The ACP Strategic Opportunities hedged equity strategy will generally have core investments in a broadly diversified portfolio of long/short equity hedge fund managers. Positions are also taken in funds that focus on certain sectors of the market (i.e., financial services, technology, healthcare, etc.). We estimate that these types of managers control about one half of the one trillion dollar hedge fund industry. On average, the strategy will be net long (approximately 20% to 40%) and have a gross exposure of approximately 100% to 130%. We attempt to diversify over a broad range of industry sectors and market capitalizations. Our strategy is currently invested in 15 underlying managers, a number which is expected to grow to 20 to 30 over time. Underlying fund turnover averages approximately 10% to 20% per year. The overall objective of the proposed strategy is to generate equity-like returns over a full market cycle, while incurring less risk. The strategies will generally have a long bias; however, returns should have a low beta and correlation with equities, thereby serving as a diversifier for traditional equity investments. Here are some steps we follow in line with our investment philosophy: 1) identifying quality managers with a proven ability to generate absolute returns under all types of market conditions; 2) careful, disciplined assessment of a manager's risk potential, including the manager's risk-management procedures and our ability to monitor the investment process and security selection continually; 3) analysis of each manager's performance pattern to ensure low correlation across the managers participating in the fund of funds; and 4) commitment to portfolio transparency in order to permit comprehensive, clear, regular client reporting of results.