Morgan Stanley Liquid

Markets Fund II LP

Fund Investment Objectives

Morgan Stanley Liquid Markets Fund II LP ("LMF II") seeks capital appreciation principally through investments in investment funds ("Investment Funds") managed by investment managers who employ a variety of investment strategies and tends to invest in funds that may include relative value strategies, security selection strategies, event driven strategies and specialist credit strategies. Philosophically, LMF II targets investments in Investment Funds that, in aggregate, have provided low systematic risk (low beta relative to broad market indices) and have demonstrated a low volatility comparable to or below that of traditional fixed income benchmarks. LMF II pursues a diversified investment orientation. Through the selection and ongoing monitoring of Investment Funds, LMF II seeks to achieve capital appreciation that is neither highly correlated with fixed income or equity indices nor disproportionately influenced by the performance of any single Investment Fund. In addition, by constructing a portfolio that is comprised of a number of Investment Funds, LMF II seeks to achieve the desired capital appreciation with lower volatility than likely would be achieved by investing in most individual Investment Funds. Management Fee is 1.50% is less than $5M and 1.25% is greater than or equal to $5M. AUM begins January 2011.