Partners, Ltd

Fund Investment Objectives

Hourglass is an equity long/short hedge fund using a top-down and bottom-up investment approach which is fundamentally based. The top-down analysis of factors such as GDP, inflation, and interest rates guides our views on sector weightings. The bottom-up process screens both value and growth companies for those trading at significant discounts or premiums to their business or intrinsic values. For both long and short investments,we consider a company's cash flow generation, capital allocation ability, competitive barriers to entry, and whether management is shareholder oriented. We focus on free cash flow. We also analyze net asset value, including hidden assets and liabilities,such as overfunded pension plans, inventory values, real estate,and off-balance sheet obligations. The General Partner, Hourglass Capital LLC, closely monitors both individual security and portfolio position limits as well as correlation risk. Investments are assessed for their specific investment merits but also for their impact on net and gross portfolio exposure.The manager has capped gross portfolio exposure at 200% and individual security weightings at 15% based upon cost. Illiquid securities, including private investments,will not exceed 10% of partner capital accounts at purchase. AUM reflects the aggregate of the onshore and the offshore fund.