Auk Capital

Partners

Fund Investment Objectives

The Partnership will primarily invest in event-driven situations, although the Partnership will not be restricted from pursuing other opportunities. Event-driven situations, as defined by the General Partner, include spin-offs, restructurings, bankruptcies and other unique situations less understood and generally less followed than general equity investments. The General Partner anticipates being a passive participant in most of these situations, but may seek an active role to exert changes in issuers' management, capital allocation or structure if and when necessary. While event driven opportunities will be the primary focus of the fund, the Partnership will also look for any opportunity to purchase any security below its intrinsic value. The General Partner follows a value investing mantra, and while it believes event driven opportunities are tremendous places to look for value, the Partnership will not be restricted in pursuing other opportunities. The key factor for any investment, event-driven or otherwise, is the ability to purchase an undervalued security with a substantial margin of safety. These situations are the situations that will be pursued by the Partnership. The Partnership will also follow a focused investment strategy. The Partnership is not restricted as far as concentration of assets, and a significant percentage of the Partnership's portfolio may be invested in five or fewer positions. The General Partner believes great investment ideas are few and far apart, and when a strong idea is identified, it must capitalize on the situation as much as possible. The Partnership will also short stocks it deems to be overvalued. While the Partnership will not attempt to be hedged or market-neutral, short positions may be a large percentage of the gross portfolio depending upon the number of short versus long ideas. Short positions will be used to add to the total return of the portfolio, not as a hedge for the portfolio. The Partnership may use margin borrowing from time to time as attractive opportunities present themselves or to facilitate short sales. As of January 1, 2014, the Fund added a hurdle rate of 6% per year.