Investment Strategy - The Market Neutral Master Fund (Class B Shares and Class B-R Shares). The Market Neutral Master Fund's strategy involves making event driven long and short investments in public lifescience companies, primarily in the biotechnology field and secondarily in the medical device and pharmaceutical fields. Those long and short investments will be balanced to create a portfolio that attempts to be market neutral and matches the long and short positions across a variety of clinical, technical, financial, and trading parameters. The Market Neutral Master Fund's strategy attempts to capitalize on the Investment Manager's ability to exploit market inefficiencies that result from the complexity of these companies' technologies and the clinical regulatory environment and marketplace. This is mainly done by rigorously evaluating future outcomes of key events. The Market Neutral Master Fund's strategy may, in rare instances, be enhanced by Private Investments in cases where the Investment Manager can negotiate attractive terms. The securities that will be purchased in Private Investment transactions include common stock issued at a discount, convertible securities with embedded put and call features, high-yield debt instruments with equity participation, and warrants to purchase common stock. Investments will be made predominately in target companies in which the Investment Manager identifies significant near-term events that will likely affect a company's stock price upwards or downwards. Such significant events include, but are not limited to: clinical trial results, unexpected side effects, market trends, additional indications for a drug or device, sales numbers, significant partnerships or joint ventures. The probability of positive or negative outcomes of these events, as well as their timing, will be analyzed in detail and is the basis of the Investment Manager's strategy. In some cases, such events may be likely to affect more than one company, creating an opportunity for pairs trading, or risk trading opportunities. The Market Neutral Master Fund combines this fundamental analysis with significant attention to risk reduction. The Investment Manager will seek to reduce risks at the specific company level and at the portfolio level by a disciplined structured investment process, which relies on rigorous data analysis and semi-quantitative analytic tools. To further reduce risk, the Market Neutral Master Fund will invest in a substantial number of companies, and will attempt to balance the long and short positions by market size, business model, and other technical, financial and trading parameters. This will sometimes require investments in companies that are not likely to have a significant near-term event, in order to diminish the market exposure resulting from a position that is likely to have such an event. The analysis of potential investments will take advantage of the significant scientific and medical background of the members of the Investment Manager, their experience in stock valuations and trading operations, as well as their wide network of clinical researchers, practicing physicians and colleagues in the lifescience field. The Investment Manager's strategy is market-neutral. Market-neutral will be defined in dollar terms, but beta-adjusted net exposure will also be closely followed. The net long exposure, [measured by ($ value of all long positions minus $ value of all short positions) divided by (total $ amount under management)] is expected to vary between -20 to 20%, depending on market conditions and the availability of attractive short selling opportunities. If at the end of the day the Market Neutral Master Fund's aggregate portfolio position should lie outside of this limit, it will be adjusted immediately at the next open trading opportunity. In general the market neutral position will be maintained through the use of stock positions, but occasionally equity and index options and other derivatives may be used. Notwithstanding its hedging strategies, the Market Neutral Master Fund's returns are expected to be volatile. Leverage is not expected to be an integral part of the Market Neutral Master Fund's investment strategy, and generally will be used little to a moderate amount. Due to the short-term event driven nature of the Investment Manager's strategy, a substantial amount of the Market Neutral Master Fund's taxable gains and losses will be characterized as short-term. The Market Neutral Master Fund will be semi-diversified. The Investment Manager expects the Market Neutral Master Fund, at any given time, will hold 10-35 long positions and 10-35 short positions. The Investment Manager will attempt to limit the Market Neutral Master Fund's initial commitment to any one position to no more than 5% of its capital invested, but this level may be exceeded from time to time. This Fund also has an onshore fund.