Arini Capital Management Limited: investment adviser

Arini US may exercise discretionary trading authority with respect to Arini UK’s Advisory Clients (as defined below) from time to time, to the extent such trading authority is delegated to it by Arini UK subject to the overall control and responsibility of Arini UK. In 2025, Arini established Arini Capital Management (ME) Limited (“Arini ME”), which is an exempt reporting adviser and a controlled affiliate with its principal office in Abu Dhabi, United Arab Emirates. Arini ME provides sub-advisory services to Arini UK as memorialized in a sub-advisory agreement. Through the sub-advisory agreement, Arini ME provides investment advisory services to Arini UK. Arini is principally owned by Hamza Lemssouguer. Arini is a specialized alternative asset manager focused on credit markets through a fundamental and opportunistic approach to credit investing. Arini may invest in a broad array of financial instruments. Please refer to Item 8 for a discussion of Arini’s strategies and types of credit instruments used. Arini provides discretionary investment advisory services to its clients (“Advisory Clients”), which include privately offered pooled investment vehicles (the “Private Investment Funds”). Arini UK’s investment advisory services also include serving as a collateral manager to entities that operate as collateral loan obligations (“CLOs” and collectively with the Private Investment Funds, the “Funds”). Relatedly, Arini manages a CLO risk retention vehicle to ensure compliance with EU securitization regulation for issuance of CLOs. Furthermore, Arini manages its US Risk Retention vehicle and Arini US CLOs and additionally launched its private credit direct lending and assetbacked finance strategies. When managing its Advisory Clients, Arini UK manages each Advisory Client within the guidelines and restrictions set forth in the Advisory Client’s legal documents and within the respective regulatory guidelines or limitations. Related to the Funds, investment advice is provided directly to the Funds and not individually to investors in the Funds (“Fund Investors”). Arini, or an affiliate, may, in its sole discretion as portfolio manager to the Funds (and prospective Funds), use side letters or other agreements to modify certain offering terms of a Fund for investors in that Fund. Arini has full responsibility for the operations in respect of the Advisory Clients. As of December 31, 2025, Arini UK managed $35,527,062,904 of Advisory Client regulatory assets under management on a discretionary basis. As of December 31, 2025, Arini US exercised discretionary

trading over certain of Arini UK’s regulatory assets, totaling $27,990,857,842. As of the date of this brochure, Arini does not manage any assets on a non-discretionary basis.

The specific manner in which fees are charged by and paid to Arini is established in written agreements with the Funds. For the details concerning applicable fees, including the calculation and payment of the fees, for Advisory Clients, please refer to the respective Fund’s offering documents. Arini generally charges performance-based compensation to applicable Advisory Clients. Details regarding the calculation and payment of the performance-based compensation for specific Advisory Clients are contained within the respective Advisory Client’s governing documents. Arini US has entered into a cost-plus service agreement with Arini UK with respect to the advisory services provided through the sub-advisory agreement for the current financial year. For managing CLOs, Arini receives management fees and may receive performance-based fees in connection with its serving as collateral manager, sponsor and/or originator to the CLOs. The specific fee rates and the methodology for calculating and billing these fees are described in detail in the governing documents of the CLOs. With respect to certain Advisory Clients, the performance-based compensation is paid to Arini’s affiliate (instead of Arini). Accordingly, to the extent applicable, Arini and such affiliate are collectively referred to in this Item 5 and Item 6 as “Arini”. The management fee for certain Advisory Clients may have transaction fee offsets. For applicable Advisory Clients, the specific information regarding the transaction fee offsets is contained within the respective Advisory Client’s governing documents. Some Fund Investors pay more or less than other Fund Investors for the same management services, depending, for example, on when a Fund Investor subscribes (e.g., on a Fund’s inception date), investment strategy, number of related investment accounts or total client assets under management with Arini. In this regard, Arini has waived or modified fees (and may continue to do so) for Advisory Clients owned by, or Fund Investors that are, members, principals, employees or affiliates of Arini and relatives of such persons and certain early, large or strategic investors. In addition to paying investment management fees and/or incurring performance-based fees/allocations, as applicable, as laid out in the applicable governing documents, Advisory Clients,

including the Funds, typically pay all of their own operating and investment expense including, but not limited to, fees and expenses related to the below items: Organizational and Offering Costs The organizational and ongoing expenses in connection with the offer, issuance and placement of the investments; explanatory and other memoranda; costs relating to obtaining investor identity information or investor licenses in various countries, as required; costs relating to the preparation, execution and amendment of legal documentation constituting the Funds, and legal documentation entered into by the Funds, including with service providers; costs of stationery; fees of the general partner and the board of directors of the Funds; costs of the meetings of the general partner and meetings of the board of directors of the Funds and travel expenses to such meetings and any other reasonable expenses approved by the general partner or the board of directors of the Funds. Trading/Transaction Expenses Professional fees (including, without limitation, fees and expenses of consultants, finders, financial advisers, investment bankers, attorneys, accountants, rating agencies and other experts) relating to the investments of the Funds and other fees and expenses relating to the acquisition, holding and disposition of investments of the Funds, without limitation, exchange listing and securities licensing fees, as applicable; third-party research; portfolio pricing services; travel related to management of investment activities; broken deal expenses (including, without limitation, legal, tax, accounting, brokers, consultants, due diligence experts, investment bankers, lenders, custodians, attorneys, ESG advisors, third-party diligence software and other service providers and similar professionals and experts), whether or not any contemplated transaction or project is consummated and whether or not such activities are successful or otherwise completed; expenses relating to the Funds’ borrowings, including, without limitation, borrowings of cash or securities; expenses relating to prime brokerage and other margin facilities to the Funds; custodial and depositary fees and expenses; expenses relating to short sales; clearing and settlement charges; expenses relating to reorganizations and restructurings involving the Funds’ investments; extraordinary expenses; expenses relating to operating investment arrangements including, without limitation, subsidiary companies necessary for accessing certain markets or instruments; expenses relating to investor and public relations; expenses of registering or qualifying the investments for sale or purchase; exchange memberships; exchange fees, transaction fees, brokerage fees and commissions or other costs of acquiring or disposing of investments of the Funds, including, without limitation, legal and accounting costs; bank service fees and interest expenses; any other costs related to the purchase, sale, transfer or processing of investments of the Funds. Certain Advisory Clients will indirectly bear collateral management fees or similar fees, including fees that are received by Arini or an affiliate. Please see Item 12 for more information on Arini’s brokerage and trade allocation practices. Market Data and Other Technology Related Expenses Market data and other data costs including, without limitation, real-time, non-real-time and historical market data licensing fees, fees for third party databases and news services and payments for alpha capture strategies; costs attributable to certain software including, without limitation, database, middleware, mathematical, statistical and analytics software license fees and associated

consulting, installation and maintenance fees; costs attributable to hardware, including, without limitation, computers, specialized hardware, connectivity hardware such as network equipment (e.g., telephone and fiber optic lines) and storage space and related consulting, installation and maintenance fees; costs associated with custom development; data center costs including, without limitation, leasing space, power and installation costs; costs of servicing, maintaining and operating hardware, software and networks including, without limitation, recovery services; depreciation costs associated with production hardware; technology costs associated with connecting to trading venues, trading counterparties, prime brokers of the Funds, and similar service providers. Administration Fees (i) The Funds’ administrators and their affiliates receive administration fees from the Funds; and (ii) certain other one-off transaction fees at rates and out-of-pocket expenses specified in the relevant administration agreement. Accounting, Tax and Related Expenses Auditing, accounting and tax preparation expenses; any VAT; costs relating to preparing PFIC information statements and other documents necessary to reasonably assist investors in their tax affairs; and fees and out-of-pocket expenses of any service company retained to provide accounting and bookkeeping services to the Funds; taxes and regulatory fees, including, without limitation, taxes linked to hosting hardware in some countries and financial transaction taxes. Legal, Insurance and Related Expenses Legal expenses; insurance premiums relating to Funds; any costs and expenses incurred in connection with any actual or potential claim, litigation, arbitration, mediation, government investigation or dispute in connection with Arini and the amount of any judgment or settlement paid in connection therewith; or the enforcement of the Funds’ rights against any person or entity (including in respect of investment positions); and costs and expenses for indemnification or contribution paid by the Funds to any person or entity; expenses related to making corporate or regulatory filings for the Funds; costs relating to directors’ and officers’ liability insurance for the directors; costs relating to the liability insurance for the officers of Arini and the directors and officers of the Funds; other extraordinary expenses. Redemptions, Transfers, Communications with Shareholders/Investors and Similar Expenses Expenses relating to transfers and redemptions of investments and printing, mailing and similar expenses, including, without limitation, expenses of preparing, printing and distributing reports, financial statements, notices, distributions and other documents to shareholders/investors and potential investors; costs of investor meetings. Arini has a fiduciary duty to its Advisory Clients and Fund Investors, owing them an affirmative duty of utmost good faith and full and fair disclosure of all material facts. Accordingly, Arini will seek to ensure that each Advisory Client only bears expenses that are permissible under the relevant

Advisory Client’s governing documents and/or disclosure documents, and that shared expenses are allocated among Advisory Clients in a fair and reasonable manner. Please refer to the applicable governing documents for a detailed listing of the types of expenses that may be allocated to a specific Advisory Client.

Additionally, Arini’s (or its affiliates’) right to performance-based fees may create an incentive for Arini to make investments that are riskier, more speculative, or more highly levered than would be the case in the absence of performance-based compensation. Arini maintains policies and procedures intended to address conflicts of interest related to the management of multiple Advisory Clients, including those with different fee arrangements. These conflicts are mitigated in part by the Firm’s suitability obligation with respect to Advisory Client investments and its disciplined investment process, and in some instances are further mitigated by Arini’s investment of its own capital in the Advisory Client and by the structure of the performancebased compensation (e.g., restrictions on the distribution of incentive compensation relating to certain Advisory Clients until after the return of all principal to Fund Investors and payment to them of any preferred return). Arini reviews investment decisions for all Advisory Clients and has developed and maintains allocation policies that seek fair and equitable treatment for all Advisory Clients over time. For a description of how Arini allocates investments among its Advisory Clients, please refer to Item 12.

In connection with the formation and management of an Advisory Client, Arini may form certain related entities. Arini may establish vehicles to address tax, legal or regulatory issues or requirements of certain investors in such Advisory Client or for other purposes. Arini may also form parallel funds to invest alongside an Advisory Client. In addition, Arini may form alternative investment vehicles, holding companies or other special purpose vehicles for the purpose of facilitating certain investments by one or more Advisory Clients. Please refer to the governing documents of the applicable Advisory Client for complete details regarding entities that Arini may form in connection with the formation and management of such Advisory Client.

Arini conducts fundamental research, which is rooted in understanding the fundamentals of a credit, how that translates into value and how the value subsequently may flow to the various holders of debt and equity. Investment Strategies Arini’s credit long/short strategy aims to deliver uncorrelated absolute returns through a fundamental, opportunistic investment approach, implemented through both long and short positions (the “The Flagship Strategy”). The Flagship Strategy is designed to be flexible in order to take advantage of short-term market dislocations, stressed opportunities and broader credit distortions identified through extensive analysis. Trading in this strategy will include a broad range of credit instruments including investment-grade bonds, high-yields bonds, senior loans and credit default swaps. Credit, credit-like, and structured credit instruments including but not limited to investment-grade bonds, high-yields bonds, loans and credit default swaps (including single name, indices or bespoke baskets), collateral loan obligations and collateral bonds obligations. Whilst the primary investments of this strategy will be in credit, credit-like, and structured instruments and derivatives thereof, the Flagship Strategy will retain maximum flexibility to invest in other securities and instruments. In addition, the strategy may invest in cash equivalents (such as money market funds) and may hold, on a temporary and ancillary basis, significant cash balances. Arini’s structured credit equity strategy aims to generate current income and long-term capital appreciation primarily by investing in equity tranches of collateralized and synthetic credit obligations (the “Structured Credit Equity Strategy”). As part of the strategy, Arini may invest from time to time on behalf of its clients in: (i) rated and unrated warehouse securities and (ii) mezzanine tranches of collateralized/synthetical obligations, as market conditions permit. Arini believes that its analysts’ credit selection capabilities and technical knowledge are key to retaining upside convexity of the asset class while identifying value in an environment of increasing credit risk and dispersion within sections. The multi-layered approach to risk management consists of the portfolio management team’s daily monitoring in addition to proprietary risk systems and independent internal risk oversight and review.

Arini’s opportunistic credit strategy aims to generate current income and long-term capital appreciation by opportunistically investing in a range of public and private debt and debt-like instruments (the “Credit Opportunities Strategy”). The strategy will seek to adopt a flexible approach to take advantage of market dislocations, stressed opportunities and broader credit valuation distortions which Arini identifies through extensive analysis. The Credit Opportunities Strategy takes a fundamental, value-based approach, with a focus on opportunities with a quantifiable medium-term catalyst and typical duration of up to three years. Arini will aim to benefit from the intellectual property developed through Arini’s experience making active long and short investments across the capital structure in the investment grade, high yield, loan and structured credit markets. The strategy may invest in long-term and illiquid investments, including, but not limited to, debt securities and other income-producing investments, investment grade and high yield corporate bonds, public and private loans, structured credit, sovereign debt and foreign exchange investments. The investments may include special situations and longer-term public investments, including distressed debt, with the ability to flexibly deploy capital based on market opportunity. The strategy will seek to make opportunistic investments globally, with a focus on Europe, and has the flexibility to invest in all parts of the capital structure. The Credit Opportunities Strategy may also make short-term investments for cash management and hedging purposes. Arini’s direct lending strategy aims to generate attractive generate attractive risk-adjusted returns, primarily through current income generation, by providing diversified exposure to performing private credit financings for mid-cap borrowers across Europe and to a lesser extent, the U.S., Canada, Australia, New Zealand, Japan and South Korea (the “Direct Lending Strategy”). The strategy will seek to maximise the value of investments by capitalising on Arini’s strategic alliance between it and its sourcing provider to complement the deal flow generated through Arini’s inhouse proprietary origination channels by investing in a range of private credit facilities for middlemarket non sponsor-owned and sponsor-owned borrowers in Europe to support M&A, organic and inorganic growth initiatives, and refinancing requirements. The Direct Lending Strategy will be open to investment opportunities in a variety of industry sectors across the capital structure, although the majority of the portfolio is expected to be composed of senior secured credit facilities. Arini’s asset-backed finance strategy aims to generate attractive risk-adjusted returns, primarily through income generation, by providing diversified exposure to asset-backed finance investments primarily across Europe (the “Asset-Backed Finance Strategy”). The strategy seeks to capitalize on the ongoing structural shifts in the lending markets. As banks withdraw from various segments, non-bank lenders and fintech platforms are stepping in, utilizing technology and data to originate, underwrite and service asset pools. Arini aims to partner with these platforms by providing tailored funding solutions which leverage Arini’s existing expertise in credit investing, industry insights and robust network. Additionally, the strategy aims to collaborate with banks seeking capital relief solutions through forward flow agreements, portfolio sales, synthetic risk transfers (SRT), and securitization of portions of their granular loan portfolios. Arini also manages a number of private investment funds-of-one for certain Advisory Clients. Such funds-of-one include (i) a fund that invests in the Flagship Strategy, the Structured Credit Equity Strategy and the Credit Opportunities Strategy and (ii) a co-investment vehicle which may or may not invest alongside a strategy managed by Arini.

Risks Investing in securities involves significant risks, including the risk of loss of some or all of an investment. An investment in the Advisory Clients may be deemed speculative and is not intended as a complete investment program. They are designed only for experienced and sophisticated persons who are able to bear the risk of substantial impairment or total loss of their investment in the Advisory Clients. Prospective investors should seek advice from their legal, tax, and financial advisors prior to making an investment with Arini. The following summary identifies the material risks related to Arini’s significant investment strategies and should be carefully evaluated before making any investment in Advisory Clients managed or advised by Arini; however, the following does not intend to identify all possible risks of an investment in Advisory Clients managed or advised by Arini or provide a full description of the identified risks. General Risks Investment Risks in General. Investing in the Advisory Clients will involve certain considerations in addition to the risks normally associated with making investments in securities. The Advisory Clients’ net asset value and any income therefrom may go down as well as up and there can be no assurance that upon redemption, sale or otherwise, investors will receive back the amount originally invested or that there will be any return of capital. Investment results will vary on a monthly, quarterly or annual basis. Any investment in the Advisory Clients is at risk of a total loss of invested capital. Arini cannot predict, measure or hedge all market or other risks linked to the Advisory Clients’ investment strategy. Arini may choose, or may determine that it is economically appropriate, to not hedge certain risks, and may instead rely on diversification in an attempt to mitigate the risks. However, the Arini is not limited by any specific policies or requirements for diversification or risk mitigation. As a result, Advisory Clients may become concentrated in a single issuer, industry, originator, sector, strategy, geographic region or asset class and the concentration of risk may increase losses suffered by the Advisory Clients. Limited diversification may cause greater volatility than would otherwise be the case, and could expose the Advisory Clients to losses disproportionate to market movements in general. Risks associated with different assets held by the Advisory Clients may become correlated in unexpected ways, with the result that the Advisory Clients become exposed to unforeseen risks. Limited Operating History. The Advisory Clients have only a limited operating history upon which prospective investors can evaluate their anticipated performance. The past performance of the Advisory Clients is not necessarily indicative of future performance. Investment Restrictions. The Advisory Clients have not adopted any specific investment restrictions or limitations of any kind and does not currently otherwise voluntarily observe any specific fixed internal investment guidelines or principles, including without limitation, with respect to diversification, asset classes, country exposure or the credit quality of its investments. The Advisory Clients will generally seek to maintain a diversified portfolio of investments spread across countries, sectors and asset classes.

Governmental Interventions and International Conflicts. Extreme volatility and illiquidity in markets has in the past led to, and may in the future lead to, extensive governmental interventions in equity, credit and currency markets. Generally, such interventions are intended to reduce volatility and precipitous drops in value. In certain cases, governments have intervened on an “emergency” basis, suddenly and substantially eliminating market participants’ ability to continue to implement certain strategies or manage the risk of their outstanding positions. In addition, these interventions have typically been unclear in scope and application, resulting in uncertainty. It is impossible to predict when these restrictions will be imposed, what the interim or permanent restrictions will be and/or the effect of such restrictions on the Advisory Clients’ strategies. Investments may be adversely affected by international conflicts, geopolitical events, and economic sanctions. Armed conflicts — such as those in the Middle East and between Russia and Ukraine — along with resulting sanctions, trade disruptions, tariffs, and policy changes can significantly impact global financial markets, supply chains, and portfolio company operations in ways that are difficult to predict or hedge against. U.S. economic sanctions administered by OFAC prohibit Arini, its professionals, and Advisory Clients from transacting with certain foreign countries, territories, entities, and individuals, including specially designated nationals and blocked persons. Additionally, major governmental interventions — including new or modified tariffs, trade agreements, nationalization of industries, or assertion of control over certain sectors — could result in losses to Advisory Clients if investments are canceled, unwound, or otherwise adversely affected, and may significantly restrict investment activities in certain industries or countries. The severity, duration, and ultimate impact of these risks on Fund performance and the ability to source, execute, manage, and exit investments remain materially uncertain. Misrepresentation, Fraud and Misconduct: Investments may be adversely affected by material misrepresentations or omissions by counterparties, which could impair collateral valuations or the ability to realize returns. While Arini and its Advisory Clients rely on the accuracy of counterparty representations where reasonable, such accuracy cannot be guaranteed. Fraud or deceptive practices by third parties can undermine Arini's due diligence efforts, negatively affect investment valuations, and contribute to broader market volatility. Additionally, misconduct by employees of Arini, portfolio companies, or third-party service providers — including unauthorized trading, concealment of losses, misappropriation of assets, or improper disclosure of confidential information — could result in significant and potentially unrecoverable losses to Advisory Clients. No assurance can be given that Arini's reasonable due diligence will identify or prevent such misconduct. Dependence on Key Individuals. The success of Advisory Clients and the Funds depends significantly on the expertise and continued service of Arini's key personnel, including the Founder and Chief Investment Officer, who hold the authority to make investment decisions and exercise business discretion on behalf of the Advisory Clients. Investors in the Private Investment Funds have no authority to make decisions on behalf of the Advisory Clients. The death, incapacity, or withdrawal of key personnel could have a material adverse effect on the Advisory Clients and the Funds, including potentially triggering significant investor withdrawals or redemptions.

Competition; Availability of Investment Strategies. The success of the Advisory Clients’ investment activities will depend on Arini’s ability to identify investment opportunities as well as to assess the importance of news and events that may affect each Advisory Clients’ investments. Identification and exploitation of the investment strategies to be pursued by Advisory Clients involves a high degree of uncertainty. No assurance can be given that Arini will be able to locate suitable investment opportunities in which to deploy all of the Advisory Client assets or to exploit discrepancies in the securities and derivatives markets. There is also the possibility that the investment strategy is employed on behalf of the Advisory Clients may be replicated by other investment managers. It is difficult to tell what impact, if any, any replication of investment strategies could have on the success of the Advisory Clients. General Economic and Market Conditions. The success of each Advisory Clients’ activities will be affected by general economic and market conditions, such as interest rates, availability of credit, credit defaults, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation of an Advisory Client’s investments), trade barriers, currency exchange controls, and national and international political circumstances (including wars, terrorist acts or security operations). These factors may affect the level and volatility of investments’ prices and the liquidity of the applicable Advisory Client’s investments. Volatility or illiquidity could impair the Advisory Clients’ profitability or result in losses. Advisory Clients may maintain substantial trading positions that can be adversely affected by the level of volatility in the financial markets–the larger the positions, the greater the potential for loss. The economies of countries in which Advisory Clients may invest may differ in such respects as growth of gross domestic product, rate of inflation, currency depreciation, asset reinvestment, resource self-sufficiency and balance-of-payments position. Further, certain economies 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. The economies of certain countries may be based, predominantly, on only a few industries and may be vulnerable to changes in trade conditions and may have higher levels of debt or inflation. Legal and Regulatory Environment. The legal and regulatory environment worldwide for private investment funds and their managers is subject to change. Changes in the regulation of private investment funds, their managers and their trading and investing activities may have a material adverse effect on the ability of the Private Investment Funds to pursue their investment programs and the value of investments held by the Private Investment Funds. Legal Risk. Many of the laws that govern private and foreign investment, equity and debt securities transactions and other contractual relationships in certain countries, particularly in developing countries, are new and largely untested. As a result, Advisory Clients may be subject to a number of unusual risks, including inadequate investor protection, contradictory legislation, incomplete, unclear and changing laws, ignorance or breaches of regulations on the part of other market participants, lack of established or effective avenues for legal redress, lack of standard practices and confidentiality customs characteristic of developed markets and lack of enforcement of existing regulations. Furthermore, it may be difficult to obtain and enforce a judgment in certain countries

in which assets of Advisory Clients are invested. There can be no assurance that this difficulty in protecting and enforcing rights will not have a material adverse effect on Advisory Clients. Inability to Transact as a Result of Exposure to Material Non-Public Information. From time to time, Arini may receive material non-public information with respect to an issuer of publicly traded securities or derivatives of such securities. In such circumstances, Arini 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. This can result in substantial risk of loss or loss of opportunity if an Advisory Client is not able to purchase or sell such security. Assumption of Business, Terrorism and Catastrophe Risks and Government Responses. Opportunities involving the assumption by Advisory Clients of various risks relating to particular assets, markets or events may be considered from time to time. An Advisory Client’s portfolio is subject to the risk of loss arising from exposure that it may incur, directly or indirectly, due to the occurrence of various events, including, without limitation, hurricanes, earthquakes and other natural disasters, terrorism and other catastrophic events, and events that could adversely affect the health or life expectancy of people. These risks of loss can be substantial, could greatly exceed all income or other gains, if any, received by an Advisory Client in assuming these risks and, depending on the size of the loss, could adversely affect the return of an Advisory Client. The ultimate impact of the public health emergencies, such as COVID-19 (or of any future pandemic, epidemic or outbreak of a contagious disease), on global, national and local economies and on financial markets is difficult to predict. There is a significant likelihood that the negative impacts associated with public health emergencies could persist for some time. In particular, disruptions to commercial activity across economies due to the imposition of quarantines, remote working policies, “social distancing” practices and travel restrictions, and/or failures to contain the outbreak despite these and other measures, could materially and adversely impact an Advisory Client’s investments, both in the near- and long-term in a variety of industries and regions or globally. In addition, public health emergencies may contribute to volatility in financial markets, which may disrupt historical pricing relationships or trends that Arini strategies and models are based on, resulting in substantial and sudden losses to an Advisory Client. This risk of loss can be compounded by the fact that in disrupted markets, positions may become illiquid and financing might become unavailable. Volatility may also make it more difficult or costly to rebalance portfolios or keep them within investment guidelines or targets. Governmental responses to outbreaks may be inadequate to limit the outbreak’s spread or to mitigate its impact on any nation’s economy or the global economy. Further, the responses of governments, regulators and exchanges to the increased volatility could have adverse effects on an Advisory Client’s ability to implement its strategies or cause an Advisory Client to incur losses. Such responses may, if unclear in scope and application, result in further confusion and uncertainty, resulting in further market volatility or even potentially suddenly and substantially eliminate an Advisory Client’s ability to continue to implement certain strategies or manage the risk of outstanding positions.

Trade Policy. Trade conflicts between the U.S. and certain foreign countries have intensified in recent periods. The U.S. government has altered its approach to international trade policy, indicating its intent to renegotiate, or potentially terminate, certain existing bilateral or multilateral trade agreements and treaties with foreign countries and imposing, or threatening to impose, tariffs on certain foreign goods. Some foreign governments, including the Chinese government, have instituted, or threatened to institute, retaliatory tariffs on certain U.S. goods. The continuation or further intensification of such conflicts may lead to the introduction of additional barriers to trade, an increase in the cost of certain goods, a decrease in trade volume, supply chain disruptions, shifts in consumer sentiment and/or a general decrease in corporate profits and securities prices in both public and private markets, any of which could have an adverse impact on the performance of the Advisory Client’s investments. Cybersecurity Risk. As part of its business, Arini processes, stores and transmits large amounts of electronic information, including information relating to the transactions of Advisory Clients and personally identifiable information of Private Investment Fund investors. Similarly, service providers of Arini or Advisory Clients, especially the administrator, may process, store and transmit such information. Arini has procedures and systems in place that it believes are reasonably designed to protect such information and prevent data loss and security breaches. However, such measures cannot provide absolute security. The techniques used to obtain unauthorized access to data, disable or degrade service, or sabotage systems change frequently and may be difficult to detect for long periods of time. Hardware or software acquired from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security. Network connected services provided by third parties to Arini may be susceptible to compromise, leading to a breach of Arini’s network. Arini’s systems or facilities may be susceptible to employee error or malfeasance, government surveillance, or other security threats. On-line services provided by Arini to Advisory Clients and investors may also be susceptible to compromise. Breach of Arini’s information systems may cause information relating to the transactions of an Advisory Client and personally identifiable information of an investor to be lost or improperly accessed, used or disclosed. The service providers of Arini and Advisory Clients are subject to the same electronic information security threats as Arini. If a service provider fails to adopt or adhere to adequate data security policies, or in the event of a breach of its networks, information relating to the transactions of the Advisory Clients and personally identifiable information of investors may be lost or improperly accessed, used or disclosed. The loss or improper access, use or disclosure of Arini’s or an Advisory Client’s proprietary information may cause Arini or an Advisory Client to suffer, among other things, financial loss, the disruption of its business, liability to third parties, regulatory intervention or reputational damage. Any of the foregoing events could have a material adverse effect on an Advisory Client and a Private Investment Fund investor’s investments therein. Artificial Intelligence and Machine Learning. Recent technological advances in artificial intelligence and machine learning technologies (collectively, “AI Technologies”), as well as the rapid growth and widespread use thereof, have the potential to pose risks to Arini and Advisory Clients. AI Technologies have the potential to result in significant and disruptive changes in

companies, sectors or industries, including those in which the Advisory Clients invest, and any such changes could render Arini’s underwriting models obsolete or create new and unpredictable operational, legal and/or regulatory risks. To the extent competitors of Arini make more efficient or extensive use of AI Technologies, there is a possibility that such competitors will gain a competitive advantage. Many jurisdictions have passed or are considering laws and regulations concerning AI Technologies, which could adversely affect Arini and Advisory Clients. Additionally, Arini and Advisory Clients could be further exposed to the risks of AI Technologies if third-party service providers or any counterparties, whether or not known to Arini, use AI Technologies in their business activities. Arini will not be able to control the use of AI Technologies in third-party products or services, including those provided by Arini’s and its affiliates’ service providers. AI Technologies are highly reliant on the accuracy, adequacy, completeness and objectivity of their underlying data, and any inaccuracies, deficiencies or biases in this data could lead to errors affecting Arini’s decision-making and investment processes. AI Technologies and their applications, including in the financial sector, continue to develop rapidly, and it is impossible to predict the future risks that have the potential to arise from such developments. Any of the foregoing factors could have a material and adverse effect on Arini and Advisory Clients. Alternative Data. The Firm may use alternative data—sourced from internet usage, payment records, financial transactions, sensors, mobile devices, satellites, and public records—in its investment process, including fundamental research. The analysis of alternative data involves significant uncertainty and expense, which may be borne in whole or in part by the Clients. There is no assurance this data will be used successfully, and there is inherent risk of reliance on faulty logic or inaccurate inputs. Additionally, increased regulatory scrutiny around alternative data use could create liability, reputational harm, or financial consequences for the Firm and Clients, and any future restrictions on its use could materially and adversely affect Client performance. Systemic Risk. Credit risk may arise through a default by one of several large institutions that are dependent on one another to meet their liquidity or operational needs, so that a default by one institution causes a series of defaults by the other institutions. This is sometimes referred to as a “systemic risk” and may adversely affect financial intermediaries, such as clearing agencies, clearing houses, banks, securities firms and exchanges, with which certain Advisory Clients interact on a daily basis. Leverage; Borrowing for Operations. Certain Advisory Clients will use “leverage” as part of the investment program. Leverage may take the form of, among other things, derivative instruments which are inherently leveraged and trading in products with embedded leverage such as options, short sales, swaps and forwards. The use of leverage will allow an Advisory Client to make additional investments, thereby increasing exposure to assets, such that total assets may be greater than an Advisory Client’s capital, however, leverage will also magnify the volatility of changes in the value of an Advisory Client’s portfolio. In addition, certain Advisory Clients will have the authority to borrow money for cash management purposes and to meet redemptions that would otherwise result in the premature liquidation of their investments. The level of interest rates generally, and the rates at which an Advisory Client can borrow particularly will affect the operating results of the Advisory Client. Leverage will be monitored in line with internal guidelines, as adopted by Arini from time to time. The amount of borrowings and leverage which an Advisory Client may have outstanding at any time may be substantial in relation to its capital. Please refer to the fund’s PPM for details on leverage.

The instruments and borrowings utilized by certain Advisory Clients to leverage investments may be collateralized by the Advisory Client’s portfolio. Accordingly, an Advisory Client may pledge its securities in order to borrow or otherwise obtain leverage for investment or other purposes. Should such pledged securities decline in value, the Advisory Client could be subject to a “margin call” pursuant to which the Advisory Client must either deposit additional funds or securities with the relevant counterparty or suffer mandatory liquidation of the pledged securities to compensate for the decline in value. The banks and dealers that provide financing to the Advisory Client can apply essentially discretionary margin, haircut, financing and collateral valuation policies. Changes by banks and dealers in any of the foregoing may result in large margin calls, loss of financing and forced liquidations of positions at disadvantageous prices. There can be no assurance that the Advisory Client will be able to secure or maintain adequate financing. Loss or Insufficiency of Margin on Derivatives. Certain Advisory Clients engage in derivative transactions pursuant to ISDA master agreements (“ISDAs”) with counterparties that are usually major banks or their affiliates. Under an Advisory Client’s ISDAs, counterparties may require the Advisory Client to post initial margin at the time of entry into a derivatives transaction, and the initial margin represents an uncollateralized credit risk to the counterparty. Also, the ISDAs provide for two-way variation margin pursuant to which the Advisory Client and the Advisory Client’s counterparty post margin to one another to reflect fluctuations in the market value of the derivative. Generally, the dealer bank is responsible for calculating the daily change in margin requirements to be paid by either party due to changes in market prices. However, the dealer bank’s calculation, due to error or lack of timely data, may not accurately reflect such market price changes. Although the Advisory Client has the right to dispute the dealer bank’s calculation, there can be no guarantee that these dispute mechanisms would work effectively leaving the Advisory Client materially undercollateralized. Further, since the variation margin amount is calculated on the day preceding any dealer default, it is unlikely to reflect fully the cost to the Advisory Client of entering into a replacement transaction on the date of the default, particularly because any default by a dealer bank can have a significant effect on the markets and value of such transactions. As a result, any margin held by the Advisory Client will likely prove insufficient in the case of a major dealer default. Net Asset Value Triggers. The trading agreements, such as ISDAs, to which an Advisory Client is a party, typically include terms relating to declines in the net asset value of an Advisory Client, measured as decrease in the net asset value of the Advisory Client by a specified percentage on a monthly, quarterly and/or annual basis (“NAV Triggers”). While a decline in the net asset value of an Advisory Client may be the result of a number of factors, including market conditions, withdrawals and/or diminishing performance, NAV Triggers provide a mechanism for an Advisory Client’s counterparties and prime brokers to take protective measures to limit exposure to the Advisory Client during a period of decline or volatility. Such protective measures may include requesting additional collateral, imposing other limitations on the Advisory Client’s ability to effect trades, closing out the Advisory Client’s positions under the relevant agreement on the counterparty’s side of the market and at prices determined by the counterparty, setting off other amounts owed by the counterparty or terminating the relevant trading agreement(s). Further, a termination of an ISDA or a declaration of default by a counterparty also may permit other counterparties to exercise similar rights against the Advisory Client under the cross-default and/or cross-acceleration provisions of other ISDAs and financing agreements. Any of these events could

result in substantial losses to the Advisory Client or have an adverse effect on the Advisory Client’s ability to trade and carry out its investment strategy. Lack of Information on Investments. Financial and other information concerning an Advisory Client’s investments may only be available through limited sources and there may be no consistent means of confirming the accuracy of such information. Third-Party Involvement. An Advisory Client may enter into arrangements with certain parties with respect to the operation or management of, and participation in, investments (including coinvestments). Such investments may involve risks not present (or not present to the same degree) in investments where such third parties are not involved. Arini or an affiliate may structure such arrangements through partnerships, joint ventures or other entities, and it may be more difficult for an Advisory Client to sell its interest in any joint venture, partnership or entity with other owners than to sell its interest in other types of investments. As a result of these risks, an Advisory Client may receive return on any such investment that is lower than would be the case if such third-party arrangements are not involved. Strategic Alliances. While Arini may access investment opportunities through a number of channels regarding the Direct Lending Strategy, the investment opportunities introduced by its sourcing provider may represent the majority of investment opportunities of the strategy. The success of the Direct Lending Strategy may therefore depend significantly on the success of the strategic alliance, which in turn will depend on a number of factors, including the wider performance of Lazard's financial advisory business. There is no guarantee that the sourcing provider's personnel will remain the same during the investment period and while the sourcing provider is, in the view of Arini, well positioned to deal with any such changes, it is possible that these may impact on the sourcing provider's ability to introduce Arini to potential investments. There can therefore be no assurance that the sourcing provider will be able to introduce Arini to sufficient and/or appropriate investment opportunities for the applicable Advisory Client(s); this may in turn negatively affect performance. Difficulty in Valuing Investment Portfolios. Arini will be responsible for valuations of certain Advisory Client investments and will review such valuations in accordance with the valuation policy from time to time. In establishing the value of an Advisory Client’s investments, Arini valuation team may consult with accounting firms, investment banks and other consulting firms when needed to assist with the valuation of the investments. Accurate valuations may be difficult due to a variety of reasons including limited sources of useful valuation information and the fact that many of an Advisory Client’s investments may be investments for which there is no liquid market. The net asset value set by Arini may not reflect the price at which an Advisory Client could dispose of its investments in a particular portfolio investment at any given time, and hence may not represent a fair market value. Nature of Bankruptcy Proceedings. An Advisory Client may invest in investments that are, or are likely to become, subject to formal bankruptcy proceedings and/or informal out of court restructurings. In general, there are a number of significant risks when making investments with respect to companies involved in bankruptcy proceedings or restructurings, including the following: First, many events in a bankruptcy are the product of contested matters and adversary proceedings that are beyond the control of the creditors. While creditors are generally given an opportunity to

object to significant actions, there can be no assurance that a bankruptcy court in the exercise of its broad powers would not approve actions that would be contrary to the interests of an Advisory Client. Second, a bankruptcy filing may have adverse and permanent effects on a company, particularly with respect to its business operations and revenue-generation abilities. For instance, the company may lose its market position and key employees and otherwise become incapable of restoring itself as a viable entity. Further, if the proceeding is converted to a liquidation, the liquidation value of the company may not equal the liquidation value that was believed to exist at the time of the investment. Third, the duration of a bankruptcy proceeding is difficult to predict. A creditor’s return on investments can be adversely impacted by delays while the plan of reorganization is being negotiated, approved by the creditors and confirmed by the bankruptcy court, and until it ultimately becomes effective. Fourth, the administrative costs in connection with a bankruptcy proceeding are frequently high and are paid out of the debtor’s estate prior to any return to creditors. Fifth, creditors can lose their ranking and priority in certain circumstances as a result of bankruptcy proceedings. Sixth, bankruptcy law permits the classification of “substantially similar” claims in determining the classification of claims in a reorganization. Because the standard for classification is vague, there exists the risk that an Advisory Client’s influence with respect to the class of securities or other obligations it owns can be lost by increases in the number and amount of claims in that class or by different classification and treatment. Seventh, in the early stages of the bankruptcy proceeding, it is often difficult to estimate the extent of, or even to identify, any contingent claims that may be made. Eighth, certain claims, such as claims for taxes or pension liabilities or claims by employees of the business, may have priority over the claims of certain creditors. Ninth, litigation (including related discovery requests) can ensue among parties in interest to a bankruptcy. These proceedings can be expensive and their outcomes (including the loss of claims and/or priority) are inherently unpredictable. Force Majeure Events. An Advisory Client’s investments may be subject to catastrophic and other force majeure events (including fires, floods, earthquakes, adverse weather conditions, assertion of eminent domain, strikes, acts of war (declared or undeclared), manmade disasters, riots, terrorist acts, pandemics, “acts of God” and similar events). These events could result in the partial or total loss of an investment or significant downtime resulting in lost revenues, among other potentially detrimental effects. Risks Relating to Investment Strategies Fundamental Analysis. The majority of the investment decisions made by Arini will be based on fundamental analysis conducted by Arini’s personnel. Information on which fundamental analysis relies may be inaccurate or may be generally available to other market participants. If any such data is inaccurate or other market participants have developed investment ideas similar to Arini’s, Advisory Client performance may be negatively impacted. Fundamental information regarding issuers is subject to interpretation. To the extent that Arini incorrectly interprets fundamental information regarding an Advisory Client’s investments or to the extent that such information is incomplete, an Advisory Client’s investment positions may result in losses. Finally, even if Arini’s analysis is ultimately correct, there can be no guarantee that a position held by an Advisory Client will be valued by the market or perform as anticipated by Arini due to investor sentiment or other conditions affecting the market.

Event Driven Investing. An Advisory Client may make investments in issuers involved in, or the target of, acquisition attempts or tender offers, or issuers involved in work outs, liquidations, spinoffs, reorganizations, asset sales, changes in control, distributions, bankruptcies or similar transactions. An Advisory Client may make certain investments in anticipation of such events. In any investment opportunity involving any such type of situation, there exists the risk that the transaction or catalyst will not occur, will take considerable time, or will result in a distribution of cash or a new security the value of which will be less than the purchase price to the Advisory Client of the security or other financial instrument in respect of which such distribution is received. If an anticipated transaction or catalyst does not in fact occur, the Advisory Client may be required to sell its investment at a loss. Event driven investing requires the investor to make predictions about (i) the likelihood that an event will occur and (ii) the impact such event will have on the value of an issuer’s financial instruments. If the event fails to occur or it does not have the effect foreseen, losses can result. For example, the adoption of new business strategies or completion of asset dispositions or debt reduction programs by an issuer may not be valued as highly by the market as Arini had anticipated, resulting in losses. In addition, an issuer may announce a plan of restructuring which promises to enhance value, but fails to implement it, which can result in losses to investors. In liquidations and other forms of corporate reorganization, the risk exists that the reorganization either will be unsuccessful, will be delayed or will result in a distribution of cash or a new security, the value of which will be less than the purchase price to the Advisory Client of the security in respect of which such distribution was made. The consummation of exchange offers or reorganization plans can be prevented or delayed by a variety of factors, including: (i) opposition of the management, stockholders or debt holders of the relevant company, which can result in litigation to enjoin the proposed transaction; (ii) intervention of a US federal or state or foreign regulatory agency; (iii) efforts by the relevant company to pursue a “defensive” strategy, including a merger with, or a friendly tender offer by, a company other than the offeror; (iv) failure to obtain the necessary stockholder or debt holder approvals; (v) market conditions resulting in material changes in securities prices; (vi) compliance with any applicable US federal or state securities laws; or (vii) inability to obtain adequate financing. Investor Engagement. Arini may from time to time engage with corporate or legal processes relating to investments. This may include engaging with corporate management, participating in bankruptcy proceedings, serving on creditors’ committees or collaborating with other investors. An Advisory Client may invest in a particular security based upon its belief that Arini’s engagement will generate returns. There can be no assurances that Arini will accomplish the goals of such engagement, as corporate managers or other market participants may have different perspective or interests in a situation, and Arini may be unable to influence the result of such situations. In addition, bankruptcy situations are complex and often involve multiple creditors and market participants creating substantial uncertainties in such processes. There may be instances where an Advisory Client will be restricted in transacting in or disposing of a particular investment as a result of such engagement. Moreover, it is possible that an Advisory Client may become involved in litigation (as either plaintiff or defendant) as a result of its engagement. Litigation entails expense and the possibility of claims for damages against an Advisory Client and ultimately judgments may be rendered against an Advisory Client.

Capital Structure. Arini may hold certain debt or equity securities of a particular issuer for one Client while holding a different part of the same issuer's capital structure, or different tranches of debt, for another Client. This may create conflicts of interest, for example, if the issuer enters financial stress or distress or is restructured or reorganised, and Arini seeks to pursue actions for one or more Clients that may have a different (possibly adverse) effect on another Client. Debt Securities. Debt securities of all types of issuers may have speculative characteristics, regardless of whether they are rated. The issuers of such instruments (including sovereign issuers) may face significant ongoing uncertainties and exposure to adverse conditions that may undermine the issuer’s ability to make timely payment of interest and principal in accordance with the terms of the obligations. Investment-Grade Debt. Investment-grade debt securities are investment-grade rated obligations that have credit ratings that are intended to reflect (but will not necessarily reflect) relatively less credit than high-yield debt securities or mezzanine debt securities. Risks of investment grade debt securities may include (among others): (i) market place volatility resulting from changes in prevailing interest rates; (ii) the absence, in many instances, of collateral security; (iii) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause an Advisory Client to reinvest premature redemption proceeds in lower-yielding debt obligations; and (iv) the declining creditworthiness and the greater potential for insolvency of the issuer of such investment grade debt securities during periods of rising credit spreads and/or interest rates and/or economic downturn. Corporate Debt Obligations and High Yield Securities. An Advisory Client may invest in bonds or other fixed-income securities, including “higher-yielding” (including non-investment-grade) debt securities. An Advisory Client may invest in bonds or other fixed-income securities, including “higher-yielding” (including non-investment-grade) debt securities. The market value of debt securities generally tends to decline as interest rates increase and, conversely, increase as interest rates decline. Debt obligations are subject to the risk of an issuer’s inability to meet principal and interest payments on the obligations (i.e., credit risk). Because “high yield” bonds and securities are rated in the lower rating categories by the various credit rating agencies, such securities result in greater risk of loss of principal and interest than higher-rated securities and are generally considered to be predominately speculative. They are also generally considered to be subject to greater risk than securities with higher ratings because the yields and prices of such securities may tend to fluctuate more than those for higher-rated securities and the market for lower-rated securities is thinner and less active. Additionally, such securities are generally not exchange traded and, as a result, these financial instruments trade in the over-the-counter marketplace, which is less transparent and has wider bid/ask spreads than the exchange-traded marketplace. In addition, an Advisory Client may 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. Also, the market for credit spreads is often inefficient and illiquid, making it difficult to accurately calculate discounting spreads for valuing financial instruments. 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 available to them more traditional methods of financing. Mezzanine Debt. It is expected that certain Advisory Clients will have direct or indirect exposure to mezzanine debt. Mezzanine debt is typically junior to the obligations of a company to senior creditors, trade creditors and employees. The ability of an Advisory Client to influence a company’s affairs, especially during periods of financial distress or following an insolvency, will be substantially less than that of senior creditors. Lower Rated and Unrated Credit Securities. Certain Advisory Clients may invest in lower rated and unrated credit securities and can do so without limit. Many of the issuers of such securities and their obligations are not rated by any credit rating agency, and a significant portion of such issuers and obligations would likely fall in the lowest rating category if they were rated. There is greater risk that issuers of lower rated and unrated credit securities will default on their obligations to pay interest or to repay principal than in the case of issuers of higher-rated securities. Such issuers are also at greater risk for insolvency. The prices of lower or unrated credit securities are likely to be more sensitive to adverse economic changes or individual corporate developments than higher- rated securities. During an economic downturn or substantial period of rising interest rates, lower or unrated issuers and, in particular, highly leveraged issuers may experience financial stress that adversely affects their ability to service their principal and interest payment obligations, to meet their projected business goals or to obtain additional financing. In the event of a default, an Advisory Client would likely incur additional expenses to seek a recovery of its investment in a restructuring or other proceeding. The secondary market for lower and unrated securities will likely be less liquid (or even non-existent) than markets for higher quality securities and, as such, may have an adverse effect on the market prices of certain securities. The illiquidity of the market could make it difficult for the particular Fund to sell such securities. There are fewer dealers in the market for lower and unrated securities than investment grade securities. The prices quoted by different dealers may vary significantly and the spread between the bid and asked price is generally much larger than for higher quality instruments. Since investors generally perceive that there are greater risks associated with lower or unrated credit securities, the yields and prices of such securities may tend to fluctuate more than those for higher rated securities. In the lower quality segments of the credit markets, changes in perceptions of issuers’ creditworthiness tend to occur more frequently and in a more pronounced manner than do changes in higher quality segments of the credit markets, resulting in greater yield and price volatility. Collateralized Loan Obligations. CLOs are pools of loans, the debt service on which is repackaged into cash flows payable on different tranches of debt collateralized by each pool. Payments on such debt are dependent on payments on the underlying loans. The CLOs in which certain Advisory Clients expect to participate in involve substantial organizational, syndication and ancillary fees. An Advisory Client’s investments in CLOs are expected to be subordinate in right

of payment to other securities issued by the CLO and not readily marketable. Depending upon the default rate on the collateral of the CLO, an Advisory Client may incur substantial losses on its CLO investments. CLO structures are complex, and an Advisory Client may be subject to a number of as yet unanticipated risks in participating in CLOs. CLO securities are subject to various structural risks, including risks relating to the capital structure of the issuer thereof and the collateral management arrangements relating thereto. The capital structure will be highly leveraged (which will affect the CLO securities of different seniorities in different ways), and the underlying instruments will generally contain various triggers and remedies, which may adversely affect an Advisory Client as an investor therein. CLO securities are secured primarily by loans (including commercial loans and eligible synthetic securities whose reference obligations consist of commercial loans), which are subject to liquidity, market value, credit, interest rate, reinvestment and certain other risks. These risks could be exacerbated to the extent that the loans are concentrated in one or more particular types of loans. There may not be an established, liquid secondary market for many of the CLO securities an Advisory Client may purchase. The lack of such an established, liquid secondary market may have an adverse effect on the market value of such CLO securities an Advisory Client’s ability to sell them. Further, CLOs will be subject to certain transfer restrictions that may further restrict liquidity. Therefore, no assurance can be given that if an Advisory Client wished to dispose of a particular CLO, it could dispose of such an investment at the previously prevailing market price. The risks associated with investing in CLO securities may in addition depend on the skill and experience of the managers of the CLOs’ underlying portfolios, particularly with respect to active trading. Investments in CLO Warehouse Equity. Certain Advisory Clients may invest in CLO warehouse equity relating to a CLO warehouse managed by the Arini Team or a third party. Such investments represent speculative leveraged investments in the underlying loans being warehoused in anticipation of a CLO issuance date and are subject to risks similar to the risks of investing in CLOs, although without certain of the related structural protections. In addition, such investments are subject to structural and event risks associated with, among other things, (i) the possibility that the related CLO does not close, resulting in the liquidation of the underlying loans on potentially unfavorable terms due to credit events or adverse market movements with respect to such loans, and (ii) the ability of senior participants in the facility to require sales of such loans or to block purchases of such loans. If the market value of the underlying loans falls significantly prior to a CLO issuance date or a CLO issuance date does not occur, the CLO warehouse financing parties, including the Advisory Client, may incur material losses and an investment in an Advisory Client may be materially adversely affected. Investors should expect that it will generally be between 612 months between a CLO warehouse’s formation until a CLO issuance date, if any, for the related CLO. From time to time, the market for CLO transactions has been adversely affected by a decrease in the availability of senior and subordinated financing for transactions, in part in response to regulatory pressures on providers of financing to reduce or eliminate their exposure to such transactions. Greater Risk of Losses for CLO Warehouse Equity and CLO Equity. The CLO warehouse equity and CLO equity in which certain Advisory Clients may invest will be subordinated to all other

securities of the relevant CLO warehouse or CLO and most or all other amounts due under the priority of payments set forth in the operative documents of such CLO warehouse or CLO issuer. As such, the greatest risk of loss relating to defaults in the underlying loans is borne by the CLO warehouse equity or CLO equity, as the case may be. An Advisory Client, therefore, as holder of such CLO warehouse or CLO equity, will rank behind most or all of the creditors, whether secured or unsecured and known or unknown, of such CLO warehouse or CLO equity. Further, CLO warehouse equity or CLO equity will not be a secured debt of the CLO warehouse or CLO issuer. The holders of more senior interests in a CLO warehouse or CLO issuer may have rights to control or influence the CLO warehouse or CLO issuer regarding various actions that the CLO warehouse or CLO issuer could take in respect of its portfolio which may have a negative impact on an Advisory Client as the holder of CLO warehouse equity or CLO equity. Leveraged Nature of CLO Warehouse Equity and CLO Equity. Due to the leverage inherent in a CLO warehouse or a CLO, changes in the value of CLO warehouse equity or CLO equity will likely be greater than the changes in the values of the underlying loans comprising the related CLO warehouse or CLO, which assets are subject to, among other things, credit and liquidity risk. Accordingly, CLO warehouse equity or CLO equity may not be paid in full and may be subject to total loss. The value of CLO warehouse equity or CLO equity could be significantly affected by, and the leveraged nature of each subordinated class may magnify the adverse impact on each such class as a result of, among other things, changes in the market value of the underlying loans, changes in the distributions on such loans, defaults and recoveries on such loans, capital gains and losses on such loans, prepayment on such loans and the availability, prices and interest rate of such loans. Investors must consider with particular care the risks of leverage in CLO warehouse equity and CLO equity because, although the use of leverage creates an opportunity for substantial returns for an Advisory Client on the CLO warehouse equity or CLO equity, it increases substantially the likelihood that an Advisory Client could lose its entire investment in CLO warehouse equity or CLO equity if the related collateral is adversely affected by market developments. These risks could be exacerbated to the extent that any of the underlying portfolios of loans are concentrated in a small number of underlying obligors, industries, geographical regions or other classification of assets. The concentration of an underlying portfolio in any one obligor would subject the CLO warehouse or CLO to a greater degree of risk with respect to defaults by such obligor, and the concentration of a portfolio in any one industry would subject the related CLO warehouse or CLO to a greater degree of risk with respect to economic downturns relating to such industry. Collateralized Bond Obligations (“CBO”). A CBO is a trust which is often backed by a diversified pool of high risk, below investment grade fixed income securities. The collateral can be from many different types of fixed income securities such as high-yield debt, residential privately-issued mortgage-related securities, commercial privately-issued mortgage-related securities, trust preferred securities and emerging market debt. CBOs may also charge management fees and administrative expenses. Cash flows from a CBO trust are split into two or more portions, called tranches, varying in risk and yield. The riskier portions are the residual, equity and subordinate tranches, which bear some or all of the risk of default by the bonds or loans in the trust, and therefore protect the other, more senior tranches from default in all but the most severe circumstances. Since they are partially protected from defaults, senior tranches from a CBO trust typically have higher ratings and lower

yields than their underlying securities, and can be rated investment grade. Despite the protection from the riskier tranches, senior CBO tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market anticipation of defaults, as well as aversion to CBO securities as a class. Certain Advisory Clients may invest in any tranche, including the equity tranche, of a CBO. The risks of an investment in a CBO depend largely on the type of the collateral securities and the class of the instrument in which an Advisory Client invests. Normally, CBOs are privately offered and sold, and thus, are not registered under the securities laws. As a result, investments in CBOs may be characterized by Arini as illiquid investments, however an active dealer market may exist for CBOs allowing them to qualify for Rule 144A under the Securities Act. CBOs may also carry additional risks including but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments; (ii) the possibility that the quality of the collateral may decline in value or default; (iii) the possibility that investments in CBOs are subordinate to other classes or tranches thereof; and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results. Reliance on the Arini Team as Manager of CLOs and CBOs. Certain Advisory Clients may invest in CLOs and CBOs (primarily equity tranches and occasionally mezzanine debt) structured and managed by the Arini team. There can be no assurance that the Arini team will be able to operate successfully or that the ratings of CLOs or CBOs on which the Arini team may rely will reflect current information, and subjective decisions and actions taken by the Arini team may cause a CLO or a CBO that it manages to incur losses or to miss profit opportunities on which it may otherwise have capitalized. The day-to-day management of the Arini Team and its investment decisions with respect to the CLO’s and CBO’s underlying assets will be determined by the individuals on the Arini Team. In the event that the Arini Team fails to retain key personnel, experiences business disruption or is otherwise compromised in its ability to manage such loans, an Advisory Client could be adversely affected. The composition and performance of the collateral obligations with respect to a CLO or CBO will depend on the skills of the Arini team and its key personnel in analyzing, selecting, managing and effecting acquisitions and sales of the CLO’s and CBO’s underlying assets. As a result, a CLO or CBO will be highly dependent on the financial and managerial experience of the investment professionals of the Arini Team who are assigned to manage the assets with respect to a CLO or CBO. Employment or other contractual arrangements between such individuals and Arini may exist, but a CLO or CBO is not a direct beneficiary of such arrangements and there is no assurance that such persons will continue to be associated with the Arini team or will continue to be assigned to manage the assets. The loss of any of these individuals could have a material adverse effect on the performance of the assets. In addition, the Arini team may add additional members to manage the assets at any time. The additional employees added to manage the assets may not have the same level of experience in selecting and managing loans and other assets as the persons they replace. The performance of the assets will also depend on the skill of the investment professionals assigned to manage the assets in applying the portfolio criteria and other requirements that apply to the selection, management and disposition of such assets.

Synthetic Assets. Certain Advisory Clients may acquire exposure to indices, debt securities, the risk of structured finance securities, loans and other types of assets synthetically through derivative products such as credit default swaps, total return swaps, credit linked notes, structured notes, trust certificates and other derivative instruments (each, a “Synthetic Asset”) A Synthetic Asset could take many forms, including a credit derivative transaction that references a structured finance security, debt security or loan, a credit derivative transaction that references a portfolio or index of corporate reference entities or a portfolio or index of reference obligations consisting of structured finance securities, total return swap transaction that references both income and any capital gains of an underlying asset, debt securities, bonds, or other financial instruments (each, a “Reference Obligation”). Exposure to such Reference Obligations through Synthetic Assets presents risks in addition to those resulting from direct purchases of the assets referenced. An Advisory Client would have a contractual relationship only with the Synthetic Asset counterparty, and not with the issuer(s) (the “Reference Entity”) of the Reference Obligations unless a credit event occurs with respect to any such Reference Obligation, physical settlement applies and the Synthetic Asset counterparty delivers the Reference Obligation to the Advisory Client. Other than in the event of such delivery, an Advisory Client generally would have no right directly to enforce compliance by the Reference Entity with the terms of any such Reference Obligation and the Advisory Client will not have any rights of set-off against the Reference Entity. In addition, the Advisory Client generally would not have any voting or other consensual rights of ownership with respect to the Reference Obligation. The Advisory Client also would not directly benefit from any collateral supporting the Reference Obligation and will not have the benefit of the remedies that would normally be available to a holder of such Reference Obligation. The Advisory Client would be subject to the credit risk of the Synthetic Asset counterparty, as well as that of the Reference Entity, as well as the documentation risk associated with these instruments. In the event of the insolvency of the Synthetic Asset counterparty, the Advisory Client would be treated as a general creditor of such counterparty, and will not have any claim of title with respect to the Reference Obligation. Consequently, the Advisory Client would be subject to the credit risk of the Synthetic Asset counterparty, as well as that of the Reference Entity. As a result, concentrations of Synthetic Assets entered into with any one Synthetic Asset counterparty will subject such Synthetic Assets to an additional degree of risk with respect to defaults by such Synthetic Asset counterparty as well as by the respective Reference Entities. While Arini expects that returns on a Synthetic Asset may reflect those of each related Reference Obligation, as a result of the terms of the Synthetic Asset and the assumption of the credit risk of the Synthetic Asset counterparty, a Synthetic Asset may have a different expected return, a different (and potentially greater) probability of default and different expected loss and recovery characteristics following a default. Spread Trading Risks. A part of Arini’s trading operations may involve an Advisory Client entering a transaction to realize gains from spread movements between two or more positions. To the extent the price relationships between such positions remain constant, no gain or loss on the positions may occur. In addition, such positions entail substantial risk that the price differential could change

unfavorably, causing a loss to the spread position. Such investment strategies may have materially diminished prospects for profitability. Arbitrage Transaction Risks. Arbitrage strategies attempt to take advantage of perceived price discrepancies of identical or similar financial instruments, on different markets or in different forms. Certain Advisory Clients will employ these arbitrage strategies. If the requisite elements of an arbitrage strategy are not properly analyzed, or unexpected events or price movements intervene, losses can occur which can be magnified to the extent an Advisory Client is employing leverage. Moreover, arbitrage strategies often depend upon identifying favorable “spreads,” which can also be identified and reduced or eliminated by other market participants. Structured Credit Products. Structured credit products are subject to prepayment, credit, liquidity, market, structural, legal and interest risks, among others. The performance of a structured credit product is affected by a variety of factors, including the level and timing of the payments and recoveries on the underlying assets and the adequacy of the related collateral. For example, synthetic portfolio transactions may be structured with two or more classes of tranches that receive different proportions of the interest and principal distributions on a pool of credit assets. The yield to maturity of a tranche may be extremely sensitive to the rate of defaults in the underlying reference portfolio. A rapid change in the rate of defaults may have a material adverse effect on the yield to maturity. It is therefore possible that an Advisory Client may incur losses on its investments in structured products regardless of their ratings by S&P or Moody’s. Additionally, the securities in which an Advisory Client is authorized to invest include securities that are subject to legal or contractual restrictions on their resale or for which there is a relatively inactive trading market. Securities subject to resale restrictions may sell at a price lower than similar securities that are not subject to such restrictions. Loans. An Advisory Client may invest in loans that are subordinate to other debt of the borrower. If a borrower defaults on an Advisory Client’s loan or on debt senior to an Advisory Client’s loan, or in the event of a borrower bankruptcy, an Advisory Client’s loan will be satisfied only after the senior debt is paid in full. Where debt senior to an Advisory Client’s loan exists, the presence of intercreditor arrangements may limit an Advisory Client’s ability to amend its loan documents, assign its loans, accept prepayments, exercise its remedies (through “standstill periods”) and control decisions made in bankruptcy proceedings relating to borrowers. Loan Participations and Assignments. An Advisory Client may invest in loans acquired through assignment or participations. In purchasing participations, an Advisory Client will usually have a contractual relationship only with the selling institution, and not the borrower. An Advisory Client generally will have no right directly to enforce compliance by the borrower with the terms of the loan agreement, nor any rights of set-off against the borrower, nor will it have the right to object to certain changes to the loan agreement agreed to by the selling institution. An Advisory Client may not directly benefit from the collateral supporting the related secured loan and may not benefit from any rights of set-off the selling institution has against the borrower. In addition, in the event of the insolvency of the selling institution, under the laws of certain jurisdictions, an Advisory Client may be treated as a general creditor of such selling institution, and may not have any proprietary, exclusive or senior claim with respect to the selling institution’s

interest in, or the collateral with respect to, the secured loan. Consequently, an Advisory Client may be subject to the credit risk of the selling institution as well as of the borrower. Differing jurisdictions may present additional legal risks relating to the characterization of such participation in the event of the insolvency of either the selling institution or the borrower. There are varying sources of statistical default rate data for term bank debts and numerous methods for measuring default rates. The historical performance of the term debt market is not necessarily indicative of its future performance. Should increases in default rates occur with respect to the type of collateral securing the bank loans in which an Advisory Client may invest, the actual default rates of the bank loans held by an Advisory Client may exceed the hypothetical default rates used in determining whether to purchase such bank debt. Credit Ratings. In general, the credit rating assigned by a nationally recognized rating agency to a security represents such rating agency’s opinion of the safety of the principal and interest payments of the rated instrument based on available information. Such ratings are relative and subjective; they are not absolute standards of quality and do not evaluate the market value risk of such securities. Such ratings also do not reflect macroeconomic or systemic risk, including the risk of increased illiquidity in the credit markets. Further, credit ratings may change over time due to various factors, including changes in the creditworthiness of the issuer and/or changes in the rating agency’s analytics and processes. It is possible that a rating agency might not change its rating of a particular issue on a timely basis to reflect subsequent events and, as a result, outstanding ratings may not reflect the issuer’s current credit standing. An Advisory Client may incur losses if it makes investments based on credit ratings that subsequently change in a way not favorable to an Advisory Client’s investment objective. Sovereign Debt. Several factors may affect (i) the ability of a government, its agencies, instrumentalities or its central bank to make payments on the debt it has issued, including securities that Arini (as defined in Item 10 below) believes are likely to be included in restructurings of the external debt obligations of the issuer in question, (ii) the market value of such debt and (iii) the inclusion of sovereign debt in future restructurings, including such issuer’s (x) balance of trade and access to international financing, (y) cost of servicing such obligations, which may be affected by changes in international interest rates, and (z) 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. Equitable Subordination. Under common law principles that in some cases form the basis for lender liability claims, if a lender (i) intentionally takes an action that results in the undercapitalization of a borrower or issuer to the detriment of other creditors of such borrower or issuer, (ii) engages in other inequitable conduct to the detriment of such other creditors, (iii) engages in fraud with respect to, or makes misrepresentations to, such other creditors or (iv) uses its influence as a stockholder to dominate or control a borrower or issuer to the detriment of other creditors of such borrower or issuer, a court may elect to subordinate the claim of the offending lender or bondholder to the claims of the disadvantaged creditor or creditors (a remedy called “equitable subordination”). If an Advisory Client engages in such conduct, an Advisory Client may be subject to claims from creditors of an obligor that debt held by an Advisory Client should be equitably subordinated.

Swap Agreements. An Advisory Client may enter into swap agreements and options on swap agreements (“swaptions”). These agreements can be individually negotiated and structured to include exposure to a variety of different types of investments, asset classes or market factors. An Advisory Client, for instance, may enter into total return swaps, contracts for difference, correlation swaps, variance swaps, volatility swaps or other swap agreements with respect to interest rates, credit defaults, currencies, securities, indexes of securities and other assets or other measures of risk or return. Depending on their structure, swap agreements may increase or decrease an Advisory Client’s exposure to, for example, equity securities, long-term or short-term interest rates, foreign currency values, credit spreads or other factors. Swap agreements can take many different forms and are known by a variety of names. An Advisory Client is not limited to any particular form of swap agreement. Whether an Advisory Client’s use of swap agreements or swaptions will be successful will depend on Arini’s ability to select appropriate transactions for the Advisory Client. Swap transactions may be highly illiquid and may increase or decrease the volatility of an Advisory Client’s portfolio. Moreover, an Advisory Client bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or insolvency of its counterparty. An Advisory Client will also bear the risk of loss related to swap agreements, for example, for breaches of such agreements or the failure of an Advisory Client to post or maintain required collateral. Many swap markets are relatively new and still developing. It is possible that developments in the swap markets, including potential government regulation, could adversely affect an Advisory Client’s ability to terminate swap transactions or to realize the amounts to be received under such transactions. Credit Default Swaps. Credit default swaps can be used to implement Arini’s view that a particular credit, or group of credits, will experience credit improvement or deterioration. In the case of expected credit improvement, an Advisory Client may sell credit default protection in which it receives a premium to take on the risk. In such an instance, the obligation of an Advisory Client to make payments upon the occurrence of a credit event creates leveraged exposure to the credit risk of the referenced entity. An Advisory Client may also buy credit default protection with respect to a referenced entity if, in Arini’s judgement, there is a high likelihood of credit deterioration. In such instance, an Advisory Client will pay a premium regardless of whether there is a credit event. Lending of Portfolio Securities. An Advisory Client may lend securities on a collateralized and an uncollateralized basis from its portfolio to creditworthy securities firms and financial institutions. While a securities loan is outstanding, an Advisory Client will continue to receive the equivalent of the interest or dividends paid by the issuer on the securities, as well as interest on the investment of the collateral or other amounts from the borrower. The risks in lending securities, as with other extensions of secured credit, if any, consist of possible delay in receiving additional collateral, if any, or in recovery of the securities or possible loss of rights in the collateral, if any, should the borrower fail financially. Convertible/Exchangeable Securities. 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 an Advisory Client is called for redemption, an Advisory 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 an Advisory Client’s ability to achieve its investment objective. Equity Securities and Equity-Related Securities. An Advisory Client may invest in equity securities and equity-related instruments. The value of equity securities varies in response to many factors. Factors specific to an issuer, such as certain decisions by management, lower demand for the issuer’s products or services or even the loss of a key executive, could result in a decrease in the value of the issuer’s securities. Factors specific to the industry in which an issuer participates, such as increased competition or costs of production or negative consumer or investor perception, can have a similar effect. The value of an issuer’s stock can also be adversely affected by changes in financial markets generally, such as an increase in interest rates or decrease in consumer confidence. These factors and others can cause significant fluctuations in the prices of the securities in which an Advisory Client invests and can result in significant losses. Arini does not perform due diligence on the fundamental soundness of the business model or management of the issuers in which an Advisory Client invests. Arini ‘s models do not take into account all, or potentially any, of the factors that contribute to the value of a particular company’s equity securities. Rights and Warrants. An Advisory Client may make investments in rights and warrants. Rights and warrants entitle the holder to buy equity securities at a specific price for a specific period of time. Rights and warrants may be considered more speculative than certain other types of investments in that they do not entitle a holder to dividends or voting rights with respect to the underlying securities that may be purchased nor do they represent any rights in the assets of the issuing company. Also, the value of a right or warrant does not necessarily change with the value of the underlying securities and a right or warrant ceases to have value if it is not exercised prior to the expiration date. Hedging Transactions. An Advisory Client may enter into hedging transactions for risk management purposes, including to protect against possible changes in the market value of the Advisory Client’s investment portfolio resulting from fluctuations in the markets and changes in currency exchange or interest rates or for any other reason that Arini deems appropriate. An Advisory Client will not be required to hedge any particular risk or its portfolio generally. While an Advisory Client may enter into hedging transactions to seek to reduce risk, such transactions may result in a poorer overall performance for an Advisory Client than if it had not engaged in any such hedging transaction. Moreover, the portfolio will always be exposed to certain risks that cannot be hedged. Volatility Risk. An Advisory Client’s investment program may involve the purchase and sale of relatively volatile securities and/or investments in volatile markets. Fluctuations or prolonged changes in the volatility of such securities and/or markets can adversely affect the value of investments held by an Advisory Client. Undervalued Securities. The identification of investment opportunities in undervalued securities is a difficult task, and there are no assurances that such opportunities will be successfully recognized or acquired. While investments in undervalued securities offer the opportunity for above-average

capital appreciation, these investments involve a high degree of financial risk and can result in substantial losses. Returns generated from an Advisory Client’s investments may not adequately compensate for the business and financial risks assumed. Unlisted Securities. Unlisted securities may involve higher risks than listed securities. Because of the absence of any trading market for unlisted securities, it may take longer to liquidate, or it may not be possible to liquidate, positions in unlisted securities than would be the case for publicly traded securities. Companies whose securities are not publicly traded may not be subject to public disclosure and other investor protection requirements applicable to publicly traded securities. Illiquid Securities. While most securities are intended to be in liquid assets, certain securities may be illiquid because, for example, they are subject to legal or other restrictions on transfer or there is no liquid market for such securities or market conditions have resulted in a lack of liquidity for such securities. Valuation of such securities may be difficult or uncertain because there may be limited information available about the issuers of such securities. The market prices, if any, for such securities tend to be volatile and may not be readily ascertainable, and an Advisory Client may not be able to sell them when it desires to do so or to realize what it perceives to be their fair value in the event of a sale. The sale of restricted and illiquid securities often requires more time and results in higher brokerage charges or dealer discounts and other selling expenses than does the sale of securities eligible for trading on national securities exchanges or in the over-the-counter markets. An Advisory Client may not be able to readily dispose of such illiquid investments and, in some cases, may be contractually prohibited from disposing of such investments for a specified period of time. As a result, an Advisory Client may be required to hold such securities despite adverse price movements. Even those markets which Arini expects to be liquid can experience periods, possibly extended periods, of illiquidity. Occasions have arisen in the past where previously liquid investments have rapidly become illiquid. Issuer Risks. An Advisory Client will invest in securities of, or otherwise have direct or indirect exposure to, issuers that are subject to business, financial and other risks. Any event or circumstance that has a negative effect on such issuers could, in turn, have a negative effect on the value or liquidity of an Advisory Client’s portfolio. Issuers of securities in which an Advisory Client invests may be highly leveraged. Leverage may have important adverse consequences to these companies and to Advisory Client. These companies may be subject to restrictive financial and operating covenants, and the leverage may impair their ability to finance future operations and capital needs. In addition, although these companies may incur leverage, including from Advisory Client, proceeds of this debt may be paid as a dividend to stockholders and not invested in operating or financial assets, or otherwise retained by the company. As a result, these companies’ flexibility to respond to changing business and economic conditions and to business opportunities may be limited. A leveraged company’s income and net assets will tend to increase or decrease at a greater rate than if borrowed money were not used. In addition, an issuer with a leveraged capital structure will be subject to increased exposure to adverse economic factors. In the event that an issuer is unable to generate sufficient cash flow to meet principal and interest payments on its indebtedness, the value of an Advisory Client’s investment could be significantly reduced or even eliminated.

Long-Term Market Considerations. The success of an Advisory Client’s long-term investment strategy depends upon Arini’s ability to identify and make investments that are undervalued and hold such investments so as to maximize value on a long-term basis. In pursuing any long-term strategy, an Advisory Client may forgo value in the short-term or temporary investments in order to be able to avail an Advisory Client of additional and/or longer-term opportunities in the future. Consequently, an Advisory Client may not capture maximum available value in the short-term, which may be disadvantageous, for example, for Private Investment Fund investors who redeem all or a portion of their shares before such long-term value may be realized by the Private Investment Fund. Short-Term Market Considerations. Arini’s trading decisions may be made on the basis of shortterm market considerations, and the portfolio turnover rate could result in significant trading-related expenses Diversification and Concentration. Arini may select investments that are concentrated in a limited number or types of securities. In addition, an Advisory Client’s portfolio may become significantly concentrated in securities related to a single or a limited number of issuers, industries, sectors, strategies, countries or, regions, asset classes or counterparties. This limited diversification may result in the concentration of risk, which, in turn, could expose an Advisory Client to losses disproportionate to market movements in general if there are disproportionately greater adverse price movements in such securities. In particular, because an Advisory Client’s mandate is focused primarily on European credit instruments, negative market or political events affecting Europe may have a greater impact than if an Advisory Client’s investments had greater geographic diversification. Significant Positions in Securities; Regulatory Requirements. In the event an Advisory Client acquires a significant stake in certain issuers of securities and such stake exceeds certain percentage or value limits, an Advisory Client may be subject to regulation and regulatory oversight that may impose notification and filing requirements or other administrative burdens on an Advisory Client and Arini. Any such requirements may impose additional costs on an Advisory Client and may delay the acquisition or disposition of the securities or an Advisory Client’s ability to respond in a timely manner to changes in the markets with respect to the types of securities held by an Advisory Client. In addition, “position limits” may be imposed by various regulators that may limit an Advisory Client’s ability to effect desired trades. All positions owned or controlled by the same person or entity, even if in different accounts, may be aggregated for purposes of determining whether the applicable position limits have been exceeded. To the extent that an Advisory Client’s position limits were aggregated with an affiliate’s position limits, the effect on an Advisory Client and resulting restriction on its investment activities may be significant. If at any time positions managed by Arini were to exceed applicable position limits, Arini would be required to liquidate positions, which might include positions of the applicable Advisory Client, to the extent necessary to come within those limits. Further, to avoid exceeding any position limits, an Advisory Client might have to forgo or modify certain of its contemplated trades.

Emerging Market Investments. An Advisory Client may invest in securities of companies located in emerging countries or issued by the governments of such countries. Investing in such securities involves certain considerations not usually associated with investing in securities of companies located in developed countries or issued by the government of such countries, including security and economic considerations, such as greater risks of expropriation, confiscatory taxation, imposition of withholding or other taxes on dividends, interest, capital gains, other income or gross sale or disposition proceeds, limitations on the removal of funds, nationalization and general social, political and economic instability; the small size of the securities markets in such countries and the low volume of trading, resulting in potential lack of liquidity and in price volatility; fluctuations in the rate of exchange between currencies and costs associated with currency conversion; certain government policies that may restrict an Advisory Client’s investment opportunities; and problems that may arise in connection with the clearance and settlement of trades. In addition, accounting and financial reporting standards that prevail in certain of such countries generally are not equivalent to standards in more developed countries and, consequently, less information is available to investors in companies located in these countries than is available to investors in companies located in more developed countries. There is also less regulation, generally, of the securities markets in emerging countries than there is in more developed countries. Placing securities with a custodian in an emerging country may also present considerable risks. Derivative Instruments. Certain swaps, options and other derivative instruments may be subject to various types of risks, including market risk, liquidity risk, credit risk, legal risk and operations risk. The regulatory and tax environment for derivative instruments in which an Advisory Client may participate is evolving, and changes in the regulation or taxation of such financial instruments may have a material adverse effect on an Advisory Client. In addition, an Advisory Client may, in the future, take advantage of opportunities with respect to certain other derivative instruments that are not presently contemplated for use or that are currently not available. Special risks may apply in the future that cannot be determined at this time. Options. Trading options is highly speculative and may entail risks that are greater than investing in other securities. Prices of options are generally more volatile than prices of other securities. In trading options, Arini speculates on market fluctuations of securities and securities exchange indices while investing only a small percentage of the value of the securities underlying such option. A change in the market price of the underlying securities or underlying market index will cause a much greater change in the price of the option contract. In addition, to the extent that Arini causes an Advisory Client to purchase options that it does not sell or exercise, an Advisory Client will suffer the loss of the premium paid in such purchase. To the extent Arini causes an Advisory Client to sell uncovered options and must deliver the underlying securities at the option price, an Advisory Client has a theoretically unlimited risk of loss if the price of such underlying securities increases. If an Advisory Client must buy those underlying securities, an Advisory Client risks the loss of the difference between the market price of the underlying securities and the option price. Any gain or loss derived from the sale or exercise of an option will be reduced or increased, respectively, by the amount of the premium paid. The expenses of option investing include commissions payable on the purchase and on the exercise or sale of an option. Furthermore, the risk of nonperformance by the obligor on an option may be greater and the ease with which an Advisory Client can dispose of such an option may be less than in the case of an exchange-traded option.

Arini may cause an Advisory Client to buy or sell OTC options—options on securities that are not traded on a securities exchange and are not issued or cleared by an internationally recognized clearing corporation. The risk of nonperformance by the obligor on such an option may be greater, and the ease with which Arini can dispose of such an option may be less, than in the case of an exchange-traded option issued by an internationally recognized clearing corporation. Futures Contracts. The value of futures contracts depends upon the price of the assets, such as commodities, underlying them. The prices of futures contracts are highly volatile, and price movements of futures contracts can be influenced by, among other things, interest rates, changing supply and demand relationships, trade, fiscal, monetary and exchange control programs and policies of governments, as well as national and international political and economic events and policies. As a result, a relatively small price movement in a futures contract may result in substantial losses to an Advisory Client. In addition, investments in futures contracts are also subject to the risk of the failure of any of the exchanges on which an Advisory Client’s positions trade or of its clearinghouses or counterparties. Futures positions may be illiquid because certain commodity exchanges limit fluctuations in certain futures contract prices during a single day by regulations referred to as “daily price fluctuation limits” or “daily limits”. Under such daily limits, during a single trading day, no trades may be executed at prices beyond the daily limits. Once the price of a particular futures contract has increased or decreased by an amount equal to the daily limit, positions in that contract can neither be taken nor liquidated unless traders are willing to effect trades at or within the limit. This could prevent an Advisory Client from promptly liquidating unfavorable positions and subject an Advisory Client to substantial losses or prevent it from entering into desired trades. Also, low margin or premiums normally required in such trading may provide a large amount of leverage, and a relatively small change in the price of a security or contract can produce a disproportionately larger profit or loss. In extraordinary circumstances, a futures exchange or the CFTC could suspend trading in a particular futures contract, or order liquidation or settlement of all open positions in such contract. Forward Contracts. An Advisory Client may enter into forward contracts and options thereon, including non-deliverable forwards, which are currently not traded through clearinghouses, although this is expected to change. The principals who deal in the forward contract market are not required to continue to make markets in such contracts. There have been periods during which certain participants in forward markets have refused to quote prices for forward contracts 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. The imposition of credit controls or price risk limitations by governmental authorities may limit such forward trading to less than that which Arini would otherwise recommend, to the possible detriment of an Advisory Client. In its forward trading, an Advisory Client will be subject to the risk of the failure of, or the inability or refusal to perform with respect to its forward contracts by, the principals with which an Advisory Client trades. Advisory Client assets on deposit with such principals will also generally not be protected by the same segregation requirements imposed on certain regulated brokers in respect of customer funds on deposit with them. Arini may order trades for an Advisory Client in such markets through agents. Accordingly, the insolvency or bankruptcy of such parties could also subject an Advisory Client to the risk of loss.

Repurchase or Reverse Repurchase Transactions, Buy-Sell Back or Sell-Buy Back Transactions. An Advisory Client may enter into repurchase and reverse repurchase transactions or buy-sell back or sell-buy back transactions. When an Advisory Client enters into a repurchase agreement or a sellbuy back transaction, it effectively “sells” the securities or commodities to a counterparty (such as a financial institution), and agrees to repurchase such securities or commodities on a mutually agreed date for the price paid by the counterparty, plus interest at a negotiated rate. In a reverse repurchase or a buy-sell back transaction, an Advisory Client “buys” securities from a counterparty, subject to the obligation of the counterparty to repurchase such securities at the price paid by an Advisory Client, plus interest at a negotiated rate. Repurchase, reverse repurchase and sell-buy back or buy-sell back transactions by an Advisory Client involve certain risks. For example, if the seller of securities to an Advisory Client under a reverse repurchase agreement defaults on its obligation to repurchase the underlying securities, as a result of its bankruptcy or otherwise, an Advisory Client will seek to dispose of such securities, which action could involve costs or delays. If the seller becomes insolvent and subject to liquidation or reorganization under applicable bankruptcy or other laws, an Advisory Client’s ability to dispose of the underlying securities may be restricted. It is possible, in a bankruptcy or liquidation scenario, that an Advisory Client may not be able to substantiate its interest in the underlying securities. Finally, if a seller defaults on its obligation to repurchase securities under a reverse repurchase agreement, an Advisory Client may suffer a loss to the extent that it is forced to liquidate its position in the market, and proceeds from the sale of the underlying securities are less than the repurchase price agreed to by the defaulting seller. Similar elements of risk arise in the event of the bankruptcy or insolvency of the buyer. Counterparty Risk. An Advisory Client expects to establish relationships to obtain financing, derivative intermediation and prime brokerage services that permit an Advisory Client to trade in any variety of markets or asset classes over time. However, there can be no assurance that an Advisory Client will be able to establish or maintain such relationships. An inability to establish or maintain such relationships could limit an Advisory Client’s trading activities, create losses, preclude an Advisory Client from engaging in certain transactions or prevent an Advisory Client from trading at optimal rates and terms. Moreover, a disruption in the financing, derivative intermediation and prime brokerage services provided by any such relationships could have a significant impact on an Advisory Client’s business due to an Advisory Client' reliance on such counterparties. In particular, the stability and liquidity of over-the-counter derivative transactions depend in large part on the creditworthiness of the parties to the transactions. It is expected that an Advisory Client will monitor on an ongoing basis the creditworthiness of firms with which it will enter into overthe-counter derivative transactions. If there is a default by the counterparty to such a transaction, Advisory Client will under most normal circumstances have contractual remedies pursuant to the agreements related to the transaction. However, exercising such contractual rights may involve delays or costs which could result in the Net Asset Value of an Advisory Client being less than if an Advisory Client had not entered into the transaction. Furthermore, there is a risk that any of such counterparties could become insolvent and/or the subject of insolvency proceedings. If one or more of an Advisory Client’s counterparties were to become insolvent or the subject of insolvency proceedings, there exists the risk that the recovery of an Advisory Client’s securities and other assets from such prime broker or broker-dealer will be delayed or be of a value less than the value of the securities or assets originally entrusted to such prime broker or broker-dealer. Investors should

assume that the insolvency of any counterparty would result in a loss to an Advisory Client, which could be material. New Issues. An Advisory Client at times may purchase equity securities that are issued in initial public offerings registered under the Securities Act (“new issues”). Pursuant to FINRA Rule 5130, certain “restricted persons” may not participate fully in gains or losses from new issues and, conversely, investors that are not restricted persons may be allocated all, or a larger portion than their pro rata share, of the profits or losses relating to such new issue offering. New issue securities in the past have on occasion experienced immediate, sometimes rapid, increases in market value following such offerings. In such cases, certain restricted persons may not receive some or any of the gains from such investment. Conversely, new issue securities may experience a decrease in market value following initial public offerings, in which case certain investors who are not restricted persons may receive more than their pro rata share of the losses from such investment. Arini has limited experience in purchasing equity securities issued in initial public offerings, and such transactions are outside the scope of Arini ‘s core competency. As such, Arini cannot necessarily predict how profitable such transactions may be and, as a result, Arini may suffer losses, which could be significant. Short Sale Transactions. Short selling is critical to Arini’s strategies which typically aim at maintaining a long-short portfolio. Short selling involves selling securities that may or may not be owned by the seller and borrowing the same securities for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. Short selling allows the investor to profit from declines in the value of securities. In addition, positions that are economically similar to short sales may be established through derivatives trading. In many jurisdictions, a party is required to borrow or locate securities before selling short. From time to time, securities will be unavailable for borrowing and, consequently, an Advisory Client will be unable to carry out intended trades. Where Arini is able to execute a short sale on behalf of an Advisory Client, the Advisory Client is susceptible to the risk of an unlimited loss, in that the price of the underlying security could increase without limit, exposing the short seller to the unlimited cost of buying those securities to cover the short position. There can be no assurance that the security necessary to cover a short position will be available for purchase. Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss. Similarly, a short position established synthetically through a derivative could also result in a substantial and possibly unlimited loss if the value of the underlying asset or index actually increases rather than decreases. In practice, Arini limits the risk of substantial loss by establishing positions that create downside protection for the short positions. In recent history, many jurisdictions have imposed restrictions and reporting requirements on short selling. For example, in 2008, the SEC suspended short selling on over 900 public companies (including issuers in the financial services industry) and, in 2010, the SEC adopted a short sale price test rule, which limited short selling a security following a 10% decline in its trading price. In Europe, in September 2008, the Italian regulator banned the short selling of Italian banks and insurance companies. In October of the same year, it extended the short selling ban to all Italian

stocks, regardless of their sector. In the same month, the UK, Dutch and Norwegian regulators banned the short selling of financial equities. Some new reporting requirements on short positions were also introduced at that time. Spain made it mandatory for investors to disclose at T+1 their short positions exceeding 0.25% of the total shares outstanding on financial stocks. These restrictions and reporting requirements, and any restrictions and reporting requirements enacted in the future, may change the manner in which an Advisory Client trades and may prevent Arini from successfully implementing its investment strategies. In addition, reporting requirements relating to short selling may provide transparency to an Advisory Client’s competitors as to its short positions, which may have a detrimental impact on an Advisory Client’s returns. If it is determined by the broader market that an Advisory Client (or others) are short a heavily shorted security, an Advisory Client may be susceptible to the risk that groups of investors may coordinate, on social media or otherwise, to drive up the price of the short position for the purpose of causing the holders of such a position, including an Advisory Client, to close out of such position at a significant loss. Interest-Rate and Foreign Exchange-Rate Risks. The prices of assets held by an Advisory Client will be sensitive to interest-rate and, in certain circumstances, foreign exchange-rate fluctuations; such fluctuations could cause the US dollar value of long and short positions to move in unanticipated directions. To the extent that interest-rate and foreign exchange-rate assumptions underpin the hedging of a particular position, fluctuations in rates could invalidate those underlying assumptions and expose an Advisory Client to losses. An Advisory Client is not obligated to hedge its exposure to any risks, including, without limitation, interest-rate and foreign exchange-rate risks. Directional Strategies. Some, but not all, of the strategies used by Arini for its Advisory Clients are directional. Directional investing is subject to all the risks inherent in incorrectly predicting future price movements. Price movements may be influenced by unanticipated factors or Arini’s analysis of known factors may prove inaccurate, in either case potentially leading to substantial losses. Relative Value Strategies. Some, but not all, of the strategies deployed by Arini for its Advisory Clients are relative value. While relative value strategies aim at being neutral to directional market moves, this does not mean that an Advisory Client will not be affected by adverse market conditions. There can be no assurances that the strategies pursued will be profitable and various market conditions may be materially less favorable to certain strategies than others. Mispricings, even if correctly identified, may not be corrected by the market, at least within a time frame over which it is feasible for an Advisory Client to maintain a position. In the event that the perceived mispricings underlying Arini’s relative value trading positions were to fail to converge toward, or were to diverge further from, relationships expected by Arini, an Advisory Client may incur a loss. Credit Risk. An Advisory Client’s investments will be subject to the risk that a borrower will be unable or unwilling to make principal and interest payments on its outstanding debt obligations when due. In general, default rates tend to accelerate during economic downturns; however, a wide range of factors may adversely affect an obligor’s ability to make repayments, including: adverse changes in the financial condition of such obligor; increased competition in the industries or regions in which it operates; the obligor’s exposure to counterparty risk; systemic risk in the financial system and settlement; changes in law or taxation; changes in governmental regulations or other

policies; natural disasters; terrorism; social unrest, civil disturbances; or general economic conditions. In the event of insolvency, liquidation, dissolution, reorganization or bankruptcy of an obligor, holders of debt instruments ranking senior to the investment would typically be entitled to receive payment in full before an Advisory Client receives any distribution in respect of its investment. After repaying the more senior creditors, such obligor may not have any remaining assets to repay its obligations to an Advisory Client. In the case of debt ranking equally with the loans or debt securities in which an Advisory Client invests, an Advisory Client would have to share on an equal basis any distributions with other creditors holding such debt in the event of an insolvency, liquidation, dissolution, reorganization or bankruptcy of the relevant portfolio investment. Each jurisdiction in which an Advisory Client invests has its own insolvency laws. As a result, investments in similarly situated portfolio investments in different jurisdictions may well confer different rights in the event of insolvency. Non-Performing Nature of Loans. Any defaults will have a negative impact on the value an Advisory Client’s investments and may reduce the return that an Advisory Client receives from its investments in certain circumstances. While some amount of default is expected to occur in the portfolio, defaults in or declines in the value of the Advisory Client’s investments in excess of these expected amounts may result in breaches of covenants under an Advisory Client’s financing arrangements, triggering credit enhancement requirements or accelerated repayment provisions and, if not cured within the relevant grace periods, permitting the finance provider to enforce its security over all the assets of an Advisory Client. There are varying sources of statistical default and recovery rate data for loans and other debt securities and numerous methods for measuring default and recovery rates. The historical performance of the credit market or the leveraged loan market is not indicative of future results. It is anticipated that certain of the loans may be non- performing and possibly in default. There can be no assurance as to the amount and timing of payments with respect to the loans. There can be no assurance that an Advisory Client’s will increase in value or that an Advisory will not incur significant losses. Arini anticipates that several of an Advisory Client’s investments will incur losses. Prospective investors should be prepared for the possibility of losing all or substantially all of their investment in an Advisory Client. Collateral. Although certain Advisory Clients seek to make investments that are believed to be secured by specific collateral, there can be no assurance that such collateral could be readily liquidated or that the liquidation thereof would satisfy the borrower’s obligation in the event of nonpayment of scheduled interest or principal payments with respect to such investments (even if the value thereof initially exceeded the principal amount of such investments). In addition, in the event of bankruptcy of a borrower, an Advisory Client could experience delays or limitations with respect to its ability to realize the benefits of the collateral securing an investment. Under certain circumstances, collateral securing an investment may be released without the consent of an Advisory Client. Moreover, an Advisory Client’s security interest (with respect to investments in secured debt) may be unperfected for a variety of reasons, including the failure to make required filings by lenders and, as a result, an Advisory Client may not have priority over other creditors as anticipated. First priority lien investments made by an Advisory Client may, in certain cases, provide a first priority lien over some, but not all, of the assets of the relevant borrower. An Advisory Client may also invest in second-lien debt investments and may, for example, to the extent they receive such assets in a restructuring, hold high-yield securities, marketable and non-marketable common and preferred equity securities and other unsecured investments each of which involves a higher

degree of risk than senior first-lien secured debt investments including the re-use and subsequent loss of such collateral by the borrower. Furthermore, an Advisory Client’s right to payment and its security interest, if any, may be subordinated to the payment rights and security interests of senior lenders (with respect to some or all of the assets of an investment). Certain of these investments may have an interest-only payment schedule, with the principal amount remaining outstanding and at risk until the maturity of the investment. In such cases, the ability of the issuer of an investment to repay the principal of an investment may be dependent upon a liquidity event or the long-term success of the company, the occurrence of which is uncertain. The terms of derivative arrangements entered into by an Advisory Client may provide that related collateral given to, or received by, an Advisory Client may be pledged, lent, re-hypothecated or otherwise re-used by the collateral taker for its own purposes. If collateral received by an Advisory Client is reinvested or otherwise re-used, an Advisory Client is exposed to the risk of loss on that investment. If such a loss should occur, the value of the collateral will be reduced and an Advisory Client will have less protection if the counterparty defaults. All of the foregoing could have a negative impact on the overall returns to an Advisory Client. Senior Loans. Senior secured loans are generally rated below investment grade or may be unrated. As a result, the risks associated with senior secured loans are similar to the risks of below investment grade fixed-income instruments, although senior secured loans are senior and secured in contrast to other below investment grade fixed-income instruments, which are often subordinated or unsecured. Investment in senior secured loans rated below investment grade is considered speculative because of the credit risk of their issuers. Such companies are more likely than investment grade issuers to default on their payments of interest and principal owed to an Advisory Client, and such defaults could have a materially adverse effect on an Advisory Client’s performance. An economic downturn would generally lead to a higher non-payment rate, and a senior secured loan may lose significant market value before a default occurs. Moreover, there is a risk that the collateral securing such loans may decrease in value over time, may be difficult to sell in a timely manner, may be difficult to appraise and may fluctuate in value based upon the success of the business and market conditions, including as a result of the inability of the relevant company to raise additional capital, and, in some circumstances, an Advisory Client’s liens could be subordinated to claims of other creditors. Consequently, the fact that a loan is secured does not guarantee that an Advisory Client will receive principal and interest payments according to the loan’s terms, or at all, or that the Advisory Client will be able to collect on the loan should it be forced to enforce its remedies. There may be less readily available and reliable information about most senior secured loans than is the case for many other types of securities, including securities issued in transactions registered under the securities laws of various jurisdictions. Subordinated Loans or Securities. An Advisory Client’s investments may consist of loans or securities or interests in pools of securities that, in either case, are subordinated or may be subordinated in right of payment and ranked junior to other securities issued by, or loans made to obligors. If an obligor experiences financial difficulty, holders of its more senior securities will be entitled to payments in priority to an Advisory Client. An Advisory Client’s asset-backed investments may also have structural features that divert payments of interest and/or principal to more senior classes of loans or securities backed by the same assets when loss rates or delinquency exceeds certain levels. This may interrupt the income an Advisory Client receives from its investments. In addition, obligors may be highly leveraged and such investments are subject to

additional risks, including an increased risk of default during periods of economic downturn, the possibility that the obligor may not be able to meet its debt payments and limited secondary market support, among other risks. Investments in Distressed Assets. Certain Advisory Clients may make investments in nonperforming, underperforming or other distressed assets (including in respect of companies experiencing significant financial difficulties and material operating issues and companies that may have been, are or will become involved in bankruptcy proceedings or other restructuring, recapitalization or liquidation processes), which may involve a high degree of financial risk, including loss of all or part of the relevant investment. Given the heightened difficulty of the financial analysis required to evaluate distressed investments, there can be no assurance that an Arini will correctly evaluate the value of the assets of a distressed investment or correctly project the prospects for the successful restructuring, recapitalization or liquidation of such investment. Under certain circumstances, distributions to an Advisory Client may be reclaimed if any such payment or distribution is later determined to have been fraudulent or a preferential payment under applicable insolvency law. Additionally, under certain circumstances, creditors that have inappropriately exercised control of the management and policies of a debtor may have their claims subordinated or disallowed or may be found liable for damages suffered by parties as a result of such actions. Early Prepayment. Certain debt that an Advisory Client may invest in, such as senior debt, may be repaid early, so that the actual maturity of such investments is shorter than their stated final maturity calculated solely on the basis of the stated life and repayment schedule. Generally voluntary prepayments are permitted and the timing of prepayments cannot be predicted with any accuracy. The degree to which borrowers prepay debt, whether as a contractual requirement or at their election, may be affected by general business conditions, market interest rates, the borrower’s financial condition and competitive conditions among lenders. Prepayments are likely to be made during any period of declining interest rates. Such prepayments may result in the an Advisory Client receiving a lower than anticipated yield on such investments, which may negatively impact returns to an Advisory Client. Limited Amortization Requirements. Certain Advisory Clients may invest in loans that have limited mandatory amortization requirements. While these loans may obligate an issuer to repay the loan out of asset sale proceeds or with annual excess cash flow, repayment requirements may be subject to substantial limitations that would allow an issuer to retain such asset sale proceeds or cash flow, thereby extending the expected weighted average life of the investment. In addition, a low level of amortization of any debt over the life of the investment may increase the risk that the issuer will not be able to repay or refinance the loans held by an Advisory Client when it matures. Lender Liability. Certain jurisdictions may allow borrowers to pursue lending institutions and others on the basis of various evolving legal theories (collectively termed “lender liability”) and may impose liability upon lenders or bondholders. An Advisory Client could be exposed to claims as a lender for, among other things: (i) breach of contract (whether express or implied by conduct) to lend or to maintain facilities, for instance where lines of credit are withdrawn abruptly or inconsistently with previous practice or in breach of good faith concepts incorporated into contracts governed by the law of applicable jurisdictions; (ii) for making misrepresentations to a borrower (potentially

through an agent lender with respect to interest rates); (iii) for the provision of negligent advice where the lender assumes a fiduciary obligation beyond the capacity of lender (particularly in consumer cases); or (iv) pursuant to the assumption of control over, and interference with, the day-to-day management of a company. In addition, the acquisition of possession, control or ownership of an asset causing contamination or pollution (by virtue of taking possession of security on default or acquiring ownership under a finance lease) may also give rise to lender liability under the laws of various jurisdictions, and in certain jurisdictions where remedies against assets subject to security interests may be exercised outside the supervision of the courts, abuse of such unsupervised remedies (for instance, where there is a failure to obtain a true market price on the sale of a security) may give rise to lender liability. Investments in Small to Medium Sized Entities. Certain Advisory Clients may, in pursuit of its investment objective, originate loans to and invest in privately and publicly held U.S. and other international issuers that are categorized as small to medium sized entities. Investments in such small to medium sized entities involve a number of risks generally associated with other types of loans described above. Loans to Private Companies. A substantial portion of the certain Advisory Clients’ portfolio may consist of loans to privately owned businesses. Compared to larger, publicly owned firms, such companies generally have limited financial resources and access to capital, as well as higher funding costs. They may be in a weaker financial position and may need more capital to expand or compete. These companies frequently have shorter operating histories, narrower product lines and smaller market shares than larger businesses, which render them more vulnerable to competitors' actions and market conditions, as well as general economic downturns. There may not be as much information publicly available about these companies as would be available for public companies and such information may not be of the same quality. These companies are also more likely to depend on the management talents and efforts of a small group of persons and, as a result, the death, disability, resignation or termination of one or more of these persons could have a material adverse impact on these companies' ability to meet their obligations. The above challenges increase the risk of these companies defaulting on their obligations. It is critical that investors, clients, and prospective clients and investors refer to the relevant confidential private offering memorandum, explanatory memorandum and/or other client governing documents for a complete understanding of the material risks involved in relation to the investment strategies and methods of analysis used by Arini. The information contained herein is a summary only and is qualified in its entirety by such documents.

Arini Capital Management Holdings II (Jersey) Limited and its subsidiaries, which include Arini UK and Arini US, operate an asset management business and provide discretionary investment advisory services with respect to one or more privately offered pooled investment vehicles and CLOs. As described in further detail in Item 4, Arini US provides sub-advisory services to Arini UK. Arini includes certain non-advisory affiliates and has its main offices in London (UK) and New York. Arini has a minority revenue sharing arrangement with Squarepoint. Arini UK serves as the investment manager to the Private Investment Funds and related persons serve as general partners to certain of the Private Investment Funds. In addition, certain of Arini’s principals may serve as directors of certain Private Investment Funds. From time to time, certain Arini team members may serve as directors or advisory board members for certain of the companies in which the Advisory Clients invest. In connection with such services, such members of the Arini team may receive directors’ fees or other similar compensation attributable to such employees’ services. As detailed in Item 11, they are subject to restrictions on personal transactions, pre-clearance and have on-going reporting obligations. Each of the Private Investment Funds for which Arini or its related persons serve as general partner or investment manager has entered and may in the future enter into additional agreements, or “side letters,” with certain prospective or existing Fund Investors whereby such Fund Investors may be subject to terms and conditions that are more advantageous than those set forth in the offering memorandum for a given Private Investment Fund. For example, such terms and conditions may provide for special rights to make future investments in the Private Investment Fund, other investment vehicles or managed accounts; a waiver or rebate in fees; rights to receive reports from the Private Investment Fund on a more frequent basis or that include information not provided to other Fund Investors (including, without limitation, more detailed information regarding portfolio positions) and such other rights, standards, waivers or modifications as may be negotiated by the Private Investment Fund and such Fund Investors. The modifications are solely at the discretion of the Private Investment Fund and may, among other things, be based on the size of the Fund Investor’s investment in the Private Investment Fund or an affiliated investment entity, an agreement by a Fund Investor to maintain such investment in the Private Investment Fund for a significant

period of time, or other similar commitment by a Fund Investor to the Private Investment Fund. Further, Arini has a dedicated fee-free share class for Fund Investors that are members, employees or affiliates of Arini and relatives of such persons.

Access Persons include, generally, any partner, officer, member or director of Arini and any employee or other supervised person of Arini who, in relation to the Advisory Clients, (i) has access to non-public information regarding any purchase or sale of securities, or non-public information regarding securities holdings or (ii) is involved in making securities recommendations, executing securities recommendations, or has access to such recommendations that are non-public. The Code also sets forth certain reporting and pre-clearance requirements with respect to personal trading by Access Persons. Access Persons must provide the Compliance Department with a list of their personal accounts and an initial holdings report within ten days of becoming an Access Person. In addition, Access Persons must provide annual holdings reports and quarterly transaction reports in accordance with Rule 204A-1 of the Investment Advisers Act of 1940, as amended. Among other restrictions on personal trading, Arini generally does not permit Access Persons to execute transactions that the Advisory Clients typically invest in within their personal accounts. Arini monitors all Access Persons’ personal securities transactions through the reporting and preclearance requirements described above. In order to manage any conflict of interest, personal securities transactions are reviewed in the best interests of Advisory Clients and are evaluated for approval or denial considering if there is a risk of potential adverse consequences to Advisory Clients. Certain Access Persons have personal investments, directly or indirectly, in one or more Advisory Clients. The amount of an Access Person’s personal investment in an Advisory Client may change over time. An Access Person may decide to invest only in certain Advisory Clients and not in others. Such an investment in one Advisory Client and not another creates a potential conflict of interest in that it could cause Arini to make different investment decisions than if they did not have such a financial ownership interest. Arini has adopted written policies and procedures concerning allocation of investment opportunities among Advisory Clients in a fair and equitable manner. Arini, an affiliate, or other Advisory Clients (including those set up for co-investment purposes) can co-invest with an Advisory Client on a particular investment if Arini determines that such coinvestment is not likely to be detrimental to an Advisory Client and underlying investors. Arini and its affiliates could (a) earn management fees or performance-based compensation (which could be different than the fees and/or compensation charged with respect to the Advisory Client) in respect

of such co-investments and (b) collect customary fees in connection with actual or contemplated investments that are the subject of such co-investment arrangements. Arini may, from time to time, offer one or more Private Investment Fund investors or investors in other accounts managed by Arini, and/or other third party investors the opportunity to co-invest with an Advisory Client in particular investments. Arini is not obligated to arrange co-investment opportunities, and no Advisory Client or Private Investment Fund investor will be obligated to participate in such an opportunity. Arini has sole discretion as to the amount (if any) of a co-investment opportunity that will be allocated to another Advisory Client or Private Investment Fund investor and is entitled to allocate co-investment opportunities instead to investors in other accounts managed by Arini or third parties. Arini receives fees and/or allocations from co-investors, which differ as among coinvestors and also may differ from the fees and/or allocations borne by a particular Advisory Client. As an investment adviser with respect to the Advisory Clients, Arini may be subject to potential conflicts of interest between Arini or its related persons and Arini’s Advisory Clients beyond those posed by personal trading. The Advisers Act imposes certain requirements designed to decrease the possibility of conflicts of interest between an adviser and its clients. Therefore, in addition to the Code, Arini will maintain policies and procedures aimed at mitigating conflicts which may arise in trading based on material non-public information, participation in outside business activities by employees, political contributions, and gifts and entertainment that may be received and/or given by employees of Arini. Arini will also maintain policies to ensure that any potential conflicts of interest which are identified are mitigated and resolved in a manner that is consistent with Arini’s fiduciary duty to its Advisory Clients and in compliance with applicable laws and regulations. Arini and its personnel may have conflicts in allocating their time and services among the Advisory Clients. Arini devotes as much time to each of the Advisory Clients as it deems appropriate to perform its duties in accordance with its investment management agreements. In addition, Arini, its affiliates, partners, members and employees are permitted to conduct outside business activities. Pursuant to Arini’s policy on outside business activities, such activities are subject to disclosure and pre-approval. Arini and its related persons have a material financial interest with respect to fees paid by Advisory Clients. In addition, such related persons invest directly in certain of the Advisory Clients. These factors could create an incentive for Arini to make investment decisions that are different from those that would be made if such parties did not have such interests. Advisory Clients and Fund Investors are provided with clear disclosure as to how performance-based compensation is charged and the risks associated with such performance-based compensation prior to making an investment. The Code also seeks to ensure the protection of non-public information about the activities of the Advisory Clients. A copy of Arini’s Code of Ethics is available upon request. Family Offices / Foundations. Arini’s Chief Investment Officer has established, and other senior Arini personnel could establish, family offices (each, a “Family Office” and collectively, the “Family Offices”) to provide investment advisory, accounting, administrative and other services to their respective family accounts (including certain charitable accounts or foundations) in connection with their personal investment activities unrelated to their investments in Arini entities and their respective involvement in such Family Offices could require the respective resources and attention

of the Chief Investment Officer and/or certain senior personnel who may also have responsibilities to one or more Clients. These activities give rise to potential conflicts between the personal financial interests of such personnel and the interests of Clients (including investments that may contradict those of the Arini funds.) Arini has adopted procedures designed to mitigate potential conflicts of interest, but there can be no assurances that such procedures reduce or eliminate such conflicts of interest.

Arini, in selecting brokers and dealers, (including prime brokers) to execute transactions, provide financing and securities on loan, hold cash and short balances and provide other services, can consider, among other factors that are deemed appropriate under the circumstances, one or more of the following: (i) the ability to obtain timely execution and deliver timely execution reports; the responsiveness to Arini’s orders; (ii) the reliability, reputation, integrity and financial condition of the broker-dealer; (iii) the size and volume of the broker’s order flow; the ability to handle difficult trades, including block trades; (iv) the ability to find liquidity in the market while also minimizing market impact; (v) research and other services provided to Arini that are expected to enhance Arini’s general portfolio management capabilities; (vi) whether Arini or a related person receives client referrals from such broker-dealer; (vii) the accommodation of special needs, including the broker’s willingness to enter into commission sharing arrangements/give-up agreements; (viii) technological offering (i.e., latency and throughput) and (ix) commission rates, fees or market maker’s commission equivalent (i.e., mark-downs and mark-ups). If Arini determines in good faith that the commissions charged by a broker or the prices charged by a dealer are reasonable in relation to the value of the brokerage and research products or services provided by the broker or dealer, an Advisory Client may pay commissions to the broker or prices to the dealer in an amount greater than another might charge. Arini maintains policies and procedures to review the quality of executions, including periodic reviews by Arini’s investment professionals. Representatives of Arini may speak at conferences and programs for investors interested in investing in hedge funds which are sponsored by prime brokers. These conferences and programs may provide opportunities by which such person is introduced to prospective investors in a Fund. Generally, the prime brokers are not compensated for providing such “capital introduction” opportunities. In addition, prime brokers may provide financing and other services to a Fund and Arini. Consequently, such additional services by prime brokers may influence Arini in deciding whether to use the services of such prime brokers in connection with the activities of a Fund. Arini currently does not obtain third-party research services or products with Advisory Clients’ commissions. To the extent applicable in the future, Arini will seek to operate within the safe harbor provided by Section 28(e) of the US Securities Exchange Act of 1934, as amended. Arini utilizes investment research services offered by prime brokers, executing brokers and occasionally independent service providers in executing the investment program of its Advisory Clients. These research services include published research notes or reports, other material or

services suggesting or recommending an investment strategy or trade ideas (including in the form of software tools, programs or other technology), macroeconomic analysis, and access to research analysts or industry experts or participants (including expert networks on rare occasions). Arini considers access to research services and materials as integral to its ability to execute the investment program and that such services and materials will inform, and add value to, Arini’s investment decisions made on behalf of its Advisory Clients. Arini opened and maintains one or more research payment accounts to facilitate the payment for investment research. Occasional, one off research projects may be charged to the Advisory Clients externally from the RPA as part of operating costs and disclosed accordingly. The research payment account(s) will be funded by a direct charge to Advisory Clients based on an investment research budget set by Arini. Arini has adopted internal procedures (“Research Policy”), including a methodology for valuing investment research, such as criteria used to assess its quality and usefulness in the investment process. Arini’s policy is to calculate investment research budgets for each investment strategy employed by Arini on behalf of its Advisory Clients. The budgets are formulated based on factors such as the anticipated level of investment research usage, range and complexity of investment research products and services required in the investment process, asset classes, and emphasis on particular sectors or geographies. The costs of investment research are allocated to Advisory Clients based on the fair allocation methodology specified in the Research Policy. Subject to consistency with the Arini’s duty of seeking to obtain best execution, Arini is permitted to aggregate orders sent to the market for more than one account managed by Arini and determine an appropriate allocation method for such aggregated orders. Arini may use various allocation methods depending on the circumstances and consideration of various factors, including those below. Regardless of the allocation method chosen, adjustments may be made to allocations, such as to avoid excessively small allocations. Aggregated or block orders are subject to equitable allocation rules for partial fills. At such time, Arini will take into consideration, among other factors (a) assets under management by various strategies; (b) timing of execution of the relevant trade by various strategies; (c) importance of the trade to various strategies; (d) informal diversification requirements; (e) potential future availability of the trade for various strategies; (f) macro risk parameters set by investment personnel; and (g) investment personnel’s determination that dividing a product into “odd lots” would be impractical or could reduce the value of the product. This last factor is especially likely to apply in the case of investments in corporate debt securities, which may not be easily divided among accounts. Whilst Arini will use reasonable efforts to allocate investment opportunities among Advisory Clients in a manner which Arini deems appropriate over time (giving due consideration to the difference among the investment strategies employed on behalf of each Advisory Client), there can be no assurance that any Advisory Client will be treated fairly or receive a pro rata allocation of investment opportunities. Arini considers factors that it deems relevant in determining how to allocate investment opportunities among Advisory Clients, which factors may include differing investment objectives, time horizons, investment strategies, current portfolio holdings and weightings, tax considerations, regulatory implications, available capital, risk levels, development costs and other considerations.

Arini maintains a risk committee that manages, monitors, and aims to mitigate market, credit, and liquidity risks. Generally, Private Investment Fund investors receive written unaudited, performance updates on a monthly basis. In addition, Investors in certain funds will receive weekly performance estimates. Fund Investors are furnished with annual audited financial statements after the close of the fiscal year. Pursuant to the indenture governing the relevant CLO, the trustee to such CLO is required to deliver monthly reports to investors in such entity and other periodic reports regarding the collateral.

As permitted under the custody rule, investors in the Private Investment Funds, and certain SMA clients that are themselves commingled investment vehicles, are generally provided with their respective annual audited financial statements within 120 days of each year-end, in lieu of having a qualified custodian send account statements directly to such investors. Certain other Advisory Clients may receive account statements from a broker-dealer, bank or other qualified custodian on a quarterly or more frequent basis. In such cases, the Advisory Clients should carefully review those statements.

Such transactions may be conducted solely on an exception basis, subject to review and approval by the Chief Compliance Officer or a designee. It may be beneficial to cross these transactions to minimize or eliminate transaction costs, obtain better pricing, and/or to limit the market impact of the transaction. Arini has a potentially conflicting division of loyalties and responsibilities regarding both parties to cross transactions. Any cross transactions must be consistent with Arini’s best execution obligations to both affected Advisory Clients. If it appears that a trade error has occurred, Arini 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 and restrictions occur, Arini’s error correction procedure is to ensure that Advisory Clients are treated fairly. In the event that an Advisory Client incurs a trade error as a result of Arini’s gross negligence, willful misconduct or fraud, trade errors will be corrected by Arini as soon as practicable. Each situation requires a tailored response and accordingly will be dealt with on a case-by-case basis consistent with Arini’s fiduciary duty with respect to its Advisory Clients.

Prior to Arini voting any proxies, Arini will determine if there are any material conflicts of interest related to the proxy in question and, assuming no material conflicts of interest exist, confirm that the voting recommendation is consistent with the guidelines set forth in Arini’s Compliance Manual and is in the best interest of the appropriate Advisory Client. On occasion, Arini may determine not to vote a particular proxy. This may be done, for example, where: a) the cost of voting the proxy outweighs the potential benefit derived from voting; b) a proxy is received with respect to securities that have been sold before the date of the shareholder meeting and are no longer held in an Advisory Client account; c) the terms of an applicable securities lending agreement prevent Arini from voting with respect to a loaned security; d) despite reasonable efforts, Arini receives proxy materials without sufficient time to reach an informed voting decision and vote the proxy; or e) the terms of the security or any related agreement or applicable law preclude Arini from voting. Arini keeps a 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, and each Advisory Client request for proxy voting records and Arini’s response for at least the previous five years. Arini’s Advisory Clients may obtain (i) a copy of Arini’s proxy voting policies and procedures and (ii) information on how Arini has voted proxies with respect to the Advisory Client’s securities by contacting Arini’s Chief Compliance Officer.