Taiga Fund A


Fund Investment Objectives

The investment objective is to create long term capital appreciation for its investors by investing in a limited number of mainly publicly listed European companies. The Fund seeks to achieve its investment objective principally by investing in mis-priced equity and equity-related securities; and (ii) adding value to long positions through pro-active ownership. Taiga Fund's ambition is to produce attractive risk adjusted returns, but also high absolute returns. The fund is best described as a "best ideas fund" where every position entered is based on high conviction investment ideas both on the long and the short side. The fund does not take on any general exposure in financial markets where the investment manager has not formed a fundamental view on the prospects of the underlying securities. Cash is a perfectly good alternative to half-baked investment ideas and the fund will at times have significant cash on hand. The fund seeks to identify attractive investment opportunities in European (mainly Nordic, publicly listed) small-cap equities with market capitalisations of up to ? 2bn at the time of investment. Smaller companies receive less attention from investors, and the Investment Manager expects to gain superior insight through proprietary research and access to management of the companies in question. The approach is value oriented with limited emphasis on overall equity market outlook. The portfolio is concentrated and long biased. 8-10 core long positions are expected to constitute a majority of the portfolio's risk and capital at any point in time. The Fund will typically seek to invest in companies with an open shareholder structure, where the Fund can exert influence through a pro-active ownership approach. Companies that do not have any single shareholder or group actively controlling more than 20% of the voting rights often fall into this category. The Investment Manager has identified more than 300 companies in the Nordic region that fit these criteria, and numerous more that have a majority of traditionally passive owners. With a significant ownership position, the Investment Manager will seek to gain influence in the companies through constructive dialogue with management and other shareholders. The Fund will promote clear corporate strategy with focus on shareholder values and support good corporate governance and investor communication. The Investment Manager will in particular seek to secure a prudent investment policy and act as a guard against dilutive acquisitions. If appropriate, the Investment Manager will seek to nominate members to governing bodies in underlying companies, including at the board of directors level, but will not be directly represented as directors in any public companies. A long biased, concentrated and small-cap oriented portfolio implies liquidity risk. The Investment Manager will seek to balance this risk by investing in mature companies with established businesses, good profitability and viable balance sheets in relation to operational leverage and cyclicality. The fund is expected to maintain limited leverage at the fund level. Short positions are entered into on an opportunistic basis primarily to provide return (rather than for hedging purposes). Companies typically have excessive valuations and/ or weak balance sheets, in relation to operating leverage and profitability outlook, and the Investment Manager has a high conviction for near term deterioration. The Investment Manager has significantly higher liquidity requirements with regards to short positions and there is no upper restriction in terms of market capitalisation. The Fund will generally avoid taking short positions in the shares of companies with a market capitalisation below ?250 million. Risk management in Taiga Fund is embedded in the stock selection process. By looking deeply into each investment case we measure risk in terms of financial leverage, cyclicality, structural growth factors, operational leverage and earnings visibility. We invest only when risk/ reward is strongly tilted in our favour. AUM was reported in EUR prior to 07/01/2012. AUM reflects the aggregate of the various share classes and is reported in NOK.