Morgan Stanley Institutional

Fund of Hedge Funds LP

Fund Investment Objectives

Morgan Stanley Institutional Fund of Hedge Funds LP ("IFHF" or the "Fund") seeks capital appreciation by investing all of its assets in investment funds ("Investment Funds") managed by unaffiliated third-party investment managers ("Investment Managers") who employ a variety of alternative investment strategies in pursuit of attractive risk-adjusted returns (i.e., returns adjusted to take into account the volatility of those returns). These investment strategies allow Investment Managers the flexibility to use leveraged or short-sale positions to take advantage of perceived inefficiencies across the global capital markets. Philosophically, IFHF targets investments in Investment Funds that, in aggregate, have provided a low beta relative to broad market indices and have demonstrated a low volatility comparable to or below that of traditional fixed income benchmarks. IFHF invests in Investment Funds that employ a variety of alternative investment strategies, including relative value strategies, security selection strategies, specialist credit strategies and directional strategies. AUM begins January 2011.