Pharo Gaia

Fund, Ltd.

Fund Investment Objectives

The objective of the Fund is to achieve consistently high absolute returns by investing mostly in local and foreign currency emerging market debt instruments. The Fund seeks to profit from opportunities that have recently appeared in the markets following the global credit crisis. The forced liquidation of assets which occurred in the second half of 2008 has created tremendous value in some currencies and bonds. These assets are expected to revert in the medium term to price levels which are aligned with their underlying fundamentals. The Fund will maintain a "long bias", i.e. it shall not sell investments short, except for the purpose of hedging existing long positions. The Fund may acquire currency exposure by investing directly in the foreign exchange market. The Fund may also use derivatives to create synthetic long investment positions or to hedge unwanted market exposure, but will always maintain a flat or long net exposure in any country or issuer. The Fund may opportunistically take positions in OECD markets if deemed appropriate by the Investment Advisors. The Fund may also invest in equity markets, provided that such exposure will not exceed 20% of the gross exposure of the Fund. The Fund's investment strategy mixes rigorous quantitative analysis with qualitative analysis based on the knowledge and experience of the Investment Advisors' investment teams. By maintaining a long bias while allowing itself to hedge up to 100% of its exposure, the Fund aims to generate relatively high returns when the global investment climate is propitious while preserving capital when liquidity dries up and risk appetite shrinks. The Fund's leverage, as measured by the greatest of the longs and the shorts, divided by the Fund's capital, will not exceed 1.75 times the Fund's net asset value.