices and the earnings of energy companies, and could therefore adversely affect the performance of a Client’s investments in such companies. Extreme weather conditions are expected to become more common, magnifying the risks to these energy companies and increasing the likelihood of losses. Interest Rate Risk. The prices of the equity securities of the energy companies a Client expects to hold in its portfolio are susceptible in the short term to a decline when interest rates rise. Rising interest rates could limit the capital appreciation of securities of certain investments as a result of the increased availability of alternative investments with yields comparable to those investments. Rising interest rates could adversely affect the financial performance of energy companies generally by increasing their cost of capital. This may reduce their ability to execute acquisitions or expansion projects in a cost-effective manner. Exploration and Production. Exploration, development and production companies are particularly vulnerable to declines in the demand for and prices of crude oil and natural gas. Reductions in prices for crude oil and natural gas can cause a given reservoir to become uneconomic for continued production earlier than it would if prices were higher, resulting in the plugging and abandonment of, and cessation of production from, that reservoir. In addition, lower commodity prices not only reduce revenues but also can result in substantial downward adjustments in reserve estimates. The accuracy of any reserve estimate is a function of the quality of available data, the accuracy of assumptions regarding future commodity prices and future exploration and development costs and engineering and geological interpretations and judgments. Different reserve engineers may make different estimates of reserve quantities and related revenue based on the same data. Actual oil and gas prices, development expenditures and operating expenses will vary from those assumed in reserve estimates, and these variances may be significant. Any significant variance from the assumptions used could result in the actual quantity of reserves and future net cash flow being materially different from those estimated in reserve reports. In addition, results of drilling, testing and production and changes

in prices after the date of reserve estimates may result in downward revisions to such estimates. Substantial downward adjustments in reserve estimates could have a material adverse effect on a given exploration and production company’s financial position and results of operations. Energy Sector Regulatory Risk. The profitability of energy companies could be adversely affected by changes in the regulatory environment. Energy companies are subject to significant regulation in virtually every aspect of their operations, including with respect to how facilities are constructed, maintained and operated, environmental and safety controls, the use of feedstocks and other inputs as well as processes utilized in the energy sector, the disposal of waste and byproducts, and the prices they may charge for the products and services they provide. Such regulation can change over time in both scope and intensity. Stricter laws, regulations or enforcement policies could be enacted in the future which would likely increase compliance costs and could adversely affect the financial performance of energy companies. Failure to comply with laws and regulations may trigger a variety of administrative, civil and criminal enforcement measures, including the assessment of monetary penalties, the imposition of remedial requirements and the issuance of orders enjoining future operations. Certain environmental statutes, including Resource Conservation and Recovery Act, Comprehensive Environmental Response, Compensation Liability Act of 1980, Oil Pollution Act and analogous state laws and regulations, impose strict, joint and several liability for costs required to clean up and restore sites where hazardous substances have been disposed of or otherwise released. Moreover, it is not uncommon for neighboring landowners and other third parties to file claims for personal injury and property damage allegedly caused by the release of oil or hazardous substances or other waste products into the environment or by the noise or effects of operations. There is an inherent risk that energy companies may incur environmental costs and liabilities due to the nature of their businesses and the substances they handle. For example, an accidental release from wells or gathering pipelines could subject them to substantial liabilities for environmental cleanup and restoration costs, claims made by neighboring landowners and other third parties for personal injury and property damage and fines or penalties for related violations of environmental laws or regulations. Moreover, the possibility exists that stricter laws, regulations or enforcement policies could significantly increase the compliance costs of energy companies, and the cost of any remediation that may become necessary. Energy companies may not be able to recover these costs from insurance. In particular, in the wake of the Supreme Court decision holding that the Environmental Protection Agency (the “EPA”) has some legal authority to deal with climate change under the Clean Air Act, the federal government, including the EPA and the Departments of Transportation, Energy and Agriculture have initiated a wide variety of significant regulatory initiatives which could regulate greenhouse gases and related activities from a wide range of energy companies. Such initiatives could have a significant adverse impact on the profitability of such energy companies.

Energy Infrastructure Companies. Infrastructure companies are susceptible to various factors that may negatively impact their businesses or operations, including costs associated with compliance with and changes in environmental, governmental and other regulations, rising interest costs in connection with capital construction and improvement programs, government budgetary constraints that impact publicly funded projects, the effects of general economic conditions throughout the world, surplus capacity and depletion concerns, increased competition from other providers of services, uncertainties regarding the availability of fuel and other natural resources at reasonable prices, the effects of energy conservation policies, unfavorable tax laws or accounting policies and high leverage. Infrastructure companies will also be affected by innovations in technology that could render the way in which a company delivers a product or service obsolete, significant changes to the number of ultimate end-users of a company’s products, inexperience with and potential losses resulting from a developing deregulatory environment, increased susceptibility to terrorist attacks and natural or manmade disasters and other natural risks (including earthquakes, floods, lightning, hurricanes, tsunamis and wind). Infrastructure companies also face operating risks, including the risk of fire, explosions, leaks, or other catastrophic events. Sub-Sector Specific Risk. Energy sector companies are also subject to risks that are specific to the particular sub-sector of the energy sector in which they operate: (i)

Pipelines. Pipeline companies are subject to the demand for natural gas, natural gas liquids, crude oil or refined products in the markets they serve, changes in the availability of products for gathering, transportation, processing or sale due to natural declines in reserves and production in the supply areas serviced by the companies’ facilities, sharp decreases in crude oil or natural gas prices that cause producers to curtail production or reduce capital spending for exploration activities and environmental regulation. Demand for gasoline, which accounts for a substantial portion of refined product transportation, depends on price, prevailing economic conditions in the markets served and demographic and seasonal factors. Companies that own interstate pipelines in the U.S. that transport natural gas, natural gas liquids, crude oil or refined petroleum products are subject to regulation by the Federal Energy Regulatory Commission (“FERC”) with respect to the tariff rates they may charge for transportation services. An adverse determination by FERC with respect to the tariff rates of such U.S. companies could have a material adverse effect on their business, financial condition, results of operations, cash flows and ability to pay cash down debt, distributions or dividends.

(ii)

Gathering and Processing. Gathering and processing companies are subject to natural declines in the production of oil and natural gas fields, which utilize their gathering and processing facilities as a way to market their production. Prolonged declines in the price of natural gas or crude oil, which curtail drilling activity and therefore production, and declines in the prices of natural gas liquids and refined petroleum products, may lower processing margins. In addition, some gathering and processing contracts subject the gathering or processing company to direct commodities price risk.

(iii)

Exploration and Production. Exploration, development and production companies are particularly vulnerable to declines in the demand for and prices of crude oil and natural gas. Reductions in prices for crude oil and natural gas can cause a given reservoir to become uneconomic for continued production earlier than it would if prices were higher, resulting in the plugging and abandonment of, and cessation of production from, that reservoir. In addition, lower commodity prices not only reduce revenues but also can result in substantial downward adjustments in reserve estimates. The accuracy of any reserve estimate is a function of the quality of available data, the accuracy of assumptions regarding future commodity prices and future exploration and development costs and engineering and geological interpretations and judgments. Different reserve engineers may make different estimates of reserve quantities and related revenue based on the same data. Actual oil and gas prices, development expenditures and operating expenses will vary from those assumed in reserve estimates, and these variances may be significant. Any significant variance from the assumptions used could result in the actual quantity of reserves and future net cash flow being materially different from those estimated in reserve reports. In addition, results of drilling, testing and production and changes in prices after the date of reserve estimates may result in downward revisions to such estimates. Substantial downward adjustments in reserve estimates could have a material adverse effect on a given exploration and production company’s financial position and results of operations. In addition, due to natural declines in reserves and production, exploration and production companies must economically find or acquire and develop additional reserves in order to maintain and grow their revenues and distributions.

(iv)

Raw Materials. The long-term profitability of energy sector companies depends, in part, on such company’s ability to continue to economically obtain resources, including energy and raw materials. For example, lithium, copper and aluminum businesses rely upon their continued ability to produce, or otherwise obtain, lithium, copper and aluminum of sufficient quality and in adequate amounts to meet customers’ demand. If a company fails to secure and retain the rights to continue to access these key raw materials, it may have to restrict or suspend operations that rely upon these key resources, which could harm its business, results of operations and financial condition. In addition, in some cases access to these raw materials is subject to decisions or actions by governmental authorities, which could adversely impact such companies and the Clients’ returns. Furthermore, other raw material and energy costs account for a significant percentage of total costs of products sold, even if they can be obtained on commercially reasonable terms. Raw material and energy costs can be volatile and may increase significantly. Increases are primarily driven by tightening of market conditions and major increases in the pricing of key constituent materials for our products such as crude oil, chlorine and metals (including molybdenum and rare earths, which are used in the refinery catalysts business). Companies may attempt to pass through changes in the prices of raw materials and energy to customers, but may be unable to do so (or may be delayed in doing so). In addition, raising prices charged to customers in order to offset increases in the prices a company pays for raw materials could cause such company

to suffer a loss of sales volumes. An inability to efficiently and effectively pass through price increases, or inventory impacts resulting from price volatility, could adversely affect a company’s margins. (v)

Chemicals. Chemical manufacturing, storage, handling and transportation, as well as natural resource extraction, are subject to hazards including explosions, fires, severe weather, natural disasters, mechanical failure, unscheduled downtime, transportation interruptions, remediation, chemical spills, discharges or releases of toxic or hazardous substances or gases and other risks. These hazards can cause personal injury and loss of life to employees of issuers of the Clients’ investments and other persons, severe damage to, or destruction of, property and equipment and environmental contamination. In addition, the occurrence of disruptions, shutdowns or other material operating problems at facilities due to any of these hazards may adversely affect a company’s profitability. Accordingly, these hazards and their consequences could adversely affect a chemical company’s reputation and have an adverse effect on such company and the Clients.

(vi)

Lithium Mining Companies. Reserves of lithium companies will, without acquiring or developing additional reserves, decline as they continue to extract these raw materials. Accordingly, future profitability depends upon a company’s ability to acquire additional lithium reserves that are economically viable to replace the reserves it will extract. Exploration and development of lithium resources are highly speculative in nature. Exploration projects involve many risks, require substantial expenditures and may not result in the discovery of sufficient additional resources that can be extracted profitably. Once a site with potential resources is discovered, it may take several years of development until production is possible, during which time the economic viability of production may change. Substantial expenditures are required to establish recoverable proven and probable reserves and to construct extraction and production facilities. As a result, there is no assurance that current or future exploration programs will be successful and there is a risk that depletion of reserves will not be offset by discoveries or acquisitions. Many companies use feasibility studies to estimate the anticipated economic returns of an exploration project. The actual project profitability or economic feasibility may differ from such estimates as a result of factors such as, but not limited to, changes in volumes, grades and characteristics of resources to be mined and processed; changes in labor costs or availability of adequate and skilled labor force; the quality of the data on which engineering assumptions were made; adverse geotechnical conditions; availability, supply and cost of water and power; fluctuations in inflation and currency exchange rates; delays in obtaining environmental or other government permits or approvals or changes in the laws and regulations related to our operations or project development; changes in royalty agreements, laws and/or regulations around royalties and other taxes; and weather or severe climate impacts.

(vii)

Energy Servicing Companies. The success of energy servicing companies may depend on their ability to meet the changing needs of customers, requiring them to successfully anticipate and respond to technological changes and processes in a

cost-effective and timely manner. The introduction of new products and the emergence of shifting customer demands or changing industry standards could render existing energy services and products obsolete and unmarketable, which would have a significant effect on their ability to generate revenue. The business of an energy servicing company also may be adversely affected if it is unable to protect any patents and proprietary technology, as competitors may develop or patent similar technology used for services, and make this technology available to customers at a lower cost or on better contractual terms. In addition, energy servicing companies may be dependent upon a limited number of suppliers, and a supplier’s failure to provide products that meet quality, quantity, cost or timeliness requirements, or an inability to obtain substitute sources on a timely basis, could violate contractual obligations. Energy servicing companies also may have a history of operating losses, may not be able to achieve profitability and may require additional capital to sustain their businesses. (viii) Equipment Manufacturing Companies. Manufacturing companies producing equipment for use by companies in the energy sector may rely on limited numbers of suppliers for raw materials, parts, components and sub-assemblies, and are subject to the risk that suppliers may fail to fulfill commitments, resulting in the disruption of production, delays in shipment, increasing costs and quality concerns. A significant portion of sales may be concentrated among a limited number of customers, and the loss or significant reduction in purchase orders could adversely affect equipment manufacturing companies’ financial condition and operations. Because of the long time horizon required to produce equipment for energy companies, equipment manufacturing companies also may place orders for raw materials, parts, components and subassemblies based on long-term forecasts. As demand may rapidly change, particularly during a downturn in the industry or adverse economic conditions, it may not be possible to timely amend orders. Equipment manufacturing companies may also utilize fixed-price contracts, and in such circumstances would be typically responsible for cost overruns. There is an inherent risk in the estimation process, including significant unforeseen technical and logistical challenges or longer than expected lead times. Equipment manufacturing companies may be exposed to intellectual property or potential product liability claims, which are inherent in the manufacturing, marketing and sale of products, and may face substantial liability for damages resulting from the faulty manufacture of products or improper use of products by end users. Alternative or Renewable Energy. Clients may invest in alternative or renewable energy (e.g., wind and solar) companies. This sector is a relatively young industry and continues to experience a rapid evolution in the areas of equipment design and manufacturing, construction methods, resource evaluation, grid integration and interconnection, operation and maintenance and a number of other areas. While improvements in these areas have generally helped to reduce the cost of alternative and renewable energy and have made alternative and renewable energy more attractive to energy purchasers at both the wholesale and retail level, a number of areas of risk continue to exist in the operation of these assets which may adversely affect their profitability, competitiveness and valuation. These risks include:

(i)

Availability and Pricing of Inputs. Investments in alternative or renewable energy are subject to a range of risks relating to the availability, price and quality of inputs. Companies focused on wind and solar energy also are subject to variations in weather patterns. Wind projects are susceptible to the loss of resources due to another wind project being built upwind of the project and both wind and solar projects are vulnerable to changes in weather and climate patterns resulting from global and regional climate change. The actual amount of wind or solar radiation at a particular project site may vary substantially from the anticipated amount of such resource at the time the investment was made.

(ii)

Equipment and Technology. The wind turbines, solar panels, solar trackers and other equipment used in alternative or renewable energy are still evolving and, as a result, much of the equipment being used has not undergone extensive field testing over a period of years to determine its long-term costs of operation or its durability. Manufacturing and delivery of the equipment as well as its timely installation may also be difficult due to rapidly changing product designs and general manufacturing issues. While such equipment is often supported by warranties, such warranties expire and equipment manufacturers or contractors may not be sufficiently capitalized to respond to all claims.

(iii)

Transmission and Interconnection. Since many offtake agreements in respect of alternative or renewable energy provide for payments only upon delivery of power to the utility or other offtaker, any interruption in transmission service or curtailment could cause a company to be unable to deliver or receive payment for the power the project could otherwise produce. In addition, some agreements allow for curtailment of the project output if the transmission facilities are unable to transmit or transport all of the power being produced in an area or a region or if the power is not needed or is more expensive in relation to other sources of generation. Any interruption in transmission service or curtailment could negatively impact the applicable company’s ability to pay operating costs.

(iv)

Decentralization. Alternative or renewable energy sources, specifically wind and solar, offer a decentralized model, in contrast to non-renewable energy sources. A decentralized model is where smaller generating stations are spread across a large area and work together to provide power. Two barriers that accompany this model include siting and transmission. Siting is the need to locate the essential aspects of the project, for example, wind turbines and pieces of land for solar farms. Siting requires negotiations, contracts, permits and community relations. If siting is not successfully achieved, the company’s underlying operation and development of projects may not launch, may be delayed or may be subject to increased costs.

Hydraulic Fracturing. In the U.S., federal, state and local legislative and regulatory initiatives relating to hydraulic fracturing, which is a process used to enhance the extraction of underground resources, including natural gas, oil and geothermal energy, could result in increased costs and additional operating restrictions or delays as well as adversely affect demand for the services of energy companies utilizing this process.

Increases in the frequency of earthquakes in states where hydraulic fracturing takes place have resulted in speculation that hydraulic fracturing may be connected to earthquakes, particularly near the locations of the wells in which the participants in the industry dispose of wastewater resulting from the hydraulic fracturing process. If research were to definitively establish a link between hydraulic fracturing and earthquakes, the energy companies in which a Client invests could be materially adversely affected. The hydraulic fracturing process requires the disposal of wastewater through injection wells or the transportation of wastewater. Disposal of wastewater through injection wells sends the wastewater deep underground. Handling, storing and transporting wastewater also involves risks. Links between the flow of wastewater into other sources of water such as drinking water, or accidents or errors as a result of the handling, storing or transporting of wastewater could result in further regulation of the hydraulic fracturing process or litigation against energy companies involved in hydraulic fracturing and therefore lead to losses on a Client’s investment in such energy companies. Hydraulic fracturing requires substantial quantities of water. Sustained drought conditions, as have been experienced in California recently, could make hydraulic fracturing more costly and difficult to use at the current rate. Equity Securities. The Clients may invest in equity and equity-related securities. Equity securities fluctuate in value in response to many factors, including the activities and financial condition of individual companies, the business market in which individual companies compete, industry market conditions, interest rates and general economic environments. Options. Investing in options can provide a greater potential for profit or loss than an equivalent investment in the underlying asset. The value of an option may decline because of a change in the value of the underlying asset relative to the strike price, the passage of time, changes in the market’s perception as to the future price behavior of the underlying asset, or any combination thereof. In the case of the purchase of an option, the risk of loss of an investor’s entire investment (i.e., the premium paid plus transaction charges) reflects the nature of an option as a wasting asset that may become worthless when the option expires. Where an option is written or granted (i.e., sold) uncovered, the seller may be liable to pay substantial additional margin, and the risk of loss is unlimited, as the seller will be obligated to deliver, or take delivery of, an asset at a predetermined price which may, upon exercise of the option, be significantly different from the market value. Options Trading. The Clients may trade options. An option is a right, purchased for a certain price, to either buy or sell the underlying instrument or product during or at the end of a certain period of time for a fixed price. The risks in trading options are different from the risks in trading the underlying instruments or products. For example, if a Client buys an option, it will be required to pay a “premium” representing the market value of the option. Unless the price of the underlying instrument or product changes and it becomes profitable to exercise or offset the option before it expires, a Client may lose the entire amount of the premium. Conversely, if a Client sells an option, it will be credited with the premium, but will have to deposit margin

due to its contingent liability to deliver or accept the underlying instrument or product in the event that the option is exercised. Sellers of certain options are subject to unlimited risk of loss. The ability to trade in or exercise options may become restricted in the event that trading in the underlying asset becomes restricted. Small-Cap Stocks. We may advise our Clients to invest in small-cap companies. While smaller companies may have potential for rapid growth, they often involve higher risks because they may lack the management experience, financial resources, product diversification and competitive strength of larger corporations. In addition, a Client may be unable to sell certain small-cap stocks at an advantageous time or price. In most cases, the frequency and volume of their trading is substantially less than is typical of larger companies. As a result, the securities of smaller companies may be subject to wider price fluctuations. Also, due to thin trading in some of these stocks, an investment in these stocks may be considered less liquid than an investment in many larger-capitalization stocks, making purchases or sales at desired prices or in desired quantities more difficult. Securities Market Volatility. Securities markets are volatile and may decline significantly in response to adverse issuer, political, regulatory, market or economic developments. Different parts of the market and different types of debt and equity securities may react differently to these developments. For example, small cap stocks may react differently than large cap stocks. Issuer, political or economic developments may affect a single issuer, issuers within an industry, sector or geographic region or the market as a whole. Foreign Securities. Investments in foreign securities involve certain factors not typically associated with investing in U.S. securities, such as risks relating to (i) currency exchange matters, including fluctuations in the rate of exchange between the U.S. dollar (the currency in which the books of the Clients are maintained) and the various foreign currencies in which a Client’s portfolio securities will be denominated and costs associated with conversion of investment principal and income from one currency into another; (ii) differences between the U.S. and foreign securities markets, including the absence of uniform accounting, auditing and financial reporting standards and practices and disclosure requirements, and less government supervision and regulation; (iii) political, social or economic instability; (iv) imposition of foreign income, withholding or other taxes; and (v) the extension of credit, especially in the case of sovereign debt. Emerging Market Securities. A Client may invest in securities of companies located in emerging market countries. The value of emerging market securities may be drastically affected by political developments in the country of the company’s location. In addition, the existing governments in the relevant countries could take actions that could have a negative impact on a Client, including nationalization, expropriation, imposition of confiscatory taxation or regulation or imposition of withholding taxes on distributions. Emerging Market Inflation. Emerging market countries tend to have periods of high inflation and high interest rates, as well as substantial volatility in interest rates. The value of emerging market securities can be expected to be extremely sensitive to changes in interest rates worldwide and, in particular, in the country of the relevant security.

Investments in MLPs. A Client may utilize swaps to provide exposure to certain types of investments, such as Master Limited Partnerships (“MLPs”), or as leverage for its investments. Nonetheless, a Client may structure the economic terms of such swaps on the basis of the total return or changes in the market price of such MLPs during the duration of the swap, taking into account the effect of entity-level taxes, if any, paid or accrued by any such MLP. As a result, the value of a Client’s investments in swaps over MLPs will depend in significant part on the MLPs being treated as partnerships for U.S. federal income tax purposes, and therefore not being subject to U.S. federal income taxes at the entity-level. If an MLP does not meet current law requirements to maintain partnership status, or if it is unable to do so because of tax law changes, it would be subject to U.S. federal income taxation, and potentially to state taxation, as a corporation. In that case, the MLP would be obligated to pay income tax at the entity level, which would likely have a material effect on the value and market price of interests in the MLP and therefore on the value of swaps over the MLP. In addition, distributions from the MLP could be treated as dividend income (the amount of which would be determined, in part, by the amount of depreciation or amortization deductions claimed by such an MLP on its U.S. federal corporate income tax return, which in the case of many MLPs may be substantial); income from certain swaps over such a dividend-paying corporate MLP could be subject to U.S. withholding tax. As a result of any such MLP’s being treated as a corporation for U.S. federal income tax purposes, there would be a material reduction in a Client’s returns on its swaps, whether as a result of the economic effect of entity-level taxes paid or accrued by such an MLP or the U.S. withholding tax imposed on payments made under a swap over such an MLP, or both. Swaps. A Client may use leverage when making any MLP related and certain other investments through swaps with counterparties selected by the Adviser (“Swap Counterparties”). A Client has entered into master agreements (“ISDA Master Agreements”) with Swap Counterparties to facilitate entering into swaps; however, there can be no assurance that the Client will be able to enter into any swaps pursuant to any ISDA Master Agreement. Although the counterparty under a particular swap may require the Client to post margin to secure all or a portion of its obligations under such swap, it is expected that the Client would generally be permitted to undertake potential obligations in respect of a particular swap substantially in excess of any margin required to be posted by the Client in connection with such swap. As such, the Client may lose more in a particular swap than it has posted as security for such particular swap. There can be no assurance that a swap will be entered into, that the underlying reference investment will appreciate and that the Client will be entitled to a payment under a swap as a result, or that, even if the Client is entitled to a payment under a swap, the Swap Counterparty that is the counterparty of the Client thereunder will be able to perform its payment obligation to the Client. International Trade. The economies of many emerging markets are heavily dependent upon international trade and, accordingly, have been and may continue to be adversely affected by trade barriers, exchange controls, managed adjustments in relative currency values and other protectionist measures imposed or negotiated by the countries with which they trade. These economies also have been and may continue to be adversely affected by economic conditions in the countries with which they trade.

Investment Controls. Restrictions or controls may at times limit or preclude foreign investment in certain emerging markets and increase the costs and expenses of the Clients. Certain emerging markets require governmental approval prior to investments by foreign persons, limit the amount of investment by foreign persons in a particular issuer, limit the investment by foreign persons only to a specific class of securities of an issuer that may have less advantageous rights than the classes available for purchase by domiciliaries of the countries and/or impose additional taxes on foreign investors. Certain emerging markets may also restrict investment opportunities in issuers in industries deemed important to national interests. Investments in emerging markets may require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if a deterioration occurs in an emerging market’s balance of payments, the country could impose temporary restrictions on foreign capital remittances. The Clients could be adversely affected by delays in, or a refusal to grant, any required governmental approval for repatriation of capital, as well as by the application to a Client of any restrictions on investments. Investing in emerging markets may require a Client to adopt special procedures, seek local government approvals or take other actions, each of which may involve additional costs to a Client. Liquidity Risk Associated with Equity Options Trading. As a result of various limits established by exchanges and the inherent limits of the facilities of exchanges and/or The Options Clearing Corporation (the “OCC”), there may not be a liquid secondary market for an equity option contract a Client holds when a Client wishes to close out its position prior to its expiration or exercise. These limits include: (i)

restrictions imposed by exchanges on opening transactions or closing transactions or both;

(ii)

restrictions imposed by exchanges limiting the maximum number of positions on the same side of the market and limits on the maximum net long or net short position;

(iii)

restrictions imposed by an exchange on the amount of fluctuation in the price of the underlying security during a single trading day;

(iv)

trading halts, suspensions or other restrictions imposed with respect to particular option contracts;

(v)

interruption of normal operations on an exchange due to unusual or unforeseen circumstances;

(vi)

the inadequacy of the facilities of an exchange or the OCC to at all times handle current volume and process options transactions; and

(vii)

the decision of an exchange to discontinue the trading of certain option contracts for economic or other reasons.

If there is no liquid secondary market for an equity option contract or other position held by a Client, the Adviser may not be able to close out such position prior to the contract’s expiration or exercise and may have to purchase or sell the underlying security, make or receive a cash settlement or meet ongoing margin requirements. A suspension would render it temporarily or permanently impossible to liquidate positions and could thereby expose a Client to significant losses. A reduction in the level of liquidity in the equity options market in general would reduce a Client’s transaction volume and, therefore, adversely affect its profit opportunities and reducing its revenues. Investments in Special Purpose Acquisition Companies. A Client may invest in securities issued by special purpose acquisition companies (“SPACs”) (provided that the Master Fund’s investments in SPACs, measured at the time of investment, will not exceed 20% of the Net Asset Value of the Master Fund). A SPAC is a “blank check” public company formed for the purpose of identifying and consummating a merger, acquisition or other business transaction with one or more operating businesses or assets (a “Transaction”). At the time that a Client invests in a SPAC, the SPAC typically will not have conducted any discussions or made any plans, arrangements or understandings with any prospective Transaction candidates. Accordingly, there is a limited basis (if any) on which to evaluate the SPAC’s ability to achieve its business objective. A SPAC will not generate any revenues until, at the earliest, after the consummation of a Transaction. While a SPAC is seeking a Transaction target its stock may be thinly traded. The economic model for a SPAC depends on there being a viable market for its stock and warrants prior to consummation of a Transaction. There can be no assurance that such a market will develop, despite the fact that such securities legally are freely tradable (having been publicly offered). SPACs are subject to significant “event risk”; that is, a SPAC’s success depends on its ability to identify and close a Transaction within a relatively short period delimited in its charter. If a SPAC fails to close a Transaction within that period it is typically required to liquidate and dissolve. At times when general market conditions are not favorable for mergers and acquisitions activity or other capital formation, the percentage of SPACs that fail to find Transactions and must dissolve is likely to increase. During such periods investors, such as the Clients, that are long in SPAC securities may suffer losses from their investments in SPACs. Even if a SPAC consummates a Transaction, there can be no assurance that an investment in such SPAC will ultimately prove to be more favorable to investors than a direct investment, if an opportunity were available, in the target business. This is especially the case with regards to SPAC warrants — warrant holders may sustain losses even in the event of a consummation if the value of the SPAC’s common stock after the Transaction is less than the strike price of the warrants. In addition, because a SPAC may be able to call warrants for redemption after the warrants become exercisable if the sale price of the common stock equals or exceeds a

specified price for a specified number of trading days, an investor’s profit potential with respect to SPAC warrants may be limited by such call feature. The operating companies that result from SPAC Transactions face all of the risks that typically follow a major business transaction, including the risks relating to integration following the transaction and the risks inherent in trying to achieve a new business plan. In addition, many SPAC Transactions involve the use of substantial leverage, and the debt burden on the operating company may exceed what is prudent or manageable. Further, SPAC operating companies often are public companies for the first time following consummation of the Transaction, and therefore may not be experienced in facing the challenges, expenses and risks of being a public company, including the increased regulatory and financial scrutiny and the need to comply with applicable governance and accounting requirements. Derivative Instruments. The Clients could potentially create leverage via the use of instruments such as options and other derivative instruments. The value of a derivative depends largely upon price movements in the underlying asset; hence many of the risks applicable to trading the underlying asset are also applicable to derivatives of such asset. In addition, there are a number of other risks associated with derivatives trading, such as increased exposure for the Clients, exposure to liquidity risks and counterparty risks. The Clients may invest in options, which can provide a greater potential for profit or loss than an equivalent investment in the underlying asset and may involve different risks than investing in directly in the underlying asset. Over-the-Counter and Other Derivative Instruments in General. In addition to commodities and futures contracts, Clients may use various derivative instruments, including options, forward contracts, swaps and other derivatives which may be volatile and speculative. Certain positions may be subject to wide and sudden fluctuations in market value, with a resulting fluctuation in the amount of profits and losses. Use of derivative instruments presents various risks, including the following: (i)

Tracking: When used for hedging purposes, an imperfect or variable degree of correlation between price movements of the derivative instrument and the underlying investment sought to be hedged may prevent a Client from achieving the intended hedging effect or expose a Client to the risk of loss.

(ii)

Liquidity: Derivative instruments, especially when traded in large amounts, may not be liquid in all circumstances, so that in volatile markets a Client may not be able to close out a position without incurring a loss.

(iii)

Leverage: Trading in derivative instruments can result in large amounts of leverage. Thus, the leverage offered by trading in derivative instruments may magnify the gains and losses experienced by a Client and could cause its net asset value to be subject to wider fluctuations than would be the case if a Client did not use the leverage feature in derivative instruments. See “Certain Risk Factors – Leverage” above.

(iv)

Over-the-Counter Trading: Certain derivative instruments may not be traded on an exchange. Over-the-counter financial instruments, unlike exchange-traded financial instruments, are two-party contracts with price and other terms negotiated by the buyer and the seller. The risk of nonperformance by the obligor on such an instrument may be greater and the ease with which a Client can dispose of or enter into closing transactions with respect to such an instrument may be less than in the case of an exchange-traded instrument. Because performance of over-the-counter financial instruments is not guaranteed by any exchange or clearinghouse, a Client will be subject to the risk of the inability or refusal to perform with respect to such financial instruments on the part of the counterparties with which they trade. Any such failure or refusal, whether due to insolvency, bankruptcy or other causes, could subject a Client to substantial losses.

(v)

Lack of Regulation: Financial instruments not traded on exchanges are also not subject to the same type of government regulation as exchange-traded instruments and many of the protections afforded to participants in a regulated environment may not be available in connection with such transactions. The counterparty to an over-the-counter financial instrument entered into by a Client may not be subject to the same credit evaluation and regulatory oversight as are members of exchangebased markets. The same may be true with respect to financial instruments traded on certain types of alternative exchanges (e.g., exempt commercial markets) that are less regulated than traditional securities, commodities and futures exchanges.

(vi)

Market Conditions: Past events in the financial markets resulting in the failure of large institutions that serve as counterparties to many over-the-counter financial instruments have resulted in greater illiquidity of such instruments and heightened concern for counterparty risk.

Forward Trading. Forward contracts and options thereon, unlike exchange-traded futures contracts and options on futures contracts, are not traded on exchanges and are not standardized; rather banks and dealers act as principals in these markets, negotiating each transaction on an individual basis. Forward and “cash” trading is substantially unregulated; there is no limitation on daily price movements and speculative position limits are not applicable. The principals that deal in the forward markets are not required to continue to make markets in the commodities they trade and these markets can experience periods of illiquidity, sometimes of significant duration. There have been periods during which certain participants in these markets have refused to quote prices for certain commodities or have quoted prices with an unusually wide spread between the price at which they were prepared to buy and that at which they were prepared to sell. Fixed-Income Investments. We may advise our Clients to invest in fixed-income financial instruments. The value of fixed-income financial instruments will change as the general levels of volatility and interest rates fluctuate. When interest rates decline, the value of fixed-income financial instruments can be expected to rise. Conversely, when interest rates rise, the value of such financial instruments can be expected to decline. To the extent that interest rates move in a direction contrary to the direction anticipated by the Adviser, the overall investment performance of the Client will be affected. The market value of fixed-income financial

instruments also varies according to the relative financial condition of the issuer. Investments in lower rated or unrated fixed-income financial instruments, while generally providing greater opportunity for gain and income than investments in higher rated financial instruments, usually entail greater risk (including the possibility of default or bankruptcy of the issuers of such financial instruments). Investment Grade Loans and Bonds. Investment grade loans and bonds typically do not contain significant covenants or other restrictions on the ability of the issuers to engage in certain activities, such as the declaration of dividends, the spin-off of substantial corporate assets, increases in corporate leverage for any purpose and engaging in mergers and acquisitions, whether as a buyer or a seller. Any such activities can lead to sudden changes in the issuer’s credit profile and consequently to downgrades of an issuer’s credit ratings. In addition, a deterioration of an issuer’s operating performance, competitive position or outlook can also lead to negative rating agency actions. These factors and others can ultimately lead to reduced prices for an issuer’s securities in the markets. Below Investment Grade Securities; High Yield Debt. Obligations, bonds or preferred stocks that are rated below investment grade or unrated by recognized rating services, such as Moody’s and Standard & Poor’s, generally offer a higher current yield than that available from higher-grade issues but typically involve greater risk. Securities rated below investment grade and unrated securities are typically subject to adverse changes in general economic conditions, changes in the financial condition of their issuers and price fluctuation in response to changes in interest rates. During periods of economic downturn or rising interest rates, issuers of securities rated below investment grade and unrated instruments may experience financial stress that could adversely affect their ability to make payments of principal and interest and increase the possibility of default. Adverse publicity and investor perceptions, whether or not based on fundamental analysis, may also decrease the values and liquidity of securities rated below investment grade and unrated securities, especially in a market characterized by a low volume of trading. In addition, the secondary market for high-yield securities, which is concentrated in relatively few market makers, may not be as liquid as the secondary market for more highly rated securities. As a result, a Client could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Credit Risk. Credit risk refers to the likelihood that an issuer will default in the payment of principal or interest on a bond or other debt security. Financial strength and solvency of an issuer are the primary factors influencing credit risk. In addition, lack of or inadequacy of collateral or credit enhancements for a fixed income security may affect its credit risk. This risk may be minimal for investments in insured or U.S. government bonds. However, this risk may be high for high-yield bonds, which are bonds with a credit rating of BB or lower (i.e., not investment grade) issued by companies that do not have substantial sales and earnings track records or that have questionable creditworthiness. The Fund may be subject to risk of loss in the event of such an issuer’s bankruptcy or other inability to meet its payment obligations under its high-yield securities.

Credit Ratings. Credit ratings issued by credit rating agencies are designed to evaluate the safety of principal and interest payments of rated securities. In general, the ratings of nationally recognized rating organizations represent the opinions of such agencies as to the quality of securities that they rate. Such ratings are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of the financial instruments and, therefore, may not fully reflect the true risks of an investment. Such credit ratings may be downgraded or otherwise changed and may be subject to revision, suspension or withdrawal by the rating agency at any time. In addition, credit rating agencies may or may not make timely changes in a rating to reflect changes in the economy or in the conditions of the issuer that affect the market value of the security. Consequently, credit ratings are not a recommendation to buy, sell or hold securities and are used only as a preliminary indicator of the investment quality. Prepayment Risk. Prepayment risk refers to the risk that the issuers of bonds will prepay (call) them prior to the bond maturity dates at a time when interest rates have declined. This risk is sometimes also known as “call risk.” If interest rates decline, a Client may have to reinvest the proceeds in bonds with lower interest rates, which can reduce the return. Not all bonds, however, can be prepaid. Risks Related to Debt Securities. A Client may invest in debt securities. Like other fixedincome securities, debt securities are subject to price fluctuations during the period they are outstanding depending upon the interest rate fluctuation during such period. This is called the interest rate fluctuation risk of debt securities. When interest rates fluctuate, the duration (which is based on the weighted average life of the cash flow of a security) may be used as an indication of the degree of change in the debt security’s price. The bigger its duration value, the larger the change in the debt security’s price for a given movement in interest rates. Debt securities generally are also subject to credit risk. Credit risk relates to the ability of the issuer of a debt security (or a borrower under a note or a loan) to make interest and principal payments on the security (or loan) as they become due. If the issuer fails to pay interest, a Client’s income might be reduced and the value of the debt security may be reduced. If the issuer fails to repay principal, the value of that security and the net asset value of a Client will be reduced. Debt securities that are below investment grade are particularly subject to risks of default. 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. Loan Investments Generally. A Client’s success in the area of loan investing may depend, in part, on its ability to purchase loans on advantageous terms. In purchasing loans, a Client may compete with a broad spectrum of investors and institutions. 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. Lending/Credit Risks. A Client may invest in first or second-lien loans and may be exposed to losses resulting from default and foreclosure. The value of the underlying collateral, if any, the creditworthiness of the borrower and the priority of the lien are each of great importance (although a Client may invest in subordinate or second priority liens). There is no assurance that a Client will correctly evaluate the value of the assets collateralizing the loans or the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to a company in which a Client holds an interest in a secured loan, the Client may lose all or part of the amounts advanced to the borrower. A Client cannot guarantee the adequacy of the protection of the Client’s interests, including the validity or enforceability of the loan and the maintenance of the anticipated priority and perfection of the applicable security interests. Furthermore, a Client cannot assure that claims may not be asserted that might interfere with enforcement of the Client’s rights. In the event of a foreclosure, a Client or an Affiliate thereof may assume direct ownership of the underlying asset. The liquidation proceeds upon sale of such asset may not satisfy the entire outstanding balance of principal and interest on the loan, resulting in a loss to the Client. Any costs or delays involved in the effectuation of a foreclosure of the loan or a liquidation of the underlying property will further reduce value of the proceeds and thus increase the loss. Bank Loans and Participations. A Client’s investment program may include investments in bank loans and participations. These obligations are subject to unique risks, including (1) the possible invalidation of an investment transaction as a fraudulent conveyance under relevant creditors’ rights laws; (2) so-called lender liability claims by the issuer of the obligations; (3) environmental liabilities that may arise with respect to collateral securing the obligations; and (4) limitations on the ability of a Client to directly enforce its rights with respect to participations. In analyzing each bank loan or participation, the Adviser will compare the relative significance of the risks against the expected benefits of the investment. Successful claims by third parties arising from these and other risks, absent certain conduct by the general partner of a Fund, as applicable, the Adviser, their respective Affiliates and certain other individuals, will be borne by the Client. Leveraged Loans. “Leveraged loans” are loans made to companies with a below investmentgrade rating from any nationally recognized rating agency. Such loans may be performing poorly when a Client acquires them. There is no assurance that the Adviser will correctly evaluate the value of the assets collateralizing such loans or the prospects for distribution on or repayment of such loans. A Client may lose its entire investment or may be required to accept cash, property or securities with a value less than the Client’s original investment and/or may be required to accept payment over an extended period of time. Hung Loans. The term “hung loan” commonly refers to a loan that has been made (or has been committed to be made), and the lender is not able to syndicate the loan on the originally anticipated terms. Hung loans are illiquid and lack readily ascertainable market values; there is no assurance that the price to be paid for hung loans by a Client will reflect a discounted price that should allow a Client to achieve a positive return on such loans or avoid losses. Since

the price of the loans to be purchased is expected to continue to be significantly impacted by, in addition to the specific circumstances relating to each loan (e.g., in the case of a loan relating to a leveraged buyout (“LBO”), the financial condition of the target), global and macroeconomic conditions (e.g., monetary policy, changes to currency exchange rates, governmental intervention or changes to existing laws, international geo-political events, etc.) as well as other systemic factors, it is possible that loans purchased by a Client will suffer significant impairments in value as a result of events not predicted by the Adviser. A Client may also face difficulties in disposing of or leveraging such loans, or in doing so without incurring losses. The markets in which hung loans are purchased and sold have been volatile and are likely to continue to be volatile in the future. Bridge Loans. It is a common practice for financial institutions to commit to providing bridge loans to facilitate acquisitions, including LBOs, where they serve as advisers to the purchaser. Bridge loans are frequently made because, for timing or market reasons, longer-term financing is not available at the time the funds are needed, which is often at the time of the closing of an acquisition. In the past, these commitments were not frequently drawn upon due to the availability of other sources of financing; however, due to market conditions affecting the availability of these other sources of financing (principally high-yield bond transactions), bridge loan commitments have been and may be drawn upon more regularly. Since these commitments were not regularly drawn upon in the past, there is little history for investors to rely upon in evaluating investments in bridge loans. Bridge loans often have shorter maturities. Borrower and lenders typically agree to shorter maturities based on the anticipation that the bridge loans will be replaced with other forms of financing within such shorter time period. However, the source and timing of such replacement financing may be uncertain and can be affected by, among other things, market conditions and the financial condition of the borrower at the maturity date of the bridge. If the borrower is unable to obtain replacement financing and repay the bridge loan at maturity, the terms of the bridge loan may provide for the bridge loan to be converted to a longer term loan. If bridge loans are not repaid (or cannot be disposed of on favorable terms) on the dates projected by the Adviser, there may be an adverse effect upon the ability of the Adviser to manage the assets of the Clients in accordance with its models and projections or an adverse effect upon the Clients’ performance and ability to make distributions. Debtor-in-Possession (“DIP”) Loans. Loans to companies that have filed for protection under Chapter 11 of the U.S. Bankruptcy Code, as amended, are most often asset-based, revolving working-capital facilities put into place at the outset of a Chapter 11 case to provide the debtor with both immediate cash and the ongoing working capital that will be required during the reorganization process. While such loans are generally less risky than many other types of loans as a result of their seniority in the debtor's capital structure and because their terms have been approved by a federal bankruptcy court order, it is possible that the debtor's reorganization efforts may fail and the proceeds of the ensuing liquidation of the DIP lender’s collateral might be insufficient to repay in full the DIP loan. Fraud Associated with Loans. Of paramount concern in loan investments is the possibility of material misrepresentation or omission on the part of the borrower or loan seller. Such inaccuracy or incompleteness may adversely affect the valuation of the collateral underlying

the loans or may adversely affect the ability of the Clients to perfect or effectuate a lien on the collateral securing the loan. The Clients will rely upon the accuracy and completeness of representations made by borrowers to the extent reasonable, but cannot guarantee such accuracy or completeness. Under certain circumstances, payments to a Client may be reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance or a preferential payment. Municipal Bonds. Various factors may adversely affect the value and yield of municipal bonds. These factors include political or legislative changes and uncertainties related to the tax status of municipal bonds or the rights of investors in these bonds. To the extent that a Client invests heavily in a particular state’s municipal bonds, such Client will be more vulnerable to factors affecting that state. A Client’s investments in revenue securities, where principal and interest payments are made from the revenue of a specific project or facility, and not general tax revenues, may have increased risks. Factors affecting the project or facility, such as local business or economic conditions, could have a significant impact on the project’s ability to make payments of principal and interest on these securities, and thus adversely affect the Client’s overall performance. High-Yield. Bonds or other fixed-income securities that are “higher yielding” debt securities are generally not exchange-traded and, as a result, these securities trade in the over-the-counter marketplace, which is less transparent and has wider bid/ask spreads than the exchange-traded marketplace and may result in a Client receiving a less favorable price than in a more liquid market. High-yield securities face ongoing uncertainties and exposure to adverse business, financial or economic conditions, which could lead to the issuer’s inability to meet timely interest and principal payments. High-yield securities are generally more volatile and may or may not be subordinated to certain other outstanding securities and obligations of the issuer, which may be secured by substantially all of the issuer’s assets. High-yield securities may also not be protected by financial covenants or limitations on additional indebtedness. The market values of certain of these lower-rated and unrated debt securities tend to reflect individual corporate developments to a greater extent than do higher-rated securities, which react primarily to fluctuations in the general level of interest rates, and tend to be more sensitive to economic conditions than are higher-rated securities. Companies that issue such securities may be highly leveraged and may not have more traditional methods of financing available to them. In addition, a Client may directly or indirectly invest in bonds of issuers that do not have publicly traded equity securities, making it more difficult to hedge the risks associated with such investments. Collateralized Debt Obligations. A Client may invest in collateralized debt obligations (including without limitation collateralized loan obligations (“CLO”) and collateralized bond obligations (“CBO”), collectively, “CDOs”). CDOs may be fixed pools or may be “market value” or managed pools of collateral which entitle the holders thereof to receive payments that depend primarily on the cash flow from the pool of assets, which may include commercial loans, high yield and investment grade debt, structured securities and derivative instruments relating to debt. Holders of CDOs bear various risks, including credit risk, liquidity risk, interest rate risk, market risk, operations risk, structural risk and legal risk. The pools of assets of CDOs are typically separated into tranches representing different degrees of credit quality,

with lower rated tranches being subordinate to senior tranches. The senior tranches of CDOs, which represent the highest credit quality in the pool, have the greatest collateralization and pay the lowest spreads over the Reference Rate. Lower rated CDO tranches represent lower degrees of credit quality and pay higher spreads over the Reference Rate to compensate for the attendant risks. The bottom tranches specifically receive the residual interest payments (i.e., money that is left over after the higher tiers have been paid) rather than a fixed interest rate. The returns on the junior tranches of CDOs are especially sensitive to the rate of defaults in the collateral pool. In addition, the exercise of redemption rights, if any, by more senior CDO tranches and certain other events could result in an elimination, deferral or reduction in the funds available to make interest or principal payments to the junior tranches. In particular, the failure of the CDO to satisfy asset coverage or interest coverage ratios, or certain other covenants may shut off all distributions to subordinate tranches of notes until the deficiency is eliminated. A Client may acquire mezzanine or equity tranches of CDOs which are the most susceptible to these risks. Residential Mortgage-Backed Securities. A Client may invest in residential mortgaged-backed securities (“RMBS”). An RMBS is a form of asset-backed security and is a general obligation of the issuer, which is typically secured by residential mortgages or residential mortgagebacked collateral. Mortgage-backed securities may be issued or guaranteed by U.S. government agencies or instrumentalities or by private entities such as banks, savings and loans, mortgage bankers and other nongovernmental issuers. Investments may receive payments from the payments that are made on mortgage loans securing an RMBS. The yield and payment characteristics of RMBS differ from traditional debt securities. Interest and principal prepayments are made more frequently, usually monthly, over the life of the mortgage loans and principal may be prepaid at any time because the underlying mortgage loans generally may be prepaid at any time. Faster or slower prepayments than expected on underlying mortgage loans can dramatically alter the yield to maturity of an RMBS, thus affecting a Client’s profitability. Prepayment rates generally increase when interest rates fall and decrease when interest rates rise, but changes in prepayment rates are difficult to predict. Prepayment rates also may be affected by conditions in the housing and financial markets, general economic conditions and the relative interest rates on fixed-rate and adjustable-rate mortgage loans. The value of most RMBS, like traditional debt securities, tends to vary inversely with changes in interest rates (i.e., as interest rates increase, the value of such securities decrease). RMBS, however, may benefit less than traditional debt securities from declining interest rates because prepayment of mortgages tends to accelerate during periods of declining interest rates. Prepayments shorten the life of the security and the time over which the Client’s investments receive income at the higher interest rate. Additionally, when mortgage loans underlying RMBS are prepaid, the prepaid amounts are re-invested in other income yielding securities which will reflect the lower interest rates prevailing at the time. During periods of rising interest rates, RMBS are often more susceptible to extension risk than traditional debt securities (i.e., rising interest rates could cause property owners to prepay their mortgages more slowly than expected when the security was purchased, which may further reduce the market value of such security and lengthen the duration of the security). RMBS are not traded on an organized exchange and may, therefore, be difficult to value. Investment in RMBS is subject to credit risk, i.e., the risk that an issuer of an RMBS will be unable to pay principal and interest when due, or that the value of the security will suffer because investors

believe the issuer is less able to pay. A default, downgrade or credit impairment of any of a Client’s investments could result in a significant or even total loss of the investment. Commercial Mortgage-Backed Securities. A Client may invest in commercial mortgagebacked securities (“CMBS”). A CMBS is a form of mortgage-backed security which is typically secured by commercial mortgages or commercial mortgage-backed collateral. Commercial mortgage loans underlying commercial mortgage-backed securities are generally secured by income producing property, such as offices, malls, stores, industrial properties, multi-family housing or other commercial property, and may entail risks of delinquency and foreclosure. In general, incremental risks of delinquency, foreclosure and loss with respect to an underlying commercial mortgage loan pool may be greater than those associated with residential mortgage loan pools. In part, this is caused by lack of diversity. CMBS are often backed by an underlying mortgage pool of only a few mortgage loans. A failure in performance of any one commercial mortgage loan in the underlying mortgage pool will have a much greater impact on the performance of the related CMBS. Credit risk relating to commercial mortgagebacked transactions is, as a result, property-specific. In this respect, commercial mortgagebacked transactions resemble traditional non-recourse secured loans. Rates of defaults and losses on commercial mortgage loans, and the value of any commercial property, may be adversely affected by risks generally incident to interests in real property, including various events which the related borrower and/or manager of the commercial property may be unable to predict or control, such as: changes in general or local economic conditions and/or specific industry segments; declines in real estate values; declines in rental or occupancy rates; increases in interest rates, real estate tax rates and other operating expenses; changes in governmental rules, regulations and fiscal policies, including environmental legislation; acts of God; environmental hazards; and social unrest and civil disturbances. If a commercial mortgage loan is in default, foreclosure of such commercial mortgage loan may be a lengthy and difficult process, and may involve significant expenses and potential liabilities. Prepayments on the underlying commercial mortgage loans in an issue of CMBS will be influenced by the prepayment provisions of the related mortgage notes and may also be affected by a variety of economic, geographic and other factors, including the difference between the interest rates on the underlying mortgage loans (giving consideration to the cost of refinancing) and prevailing mortgage rates and the availability of refinancing. In general, if prevailing interest rates fall significantly below the interest rates on the related mortgage loans, the rate of prepayment on the underlying mortgage loans would be expected to increase. Conversely, if prevailing interest rates rise to a level significantly above the interest rates on the related mortgages, the rate of prepayment would be expected to decrease. Prepayments could reduce the yield received on the related CMBS issue. Concentrations of CMBS of a particular type, as well as concentrations of CMBS issued or guaranteed by affiliated obligors, serviced by the same servicer or backed by underlying collateral located in a specific geographic region, may subject the CMBS to additional risk. CMBS issues may be subordinate in right of payment and rank junior to other securities that are secured by or represent an ownership interest in the same pool of assets. In general, subordinate classes are more sensitive to risk of loss and writedowns than senior classes of such securities. Commercial Paper. A Client may purchase or have exposure to commercial paper that is issued by structured investment vehicles or other conduits. Commercial paper is a short-term

obligation with a maturity generally ranging from one to 270 days and is issued by U.S. or foreign companies or other entities in order to finance their current operations. Such investments are unsecured and usually discounted from their value at maturity. The value of commercial paper may be affected by changes in the credit rating or financial condition of the issuing entities and will tend to fall when interest rates rise and rise when interest rates fall. Asset-backed commercial paper may be issued by structured investment vehicles or other conduits that are organized to issue the commercial paper and to purchase trade receivables or other financial assets. The repayment of asset-backed commercial paper depends primarily on the cash collections received from such an issuer’s underlying asset portfolio and the issuer’s ability to issue new asset-backed commercial paper. Sovereign Debt. Several factors may affect (1) the ability of a government, its agencies, instrumentalities or its central bank to make payments on the debt it has issued, including securities that the Adviser believes are likely to be included in restructurings of the external debt obligations of the issuer in question, (2) the market value of such debt, and (3) the inclusion of sovereign debt in future restructurings, including such issuer’s (A) balance of trade and access to international financing, (B) cost of servicing such obligations, which may be affected by changes in international interest rates, and (C) level of international currency reserves, which may affect the amount of exchange available for external debt payments. Significant ongoing uncertainties and exposure to adverse conditions may undermine the issuer’s ability to make timely payment of interest and principal, and issuers may default on their sovereign debt. Currencies. A Client may enter into spot and forward currency contracts or invest in currency futures contracts and options on currencies and futures to hedge currency risk by shifting exposure to foreign currency fluctuations from one currency to another with respect to a Client. Currency transactions made on a spot (i.e., cash) basis are at the spot rate prevailing in the currency exchange market. A forward currency contract, which involves an obligation to purchase or sell a specific currency at a future date at a price set at the time of the contract, reduces a Client’s exposure with respect to its investment to changes in the value of the currency it will deliver and increases a Client’s exposure to changes in the value of the currency it will receive for the duration of the contract. Currency trading is subject to risks different from those of other securities transactions. Because exchange rate control is of great importance to the issuing governments and influences economic planning and policy, purchases and sales of currency and related instruments can be negatively affected by government exchange controls, blockages, and manipulations or exchange restrictions imposed by governments. These government actions can result in losses to a Client if it is unable to deliver or receive currency or funds in settlement of obligations. Buyers and sellers of currency futures are subject to the same risks that apply to the use of futures generally. Furthermore, settlement of a currency forward contract for the purchase of most currencies must occur at a bank based in the issuing nation. The ability to establish and close out options on currency futures is subject to the maintenance of a liquid market, which may not always be available. Currency exchange rates may fluctuate based on factors extrinsic to that country’s economy.

At or before the maturity of a forward currency contract, a Client may either make delivery of the currency, or terminate its contractual obligation to deliver the currency by buying an “offsetting” contract obligating it to buy, on the same maturity date, the same amount of the currency. If a Client engages in an offsetting transaction, it may later enter into a new forward currency contract to sell the currency. If a Client engages in an offsetting transaction, it will incur a gain or loss to the extent that there has been movement in forward currency contract prices. If forward prices go down during the period between the date a Client enters into a forward currency contract for the sale of a currency and the date it enters into an offsetting contract for the purchase of the currency, the Client will realize a gain to the extent that the price of the currency it has agreed to sell exceeds the price of the currency it has agreed to buy. If forward prices go up, the Client will suffer a loss to the extent the price of the currency it has agreed to buy exceeds the price of the currency it has agreed to sell. Credit Instruments of Distressed or Bankrupt Issuers. A Client may invest in some credit instruments issued by distressed and bankrupt issuers, including debt obligations that are in covenant or payment default. Evaluating reorganizations and bankruptcies can be a complex, time consuming and expensive process that requires specialized expertise. Although such investments have the potential to achieve significant returns, they involve a high degree of risk, and may fail to show any return for a considerable period of time or result in substantial or complete loss. There is no assurance the Adviser will accurately evaluate the prospects for a profitable return on a Client’s investments. While exit from distressed trading strategies may come through recovery or appreciation and subsequent sale in financial markets, other means of exit take alternate and sometimes suboptimal forms, including (1) a refinancing, sometimes providing for withdrawal of positions held by a Client; (2) reset terms and conditions, including but not limited to a longer tenure or a diminished coupon; (3) conversion of debt instruments to further subordinated debt, hybrid, or equity securities; (4) sale of the entire company to a strategic or financial buyer; (5) government nationalization; (6) liquidation of assets or creation of liquidation trusts for assets; and (7) cash settlement of claims from others involved in restructuring. Certain of these exit strategies may go beyond the expected tenure of the trading strategy and adversely impact liquidity, volatility and pricing. Many of the events within a bankruptcy case are adversarial and often beyond the control of creditors. There can be no assurances that a Client will be able to adequately exercise or enforce its full rights under the stated terms of its investments, or that any actions taken by a Client will be either beneficial or not harmful to final recovery value. In some situations, the market of available dealers for distressed positions may constrict and could impact the willingness to purchase or repurchase at an expected or modeled fair market value. Consequently, a Client may sometimes exit positions at times or under conditions different than initially anticipated and accept substantial losses. Convertible Securities. Convertible securities are bonds, debentures, notes, preferred stock or other securities that may be converted into or exchanged for a specified amount of common stock of the same or different issuer within a particular period of time at a specified price or formula. A convertible security entitles its holder to receive interest that is generally paid or

accrued on debt or a dividend that is paid or accrued on preferred stock until the convertible security matures or is redeemed, converted or exchanged. Convertible securities have unique investment characteristics in that they generally (1) have higher yields than common stocks, but lower yields than comparable non-convertible securities; (2) are less subject to fluctuation in value than the underlying common stock due to their fixed-income characteristics; and (3) provide the potential for capital appreciation if the market price of the underlying common stock increases. The investment value of a convertible security is influenced by changes in interest rates, with investment value declining as interest rates increase and increasing as interest rates decline. The credit standing of the issuer and other factors may also have an effect on the convertible security’s investment value. The conversion value of a convertible security is determined by the market price of the underlying common stock. To the extent the market price of the underlying common stock approaches or exceeds the conversion price, the price of the convertible security will be increasingly influenced by its conversion value. A convertible security generally will sell at a premium over its conversion value by the extent to which investors place value on the right to acquire the underlying common stock while holding a fixed-income security. Generally, the amount of the premium decreases as the convertible security approaches maturity. A convertible security may be subject to redemption at the option of the issuer at a price established in the convertible security’s governing instrument. If a convertible security held by a Client is called for redemption, the Client will be required to permit the issuer to redeem the security, convert it into the underlying common stock or sell it to a third-party. Any of these actions could have an adverse effect on a Client’s ability to achieve its investment objective. Exchange-Traded Funds. Exchange-traded funds (“ETFs”) are publicly traded unit investment trusts, open-end funds or depository receipts that seek to track the performance and dividend yield of specific indexes or companies in related industries. These indexes may be either broadbased, sector-specific, or international. However, ETF shareholders are generally subject to the same risk as holders of the underlying securities they are designed to track. ETFs are also subject to certain additional risks, including the risk that their prices may not correlate perfectly with changes in the prices of the underlying securities they are designed to track, and the risk of trading in an ETF halting due to market conditions or other reasons, based on the policies of the exchange upon which the ETF trades. Generally, each shareholder of an ETF bears a pro rata portion of the ETF’s expenses, including management fees. Accordingly, in addition to bearing their proportionate share of a Client’s expenses, Fund Investors or Managed Account Clients, as applicable, may also indirectly bear similar expenses of an ETF. Derivatives Generally. Derivative instruments, or “derivatives,” include futures, options, swaps, structured securities and other instruments and contracts that are derived from, or the value of which is related to, one or more underlying securities, financial benchmarks, currencies or indices. Derivatives allow an investor to hedge or speculate upon the price movements of a particular security, financial benchmark currency or index at a fraction of the cost of investing in the underlying asset. The value of a derivative depends largely upon price movements in the underlying asset. Therefore, many of the risks applicable to trading the

underlying asset are also applicable to derivatives of such asset. However, there are a number of other risks associated with derivatives trading. For example, because many derivatives are “leveraged,” and thus provide significantly more market exposure than the money paid or deposited when the transaction is entered into, a relatively small adverse market movement can not only result in the loss of the entire investment, but may also expose a Client to the possibility of a loss exceeding the original amount invested. Derivatives may also expose investors to liquidity risk, as there may not be a liquid market within which to close or dispose of outstanding derivatives contracts, and to counterparty risk. The counterparty risk lies with each party with whom a Client contracts for the purpose of making derivative investments (the “Counterparty”). In the event of the Counterparty’s default, a Client will only rank as an unsecured creditor and risks the loss of all or a portion of the amounts it is contractually entitled to receive. Futures. Futures contracts are subject to numerous risks, including the following: (i)

Volatility. Futures prices are highly volatile. Because of the low margin deposits normally required in futures trading, an extremely high degree of leverage is typical of a futures trading account. As a result, a relatively small price movement in a futures contract may result in substantial losses to a Client. Like other leveraged investments, any purchase or sale of a futures contract may result in losses that exceed the amount invested. Relatively small futures positions have the potential to significantly erode or erase a Client’s gains in other investments.

(ii)

Margin requirements. Margin requirements for commodities trading are set by the individual commodity exchanges or other trading facility for each type of commodity contract based upon the perceived volatility of each type of contract. Margin requirements vary not only by the type of commodity contract, but also depending upon whether the transaction is for “bona fide hedging” as defined in Section 1.3 of the CFTC Regulations. Margin requirements for transactions that are not bona fide hedging are significantly higher than for bona fide hedging transactions.

(iii)

Daily Price Fluctuation Limits. Commodity exchanges and trading facilities limit fluctuations in certain commodity futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits.” During a single trading day, no trades may be executed at prices beyond the daily limit. Once the price of a futures contract for a particular commodity has increased or decreased by an amount equal to the daily limit, positions in the commodity cannot be taken or liquidated unless traders are willing to effect trades at or within the limit. Commodity futures prices have occasionally moved to the daily limit for several consecutive days with little or no trading. This could prevent the prompt liquidation of unfavorable positions and subject a Client to substantial losses.

(iv)

Speculative Position Limits. The CFTC and futures exchanges and trading facilities have established “speculative position limits” on the maximum net long or net short futures and options positions that any person may hold or control in almost all commodities. Speculative position limits also apply to any swap that is

“economically equivalent” to a futures contract to which U.S. federal speculative position limits apply. Trading instructions may have to be modified and a Client’s positions that are deemed controlled by the Adviser may need to be liquidated to avoid exceeding these limits. These actions could adversely affect a Client’s operations and profitability. (v)

Risk Disclosure. Commodity futures trading is highly speculative. Price movements of commodity futures contracts are influenced by, among other things, changing supply and demand relationships, governmental agricultural and trade programs and policies and national and international political and economic events.

Swaps. A Client may use leverage when making any MLP related and certain other investments through swaps with counterparties selected by the Adviser (“Swap Counterparties”). A Client may enter into master agreements (“ISDA Master Agreements”) with Swap Counterparties to facilitate entering into swaps; however, there can be no assurance that a Client will enter into any such ISDA Master Agreements or that a Client will be able to enter into any swaps pursuant to any ISDA Master Agreement. Although the counterparty under a particular swap may require a Client to post margin to secure all or a portion of its obligations under such swap, it is expected that a Client would generally be permitted to undertake potential obligations in respect of a particular swap substantially in excess of any margin required to be posted by a Client in connection with such swap. As such, a Client may lose more in a particular swap than it has posted as security for such particular swap. There can be no assurance that a swap will be entered into, that the underlying reference investment will appreciate and that a Client will be entitled to a payment under a swap as a result, or that, even if a Client is entitled to a payment under a swap, the Swap Counterparty that is the counterparty of a Client thereunder will be able to perform its payment obligation to a Client. Credit Default Swaps. A Client may purchase and sell credit derivative contracts – primarily credit default swaps – both for hedging and other purposes. A credit default swap is a contract between two parties under which they both agree to isolate and separately trade the credit risk of at least one third-party entity. The typical credit default swap contract requires the seller to pay to the buyer, in the event that a particular reference entity experiences specified credit events, the difference between the notional amount of the contract and the value of a portfolio of securities issued by the reference entity that the buyer delivers to the seller. In return, the buyer agrees to make periodic payments equal to a fixed percentage of the notional amount of the contract. A Client may also sell credit default swaps on a basket of reference entities as part of a synthetic collateralized debt obligation transaction. The Adviser, on behalf of a Client, is permitted to use credit default swaps to hedge a portion of the default risk on a single debt obligation or portfolio of obligations. The Adviser may also use credit default swaps if it believes that a particular credit or group of credits will experience credit improvement or credit deterioration. The leverage involved in many credit default swap transactions, and the possibility that a widespread downturn in the market could cause massive defaults, both add to the uncertainty of an investment in these instruments. As a buyer of credit default swaps, a Client will be exposed to the risk that deliverable securities will not be available in the market, or will be available only at unfavorable prices, as would be

the case in a so-called “short squeeze.” While the credit default swap market auction protocols reduce this risk, it is still possible that an auction will not be organized or will be unsuccessful. In certain instances of issuer defaults or restructurings (for those credit default swaps for which restructuring is specified as a credit event), it has been unclear under the standard industry documentation for credit default swaps whether or not a “credit event” triggering the seller’s payment obligation has occurred. ISDA Credit Derivatives Determination Committees (each, a “Determination Committee”) function to reduce this uncertainty and create uniformity across the market, although it is possible that a Determinations Committee will not be able to reach a resolution or do so on a timely basis. In either of these cases, a Client would not be able to realize the full value of the credit default swap upon a default by the reference entity. As a seller of credit default swaps, a Client will incur leveraged exposure to the credit of the reference entity and is subject to many of the same risks it would incur if it were holding debt securities issued by the reference entity. However, a Client will not have any legal recourse against the reference entity and will not benefit from any collateral securing the reference entity’s debt obligations. In addition, the credit default swap buyer will have broad discretion to select which of the reference entity’s debt obligations to deliver to a Client following a credit event and will likely choose the obligations with the lowest market value in order to maximize the payment obligations of a Client. Credit default swaps generally trade on the basis of theoretical pricing and valuation models, which may not accurately value such swap positions when established or when subsequently traded or unwound under actual market conditions. The credit derivative market may become subject to increased regulation, which could increase costs or even prevent participation by a Client. High Volatility of Derivatives. The prices of derivative instruments, including currencies, futures and option prices, can be highly volatile. Price movements of derivative contracts in which a Client’s portfolio’s assets may be invested are influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, and national and international political and economic events and policies. In addition, governments from time to time intervene, directly and by regulation, in certain markets, particularly those in currencies, financial instruments, futures and options. Such intervention often is intended directly to influence prices and may, together with other factors, cause all of such markets to move rapidly in the same direction because of, among other things, interest rate fluctuations. A Client’s portfolio is also subject to the risk of the failure of any exchanges on which its positions trade or of their clearinghouses. Other Derivative Instruments. A Client may take advantage of opportunities with respect to certain other derivative instruments that are not currently contemplated for use or that are currently not available, but that may be developed, to the extent such opportunities are both consistent with the investment objective of the Client and believed by the Adviser to be legally permissible. Special risks may apply to instruments that are invested in by a Client in the future that cannot be determined at this time or until such instruments are developed or invested in by a Client. Certain swaps, options and other derivative instruments may be subject to various types of risks, including market risk, liquidity risk, the risk of non-performance by the

counterparty, including risks relating to the financial soundness and creditworthiness of the counterparty, legal risk and operations risk. Regulation in the Derivatives Industry. There are many rules related to derivatives that may negatively impact the Clients, such as requirements related to recordkeeping, reporting, portfolio reconciliation, central clearing, minimum margin for uncleared OTC instruments and mandatory trading on electronic facilities, and other transaction-level obligations. Parties that act as dealers in swaps are also subject to extensive business conduct standards, additional “know your counterparty” obligations, documentation standards and capital requirements. All of these requirements add costs to the legal, operational and compliance obligations of the Adviser and the Clients, and increase the amount of time that the Adviser spends on noninvestment-related activities. Requirements such as these also raise the costs of entering into derivative transactions, and these increased costs will likely be passed on to the Clients. These rules are operationally and technologically burdensome for the Adviser and the Clients. These compliance obligations require employee training and use of technology, and there are operational risks borne by the Clients in implementing procedures to comply with many of these additional obligations. These regulations may also result in the Clients forgoing the use of certain trading counterparties (such as broker-dealers and futures commission merchants (“FCMs”)), as the use of other parties may be more efficient for the Clients from a regulatory perspective. However, this could limit the Clients’ trading activities, create losses, preclude the Clients from engaging in certain transactions or prevent the Clients from trading at optimal rates and terms. Many of these requirements were implemented pursuant to the U.S. Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the EU Regulation on OTC Derivatives, Central Counterparties and Trade Repositories (known as the European Market Infrastructure Regulation, or “EMIR”) and similar regulations globally. In the United States, the Dodd-Frank Act divides the regulatory responsibility for derivatives between the SEC and the CFTC, a distinction that does not exist in any other jurisdiction. The SEC has regulatory authority over “security-based swaps” and the CFTC has regulatory authority over “swaps”. EMIR is being implemented in phases through the adoption of delegated acts by the European Commission. As a result of the SEC and CFTC bifurcation and the different pace at which the SEC, the CFTC, the European Commission and other international regulators have promulgated necessary regulations, different transactions are subject to different levels of regulation. Though many rules and regulations have been finalized, there are others, particularly SEC regulations with respect to security-based swaps and EMIR regulations, that are still in the proposal stage or are expected to be introduced in the future. The following describes derivatives regulations that may have the most significant impact on the Clients: (i)

Reporting. Most swap transactions have become subject to anonymous “real time reporting” requirements, meaning that information relating to transactions entered into by a Client will become visible to the market in ways that may impair a Client’s

ability to enter into additional transactions at comparable prices or could enable competitors to “front run” or replicate the Client’s strategies. (ii)

Central Clearing. In order to mitigate counterparty risk and systemic risk in general, various U.S. and international regulatory initiatives are underway to require certain derivatives to be cleared through central clearinghouses. In the United States, clearing requirements have been implemented as part of the Dodd-Frank Act. The CFTC imposed its first clearing mandate on December 13, 2012 affecting certain interest rate and credit default swaps. The CFTC and the SEC may introduce clearing requirements for additional classes of derivatives in the future. EMIR also requires OTC derivatives contracts meeting specific criteria to be cleared through central counterparties. While such clearing requirements may be beneficial for the Clients in many respects (for instance, they may reduce the counterparty risk to the dealers to which the Clients would be exposed under non-cleared derivatives), the Clients could be exposed to new risks, such as the risk that an increasing percentage of derivatives will be required to be standardized and/or cleared through central clearinghouses, and, as a result, the Clients may not be able to hedge their risks or express an investment view as well as they would have been able to had they used customizable derivatives available in the over-the-counter markets. The Clients may have to split their derivatives portfolios between centrally cleared and overthe-counter derivatives, which may result in operational inefficiencies and an inability to offset risk between centrally cleared and over-the counter positions, and which could lead to increased costs. Another risk is that the Clients may be subject to more onerous and more frequent (daily or even intraday) margin calls from both a Client’s FCM and the clearinghouse. Virtually all margin models utilized by the clearinghouses are dynamic, meaning that unlike traditional bilateral swap contracts where the amount of initial margin posted on the contract is typically static throughout the life of the contract, the amount of the initial margin that is required to be posted in respect of a cleared contract will fluctuate, sometimes significantly, throughout the life of the contract. The dynamic nature of the margin models utilized by the clearinghouses and the fact that the margin models might be changed at any time may subject the Clients to an unexpected increase in collateral obligations by clearinghouses during a volatile market environment, which could have a detrimental effect on the Clients. Clearinghouses also limit collateral that they will accept to cash, U.S. treasuries and, in some cases, other highly rated sovereign and private debt instruments, which may require a Client to borrow eligible securities from a dealer to meet margin calls and raise the costs of cleared trades to the Client. In addition, clearinghouses may not allow a Client to portfolio-margin its positions, which may increase a Client’s costs. Although standardized clearing for derivatives is intended to reduce counterparty risk (for instance, it may reduce the counterparty risk to the dealers to which the

Clients would have been exposed under OTC derivatives), it does not eliminate risk. Derivatives clearing may also lead to concentration of counterparty risk, namely in the clearinghouse and a Client’s FCM, subjecting the Client to the risk that the assets of the FCM are insufficient to satisfy all of the FCM’s payment obligations, leading to a payment default. The failure of a clearinghouse or FCM could have a significant impact on the financial system. Even if a clearinghouse does not fail, large losses could force significant capital calls on FCMs during a financial crisis, which could lead FCMs to default and thus worsen the crisis. (iii)

Swap Execution Facilities. In addition to the central clearing requirement, certain swap transactions are required to trade on regulated electronic platforms such as swap execution facilities (“SEFs”), which require the Client to subject itself to regulation by these venues and subject the Client to the jurisdiction of the CFTC. The EU regulatory framework governing derivatives is set not only by EMIR but also a legislative package known as a recast of the Markets in Financial Instruments Directive (“MiFID II”). Among other things, MiFID II requires transactions in derivatives to be executed on regulated trading venues. The SEC has yet to finalize rules related to security-based swap execution facilities. It is not clear whether these trading venues will benefit or impede liquidity, or how they will fare in times of market stress. Trading on these trading venues may increase the pricing discrepancy between assets and their hedges as products may not be able to be executed simultaneously, therefore increasing basis risk. It may also become relatively expensive for the Client to obtain tailored swap products to hedge particular risks in its portfolio due to higher collateral requirements on bilateral transactions as a result of these regulations.

(iv)

Margin Requirements for Non-Cleared Swaps. Rules issued by U.S., EU and other regulators globally (the “Margin Rules”) impose various margin requirements on all swaps that are not centrally cleared, including the establishment of minimum amounts of initial margin that must be posted, and, in some cases, the mandatory segregation of initial margin with a third-party custodian. Although the Margin Rules are intended to increase the stability of the derivatives market, the overall amount of margin that a Client will be required to post to swap counterparties may increase by a material amount, and as a result a Client may not be able to deploy capital as effectively. Additionally, to the extent a Client is required to segregate initial margin with a third party custodian, additional costs may be incurred by a Client.

Cash Investments. A Client may from time to time hold cash or invest in cash equivalents for short-term investments (including in times of usual or adverse conditions and for temporary defensive purposes). While a Client holds cash or has investments in cash equivalents, the overall appreciation of a Client’s assets may be less than if all of a Client’s assets were invested fully in accordance with the relevant investment strategy.

Illiquid Investments. A Client may invest in, or hold, investments that are long term, illiquid and/or without a readily ascertainable market value. Illiquid financial instruments may be required to be held for a lengthy period of time and often require more time to sell and result in higher brokerage charges or dealer discounts and other selling expenses than does the sale of financial instruments eligible for trading on national securities exchanges or for which there is an active over-the-counter market. In addition, due to thin trading in certain financial instruments or assets, investments in such financial instruments or assets may be less liquid than alternative investments for which there is a more active trading market, which could cause a Client to suspend net asset value calculations and/or withdrawals. Therefore, a Client’s investments in illiquid or thinly traded financial instruments or assets may reduce the returns of a Client because it may be unable to sell the illiquid or thinly traded financial instruments or assets at an advantageous time or price. Also, the size of a Client’s positions may magnify the effect of a decrease in market liquidity for the financial instruments it trades. As in the past, changes in the overall market leverage (e.g., deleveraging or liquidations by other market participants of the same or similar positions) also may adversely affect a Client’s positions. New Issues. A Client may invest in “new issues.” The purchase of “new issues” (defined as any initial public offering of an equity security) involves greater risk than securities trading in general. The prices of new issues may not increase as expected and, in fact, may decline more rapidly. While most people assume that new issues will trade at a premium to their issue price until they are liquidated, there is no guarantee that this will occur. In order for a Client to trade “new issues,” or invest in investment vehicles that trade “new issues,” each investor must represent and warrant in the Subscription Documents that it either is or is not restricted from participating in such new issues pursuant to applicable FINRA Rules, and a Client will be relying on such representations and warranties in engaging in its business activities. Those Fund Investors or Managed Account Clients who are so restricted may not participate in some or all of the gains, losses or expenses of a Client related to new issues in compliance with FINRA rules. D. The following is a brief summary of regulatory-related risks and risks: Increased Governmental and Regulatory Scrutiny; Litigation and Regulatory Risks. Governmental scrutiny of the financial services industry has continued to be significant. Routine and targeted examinations of hedge fund managers have continued to occur and regulators continue to commence investigations and bring enforcement actions against industry participants. Responding to examinations, investigations and enforcement actions is both time consuming and expensive, and would divert the time and effort of the Adviser’s senior management from the business of the Funds. In addition, commencement of a lawsuit or regulatory proceeding against a Fund or the Adviser, regardless of the eventual outcome, could adversely affect the reputation of a Fund and the Adviser and could result in the imposition of penalties or limit the ability of the Adviser to conduct its business (including managing the Managed Accounts) and the Funds to offer interests in jurisdictions with so-called “bad actor” laws. The extent of the Funds’ and the Adviser’s exposure to legal and regulatory matters is unpredictable.

E. The following is a brief summary of the conflicts of interest associated with the Adviser’s business: Other Activities; Proprietary Trading. The Adviser and its principals and affiliates (the “Adviser Parties”) may engage in, invest in, participate in or otherwise enter into other business ventures of any kind, nature or description, alone or with others, including, without limitation, the management of or investment in other investment or trading entities or vehicles and trading for their own accounts, and neither the Clients nor any Fund Investor or Managed Account Client shall have any right in or to any such activities or the income or profits derived therefrom. The Adviser Parties are not obligated to devote any specific amount of time to the affairs of the Clients. The general partners of the Funds and the Adviser Parties, as applicable, will devote only so much time and attention to the business and affairs of the Clients as it deems reasonably necessary. The Adviser Parties may engage in, invest in, participate in or otherwise enter into other business ventures of any kind, nature or description, alone or with others, including, without limitation, the management of or investment in other investment or trading entities or vehicles, and none of the Clients, any Fund Investor and any Managed Account Client shall have any right in or to any such activities or the income or profits derived therefrom. The Adviser Parties may invest and trade for their own accounts, provided that they may not buy securities from or sell securities to the Clients. The Adviser Parties have established policies and procedures designed to ensure that any such trading is conducted on a fair and equitable basis over time. The records of trading by the Adviser Parties will not be made available to the Fund Investors or Managed Account Clients, except to the extent required by law. Performance Compensation. Performance Compensation may create an incentive for the Adviser to cause the Clients to make investments that are riskier or more speculative than would be the case if the Adviser or its affiliates, as applicable, were not to receive any performance based compensation. Since Performance Compensation is calculated on a basis that includes unrealized appreciation as well as realized appreciation, Performance Compensation may be greater than if it were based solely on realized gains. Valuation. To the extent that the Adviser is involved in the valuation of a Client’s assets and liabilities, the Adviser has an inherent conflict of interest in performing this function. It is in the Adviser’s interest to value the assets of a Client at as high a level as possible, as the Management Fee and Performance Compensation are calculated based on the net asset value of a Client. In addition, the Adviser’s, and a Fund’s general partner’s, as applicable, performance records used in marketing their services to actual and prospective clients and investors will be in part dependent on the performance of the applicable Client. Cross Trades. From time to time, the Adviser may determine that a sale of positions from one client account to another is in the best interests of both accounts. For example, a Client may acquire investments from unrelated sellers and may re-offer a portion of such investments to affiliated investment vehicles that were subject to legal, fiscal or other restrictions on

participating in the original transaction. Alternatively, an affiliate may acquire an investment from an unrelated seller in anticipation of offering it to a Client at a future date, if a Client does not have available capital to make the investment when it is being marketed by the unrelated seller. While these transactions with related parties are expected to expand the universe of opportunities that are available to a Client and other clients of the Adviser, a Client will not necessarily derive a benefit from each such transaction, and the Client and the other party to a particular transaction may have divergent interests. Moreover, there may be uncertainties regarding the valuation of investments that are subject to these transactions. Affiliates may earn commissions, spreads or other compensation from a Client relating to such transactions. Amounts due from a Client to the Adviser and its affiliates are not adjusted for such commission, spreads or other compensation. For the avoidance of doubt, where investment strategies or investments among the Clients overlap, the Adviser may make cross trades of positions between the Clients (i) to rebalance the portfolios of the Clients, or (ii) for any other purpose that the Adviser or the general partner of a Fund, if applicable, determines in good faith is advisable for the participating parties; provided that any such cross trades will be effected at prevailing market prices in accordance with the valuation methodologies described herein. Certain cross trades may create a potential conflict of interest between the interests of one Client, on the one hand, and the interests of the other Clients, on the other hand. THE FOREGOING LIST OF RISK FACTORS DOES NOT PURPORT TO BE A COMPLETE ENUMERATION OR EXPLANATION OF THE RISKS INVOLVED ASSOCIATED WITH MEREWETHER’S INVESTMENT ANALYSIS AND INVESTMENT STRATEGIES. SUBSTANTIAL ADDITIONAL RISKS MAY BE PRESENT. PROSPECTIVE INVESTORS SHOULD READ THE OFFERING DOCUMENTS AND CONSULT WITH THEIR OWN ADVISORS BEFORE DECIDING TO MAKE AN INVESTMENT.

Performance Compensation may create an incentive for the Adviser to make investments that are riskier or more speculative than would be the case if such arrangement was not in effect. However, as noted in Item 11, the Adviser has a written Code of Ethics that contains policies and procedures to address conflicts of interest. Under such policies and procedures, the Adviser is required to make investment decisions for its Clients in a manner that is consistent with its fiduciary duties to its Clients. D. The Adviser does not recommend or select other investment advisers for its Clients nor does it have any business relationship with other advisers that might create a material conflict of interest.

The Adviser requires pre-clearance of purchases of an IPO or a new private placement; preclearance of certain personal securities transactions; periodic reporting of employees' personal securities transactions and holdings; and prompt internal reporting of Code violations. As part of its Code, the Adviser has established procedures to reduce the inherent risk created by potential material, non-public information, which includes procedures for, among other things, the use and maintenance of restricted trading lists. The Adviser will provide a copy of the Code to any investor or prospective investor upon request. B. Neither the Adviser nor any of its related persons recommend to its Clients securities in which the Adviser or any related persons have a material financial interest. C. The Adviser or related persons may invest in securities that it recommends to Clients. This may create an incentive for the Adviser to allocate securities in favor of the Adviser’s proprietary accounts over the Client accounts. To address these conflicts of interest, the Adviser has implemented personal trading policies within the Code that requires preclearance of personal trades in certain circumstances; requires periodic reporting of employees’ personal securities transactions and holdings; and requires prompt internal reporting of Code violations. D. Subject to the requirements of the Code, the Adviser or related persons may recommend investments to Clients, or make investments for Clients, at or about the same time that the Adviser or its related persons buys or sells the same investments for their own personal account. See Item 11.C. above for a discussion on how these conflicts of interest are addressed. E. The Adviser will allocate investments among the accounts of its Clients in a manner which it believes to be fair and equitable. The Adviser will not allocate investment opportunities based on anticipated compensation or profits to the Adviser, any affiliates or its professionals. In addition, no allocations will be made to a personal account of any employee of the Adviser. To ensure fairness in the allocation of investment opportunities amongst Clients, the Adviser will allocate investment opportunities with regard to the suitability of such investments to each Client. In determining the suitability of each investment opportunity for a Client, consideration will be given to a number of factors, the most important being the Advisory Client’s investment objectives, strategies, guidelines, existing

portfolio composition and cash levels, as well as legal, tax and regulatory suitability. The Adviser may, however, determine not to allocate investments that may be suitable for multiple Clients in accordance with the above standard allocation method for a variety of reasons that are set forth in the trade allocation policy adopted by the Adviser.

execution.” In seeking best execution, the determinative factor is not the lowest possible cost, but whether the transaction represents the best qualitative execution, taking into consideration the full range of a broker-dealer’s services, including the value of research provided, execution capability, commission rates, and responsiveness. Accordingly, although we will seek competitive rates, we may not necessarily obtain the lowest possible commission rates for a specific client account transaction. The transactions executed by the Clients may be cleared through, and the Clients’ investment instruments may be held by, a number of financial institutions the Adviser will select on terms negotiated with each such financial institution individually. Subject to the Adviser’s Offering Documents, the Adviser may use a variety of financial institutions both to take advantage of differing expertise and capabilities and to avoid, due to credit concerns, having all investment instruments concentrated at one firm.

Brokerage for Client Referrals In selecting or recommending broker-dealer for client accounts, neither the Adviser nor its related person will consider the receipt of client referrals when selecting broker-dealers to execute transactions.

Directed Brokerage The Managed Accounts will have designated firms to serve as both the custodian and prime broker for its assets. The Managed Accounts, however, will not routinely recommend, request or require the Adviser to execute transactions through a specified broker-dealer. The executing brokers retained by Merewether will be selected by the Adviser at its sole discretion.

Soft Dollars The Adviser may receive from a Clients’ broker-dealers, products and services in addition to brokerage services. A portion of the commissions generated on the Clients’ brokerage transactions may generate “soft dollar” credits that the Adviser is authorized to use to pay for research and other nonresearch related services and products used by the Adviser or its affiliates. The Adviser may enter into “soft dollar” arrangements with one or more broker-dealers whereby the Adviser will

direct securities transactions to the broker-dealer in return for research products and services from the broker-dealer. The Adviser will use the research and services in making investment decisions for the applicable Client. The Adviser may also enter into “soft dollar” arrangements to cover Client expenses or costs and expenses of the Adviser to the extent such arrangements are permitted by law. The Adviser has authority to use “soft dollar” credits generated by the Clients’ securities transactions to pay for expenses that might otherwise have been borne by the Adviser. This may give the Adviser an incentive to select brokers or dealers for Client transactions, or to negotiate commission rates or other execution terms, in a manner that takes into account the soft dollar benefits received by the Adviser rather than giving exclusive consideration to the interests of the Client. In the event that the Adviser elects to use soft dollars, it intends to limit such use to services that fall within the safe harbor afforded by Section 28(e) of the Securities Exchange Act of 1934, as amended, or such services that are otherwise reasonably related to the investment decision-making process. The term “soft dollars” refers to the receipt by an investment adviser of products and services provided by brokers, without any cash payment by the investment adviser, based on the volume of revenues generated from brokerage commissions for transactions executed for clients of the investment adviser. The products and services available from brokers include both internally generated items (such as research reports prepared by employees of the broker) as well as items acquired by the broker from third parties (such as quotation equipment). The use of brokerage commissions to obtain investment research services and to pay for the administrative costs and expenses of the Adviser may create a conflict of interest between the Adviser and its Clients. Research and brokerage products and services may be used by the Adviser in servicing some or all of the Adviser’s Clients. In addition, some research and brokerage may not be used by the Adviser in servicing the Clients whose commission dollars provided for the research or brokerage. In addition, the availability of these non-monetary benefits may influence the Adviser to select one broker rather than another to perform services for its Clients. B. In managing Clients’ portfolios, the Adviser may aggregate trades if it believes that doing so is consistent with its duty to seek best execution and to negotiate more favorable commission rates or other transaction costs than might be paid if orders are placed independently. When Advisory Client trades in the same security or other instrument cannot be aggregated into a single order, the Adviser will direct the trades to the market in a way that seeks to best achieve equivalent treatment. Trade Allocations Trade allocation decisions are made in a manner that is both fair and equitable to all of its Advisory Clients. The Adviser will take steps to ensure that no Client will be systematically disadvantaged by the aggregation, placement or allocation of trades. If the Adviser has determined to invest at the

same time for more than one of Clients, the Adviser will generally place combined orders for all such accounts simultaneously, and if all such orders are not filled at the same price, it will generally average the prices paid. Trade Error Policy The Adviser may from time to time make trade errors. Trade errors are not errors in judgment, strategy, market analysis, economic outlook, etc., but rather errors in implementing specific trades which the Adviser had determined (rightly or wrongly) to make. Trade errors include, for example, purchases or sales of securities that the Adviser knows or should have known were not legally authorized for a Client’s account, purchases or sales of securities not authorized by the Client’s investment advisory contract, and failure to place a portfolio manager’s order to purchase or sell securities as intended, such as by transacting in the wrong securities or for the wrong amount, or effecting a buy instead of a sell. The Adviser seeks to promptly correct any trade errors incurred by a Client account. It is the Adviser’s goal to reduce the number and frequency of trade errors. If it appears that a trade error has occurred, the Adviser will review the relevant facts and circumstances to determine an appropriate course of action. To the extent that trade errors and breaches of investment guidelines or restrictions occur, the Adviser’s error correction procedure is to ensure that Clients are treated fairly. The Adviser has discretion to resolve a particular error in any appropriate manner that is consistent with the above stated policy and the relevant Offering Documents.

Merewether may not remove any cash or securities from a Managed Account and the assets subject to supervision will be maintained in street name in the respective Managed Account’s custody with the custodian and/or broker-dealer selected by the Managed Accounts and set forth in each respective investment management agreement. Managed Accounts should carefully review account statements received from the broker-dealer, bank or other qualified custodian. Merewether periodically evaluates its status under the custody rule to determine any change.

If a material conflict is identified, the principal, or such other designee (in consultation with outside compliance consultants and/or legal counsel) will determine what course of action is in the best interests of the affected Clients (which may include utilizing an independent third party to vote such proxies). Further, Merewether will determine whether it is appropriate to disclose the conflict to affected Clients. In the event the Adviser participates in proxy voting, the Adviser will keep record of its proxy voting policies and procedures, proxy statements received, votes cast, all communications received and internal documents created that were material to voting decisions, each client request for proxy voting records, and Merewether’s response for the previous five years. Investors do not have the ability to direct proxy votes. Advisory Clients may obtain additional information regarding how Merewether voted proxies and may obtain a copy of Merewether’s proxy voting policies and procedures by contacting Compliance@merewetherinvestment.com B. As discussed above, Merewether has the authority to vote Client securities.