The five principles that drive our investment approach are:

• Multi-Strategy
• Risk Index
• Global Active Allocation
• Market Neutral
• Diversification

Multi-Strategy

We believe style-based investing (large-cap, mid-cap, growth, value, etc) uses arbitrary definitions, and can limit the portfolio manager from pursuing the very best ideas. Our holdings are not limited to any single style (growth versus value) or asset class (stocks versus bonds). The goal of each strategy is to meet a client's investment objective by investing in the asset that best achieves that objective while maintaining a predefined risk profile.

These objective-based strategies are: Opportunity, Capital Growth, Total Return, Income, and Preservation.

Risk Index

We believe the risk associated with any asset can be measured by three factors: valuation, liquidity and technical.

• Valuation Risk is defined as the extent to which price implied expectations over/understate an asset's correct intrinsic value- present value of future cash flows.
• Liquidity Risk is defined as the change in capital flows that sustain or propel prices to new levels.
• Technical Risk is defined as the price momentum of an asset or a related asset.

Global Active Allocation

We believe the return on individual assets is highly correlated with the overall direction of the market. We aim to strike a balance between a top-down and a bottom-up approach. We monitor secular trends and business cycles in the G20 nations by monitoring our Risk Index. We define an investment period as the time horizon in which the current economic and market conditions will prevail. Once we have identified the best opportunities in the upcoming period, we look for individual securities that offer the greatest opportunity to outperform the benchmark.

Market Neutral

We believe a portfolio should make money in an up or down market by taking advantage of long and short positions. By buying undervalued assets and selling overvalued ones, we also intend to reduce the volatility of the overall portfolio, particularly to external shocks such as natural disasters and terrorism. The net direction of the portfolio at any given time depends on our Risk Index.

Diversification

We believe diversification lowers the risk of losing capital. We generally allocate our portfolio to the best 25-30 ideas. While diversification lowers the risk of losing capital, focusing on the very best ideas enables each position to have a meaningful impact on the overall portfolio. Ultimately, this principle aims to strike a balance between "not putting all of your eggs in one basket" and "not spreading yourself too thin."