KS Capital

Partners L.P.

Fund Investment Objectives

KS Management Corp. (the "Firm") pursues a value oriented, event-driven approach to investing, specializing in U.S. distressed and risk arbitrage investments. The Firm uses its experience in bankruptcies, restructurings, mergers and reorganizations to take advantage of disparities that often exist between market prices and realizable value. The Firm believes that the nature of these situations, where outcomes are determined by specific events and catalysts, may provide attractive returns with low correlation to broader equity and debt markets. The Firm does not have an asset allocation bias, but instead allocates opportunistically, seeking investments with the highest risk-adjusted return potential. Distressed: A significant portion of capital is invested in distressed securities, which are securities of companies experiencing financial or operating difficulties that often address these difficulties through a debt restructuring, Chapter XI reorganization or liquidation. The subject companies of distressed securities may be involved in various stages of bankruptcy. Difficulties of subject companies may have resulted from poor operating results, catastrophic events or excessive leverage. The Firm believes that a disparity often exists between the market price of distressed securities and their realizable value. Risk Arbitrage: The Firm's arbitrage investments are in securities of companies that are the targets of cash takeovers, stock-for-stock mergers, as well as hostile takeovers or other corporate reorganizations where a disparity exists between the market price of the security and the value to be received upon successful consummation of the reorganization. Conservative Approach: The Firm takes a conservative approach to investing, limiting leverage and complex derivatives, and focusing on capital preservation. * Merger Arbitrage portfolio is primarily focused on deals with definitive agreements * Distressed portfolio has a bias towards senior and/or secured investments and liquidations. Broad Opportunity Set: The Firm participates in the full range of traditional distressed and merger arbitrage opportunities. However, the Fund's size allows it to also take advantage of smaller situations that may provide attractive risk adjusted returns such as: * Smaller companies (companies with total debt less than $1bn) * Smaller debt issues of large companies (unique debt issues of $300mm or less) * Merger arbitrage opportunities in debt * Small and mid-cap merger transactions Attractive risk adjusted returns are possible in part due to reduced competition from larger investment managers where availability or lack of liquidity make it difficult or undesirable to size up positions. Smaller companies may also be underfollowed and underappreciated. The team utilizes the same conservative approach to smaller situations focusing on senior and/or secured debt in distressed and definitive deals in arbitrage.