Elm Ridge Capital Partners,


Fund Investment Objectives

The Fund's objective is to achieve a high total return, in variable market and economic conditions, while targeting preservation of capital. In pursuing the Fund's objective, the Investment Manager will establish positions using a disciplined and systematic valuation framework and an in-depth research process. The Fund is permitted to invest in and trade all types of equity and debt securities, but primarily will invest in publicly-traded equity securities of U.S. listed companies. The Investment Manager intends to construct a portfolio that generally contains 30 to 50 long positions and 40 to 60 short positions. The Fund primarily will follow a 'value' investment philosophy of purchasing assets at prices which are believed to be below their full economic value. The market price of such issuers may be temporarily depressed by visible near-term problems, because value is being overlooked by the market, or because of investor uncertainty or over-reaction to present business conditions. The Investment Manager believes that this strategy should result in long positions which have significant potential for appreciation. With respect to short positions, the Fund will sell short assets that the Investment Manager believes to be priced above their full economic value. The Fund will also look for evidence of deteriorating fundamentals that could call investors' optimistic views into question. The Investment Manager believes that a portfolio of overvalued businesses with such deteriorating fundamentals should provide opportunities for profitable short positions.