Arbitrage Fund Class B

Fund Investment Objectives

The objective of the Fund is to earn low-volatility returns by investing in a mix of arbitrage, credit, special situations, event-driven and value opportunities. The objective of the Fund is to earn low-volatility and value opportunities. LAF has a 24-year track record of delivering solid risk-adjusted returns through active portfolio management. The Fund attempts to deliver low-volatility returns by virtue of creating a diversified multi-strategy portfolio. The Fund has a broad investment universe which has historically allowed for positive performance in the absence of favoring any one sector. Capital preservation is integral to the strategy and is achieved by maintaining a disciplined approach towards managing risk. We hedge in an attempt to dampen volatility. We use options, short sales, ETFs and forwards and may engage in futures or other hedging techniques. Our investment team regularly reviews the entire portfolio from both a bottom-up and top-down perspective and makes investment decisions accordingly. The Fund invests both in the United States and abroad. The investment team regularly reviews available resources for potential investments and, if an opportunity appears attractive, initiates dialogue with management teams and creates financial models. The investment team has a wide range of experience and a long history of trading an eclectic array of instruments. Regardless of which strategy the Fund is pursuing, the team endeavors to understand the risks, rewards and principal dynamics driving each investment. Disclaimer: The historical return statistics shown herein are calculated by Pertrac using the month-over-month compounded return for the Loeb Arbitrage Fund Class B Interests as of February 29, 2012. The date of inception of the B Class is May 2008; returns prior to the inception of this class are estimates calculated by retroactively applying the fee structure of the B Class (1.5% management fee and 20% performance fee) to the actual gross returns (prior to application of management and performance fees) of Class A Interests. AUM reflects the aggregate of the various share classes and is denominated in USD.