Black Diamond

Arbitrage Ltd.

Fund Investment Objectives

Black Diamond Arbitrage is a single-strategy fund dedicated to Carlson's Event-Driven strategy. Mergers and acquisitions are the primary focus of this strategy, but other corporate events may include restructurings, bankruptcies, spin-offs or significant litigation. The goal is to uncover securities with a favorable risk-reward ratio based on the probability that the desired event will occur. An appropriate hedge is then developed in an effort to minimize exposure to market risk and attempt to ensure that, if events unfold as anticipated, the investment is likely to generate the expected returns.** Please Note- From July 2011 forward, the numbers reflect the deduction of a 1.0% management fee. From August 2007 to June 2011, the numbers reflect the deduction of a 1.5% management fee. Prior to this date, the performance represents the deduction of a 1% management fee. The numbers reflect the deduction of a 20% performance fee. Investments in series of interests with lower fees will result in higher returns. Some series are no longer available for new investment. Please refer to the Offering Memorandum for fees and other terms applicable to the various series available to investors.