THIS SUMMARY IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES. OFFERS WILL BE MADE SOLELY BY MEANS OF A CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM. Its sole purpose is to provide general information regarding hedge fund investments. This summary does not describe all of the risk factors. To the extent that any of the information herein may be inconsistent with the private placement memorandum (PPM), the terms of the PPM shall govern.

U.S. hedge funds are usually U.S. private investment partnerships or limited liability companies invested primarily in publicly traded securities or financial futures. The classic hedge fund, which originated around the early 1950's, invests primarily in common stocks, taking short positions to hedge the portfolio. With the most recent proliferation of the derivatives markets and interest in global investing, the hedge fund industry has expanded to include a wide range of trading strategies or techniques, asset classes and instruments, which were not previously available.

Hedge funds are private investment partnerships that the SEC limits to 99 investors, within a roll fund and most investors must be "accredited." "Accredited" investors are often defined as investors having a net worth of at least $1 million. The SEC requires that hedge funds not advertise.

The benefits to investors are mainly in the opportunity to enhance portfolio returns and obtain additional diversification. In the case of a multi-strategy fund-of-funds that utilizes managers with various approaches, investors have the ability to further improve their overall portfolio risk profile. This risk reduction benefit arises because the styles of individual hedge fund managers are not highly correlated with one another and the hedge funds themselves have a low correlation to stocks and bonds.

Hedge fund managers and their investors are interested in absolute rates of return. They're not bound to the game of besting relative return benchmarks, such as the indices by which mainstream investors judge the performance of their managers. Consequently, hedge fund managers are much more likely to use leverage, derivatives, or highly concentrated on stocks, rather than the quasi-indexed positions often adopted by traditional money managers.

The growth of hedge funds has attracted the interest of an increasing range of investors, both within and outside the United States. Wealthy individuals and family groups, historically representing the majority of hedge fund investors have, more recently, been joined by institutions such as pension plans, endowments and foundations. While private partnership investments have not previously represented a significant component of overall institutional portfolios, they have recently gained increased acceptance, particularly among college and university endowments.

Hedge funds provide their performance advantage in the long run by not losing as much in down markets. Thus, hedge funds do what they should over time; provide hedged performance. According to research, hedge funds, on aggregate, have strongly outperformed both mutual funds and broad-market indicators, not only in returns but usually with lower risk and better protection in down markets.

For the period January 1, 1990 to October 31, 2002, hedge funds returned 14.5% net annually (based on HFRI Fund Weighted Composite Index) compared to 4.71% for the MSCI World Equity Index, 6.41% for the Russell 2000 Equity Index, 8.19% for the Lehman Aggregate Bond Index, and 9.84% for the S&P 500 Index. These hedge fund numbers are averages of a database of 1,350 U.S. and non-U.S. hedge funds. The superior hedge fund returns were achieved with excellent risk characteristics; i.e., significantly less risk of loss than the World Equity Index, less risk of loss than the Russell 2000 Index and the S&P 500 Index. Hedge funds do not do as well in terms of absolute returns as the stock market in years when the stock market goes up strongly.

Hedge funds have inherent in them an element of risk that is not present in the same degree in many other investments, such as mutual funds. That risk is the future use of bad judgment by the fund manager, particularly relating to highly concentrated portfolio positions and/or leverage. Many hedge funds use large amounts of leverage and the risk is often totally dependent on the judgment of its manager. While the history of hedge funds overall has been very good in this regard, there have been occasional hedge fund failures.

Minimum initial investments may be in the range of $250,000 to $500,000, even a minimum of $1 million or higher is not uncommon for more established funds. However, a fund-of-funds, which allocates its capital among several hedge fund managers, may be accessed with a lower minimum investment. This structure benefits the investor who could not otherwise obtain the diversification and lower volatility associated with a multiple manager portfolio.

The fee structure of hedge funds varies considerably. The managers are typically compensated based primarily on the fund's performance. The General Partner of the fund usually receives 20% of the profits in addition to a fixed management fee, usually 1% of the assets under management. Some funds charge incentive fees only in excess of a hurdle rate. Liquidity or redemption privileges vary from monthly to annually and generally after an initial waiting period.