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Investment Objective And Strategy

The investment objective of the Fund is to seek the highest long-term return on capital consistent with principles designed to minimise the risk of capital loss.

The policies that the Fund will utilise to achieve such objective may vary but the Fund currently intends to invest principally as a “fund of funds”, investing in existing collective investment vehicles managed by the Investment Manager, and may also invest directly in managed accounts. The Fund will create a single Portfolio of assets and does not currently intend to have a separate portfolio of assets for each Class.

Investment Policies And Philosophy

Inseeking to achieve the investment objective of the Fund and in implementing its investment policies or strategy, the Fund may, indirectly via the collective investment vehicles or managed accounts in which it is invested, employ a wide range of investment techniques including, but not limited to, the following:

• trading and investing, both long and short, in a wide range of securities, currencies, commodities and related derivative instruments including, but not limited to, equities, equity related securities, bonds and other fixed income securities, swaps, listed and over-the-counter options, warrants, repurchase agreements, futures and forward contracts and indices;
• investing in collective investment vehicles, managed accounts, shares of other investment companies or other instruments providing investment exposure to underlying securities;
• purchasing and selling put and call options on securities and securities’ indices, and futures and forward contracts on currencies, government and private securities and securities’ indices. These techniques may be used both as independent profit opportunities and to hedge existing long and short positions.

The Fund shall have complete flexibility, through its underlying investments, as to the instruments and markets in which it may invest and the investment techniques it may use;

The base currency of the Portfolio will be US Dollars. Where the Operational Currency of a Class is not US Dollars, the Fund will enter into hedging arrangements on behalf of such Class in order to seek to minimise downside currency exposure.

Any excess funds held by the Fund will normally be invested in money market instruments or as otherwise deemed appropriate by the Directors.

The Fund is not restricted in effecting transactions by any specific limitations with regard to the portfolio turnover rate of its investments.

The Directors will not commingle the property of the Fund with the property of any other person, although securities owned by the underlying investment vehicles and other property of the Fund may be commingled by those firms which act as brokers and custodians for the underlying vehicles.

The investment objectives and policies of the principal funds and managed accounts which will comprise the initial Portfolio are also to achieve the highest long-term return on capital consistent with principles designed to minimise the risk of capital loss.

Investment Restrictions

The Fund has broad investment authority but currently intends to adhere to the following investment restrictions:

• the Fund will not employ leverage and will not borrow; and
• no single investment will be valued at more than 75% of the Net Asset Value of the Fund at the time of making the investment.

The Investment Manager will review the composition of the Portfolio from time to time to ensure that such restrictions have not been materially exceeded since the time of investment.

Investment Risks

There can be no assurance that the investment objective of the Fund will be achieved. The value of Shares may go down as well as up and there can be no assurance that on a redemption, or otherwise, investors will receive back the amount originally invested. Values of underlying investments may also fluctuate widely. Accordingly, the Fund is only suitable for investment by investors who understand the risk involved and who are able and willing to withstand the total loss of their investment. Investment in the Fund should be considered long-term in nature. Set forth below are certain factors which should be taken into consideration before making a decision to subscribe for Shares. While the Directors believe the following to be comprehensive, it is not intended to include all of the factors relating to the risks that the Fund, and the underlying investment vehicles and managed accounts in which it invests, may encounter.

• Political and/or Regulatory Risks
• Currency Risk
• Liquidity
• No Prior History of Fund Operations
• Cross-Class Liability
• Conflicts of Interest
• Investment and Trading Risk Generally
• Use of Derivatives
• Options
• Hedging and Arbitrage
• Changes in Investment Strategies
• Suspension of Trading
• Fees based on Net Asset Value
• Counterparty and Settlement Risk
• Dependence on Key Employees
• Non-Transferability of Shares, Restrictions on Redemptions and Compulsory Redemption
• Market Risks
• Trading in Futures Contracts
• Brokerage Commissions/Transaction Costs

Full details relating to the above identified risks can be found in the Offering Memorandum.

Investment Manager

The Fund has appointed City Fund Management Limited (“CFML”) as the Investment Manager. CFML was established in London, England in 1994 and is regulated by the Financial Services Authority.The directors and key personnel of City Fund Management Limited are set out below, together with their biographical details.

During the last 5 years the company has developed several products that have delivered consistent returns within a conservative risk adjusted framework. The track records of these products have featured in the top five of the MANAGED ACCOUNT REPORTING (MAR) database for offshore products.

Key personnel of the Investment Manager include:

Christopher Lee — Executive Chairman

Christopher Lee has a history of holding senior executive positions in the City with such institutions as Bankers Trust, Chemical Bank, Charterhouse Bank, Christiania Bank and Royal Trust and has held responsible positions in respect of market risk and trading in all of these. He is also Managing Director of City Risk Management Limited, a risk management consultancy, and whilst at Royal Trust was Managing Director of Royal Trust Investment Management. His executive position with CFML takes particular responsibility for client protection.

John Jackson — Senior Executive Officer

Mr Jackson became Managing Director and principal shareholder of CFML upon the formation of the company in November 1995. Prior to this, he held a number of senior management positions with major broking firms in the London Money Market between 1973 and 1981. He was one of the founding members of LIFFE, starting as joint Managing Director and shareholder in LCF Futures from 1981 to 1989. Subsequently, as the Senior Partner of JAK Futures, John Jackson has retained an active interest in the markets.

Robert McGregor — Non-Executive Director

Mr McGregor has been in the financial markets for over 30 years and has a wide range of skills and experience in the financial arena. His early career was spent in trading, predominantly for major US Banks, and he has extensive knowledge of the derivatives arena. He has been associated with City Fund Management Limited for over 10 years in his capacity as Finance Director and has been closely involved in the development and growth of the company. He has also been responsible for all aspects of compliance, both for City Fund and for its associated offshore funds. He has recently relocated to Grand Cayman in the Cayman Islands to open a new office for City Fund Management.

Full details of the Fund can be obtained by reading the Offering Document