The Continental Healthcare Funds are invested long and short in companies operating primarily in the healthcare industry (e.g., distribution, providers, managed care, pharmaceutical services, devices, etc.). Continental seeks to preserve and grow capital by combining attractive attributes of traditional hedged equity portfolios with modern risk management tools and practices. The firm relies on fundamental valuation measures driven by projected cash flows in evaluating an issuer's investment merit. We attempt to develop and exploit a competitive advantage in security selection by focusing on specific industries and/or specific subsectors within industries. We hold concentrated portfolios that will typically consist of 25 to 50 different companies. Our long side investment process is strategic while the short side is tactical. We employ conservative levels of leverage (maximum 1.5X capital).