Waterfall Victoria ERISA

Fund, Ltd.

Fund Investment Objectives

Waterfall Victoria Fund, Ltd.'s (the "Fund") investment objective is to seek to achieve attractive risk adjusted returns primarily through investing in credit-sensitive or distressed consumer and commercial loans, mortgage-backed securities ("MBS") and other asset-backed securities (collectively, "ABS"), and related financial instruments. Waterfall Asset Management, LLC (the "Investment Manager") focuses on investments in distressed and high-yield structured finance securities and consumer and commercial performing and non-performing loans (collectively, "NPLs"). The Fund was launched with an initial focus on non-performing residential mortgages and MBS, but invests opportunistically in additional sectors offering superior relative value, such as small-balance commercial mortgage loans. Where possible, the Investment Manager seeks investments where it can exercise some degree of control over loss mitigation, targeting returns that are driven by capital gains from purchasing ABS or NPLs at discounts and seeking exits from such investments at higher prices through proprietary loss mitigation programs. The Investment Manager may either execute loss mitigation plans for each investment directly, or contract with third-party loan servicers or asset managers with oversight by the Investment Manager. The Fund has engaged third-party loan servicers, and may engage additional third-party loan servicers in the future (each, a "Special Servicer" and collectively, the "Special Servicers"), to assist with its investment strategy, including the management of the upkeep, marketing and ultimate sale of real estate that results from the conclusion of a foreclosure (an "ROE"). The Fund may also make equity investments in operating companies that are strategic in nature and promote returns on NPL or ABS investments, such as lending or servicing companies. The fund incorporated on November 4, 2010. Please note this fund offers a preferred return of 8% to investors. Once the preferred return has been achieved, 100% of the additional return is paid to the manager.