CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM

relating to Participating Shares in

Global Umbrella Fund

(a Cayman Islands exempted company with limited liability)

Recipients Name:

_______________________________ Memorandum Number:

Date:

THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN

OFFER TO BUY PARTICIPATING SHARES IN THE FUND IN ANY JURISDICTION OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SALE. AN INVESTMENT IN
THE FUND IS SPECULATIVE AND IS NOT INTENDED AS A COMPLETE INVESTMENT PROGRAM.
UPDATED MARCH 2010

TABLE OF CONTENTS
CLAUSE

PAGE

SUMMARY OF THE OFFERING .................................................................................................................. 2

DIRECTORY ................................................................................................................................................. 3
DEFINITIONS ............................................................................................................................................... 4
INVESTMENT OBJECTIVE, STRATEGY AND POLICY ............................................................................. 6
INFORMATION ON THE DIRECTORS, THE INVESTMENT MANAGER, ADMININISTRATOR AND
OTHER ADVISERS .................................................................................................................................... 11
FEES AND EXPENSES .............................................................................................................................. 16
DETERMINATION OF NET ASSET VALUE .............................................................................................. 18
THE PARTICIPATING SHARES AND ARTICLES ..................................................................................... 19
ADDITIONAL INFORMATION .................................................................................................................... 24
RISK FACTORS .......................................................................................................................................... 26
SUBSCRIPTION INSTRUCTIONS ............................................................................................................. 30

This Memorandum does not constitute an offer to sell or a solicitation of an offer to buy Participating
Shares in the Fund in any jurisdiction to any person to whom it is unlawful to make such an offer or
sale.
The shares in the Fund offered pursuant to this Memorandum have not been registered with or
approved by any regulatory authority, (with the exception of filing this document with the Cayman
Islands Monetary Authority), nor has any such authority passed upon the accuracy or adequacy of this
Memorandum. Any representation to the contrary is unlawful.
No public or other market is expected to develop for the shares in the Fund. The shares in the Fund
offered hereby may be sold, transferred, hypothecated or otherwise disposed of only upon the terms
set out in this Memorandum and the Articles of the Fund which include the requirement to obtain the
prior written consent of the Directors which may be withheld without the provision of any reasons. The
Fund has the right compulsorily to redeem the shares of an investor at any time for any reason or for
no reason.
Investment in the Fund involves special risks, and purchase of the shares in the Fund should be
considered only by persons who can bear the economic risk of their investment for an indefinite period
and who can afford a total loss of their investment (see Risk Factors below).
The Fund reserves the right to modify, withdraw or cancel any offering made pursuant to this
Memorandum at any time prior to consummation of the offering and to reject any subscription, in
whole or in part, in its sole discretion.
No offering materials will or may be employed in the offering of shares in the Fund except for this
Memorandum (including appendices, exhibits, amendments and supplements hereto) and the
documents summarised herein. No person has been authorised to make representations or give any
information with respect to the Fund or its shares except for the information contained herein.
Investors should not rely on information not contained in this Memorandum or the documents
summarised herein.
This Memorandum is intended solely for use on a confidential basis by those persons to whom it is
transmitted by the Fund in connection with the contemplated private placement of shares in the Fund.
Recipients, by their acceptance and retention of this Memorandum, acknowledge and agree to
preserve the confidentiality of the contents of this Memorandum and all accompanying documents
and to return this Memorandum and all such documents to the Fund or the Administrator if the
recipient does not purchase any shares in the Fund. Neither this Memorandum nor any of the
accompanying documents may be reproduced in whole or in part, nor may they be used for any
purpose other than that for which they have been submitted, without the prior written consent of the
Fund.
Neither the Fund, the Administrator nor the Investment Manager is making any representation to any
offeree or investor in the Fund regarding the legality of investment by such offeree or investor under
applicable investment or similar laws.
This Memorandum is based on the law and practice currently in force in the Cayman Islands and is
subject to changes therein. No invitation to the public in the Cayman Islands to subscribe for any
shares in the Fund is permitted to be made. This Memorandum should be read in conjunction with the
Articles of the Fund.
Investors are not to construe the contents of this Memorandum as legal, business or tax advice. Each
investor should consult his own attorney, business adviser and tax adviser as to legal, business, tax
and related matters concerning this offering.
The distribution of this Memorandum and the offer and sale of the shares in certain jurisdictions may
be restricted by law. Prospective investors should inform themselves as to the legal requirements and
tax consequences within the countries of their citizenship, residence, domicile and place of business
with respect to the acquisition, holding or disposal of shares, and any foreign exchange restrictions
that may be relevant thereto.

SUMMARY OF THE OFFERING

This summary is qualified in its entirety by the more detailed information included, or referred to, in
this Memorandum.
Global Umbrella Fund (the "Fund") was incorporated as an exempted limited liability company under
the provisions of the Companies Law (as amended) of the Cayman Islands on 8 February 1999.
The Fund utilizes an umbrella structure designed to give investors the flexibility of assembling a
diversified portfolio of funds (each, a Sub-Fund) with relatively low transaction costs associated with
making changes in the portfolio. The Fund currently consists of four Sub-Funds, the U.S. Hedge
Fund, the European Hedge Fund, the Japan Asia Hedge Fund, and the Advanced Sciences Fund.
Each Sub-Fund will seek capital growth, while utilizing multiple investment advisors to give investors
the risk control benefits of diversification.
As discussed under Investment Objective, Strategy and Policy, each Sub-Fund will consist of a
number of subportfolios (each a Subportfolio), each of which constitutes a portion of such SubFunds overall portfolio.
Additional information regarding each Sub-Fund, including more detailed information regarding each
of its Subportfolios, is set forth in the following Addendums to this Memorandum:
Addendum A U.S. Hedge Fund
Addendum B European Hedge Fund
Addendum C Japan Asia Hedge Fund
Addendum D Advanced Sciences Fund
Each Addendum will be updated from time to time after the date of this Memorandum to reflect,
among other things, changes in the identity of the Subportfolios of the relevant Sub-Fund.
Participating Shares of each Sub-Fund will be offered for sale on a continuing basis at the
Subscription Price. The minimum initial subscription amount in the Fund is $100,000 per investor,
which may be invested in any single Sub-Fund or divided among the various Sub-Funds in such
proportion as the investor determines (provided the initial investment and any subsequent investment
in each Sub-Fund is not less than $10,000). The Fund reserves the right to raise or lower the
minimum initial subscription amount.
The Directors have the right, in their sole discretion and at any time and from time to time, to issue
new classes of shares in the capital of the Fund upon such terms and in such manner as they may
determine. These shares will generally participate directly in the investments in respect of which the
net proceeds of issue are utilised.
ALL POTENTIAL INVESTORS SHOULD CAREFULLY REVIEW THE INFORMATION PRESENTED
IN THE "RISK FACTORS" SECTION SET OUT BELOW FOR A DESCRIPTION OF CERTAIN
RISKS ASSOCIATED WITH AN INVESTMENT IN THE FUND (INCLUDING THE RISK OF A
COMPLETE LOSS OF THEIR INVESTMENT).

DIRECTORY
The Fund

Global Umbrella Fund

c/o Walkers Corporate Services Limited
Walker House
87 Mary Street
George Town
Grand Cayman KY1-9005
Cayman Islands

Class A Directors

Maha Al-Ghunaim
Bader Al-Sumait
Abdulla Al-Sabah

Class B Directors

Robert Howe
Sandy Shaw
Steven Skancke

Investment Manager

Global Investment House (K.S.C.C.)

PO Box 28807
Safat 13149
Kuwait

Administrator, Registrar and

Transfer Agent
Citi Hedge Fund Services (Ireland), Limited
1 North Wall Quay, Dublin 1
Ireland.
Custodian

Citibank N.A. London

25 Canada Square, Canary Wharf, London E14 5LB,
England

Auditors

PricewaterhouseCoopers
Strathvale House
90 North Church Street
PO Box 258
George Town
Grand Cayman KY1-1104
Cayman Islands

Legal Advisers
(as to Cayman Islands law)

Walkers (Dubai) LLP

PO Box 506513
Fifth Floor
The Exchange Building
Dubai International Financial Centre
Dubai
UAE

DEFINITIONS
"Administrator" means Citi Hedge Fund Services (Ireland), Limited or such other administrator as
appointed from time to time;
Articles means the Memorandum and Articles of the Fund, as amended, substituted or
supplemented from time to time;
"Auditors" means PricewaterhouseCoopers or such other auditors as appointed from time to time;
"Business Day" means any day other than Saturday or Sunday or any other day on which the banks
in Dublin, Ireland, Geneva, Switzerland or New York, New York are obligated or authorised to remain
closed, and any such other day classified as a business day by the Directors from time to time;
"Custodian" means Citibank N.A. London or such other custodian as appointed from time to time;
"Dealing Day" means either (i) the first Business Day of any month (in the case of the U.S. Hedge
Fund, the European Hedge Fund and the Japan Asia Hedge Fund) or (ii) the first Business Day of any
calendar quarter (in the case of the Advanced Sciences Fund);
"Directors" means the directors of the Fund for the time being, or as the case may be, the directors
assembled as a board or as a committee thereof and "Board of Directors" shall have a corresponding
meaning;
"Fiscal Year" means the period beginning on 1 July of each year and ending on 30 June of the
following year, or such other period or periods as the Directors may from time to time determine;
"Fund" means Global Umbrella Fund, a Cayman Islands exempted company;
"Investment Manager" means Global Investment House (K.S.C.C.);
"Law" means The Companies Law of the Cayman Islands (as amended);
"Management Shares" means the voting non-participating shares of par value $0.001 each in the
capital of the Fund;
"Memorandum" means this Private Placement Memorandum as amended, substituted or
supplemented from time to time;
"Minimum Holding" means Participating Shares having a Net Asset Value as at the last Valuation
Day of not less than $50,000;
"Minimum Investment" means the minimum initial subscription amount from each investor is
$100,000. The Directors may in their discretion raise or lower the minimum initial subscription
amount;
"Net Asset Value" means the Net Asset Value of the Fund, a Sub-Fund, or the Participating Shares
or any class thereof as the context may require;
"Participating Share" means a participating redeemable share of $0.001 nominal or par value each
in the capital of the Fund. All references to "Participating Shares" herein shall be deemed to be
Participating Shares of any or all classes or series as the context may require;
"Participating Shareholder" means the person registered as the holder of a Participating Share in
the register of members of the Fund required to be kept pursuant to the Law;
"Redemption Notice" means the Redemption Notice in the form attached as Appendix B to this
Memorandum or in such other form as the Directors may from time to time determine;

"Redemption Price" means the prevailing Net Asset Value per Participating Share of the relevant
class as at the relevant Valuation Day;
"Subscription Form" means the Subscription Form in the form attached as Appendix A to this
Memorandum or in such other form as the Administrator or Directors may from time to time determine;
Sub-Fund means a portfolio that will consist of a number of subportfolios (each a Subportfolio),
each of which constitutes a portion of such Sub-Funds overall portfolio.
"Subscription Price" means the prevailing Net Asset Value per Participating Share;
"Valuation Day" means the day upon which the Net Asset Value is calculated, being the Business
Day immediately before a Dealing Day and such other day or days as the Directors may from time to
time determine either generally or in any particular case.
Capitalised terms used in this Memorandum and not otherwise defined in this Memorandum, have the
meanings ascribed to them in the Articles of the Fund and references to US$ or $ are references to
the lawful currency of the United States.

INVESTMENT OBJECTIVE, STRATEGY AND POLICY

Investment Objective
The primary investment objective of each Sub-Fund will be to seek to provide investors with an annual
rate of return that is 600-800 basis points above the yield on a one-year U.S. Treasury Bond for the
corresponding year, as determined by the percentage change in the Citigroup/Salomon Brothers One
Year Treasury Index (Bloomberg ticker SBTSY1) from the beginning to end of that year. Each SubFund will consist of a number of subportfolios (each, a Subportfolio), each of which constitutes a
portion of such Sub-Funds overall portfolio. The Subportfolios of each Sub-Fund are identified in the
Addendum pertaining to such Sub-Fund. The Fund may offer additional Sub-Funds in the future.
Subportfolios may change from time to time, as described below. The structure of the Fund may be
represented as follows:

Each of the Sub-Funds will use a multi-advisor investment approach. The Investment Manager does
not expect that the Sub-Funds will have a significant correlation with traditional equity or fixed-income
investments. Each Sub-Fund will utilize investment advisors primarily through collective investment
vehicles sponsored by the investment advisors in which the assets of the relevant Sub-Fund are
pooled with the assets of other investors, such as investment partnerships or companies, mutual
funds and unit trusts, as well as through separate accounts managed on a discretionary basis
specifically for such Sub-Fund.
The Investment Manager believes that an investment portfolio incorporating various Subportfolios can
offer significant benefits. To the extent that the Subportfolios of a Sub-Fund pursue different
investment strategies, the risk/return characteristics of such Sub-Fund may be more attractive than
traditional, long-only strategies. Investment objectives and guidelines of Subportfolios may be
structured to provide more flexibility to capitalize on market opportunities and adapt to adverse market
conditions. Structural advantages for investment advisors, including incentive compensation, tend to
attract the most talented and capable professionals and align the interests of the investor and the
investment advisor.
An allocation to alternative strategies may add a valuable element of diversification to investment
portfolios that are otherwise dominated by conventional equity and fixed-income investment styles.
The Fund may utilize a variety of investment strategies to achieve market exposure in equities and
interest rates. Strategies may be categorized into four broad groups, as outlined below.
(1) Relative Value Hedging Convertible bonds and warrants
Fixed income arbitrage
Statistical arbitrage
Long and short equities
6

 Income arbitrage
(2) Opportunistic investing
Equities
Fixed income and currencies
- Managed Futures
(3) Specialized Equity and Debt
Hedged
Short selling
(4) Event Driven
Merger arbitrage
Distressed securities
Bankruptcies
Using a multi-advisor investment approach, the Investment Manager seeks to provide investors in a
Sub-Fund with:
(a)

diversification among a group of highly skilled investment advisors within the various
strategies, although the precise level of diversification will depend on the extent to which the
Investment Manager selects investment advisors deploying differing investment strategies;

(b)

utilization of investment advisors not otherwise accessible to many investors;

(c)

professional screening, selection and monitoring of investments and investment advisors; and

(d)

accounting and administrative support in the operation of the multi-manager investment

approach.

In identifying and evaluating investment strategies, the Investment Manager will assess:
(a)

the expected returns from a given strategy during a period of time;

(b)

the expected variability of those returns;

(c)

the magnitude of a potential extreme case loss;

(d)

the effects of different investment and economic environments on the strategies returns;

(e)

the cost of implementing different strategies, including transactions costs and fees and
expenses paid to investment advisors;

(f)

the quality and caliber of investment advisors available to implement the strategy, as well as
the potential benefits of alternative investment styles; and

(g)

the fundamental or technical basis driving the expected profitability of the strategy.

Relative Value Hedging

In general, relative value hedging strategies seek to profit by exploiting pricing inefficiencies between
related securities while remaining neutral to directional price movements in any one market. Every
relative value strategy consists of an exposure to some second order aspect of the market, such as
implied volatility (or premium) in convertible bonds and warrants, the yield spread between similar
term government bonds, the yield or swap spread between government and corporate bonds or the

price spread between different classes of stock issued by the same company. The returns from these
relative value strategies are generally derived from those second order risks.
Opportunistic Investing
Opportunistic investing seeks to exploit opportunities in various markets. These investment advisors
are active in listed and over-the-counter cash and derivatives markets, may use leverage in varying
amounts and may take positions that are directional (in contrast to relative value positions). They
often seek to maintain the flexibility to shift the allocations of their portfolios quickly in response to
changing market conditions and opportunities.
Specialized Equity/Debt
The specialized equity/debt segment includes alternative investment strategies in the equity and fixed
income markets. This segment of the portfolio includes a number of niche investment strategies
which, with few exceptions, are absolute return oriented. The strategies include:
Equities - Hedged: Hedged equity investment advisors purchase stocks which they perceive to be
undervalued and sell stocks which they perceive to be overvalued. The investment advisors in this
category tend to be micro investors who deploy relatively small amounts of capital and possess a
great deal of knowledge about the companies in which they invest. Some hedged equity investment
advisors are value oriented, while others are growth oriented. In addition, some investment
advisors can be further distinguished by industry sector concentration. These investment advisors
generally seek to maintain the flexibility to vary the market exposure of their portfolio from net short to
net long and may use moderate leverage. Hedged equity investment advisors use short selling of
individual stocks as well as equity index futures and options to control market exposure.
Equities - Short Selling: Short selling investment advisors sell short equities based upon fundamental
analysis in an effort to profit from declining equity prices. In the Investment Managers experience,
this strategy has been a better hedge against declining equity markets than taking short positions in a
broad equity index (such as the S&P 500 Index). Short selling may be utilized as a hedge against the
natural long bias of certain strategies.
Event Driven
The event driven component consists of a number of strategies that profit from the successful
underwriting of particular events. This category includes merger arbitrage, distressed securities and
bankruptcy investing, as well as event-related special situations investing (e.g., stubs, spinoffs,
liquidations). Event driven investment advisors do not rely on market direction for results; however,
major market declines, which would cause transactions to be repriced, may have a negative impact
on the strategy.
Evaluation of Investment Advisors
In evaluating a prospective investment advisor, the Investment Manager will consider both qualitative
factors (such as investment process, integrity, sources of investment ideas, talent, research
methodology, dedication, valuation methodology, risk management techniques, personal investment,
method of operation, organization and staff, background and liquidity) and quantitative factors (such
as rate of return, standard deviation of return, Sharpe ratio, correlation with various market indices,
performance compared to other investment advisors using the same strategy, worst period of loss,
assets under management and fees).
Monitoring of Strategies and Investment Advisors
The Investment Manager will monitor the performance of the strategies chosen and of the different
investment advisors operating within each of these respective strategies. In the case of most of the
collective investment vehicles with which the Sub-Funds will invest, the Investment Manager will not
receive actual trading records, but will be sent periodic performance reports and audited financial
statements.

Adjustment of the Portfolios

Although the Investment Manager typically makes medium-to-long-term commitments to each
investment advisor it selects (in order to give such investment advisors strategy a realistic opportunity
to achieve its objectives), each Sub-Funds portfolio will be reviewed at least quarterly by the
Investment Manager. If considered advisable by the Investment Manager, asset allocations to
existing investment advisors will be adjusted and investment advisors will be added or replaced.
****
In connection with any margin purchase or short sale of portfolio securities by a Sub-Fund, the Fund
may be required to pledge securities and other assets of such Sub-Fund as collateral for its obligation
to repay the borrowing (in the case of a margin purchase) or to deliver securities (in the case of a
short sale). Depending on the level of margin purchases and short sales, a substantial portion of a
Sub-Funds assets may at any time be so pledged as collateral.
There can be no assurance that any particular Sub-Fund will realize its objective. The Fund is
designed for investors who understand and are willing to accept the risks of seeking capital
appreciation through participating in a group of professionally-managed securities portfolios which
utilize one or more investment strategies, possibly including short selling and options trading.

Investment Restrictions
The Fund is not limited in its investments to any particular type of security and may invest directly in
common or preferred stocks, bonds or other corporate obligations or government obligations,
including securities convertible into any of the foregoing, or in investment partnerships or companies,
mutual funds and unit trusts. Moreover, whenever the Fund seeks liquidity and defensive strength (for
example, when the Funds management anticipates a major, secular market decline), the proportion
of investments in equity securities or in investment partnerships or companies, mutual funds and unit
trusts may decrease and substantial investments may be made in preferred stocks, corporate and
government debt obligations and cash items, including bank deposits and certificates of deposit.
However, each Sub-Fund has adopted the following restrictions, which cannot be changed without
approval by vote of a majority of such Sub-Funds outstanding Participating Shares.
None of the Sub-Funds will:
(a)

Invest in the securities of any single issuer if immediately after and as a result of such
investment more than 40% of the total assets of such Sub-Fund would consist of the
securities of such issuer, except that for defensive purposes each Sub-Fund may invest up to
100% of its assets in debt securities issued or guaranteed by any sovereign member state of
the Organization for Economic Cooperation and Development, any political subdivision or
local authority thereof or any international organization of which several such sovereign states
are members. However, any Sub-Fund may, from time to time, invest in an investment
partnership or company, mutual fund or unit trust which in turn invests more than 40% of its
total assets in securities of a single issuer.

(b)

Purchase or sell real estate, provided that such Sub-Fund may invest in securities secured by
real estate or interests therein or issued by companies which invest in real estate or interests
therein.

(c)

Purchase or sell commodities or commodity contract or securities representing merchandise

or rights to merchandise, provided that such Sub-Fund may invest in securities of issuers
which purchase and sell commodities, commodity contracts or securities representing
merchandise or rights to merchandise.

(d)

Underwrite the sale of securities.

(e)

Invest in oil, gas or other mineral exploration or development programs, but this shall not
prohibit such Sub-Fund from investing in securities of companies engaged in oil, gas or
mineral activities or investigations.

Each Sub-Fund may from time to time impose such further investment restrictions as are compatible
with or in the interest of its Participating Shareholders, or as may be necessary in order to comply with
the laws and regulations of the countries where the Participating Shares are sold.

THERE CAN BE NO ASSURANCE THAT THE FUND'S INVESTMENT STRATEGY WILL ACHIEVE
PROFITABLE RESULTS. AS A RESULT OF INVESTMENT RISKS, AN INVESTOR MAY LOSE
ALL OF THE CAPITAL IT HAS INVESTED IN THE FUND.

10

INFORMATION ON THE DIRECTORS, THE INVESTMENT MANAGER, ADMININISTRATOR AND

OTHER ADVISERS
The Directors
The Directors of the Fund have overall authority over, and responsibility for, the operations and
management of the Fund. The Fund has however, delegated the investment management of the Fund
and its investments to the Investment Manager and the administration of the Fund to the Administrator
on the terms of the Investment Management Agreement and Administration Agreement respectively.
The Board of Directors consists of two classes of Directors (Class A Directors and Class B Directors).
There are no service contracts existing or proposed between the Fund and its Directors. All of the
Class A Directors are interested in the promotion of the Fund by virtue of other offices held by them in
the Investment Manager or its shareholders and, in the case of all Class A Directors except Mr. AlSabah, by virtue of their ownership of shares of the Investment Manager.
Class A Directors
Unless and until a Fund Emergency (as defined in the Articles) is declared, the Class A Directors will
have all of the rights, powers and duties accorded to the Board of Directors under Cayman Islands
law and the Articles.
The Class A Directors of the Fund are as follows:
Maha K. Al-Ghunaim, Chairperson and Managing Director (Kuwaiti), of the Manager; Global Tower,
Al Shuhadaa Street, Al Sharq, Kuwait City, P.O. Box 28807 Safat 13149, Kuwait. Mrs. Al-Ghunaim
also currently serves as the Vice Chairman of Housing Finance Company. She has served as a
member of the Financial & Investment Committee at Kuwait Chamber of Commerce & Industry since
October 2001, and has served as a Board Member and a member of the executive committee of
National Industries Group since 1996. Mrs. Al-Ghunaim also served as the Vice Chairman of Kuwait
Financing Services Company (a listed company in Kuwait) from 2000 to 2002. From 1994 to 1998,
Mrs. Al-Ghunaim served as a Board Member and a member of the executive committee at the United
Bank of Kuwait (now Ahli United Bank). She was also a Board Member of the International Financial
Advisors Co. from 1986 to 1988. Mrs. Al-Ghunaim has served on the boards of a number of different
investment funds, was the head of the Strategy Committee for Asset and Currency Allocation at
Kuwait Investment Co. (KIC), and was also the Assistant General Manager of Asset Management at
KIC. In 1982 she joined Kuwait Foreign Trading Contracting & Investment Co., where she was
promoted to be the head of the portfolio management department in 1988. Mrs. Al-Ghunaim received
a B.S. in Mathematics from San Francisco State University, California.
Bader AL-Sumait, Director (Kuwaiti) of the Manager; Chief Executive Officer of the Manager; Global
Tower, Al Shuhadaa Street, Al Sharq, Kuwait City, P.O. Box 28807 Safat 13149, Kuwait. Mr. AlSumait received his B.S. from Chapman University, in the United States, in 1980. In 1984, he
became the General Manager for Arab Financial Consultants Company and in 1997 he became its
Managing Director. Mr. Al-Sumait helped establish the Al-Oula Brokerage Company in 1985, where
he served as the Chairman and Managing Director until 1997. He has served as a Board Member of
KIC, Kuwait International Fairs Co., Bank of Bahrain & Kuwait, Educational Services Company and
Palm Agricultural Production Company. In 1991, he served as Chairman of the Committee for the
Merger between KIC, Kuwait Foreign Trading Contracting & Investment Co. and International
Financial Advisors Co. Currently, he is Vice Chairman of Gulf Franchising Company and Chairman of
Kuwait Financing Services Company.
Abdulla Al-Jaber Al-Sabah, Director (Kuwaiti) of the Manager; Director of the Manager; Global
Tower, Al Shuhadaa Street, Al Sharq, Kuwait City, P.O. Box 28807 Safat 13149, Kuwait. Mr. AlSabah is the Investment Technical Office Manager at the Public Institution for Social Security of
Kuwait (PIFSS), where he earlier worked as Manager of the Securities Department and the Head of
Private Equity from 2000 to 2002. Mr. Al-Sabah also currently serves as Chairman of the Housing
Finance Company (Iskan) and as a Director of Al-Ahli Bank of Kuwait. Mr. Al-Sabah was a Vice
President at Wafra Investment Advisory Group in New York from 1991 to 1998, and was involved with
projects with the direct equity, real estate and securities divisions. He began his career at PIFSS,
11

where he was a Portfolio Manager from 1988 to 1991, specializing in U.S. and Japanese equities. Mr.
Al-Sabah received his M.B.A. in Finance from Columbia University and his B.A. in Economics and
International Relations from Brown University.
Protective Structure; Class B Directors
By amending the Articles and taking certain other measures, the Investment Manager and the
Directors have established a protective structure for the Fund. This protective structure is intended to
ensure the continued operation of the Fund (including the continued ability to effect redemptions of
Participating Shares) during an emergency inside or affecting Kuwait. The basic purpose of these
measures is to enable the Board of Directors, which is empowered under the Articles to oversee the
Funds operations, to function effectively notwithstanding the emergency.
In order to implement this protective structure, the Funds Board of Directors has been restructured
into two classes of Directors. As discussed above, unless and until the declaration (or deemed
declaration) of a Fund Emergency, the Class A Directors will have all of the rights, powers and duties
accorded to the Board of Directors under Cayman Islands law and the Funds Articles. Immediately
upon the declaration of a Fund Emergency, all such rights, powers and duties with respect to the
management of the Fund will be transferred to the Class B Directors, all of whom reside outside of
Kuwait.
A Fund Emergency may only be declared if, upon the commencement or during the continuance of a
Period of Emergency (as defined in the Articles), as a result of the events or conditions giving rise to
the Period of Emergency or justifying its continuation, the Class A Directors are unable to effectively
manage the Fund (i) in the interests of its shareholders, (ii) in a manner consistent with the Articles or
(iii) in a manner consistent with this Memorandum. The Class A Directors have the sole authority to
declare a Fund Emergency, and they are required to do so as soon as practicable after any state of
affairs first constitutes a Fund Emergency, unless they are prevented from making the declaration by
reason of force majeure. In the event that the Class A Directors do not declare a Fund Emergency
concurrently with the commencement of a Period of Emergency, a Fund Emergency will nonetheless
be deemed to have been declared if, during any 15-day period within such Period of Emergency, the
Class A Directors fail to adopt a resolution stating that a Fund Emergency does not exist.
The commencement of a Period of Emergency may be declared by either the Class A Directors or the
Class B Directors. Accordingly, the Articles require both the Class A Directors and the Class B
Directors to (a) monitor conditions inside Kuwait to the extent necessary to determine whether any of
the events or conditions constituting a Period of Emergency has occurred or is continuing and (b)
declare a Period of Emergency as soon as practicable if, in their good faith judgment, any of such
events or conditions has occurred and is continuing.
A Period of Emergency or Fund Emergency may be terminated at any time by the Class A Directors in
their sole discretion. The Class B Directors do not have any authority to terminate a Period of
Emergency or Fund Emergency. Upon the termination of a Fund Emergency, the rights, powers and
duties that were transferred to the Class B Directors upon the declaration of the Fund Emergency will
revert back to the Class A Directors until a further Fund Emergency is declared.
The Class B Directors of the Fund are as follows:
Robert J. Howe, Walsall, England. Mr. Howe has extensive business experience in Europe, the
Middle East and North America, specializing in collective investment schemes, mutual funds and unit
trusts. Mr. Howe held various executive positions with The Chase Manhattan Bank and Bank of
America, and was the General Manager of Financial Group of Kuwait from 1985 to 1989. He is a
graduate of Cardiff Technical College, and a Fellow of the Chartered Institute of Secretaries and
Administrators.
Sandy Shaw, London, England. Throughout her career, Ms. Shaw has been actively involved in the
financial markets of Europe and the Middle East. From 1969 to 1999, she worked in London for the
United Bank of Kuwait (UBK). At the time of her departure from UBK, Ms. Shaw was the Chief
Executive of Private Banking and a member of UBKs general management team. Since 2000, Ms.

12

Shaw has worked for Coutts and Company, where she currently serves as the head of its Middle East
Private Banking team.
Steven L. Skancke, Great Falls, Virginia, United States. Dr. Skancke is currently a Managing
Director of G. William Miller & Co., Inc., a private U.S.-based merchant banking firm, which he joined
in 1984. From 1969 to 1984, Mr. Skancke held various positions in the United States Government,
working at the White House from 1969 to 1976 on national security, foreign policy and defense issues
and working at the Treasury Department from 1977 to 1984 in coordinating the development of
economic policies and supervising regulatory activities. Dr. Skancke is currently the Chairman of the
Falls Church Fellows Program, a post-graduate leadership development program, has authored two
books on business, and has written numerous articles and speeches on banking and financial topics.
He received his Ph. D. in Economics and his B.A. in International Affairs from the George Washington
University.
In addition, for so long as a Fund Emergency is in effect, each Class A Director who provides written
confirmation that he or she is physically located outside Kuwait will automatically constitute a Class B
Director.
The Investment Manager
Global Investment House (K.S.C.C.) (the Investment Manager), a Kuwait company listed on the
Kuwait Stock Exchange, has been retained by the Fund under a management agreement to provide
such management, investment advisory and administrative services as the Fund may require, subject
to the general control of the Board of Directors. The principal shareholders of the Investment
Manager include Wafra International Investment Company, Mohammed Abdulmohsen Al-Kharafi and
Sons Company, Kuwait Metal Pipes & Oil Services Company, Behbahani Investment Company and
Kuwait Industrial Projects Company. The Investment Manager has authorized and issued share
capital of approximately 16,000,000 Kuwaiti Dinars. Its board of directors consists of:
Maha Khalid Al-Ghunaim, Chairperson and Managing Director (Kuwaiti) from 1998 to the present.
See The Directors for biographical information as to Mrs. Al-Ghunaim.
Khalid Jassem Al-Wazzan, Director (Kuwaiti) from 1998 to the present. Mr. Al-Wazzan currently
serves as the Chairman of Mezan Holdings Group of Companies and its subsidiaries. Mr. Al-Wazzan
has been a Board Member of Gulf Insurance Company, a listed company on the Kuwait Stock
Exchange, since 1990. From 1993 to 1995, Mr. Al-Wazzan was a member of the Branch Committee
of Public Authority for Assessing Damages resulting from the war against Kuwait. He was a member
of the Board of Directors of the Public Authority for Industry from 1997 to 2000 and of the Board of
Directors of the Kuwaiti Ports Company from 1992 to 1996.
He was also the Vice Chairman of Commercial Bank of Kuwait, a listed company on the Kuwait Stock
Exchange.
Abdulla Al-Jaber Al-Sabah, Director (Kuwaiti) from 1998 to the present. See The Directors for
biographical information as to Mr. Al-Sabah.
Marzouk Naser Al-Kharafi, Director (Kuwaiti) from 1998 to the present. Mr. Al-Kharafi is currently the
Managing Director of Kuwait Food Company, S. A. K. Americana. He is also the Director General of
Aluminum Industries Co. and the Assistant Managing Director of Mohamed Abdul Mohsen Al-Kharafi
& Sons Co. In addition, Mr. Al-Kharafi is a Board Member of the National Company for Mechanical
and Electrical Works, a Vice President of the Aluminum Producers and Traders Association, and the
Chairman of International Khoshtam Food Co. (Iran) and Kuwaiti Syrian Holding Co. Mr. Al-Kharafi
received his Degree in Finance and Business Administration from Kuwait University.
The Investment Manager holds the Management Shares of the Fund.
Under the terms of its management agreement with the Fund, the Investment Manager will provide
persons satisfactory to the Funds Board of Directors to act as officers of the Fund. The Investment
Manager is also responsible for making investment decisions and placing and monitoring orders for
portfolio transactions for each Sub-Fund.
13

The Investment Manager will act as investment advisor to each of the Sub-Funds, retaining authority
to delegate its advisory responsibilities for investments in Subportfolios to one or more investment
advisors (each, an Investment Advisor) in its sole discretion. Under advisory agreements between
the Investment Manager and the Investment Advisor of any Subportfolio that is a managed account
(and not an investment partnership or company, mutual fund or unit trust), the relevant Investment
Advisor will have authority to effect the investment and reinvestment of the assets of such
Subportfolio at its discretion, subject to the provisions of this Memorandum and of the Articles. The
fees of each Investment Advisor are paid by the Investment Manager. Each such advisory agreement
will be terminable on 60 days written notice by either party and will terminate automatically in the
event of the relevant Sub-Funds liquidation.
In the case of Subportfolios that constitute investments in collective investment vehicles, such as
investment partnerships or companies, mutual funds and unit trusts, the Investment Manager will
exercise its authority as investment advisor. Typically, the Fund (on behalf of the relevant Sub-Fund)
will enter into a subscription agreement in respect of each such collective investment vehicle.
The management agreement has a term of twenty-one years from March 18, 1999 and may be
terminated by the Fund for cause upon 120 days written notice. Any change in the identity of the
Investment Manager will require the approval of the holders of a majority of the Participating Shares
voted at a general meeting unless the Board of Directors, the Investment Manager and the Custodian
each certify that such change does not prejudice the interests of the Participating Shareholders.
Notwithstanding the arrangements between the Fund and the Investment Manager, the Board of
Directors will remain responsible at all times to Participating Shareholders for the management of the
Fund.
The fees payable to the Investment Manager are set out in Fees and Expenses below.
The Administrator
Citi Hedge Fund Services (Ireland), Limited has been appointed by the Fund as the Fund's
administrator (the "Administrator") pursuant to the terms of an administrative services agreement
between the Fund and the Administrator. The Administrator is responsible, under the supervision of
the Directors, for providing administrative services required in connection with the Fund's operations,
including, maintaining compiling and publishing the Net Asset Value of the Fund and the Net Asset
Value per Participating Share and the Subscription Price, providing registrar and transfer agent
services in connection with the issue, transfer and redemption of Participating Shares and collecting
subscription payments and disbursing redemption payments. The Administrator also undertakes
appropriate KYC on investors in the Fund in accordance with the anti-money laundering laws of
Ireland.
The fees payable to the Administrator are set out in Fees and Expenses below.
The Auditors
PricewaterhouseCoopers has been appointed to act as auditors to the Fund.
The Custodian
The Fund has appointed Citibank N.A. London as custodian (the "Custodian") of all of its portfolio
assets pursuant to a Custodian Agreement. The Custodian is generally required to maintain the
assets of the Fund, including securities and assets other than cash, in a segregated client account.
However, assets deposited as margin with a broker need not be segregated and may be available to
the creditors of the broker.
The Custodian may appoint sub-custodians, agents or delegates (Correspondents) to hold the
assets of the Fund. The Custodian is required to exercise reasonable skill and care in the selection,
appointment and monitoring of Correspondents. The Custodian will retain responsibility for the acts
and omissions of the majority of its Correspondents, but will not be liable for any loss directly or
indirectly arising as a result of the acts or omissions of its Correspondents in certain restricted
markets (as referred to in the custodian agreement), provided that the Custodian has not been
14

negligent in the selection and monitoring of such Correspondents. In addition, the Custodian will not
be liable for any losses arising as a result of the liquidation, bankruptcy or insolvency of its
Correspondents in any market, provided that the Custodian has not been negligent in the selection or
monitoring of such Correspondents. The Custodian is not responsible for the safekeeping of assets
deposited as margin with brokers.
The custodian agreement provides that the appointment of the Custodian will continue in force unless
and until terminated by either party giving to the other not less than 60 days written notice, although
in certain circumstances the agreement may be terminated forthwith by notice in writing by either
party to the other. The custodian agreement contains indemnities in favour of the Custodian excluding
matters arising by reason of its or any Correspondents fraud, willful default or negligence.
The fees payable to the Custodian are set out in Fees and Expenses below.

15

FEES AND EXPENSES

Investment Manager's Fees
The Investment Manager will charge each Sub-Fund a fee for its management and investment
advisory services equal to 1% per annum of such Sub-Funds Net Asset Value, determined as of the
close of business on the last day of each month without reduction for any management fees paid or
accrued in favor of the managers of Subportfolios invested in collective investment vehicles in respect
of the same month. In all cases, this fee will be accrued monthly and paid quarterly.
For each calendar year, the Investment Manager will charge each Sub-Fund a performance fee equal
to 10% of the amount by which the net increase in such Sub-Funds Net Asset Value during such
calendar year, adjusted to exclude purchases and redemptions of Participating Shares of such SubFund, exceeds 15%.
The performance fee payable by each Sub-Fund to the Investment Manager will be accrued monthly
and, for purposes of calculating this fee, neither the relevant Sub-Funds Net Asset Value nor the
amount of such fee shall be reduced by the amount of any performance fees paid or accrued during
the relevant calendar period in respect of any Subportfolios of such Sub-Fund invested in collective
investment vehicles. The performance fee payable by each Sub-Fund to the Investment Manager will
be paid by such Sub-Fund on an annual basis following the end of each calendar year.
In all cases, if any Sub-Fund has had a net decrease in Net Asset Value (as adjusted to exclude
purchases and redemptions of Participating Shares of such Sub-Fund) in any relevant calendar period
followed by a net increase in a subsequent relevant calendar period or periods, no performance fee
will be payable by such Sub-Fund until, generally, the amount of the net decrease has been
recouped. Solely for the purpose of determining the Net Asset Value of any Sub-Fund as of any date
during a relevant calendar period, the amount of the performance fee, if any, payable by such SubFund to the Investment Manager in respect of such calendar period (calculated as if the date of
determination were the last day of the calendar period) will be accrued on such date of determination.
The fees of any investment advisor will be paid by the Investment Manager and may include a
performance fee that will be equal to a substantial portion of any performance fee paid to the
Investment Manager.
The Investment Manager also will charge each Sub-Fund a fee for its administrative services equal to
0.36% per annum of such Sub-Funds Net Asset Value as of the close of business on the last day of
each month (subject to a minimum of $2,500 per month). In all cases, this fee will be accrued monthly
and paid quarterly.
Each Sub-Fund will pay a pro rata portion (calculated on the basis of their respective Net Asset Value
of the Fund) of:
(a)

the fees and expenses of the Custodian and the Administrator;

(b)

Directors fees in an amount not to exceed $1,000 per annum;

(c)

expenses associated with the continuing offering of the Participating Shares; and

(d)

auditing costs, legal fees, expenses of printing offering circulars and reports to
Shareholders; and filing, registration, recording and other governmental fees.

Each Sub-Fund will also pay interest charges, taxes, brokerage fees, commissions and other
expenses of the investment and reinvestment of its assets.
As additional Sub-Funds are established, each such Sub-Fund will pay up to $25,000 of the costs
associated with the organization of such Sub-Fund and the initial offering of Participating Shares of
such Sub-Fund (including legal and governmental fees). The Investment Manager will pay any such
organizational costs in excess of $25,000. The Fund intends to amortize any and all organizational
costs payable by additional Sub-Funds over a period of five years.

16

The Administrator
The Administrator is compensated by the Fund for its services performed and the facilities and
personnel provided by the Administrator by a fee (the "Administration Fee") at a rate of 4 basis
points (0.04%) to 6 basis points (0.06%) per annum of the amount of the Net Asset Value of the Fund,
subject to a minimum monthly Administration Fee of $42,500. The Administration Fee shall accrue
daily and be calculated and payable monthly based on the Net Asset Value of the Fund on the last
Valuation Day in each month in respect of which the fee is payable.
The Custodian
The Custodian is compensated by the Fund by a custody fee at the rate of 1.25 basis points
(0.0125%) to 3.5 basis points (0.035%) depending upon the size of the assets, calculated and
payable monthly based on the Net Asset Value of the Fund on the Valuation Day in each month in
respect of which the fee is payable.

17

DETERMINATION OF NET ASSET VALUE

The assets of each Sub-Fund will be valued monthly, as of the last day of each calendar month, and
at such other times as the Directors considers necessary or desirable, for example, when events or
circumstances may indicate a significant change in values.
Valuation of portfolio securities will be made on the basis of market price whenever market quotations
are readily available and all securities of the same class held by such Sub-Fund can be readily sold in
a particular market. Listed securities will be valued at the published last sales price or, in the absence
of recorded sales, at the mean of the last bid and asked prices. Valuation of interests in investment
companies held by a Sub-Fund will be based on the valuations made by such investment companies.
Unlisted securities will be valued at the mean of the bid and asked prices. Bankers acceptances,
certificates of deposit, U.S. treasury bills, U.S. government agency discount notes and commercial
paper will be valued at cost plus accrued interest and earned discount. All other investments of such
Sub-Fund for which current market quotations are not readily available will be valued at fair value as
determined in good faith by the Board of Directors.
The Net Asset Value of each Sub-Fund shall mean, as of any date, the total assets, less the total
liabilities, of such Sub-Fund (each determined on the basis of generally accepted accounting
principles, consistently applied under the accrual method of accounting), except that Net Asset Value
shall include any unrealized profit or loss on portfolio securities (valued as described above) and any
unamortized organization expenses, and an accrual for any performance fee payable to the
Investment Manager shall be charged against Net Asset Value. The Net Asset Value per Share shall
mean, with respect to any Sub-Fund as of any date, an amount determined by dividing the Net Asset
Value of such Sub-Fund as of such date by the number of Participating Shares of such Sub-Fund
outstanding on such date, such sum being rounded downward to the nearest whole cent.

18

THE PARTICIPATING SHARES AND ARTICLES

The rights and obligations of the holders of Participating Shares are governed by the Articles of the
Fund. Prospective investors should examine these documents carefully and consult with their own
legal counsel concerning their rights and obligations before subscribing for Participating Shares.
Copies of the Articles of the Fund are available for inspection by an interested investor at the
Administrator's office during normal business hours on any Business Day. The following statements
and other statements in this Memorandum concerning the Articles and related matters are only a
summary, do not purport to be complete, and in no way modify or amend the Articles.
The Fund's Share Capital
The Fund's authorised share capital is $50,000 divided into:
1.

49,999,900 Participating Shares being redeemable participating shares of par value $0.001
each to be issued to investors, none of which are currently in issue. The Directors may issue
Participating Shares in classes or series with such designations or classifications as the
Directors may determine (and the Directors may rename or redesignate any issued class or
series of Participating Share) without the consent of or a notice to existing investors. The
Participating Shares being issued pursuant to this Memorandum do not have the right to
receive notice of, attend, speak or vote at general meetings of the Fund. Participating Shares
are redeemable at the option of the holder in accordance with the terms set out in this
Memorandum and the Articles of the Fund and are subject to compulsory redemption in
certain circumstances.

2.

100 Management Shares being voting non-participating shares of par value $0.001 each, all
of which have been issued and are held by the Investment Manager. Management Shares
carry one vote per share but do not carry any right to dividends. In a liquidation the
Management Shares rank only for a return of the nominal amount paid up on those shares
before any payment to the holders of Participating Shares and any other shares ranking pari
passu with the Participating Shares in a liquidation.

Subject to the terms of the Articles, authorised but unissued shares may be redesignated and/or
issued at the discretion of the Directors and there are no pre emption rights with respect to the issue
of additional Participating Shares or any other class of share.
The Fund may by special resolution of the voting shareholders increase or reduce its authorised share
capital.
Participating Shares of each Sub-Fund represent an interest in the same investment portfolio of the
Sub-Fund, and each Participating Share of each Sub-Fund has equal dividend, distribution, liquidation
and voting rights.
If one or more of the Sub-Funds should become insolvent, a creditor of the Fund may be able to
attach the assets of the other Sub-Funds. Because the Sub-Funds are not separate legal entities,
their liabilities are liabilities of the Fund. If the assets of one Sub-Fund were insufficient to cover its
liabilities, the creditors of that Sub-Fund would be able to require the Fund to satisfy those liabilities,
and the Fund would have to use assets of the other Sub-Funds to do so.
Subject to the foregoing, (a) the Fund is structured internally so that no Sub-Fund will be responsible
for the liabilities of another Sub-Fund and any liabilities incurred by any one Sub-Fund will be selfcontained, and (b) each Sub-Fund will be treated by the Fund as if it were a separate entity with the
shareholders of such Sub-Fund benefiting and bearing losses only from the particular investments in
which it invests. The net assets of each Sub-Fund will be segregated as a separate investment fund
and invested in accordance with the investment objectives and policies of that Sub-Fund. Each SubFund will bear all expenses attributable to the activities of that Sub-Fund and a pro rata portion of
general expenses.

19

Eligible Shareholders
Participating Shares may be purchased only by investors who are aware of the risks associated with
the trading activities to be undertaken by the Fund, who do not require immediate liquidity from their
investments and who are aware that there can be no assurance that the Fund or the Participating
Shares will be profitable or that the Fund will be able to meet its investment objective.
The Fund is permitted by its Articles to impose such restrictions as the Directors determine are
necessary for the purpose of ensuring that no Participating Shares are acquired or held by (a) any
person in breach of the laws or requirements of any country or governmental authority or (b) any
person in circumstances which in the opinion of the Directors might result in the Fund incurring liability
to taxation or suffering any other pecuniary or fiscal disadvantage which the Fund might not otherwise
incur or suffer.
Participating Shares may not be offered or sold to any person, directly or indirectly, in the United
States of America or to any citizen or resident of the United States, its territories or possessions, the
United Kingdom or Ireland, to any entity or organization controlled by such a citizen or resident, to
certain other persons defined as "U.S. Persons" under the Articles, or to any member of the public of
the Cayman Islands (except for exempted or non-resident companies). The Fund may at any time
redeem the Participating Shares held by anyone who is excluded from purchasing or holding
Participating Shares.
Subscription for Participating Shares
Participating Shares of each Sub-Fund will be offered for sale on a continuing basis at the
Subscription Price, plus an initial charge equal to a percentage of the subscription amount as
determined in accordance with the following table:
Subscription Amount

Initial Charge

Up to $499,999

2%

$500,000 to $999,999

1.5%

$1,000,000 or more

1%

The Fund will pay to the Investment Manager all initial charges received from the issue of
Participating Shares in any Sub-Fund. Part of the initial charge may be paid by the Investment
Manager to recognized sales agents.
Participating Shares may be purchased by an eligible investor by completing a Subscription Form and
presenting it to the Administrator and remitting the funds for investment. Initial subscriptions for
Participating Shares should amount to not less than $100,000, which may be invested in any single
Sub-Fund or divided among the Sub-Funds in such proportion as the investor determines, so long as
the initial investment in each Sub-Fund is not less than $10,000. Subsequent subscriptions should
amount to not less than $10,000, all of which must be invested in one of the Sub-funds. Subscription
amounts must be remitted through a bank account in the subscriber's name.
Subscription monies received will be held in escrow and will normally be invested in Participating
Shares on the next Dealing Day, provided that a Subscription Form is received and accepted by the
Fund and the applicable subscription proceeds and initial charge have been cleared on or before the
last Business Day of the month. The Fund reserves the right to accept late subscription applications
or monies.
Subscription Forms will (save as determined by the Administrator) be irrevocable and may be sent by
facsimile at the risk of the applicant. The originals of any Subscription Form sent by facsimile should
be sent immediately by post or by internationally recognised courier. Failure to provide the original
Subscription Form may, at the discretion of the Administrator, result in the cancellation of the
allotment of the Participating Shares.
20

Fractions of Participating Shares will be issued to the nearest four decimal places where the balance
of the subscription monies for Participating Shares represents less than the Subscription Price.
Confirmations will be sent to applicants on approval of their application as soon as practicable after
the relevant Dealing Day, setting out details of the Participating Shares they have been issued.
Participating Shares will be issued only in registered form. The Administrator maintains the official
register of Participating Shares of the Fund. Certificates representing Participating Shares will not be
issued.
Redemption of Participating Shares
Participating Shares of the U.S. Hedge Fund, the European Hedge Fund and/or the Japan Asia
Hedge Fund having an aggregate Redemption Price of not less than $10,000 may be redeemed as of
the first Business Day of any month (a Monthly Dealing Day) at the prevailing Redemption Price,
less a redemption charge equal to 0.25% of the Redemption Price (which charge is subject to waiver
at the Investment Managers discretion).
Participating Shares of the Advanced Sciences Fund having an aggregate Redemption Price of not
less than $10,000 may be redeemed as of the first Business Day of any calendar quarter (a
Quarterly Dealing Day and, together with any Monthly Dealing Day, a Dealing Day) at the
prevailing Redemption Price, less a redemption charge equal to 0.25% of the Redemption Price
(which charge is subject to waiver at the Investment Manager's discretion).
With respect to the U.S. Hedge Fund, the European Hedge Fund and the Japan Asia Hedge Fund, if
a request for redemption is received by the Administrator at least 10 days prior to the applicable
Monthly Dealing Day, redemption will be as of the next Monthly Dealing Day. If a request for
redemption is received within 10 days of the applicable Monthly Dealing Day, redemption will be as of
the second following Monthly Dealing Day.
With respect to the Advanced Sciences Fund, if a request for redemption is received by the
Administrator at least 45 days prior to the applicable Quarterly Dealing Day, redemption will be as of
the next Quarterly Dealing Day. If a request for redemption is received within 45 days of the
applicable Quarterly Dealing Day, redemption will be as of the second following Quarterly Dealing
Day.
Redemptions may also be made at such other times and upon such payment terms as approved by
the Directors in their sole discretion.
Redemption proceeds shall only be remitted back into the account of the registered
Participating Shareholder.
The Fund has the power, at the discretion of the Directors, to make payments for redemptions by
cash, in kind or partly in cash and partly in kind.
In the event that a Participating Shareholder invests the proceeds of redemption in another Sub-Fund
not later than the first Business Day of the next succeeding calendar month, a switching charge of
0.125% of the redemption proceeds will be deducted from the proceeds invested in the other SubFund. In that event, any and all redemption proceeds to be reinvested in another Sub-Fund will be
held in a money market fund managed by the Investment Manager (if such a fund is then accepting
amounts for investment) during any period between redemption and re-investment. The Fund will pay
all redemption and switching charges to the Investment Manager.
A redemption request for less than all of the Participating Shares held by an investor in a Sub-Fund
will not be honoured if the value of the remaining Participating Shares would be less than the amount
of the minimum initial investment required for that Sub-Fund.
Any increase or decline in Net Asset Value from the date a request for redemption is given until the
relevant date on which Net Asset Value per Participating Share is determined will be reflected in the
redemption price.
21

Participating Shares may be redeemed by forwarding to the Administrator a duly completed and
signed Redemption Notice indicating the name and full address printed exactly as the Participating
Shares have been registered. In certain instances, additional documents may be required, such as,
but not limited to, trust instruments, death certificates, appointments as executor or administrator or
certificates of corporate authority.
A Redemption Notice may only be withdrawn with the consent of the Director during a period when
the Directors have suspended the determination of Net Asset Value or the right of redemption or the
date of payment of redemption proceeds.
The Directors may cause the Fund to redeem all the Participating Shares of one or more Sub-Funds
held by any Participating Shareholder for any reason. The Fund also has the right, upon 7 Business
Days notice, to redeem all the Participating Shares held by any Participating Shareholder for any
reason, including if the Directors, in their sole discretion, determine that:
(a)

the subscription for or holding of Participating Shares by such Shareholder is or may

be unlawful or detrimental to the Funds interests;

(b)

as a result of prior redemptions, the value of the Shareholders Participating Shares is

less than the minimum initial investment required for the Fund, provided that the
Participating Shareholder has been afforded a 30-day period to increase the value of
its Participating Shares above such minimum initial investment;

(c)

representations made by the Participating Shareholder were not true at the time of its
subscription for Participating Shares or thereafter cease to be true; or

(d)

such redemption is in the best interests of the Fund.

In each case, the Redemption Price will be equal to the prevailing Net Asset Value per Participating
Share on the next Valuation Day for the relevant Participating Shares, less a redemption charge equal
to 0.25% of the Redemption Price (which charge is subject to waiver at the Investment Manager's
discretion).
With respect to the U.S. Hedge Fund, the European Hedge Fund and the Japan Asia Hedge Fund,
payment on redemptions will be made within a reasonable time, normally not to exceed 15 Business
Days after the relevant Dealing Day. With respect to the Advanced Sciences Fund, payment on
redemptions will be made within a reasonable time, normally not to exceed 30 Business Days after
the relevant Dealing Day. In all cases, portfolio investments will be liquidated to the extent necessary
to discharge the relevant Sub-Funds liabilities on the date of redemption.
Suspension of Redemptions and Subscriptions
The Articles provide that the Directors may, with respect to any Sub-Fund, suspend the determination
of Net Asset Value per Share or the right of redemption or postpone the date of payment or
redemption in respect of the Participating Shares of such Sub-Fund during any period:
(a)

when any market on which such Sub-Funds investments are traded is closed or trading is
restricted;

(b)

when an emergency exists as a result of which it is impossible to dispose of the assets of

such Sub-Fund, or when it is impossible fairly to determine the value of any assets of such
Sub-Fund;

(c)

when it may not be possible to dispose of investments in a practicable manner;

(d)

when a breakdown occurs in the means of communication normally employed in calculating

the Net Asset Value or for any reason the value of such Sub-Funds investments cannot be
reasonably ascertained; or

22

(e)

when the transfer of cash in respect of redemptions or the acquisition or realization of

investments cannot, in the opinion of the Directors, be effected at normal rates of exchange.

Transfers
In the case of the death of a joint holder the survivor will be the only person recognised by the Fund
as having any title to a Participating Share.
No Participating Shares may be transferred, assigned or disposed of without the prior written consent
of the Directors or their authorised agents which may be withheld in their absolute discretion. Subject
as aforesaid, Participating Shares are transferable by written instrument signed by the transferor, but
transfers will not be effective until registered in the Register of Participating Shareholders of the Fund.
Participating Shareholders wishing to transfer Participating Shares must complete and sign the
transfer in the exact name or names in which the Participating Shares are registered, indicating any
special capacity in which they are signing and supply the details to the Fund.
The Directors may in their absolute discretion decline to register any transfer of Participating Shares
without organising any reason therefor.
Modification of Rights attaching to the Participating Shares
The special rights attached to the Participating Shares of any class may from time to time (whether or
not the Fund is being liquidated) only be materially adversely varied or abrogated with the consent in
writing of the holders of at least two thirds of the issued Participating Shares of the relevant class, or
with the sanction of a resolution passed by Participating Shareholders holding at least two thirds of all
the Participating Shares of the relevant class then in issue.
All the provisions of the Articles as to general meetings of the Fund apply to every such separate
meeting, except that the necessary quorum at any such meeting is one or more persons at least
holding or representing by proxy at least one third of the issued Participating Shares then in issue
except that at an adjourned meeting of the Participating Shareholders those shareholders who are
present in person or by proxy shall constitute a quorum.
The rights attaching to the Participating Shares shall be deemed not to be varied by the creation,
allotment or issue of further shares ranking pari passu with the Participating Shares or ranking behind
the Participating Shares, or the redemption or repurchase of any shares.
Directors
The following is a summary of certain provisions of the Articles of the Fund relating to Directors.
There is no share qualification or age limit for Directors. Each Director is entitled to such remuneration
as may be approved by the Fund in general meeting. The Directors may also be reimbursed for
expenses incurred in attending board meetings or in connection with the business of the Fund, and
may receive remuneration for special services. A Director may act in a professional capacity for the
Fund (other than as Auditor) and may receive remuneration for such professional services. A Director
may hold any other office or place of profit with the Fund (other than the office of Auditor) and may be
a director, officer or member of any company in which the Fund may be interested. A Director may
contract with the Fund and no contract or arrangement made by the Fund in which any Director is in
any way interested shall be liable to be avoided, but the nature of this interest must be declared in
advance at a meeting of the Directors and such Director may not normally vote in respect of any such
contract or arrangement. A Director may be removed from office at any time by ordinary resolution of
the Fund in general meeting.
The Fund has the power to borrow, whether in connection with purchasing securities on margin or
otherwise, and to pledge or mortgage its assets as collateral security for any of its obligations. The
Articles of the Fund permit these powers to be delegated to the Investment Manager, and such
delegation has been made under the management agreement. The management agreement, in turn,
permits a further delegation of these powers to an Investment Advisor.

23

ADDITIONAL INFORMATION
Taxation
It is the responsibility of all persons interested in purchasing Participating Shares to inform themselves
as to any tax consequences from their investing in the Fund and the Fund's operations or
management, as well as any foreign exchange or other fiscal or legal restrictions, which are relevant
to their particular circumstances in connection with the acquisition, holding or disposition of
Participating Shares. Investors should therefore seek their own separate tax advice in relation to their
holding of Participating Shares and accordingly neither the Fund, the Investment Manager nor the
Administrator accept any responsibility for the taxation consequences of any investment into the Fund
by an investor.
The Fund has received an undertaking from the Governor in Cabinet of the Cayman Islands to the
effect that, for a period of 20 years from such date, no law that thereafter is enacted in the Cayman
Islands imposing any tax or duty to be levied on profits, income or on gains or appreciation, or any tax
in the nature of estate duty or inheritance tax, will apply to any property comprised in or any income
arising under the Fund, or to the Shareholders thereof, in respect of any such property or income.
Anti-Money Laundering
Cayman Islands
As part of the Fund's responsibility for the prevention of money laundering, the Fund and the
Administrator (including its affiliates, subsidiaries or associates) will require a detailed verification of
the applicants identity and the source of payment. Depending on the circumstances of each
application, a detailed verification might not be required where:
1.

the applicant is a recognised financial institution which is regulated by a recognised regulatory

authority and carries on business in a country listed in Schedule 3 of the Money Laundering
Regulations (as amended) of the Cayman Islands (as amended) (a "Schedule 3 Country");

2.

the application is made through a recognised intermediary which is regulated by a recognised

regulatory authority and carries on business in a Schedule 3 Country. In this situation the
Fund may rely on a written assurance from the intermediary that the requisite identification
procedures on the applicant for business have been carried out; or

3.

the subscription payment is remitted from an account (or joint account) held in the applicant's
name at a bank in the Cayman Islands or a bank regulated in a Schedule 3 Country. In this
situation the Fund may require evidence identifying the branch or office of the bank from
which the monies have been transferred, verify that the account is in the name of the
applicant and retain a written record of such details.

The Fund and the Administrator reserve the right to request such information as is necessary to verify
the identity of an applicant. In the event of delay or failure by the applicant to produce any information
required for verification purposes, the Administrator will refuse to accept the application and the
subscription monies relating thereto.
If any person who is resident in the Cayman Islands (including the Administrator) has a suspicion that
hat payment to the Fund (by way of subscription or otherwise) contains the proceeds of criminal
conduct that person is required to report such suspicion pursuant to The Proceeds of Crime Law (as
amended) of the Cayman Islands.
By subscribing, applicants consent to the disclosure by the Fund and the Administrator of any
information about them to regulators and others upon request in connection with money laundering
and similar matters both in the Cayman Islands and in other jurisdictions.

24

Reports to Shareholders
The Fund will issue semi-annual and annual reports to the Participating Shareholders of each SubFund. Each report will include statements in respect of the relevant Sub-Fund of (a) Net Asset Value;
(b) Net Asset Value per Share; (c) assets (including a schedule of portfolio investments) and liabilities,
and (d) income and expense during the period covered by the report. Financial statements included
in the annual reports will be audited; financial statements included with other reports will not. The
Funds financial year will end on June 30 of each year.
Cayman Islands Mutual Funds Law
The Fund falls within the definition of a "Mutual Fund" in terms of the Mutual Funds Law (as amended)
of the Cayman Islands (the "Law") and accordingly is regulated in terms of that Law. However, the
Fund is not required to be licensed or employ a licensed mutual fund administrator since the minimum
aggregate investment purchasable by a prospective investor in the Fund is equal to or exceeds
$100,000 or its equivalent in any other currency.
As a regulated mutual fund, the Fund is subject to the supervision of the Cayman Islands Monetary
Authority (the "Monetary Authority"). The Fund must file this Memorandum and details of any
changes that materially affect any information in this document with the Monetary Authority. The
Fund must also file annually with the Monetary Authority accounts approved by an approved auditor,
together with a return containing particulars specified by the Monetary Authority, within six months of
its financial year end or within such extension of that period as the Monetary Authority may allow. A
prescribed fee must also be paid annually.
The Monetary Authority may, at any time, instruct the Fund to have its accounts audited and to submit
them to the Monetary Authority within such time as the Monetary Authority specifies. In addition, the
Monetary Authority may ask the Directors to give the Monetary Authority such information or such
explanation in respect of the Fund as the Monetary Authority may reasonable require to enable it to
carry out its duty under the Law.
The Monetary Authority shall, whenever it considers it necessary, examine, including by way of onsite inspections or in such other manner as it may determine, the affairs or business of the Fund for
the purpose of satisfying itself that the provisions of the Law and applicable anti-money laundering
regulations are being complied with.
The Directors must give the Monetary Authority access to or provide at any reasonable time all
records relating to the Fund and the Monetary Authority may copy or take an extract of a record it is
given access to. Failure to comply with these requests by the Monetary Authority may result in
substantial fines on the part of the Directors and may result in the Monetary Authority applying to the
court to have the Fund wound up.
The Monetary Authority may take certain actions if it is satisfied that a regulated mutual fund:
1.

is or is likely to become unable to meet its obligations as they fall due;

2.

is carrying on or is attempting to carry on business or is winding up its business voluntarily in

a manner that is prejudicial to its investors or creditors;

3.

is not being managed in a fit and proper manner; or

4.

has persons appointed as Director, manager or officer that is not a fit and proper person to
hold the respective position.

The powers of the Monetary Authority include inter alia the power to require the substitution of
Directors, to appoint a person to advise the Fund on the proper conduct of its affairs or to appoint a
person to assume control of the affairs of the Fund. There are other remedies available to the
Monetary Authority including the ability to cancel the registration of the Fund and to apply to the court
for approval of other actions.

25

RISK FACTORS
Investment in the Fund carries with it a substantial degree of risk, including, but not limited to, the
risks referred to below. Investment in the Fund is suitable only for investors who are in a position to
take the risks associated therewith. The investment risks described below are not purported to be
exhaustive, and potential investors should review this Offering Circular in its entirety, and consult with
their professional advisors, before making an application for Participating Shares of any Sub-Fund.
Different risk considerations may apply to each Sub-Fund, and there can be no assurance that any
Sub-Fund will achieve its investment objective. The Net Asset Value of any Sub-Fund, and the
income attributable to Participating Shares of such Sub-Fund, may go down as well as up, and
investors in any Sub-Fund may not get back the amount invested or any return on their investment.
The performance of each Sub-Fund is linked directly to the performance of, and is generally subject
to, the same risks as the Subportfolios in which it invests.
The particular risks associated with the Fund include the following:
Cross-Class Liability. The Fund is a single legal entity and accordingly the assets of each Sub-Fund
are available to all creditors of the Fund, including creditors whose claims are based on the activities
of other Sub-Funds.
General Economic Conditions. The market value of each Sub-Funds investments, including
investments in the Subportfolios of such Sub-Fund, may be affected by, among other things, changes
in general economic conditions, market rates of interest, the condition of financial markets and the
financial condition of the Subportfolios and other entities in which such Sub-Fund has invested. The
Investment Manager will not have any control over the extent or timing of such changes or their
impact on the market value of any Sub-Funds investments.
Potential Illiquidity of Sub-Fund Investments. There will be no readily available market for a
substantial number of each Sub-Funds investments, including investments in the Subportfolios of
such Sub-Fund. The lack of an established, liquid secondary market for a Sub-Funds investments
may have an adverse effect on their market value and on the Sub-Funds ability to dispose of them.
Furthermore, investments in Subportfolios or other entities will be subject to certain other transfer
restrictions that may contribute to illiquidity. Therefore, no assurance can be given that, if a Sub-Fund
is determined or required (by reason of redemptions of Participating Shares of such Sub-Fund or
otherwise) to dispose of its investment in a particular Subportfolio or other entity held by such SubFund, it will be able to dispose of such investment on a timely basis at an appropriate market price.
Potential Illiquidity of Subportfolio Investments. The Subportfolios of any Sub-Fund may invest in
securities which are subject to legal or other restrictions on transfer or for which no readily available
market exists. These factors may adversely affect the market value of such securities and the
relevant Subportfolios ability to dispose of them. Accordingly, there can be no assurance that a
Subportfolio will be able to sell any such securities when it desires to do so or to realize what it
perceives to be their fair value in the event of a sale.
Leverage; Interest Rates. The investment advisors of the Subportfolios of any Sub-Fund may
borrow funds on behalf of such Subportfolios in order to increase investment positions or to make
additional investments. Risk of loss and the magnitude of possible gains are both increased by a
Subportfolios use of borrowed funds for these purposes. Fluctuations in the market value of such
Subportfolios investment portfolio will have a greater effect relative to such Subportfolios capital than
would be the case in the absence of leverage. In the case of margin borrowings by a Subportfolio,
adverse market fluctuations may require the untimely liquidation of one or more of such Subportfolios
investment positions. The amount of borrowings which any Subportfolio may have outstanding at any
time may be large in relation to its capital. In addition, interest costs are an expense of each
Subportfolio that borrows funds, and will affect the operating results of such Subportfolio. The interest
costs incurred by any Subportfolio will in turn be affected by its borrowing levels and by fluctuations in
interest rates.

26

Short Selling; Derivatives; Relative Value Strategies. One or more Subportfolios of any Sub-Fund
may engage in selling securities short. Short selling exposes the seller to unlimited risk, because
there is no upper limit on the price to which the relevant securities may rise.
In addition, one or more Subportfolios of any Sub-Fund may utilize derivative instruments, such as
equity index futures, options and swaps. Market movements that would adversely affect a
Subportfolios financial obligations under derivative instruments may be difficult to predict in advance.
Accordingly, one or more markets may move against the derivative positions held by a Subportfolio,
thereby causing substantial losses. Substantial risks are also involved in borrowing and lending
against derivative instruments.
The use of relative value hedging or arbitrage strategies by one or more Subportfolios of a Sub-Fund
should not be taken to imply that the use of such strategies is without risk. Every relative value
strategy involves exposure to some second order market risk, such as the implied volatility in
convertible bonds and warrants, the yield spread between similar term government bonds, the yield or
swap spread between government and corporate bonds or the price spread between different classes
of stock issued by the same company. Substantial losses may be incurred by a Subportfolio on hedge
or arbitrage positions, and illiquidity or default by a counterparty can cause the position to have the
same economic effect as an outright speculation.
Voting Control. Although the Participating Shares carry certain voting rights, such rights relate only
to the Fund and the relevant Sub-Fund. The Participating Shares do not carry any voting rights with
respect to any of the Subportfolios of any Sub-Fund, and therefore holders of Participating Shares of
such Sub-Fund, in their capacity as such, will not have any direct voting or other control over the
affairs of a Subportfolio.
Currency. Participating Shares are denominated in U.S. Dollars, and redemptions will be effected in
that currency. A portion of the net assets of the Subportfolios of each Sub-Fund, particularly the
European Hedge Fund and the Japan Asia Hedge Fund, will be invested in non-U.S. securities, and
the income generated thereby may be received in non-U.S. currencies. However, each Sub-Fund will
calculate its income in U.S. Dollars. Consequently, the strengthening of the U.S. Dollar against foreign
currencies subsequent to the initial investment in any non-U.S. security by a Subportfolio may have
an adverse impact on the net assets of the relevant Sub-Fund, unless the investment advisor of the
relevant Subportfolio hedges effectively against such risks.
Limited Ability to Liquidate the Participating Shares. Participating Shares can only be redeemed
on the relevant Dealing Day, and the right to redeem Participating Shares is subject to certain
limitations. See Redemption of Participating Shares and Determination of Net Asset Value. There
is no market for the Participating Shares, and none is expected to develop. Accordingly, an
investment in Participating Shares cannot be immediately liquidated, and holders of Participating
Shares may be unable to liquidate their investment when they desire to do so.
Layering of Fees. Each Sub-Fund will invest all or a portion of its assets in other investment funds,
such as investment partnerships or companies, mutual funds and unit trusts. To the extent that a SubFund invests in other investment funds, investors in such Sub-Fund will be subject to two levels of
fees and greater expenses than would result from direct investment in such other investment funds.
Possible Effects of Substantial Redemptions. Substantial redemptions of the Participating Shares
of any Sub-Fund at any particular time could require such Sub-Fund to liquidate positions more
rapidly than would otherwise be desirable.
Institutional Risk. Institutions, such as brokerage firms or banks, will typically have custody of the
assets owned by the Subportfolios in which a Sub-Fund invests, and such institutions may hold such
assets in street name. Bankruptcy or fraud at one of these institutions could impair the operational
capabilities or the capital position of the relevant Subportfolios, resulting in losses to the Sub-Fund.
Incentive Fees. The incentive fees payable by each Sub-Fund to the Investment Manager are based
on a percentage of the net increase in such Sub-Funds Net Asset Value during the relevant calendar
year (adjusted to exclude purchases and redemptions of Participating Shares of such Sub-Fund).
See Management of the Fund. This arrangement may create an incentive for the Investment
27

Manager to cause such Sub-Fund to make investments that are riskier or more speculative than those
that would be made if the Investment Managers fees were based solely upon a percentage of such
Sub-Funds capital. The incentive fees payable by each Sub-Fund to the Investment Manager are
calculated on a basis which includes unrealized appreciation. Valuations of interests in other
investment funds will be based on the valuations provided by such funds, and valuations of other
securities for which current market quotations are not readily available will be determined in good faith
by the Board of Directors of the Fund. See Determination of Net Asset Value. Such valuations may
affect the amount of incentive fees payable by the relevant Sub-Fund to the Investment Manager.
To the extent that the incentive fees payable by the Subportfolios of a Sub-Fund to their investment
advisors are structured similarly to those payable by such Sub-Fund to the Investment Manager,
similar considerations will apply with respect to such Subportfolios and their investment advisors. In
some cases, the incentive fees payable by a Subportfolio to its investment advisor may be on terms
more favorable than those applicable to the incentive fees payable to the Investment Manager by the
relevant Sub-Fund. To the extent that any Sub-Fund employs a multi-advisor investment approach,
such Sub-Fund (through its Subportfolios) may pay substantial incentive compensation to the
investment advisors of certain of its Subportfolios during a period when such Sub-Fund incurs an
overall net loss.
Investment Advisors of Subportfolios. When a Sub-Fund invests in a Subportfolio, the Sub-Fund
will be subject to the risk that the investment advisor of such Subportfolio could divert or misuse the
Sub-Funds investment, furnish the Sub-Fund with false or misleading financial statements and other
reports, or engage in other misconduct. In addition, a Sub-Funds investment in a Subportfolio may
be adversely affected if activities of the Subportfolios investment advisor result in substantial liabilities
or penalties for damages caused to third parties or for violations of securities or other laws (for
example, liabilities or penalties resulting from breach of contract or the misuse of confidential
information).
The investment advisors of the Subportfolios in which a Sub-Fund invests may also manage other
accounts in addition to these Subportfolios (including other accounts in which such investment
advisors may have an interest). These investment advisors may have financial or other incentives to
favor such other accounts over the Subportfolios which they manage.
Apart from the above-described risks associated with Subportfolio investment advisors, some of the
Subportfolios in which a Sub-Fund invests may have investment advisors that are managed by a
small number of key individuals. If one or more of those key individuals dies, becomes incapacitated
or otherwise ceases to be involved in the activities of the relevant Subportfolio, the Sub-Fund may
sustain losses in respect of such Subportfolio.
Concentration of Investments. As part of its investment strategy, each Sub-Fund may make
concentrated investments in certain issuers, industries or asset types. This lack of diversification may
expose such Sub-Fund to the risks relating to a specific industry or asset type. In addition, the
Subportfolios of a Sub-Fund might coincidentally accumulate substantial positions in identical or
similar issuers, industries or asset types at or about the same time. Such accumulations could impair
achievement of the diversification goals (if any) of such Sub-Fund, and the Investment Manager may
be unable to determine whether such accumulations have occurred.
Changes in Allocations. The Investment Manager will, from time to time, change the manner in
which each Sub-Funds assets are allocated among such Sub-Funds Subportfolios. These changes
may include the replacement of existing Subportfolios with new Subportfolios. Allocation changes with
respect to any Sub-Fund are likely to occur, among other reasons, as a result of performance
differences among its Subportfolios or the receipt by such Sub-Fund of additional investment capital
at a time when one or more of its existing Subportfolios are not accepting additional funds. Each SubFunds success will depend on the Investment Managers ability to select Subportfolios and to allocate
assets among new and existing Subportfolios.
Tax Consequences. The Fund is not suitable for investment by a person generally subject to U.S.
taxation. Persons interested in purchasing Participating Shares of the Fund should consult their
professional advisors as to any income, capital gains or other tax consequences in the countries in

28

which they are resident or domiciled for tax purposes that may result from the purchase, holding or
disposition of the Participating Shares.
Absence of Secondary Market
Currently there is no public market for the Participating Shares and it is unlikely that any active
secondary market for any of the Participating Shares will develop. Participating Shares are not being
registered to permit a public offering under the securities laws of any jurisdiction. The Participating
Shareholders might be able to dispose of their Participating Shares only by means of redemptions on
the relevant Redemption Day at the Redemption Price, in the absence of an active secondary market.
The risk of any decline in the Net Asset Value during the period from the date of notice of redemption
until the Redemption Day will be borne by the Participating Shareholder(s) requesting redemption. In
addition, the Directors have the power to suspend and compel redemptions. There are also
restrictions on transferring Participating Shares.
Operating Deficits
The expenses of operating the Fund (including the fees payable to the Investment Manager, the
Administrator and other service providers) may exceed the Fund's income, thereby requiring that the
difference be paid out of the Funds capital, reducing the value of the Fund's investments and
potential for profitability.
Conflicts of Interest
The Investment Manager, the Directors and the Administrator may from time to time act in a similar
capacity to, or otherwise be involved in, other funds or collective investment schemes, some of which
may have similar investment objectives to those of the Fund. Thus, each may be subject to conflicting
demands in respect of allocating management time, services and other functions between the
activities each has undertaken with respect to the Fund and the activities each has undertaken or will
undertake with respect to other investors, commodity pools, managed accounts and/or trading
advisers. It is therefore possible that any of them may, in the course of their respective businesses,
have potential conflicts of interest with the Fund or the Participating Shareholders. Each will at all
times have regard to its obligations to the Fund and/or the Participating Shareholders and, in the
event that a conflict of interest arises they will endeavour to ensure that such conflicts are resolved
fairly.
THE FOREGOING RISK FACTORS DO NOT PURPORT TO BE A COMPLETE EXPLANATION OF
THE RISKS INVOLVED IN THIS OFFERING. POTENTIAL INVESTORS MUST READ THE ENTIRE
MEMORANDUM INCLUDING ALL ATTACHMENTS AND MUST CONSULT THEIR OWN
PROFESSIONAL ADVISERS, BEFORE DECIDING TO INVEST IN THE FUND.

29

SUBSCRIPTION INSTRUCTIONS
Subscription Applications
Applications may be made only by using the accompanying Subscription Form. All applications should
be directed to the Administrator at the address shown on the Subscription Form. The Fund reserves
the right to require additional information and certification to comply with money laundering
regulations or to reject subscriptions in whole or in part, in which event subscription payments will be
refunded at the applicant's risk, without interest. A properly completed and signed copy of a
Subscription Form may be submitted to the Administrator by fax on +353-1-6226896/97 in advance of
submitting the original in order to expedite processing of the application. The signed original,
however, must be submitted as soon as possible and in any event within fourteen days thereafter.
Subscription Payments
Payments in full for the amount subscribed should be made by bank telegraphic transfer as follows:
Bank:
SWIFT BIC:
Corresponding bank:
Swift BIC:

Citibank N.A. London

CITIGB2L
Citibank New York
CITIUS33

Global Umbrella Fund - U.S. Hedge Fund

Account Name: GUF-U.S. Hedge Fd-Opps Acc
Account Number: 12496712
Global Umbrella Fund - European Hedge Fund
Account Name: GUF-European Hedge Fd-Opps Acc
Account Number: 12496704
Global Umbrella Fund - Japan Asia Hedge Fund
Account Name: GUFJapan Asia Hedge Fd-Opps Acc
Account Number: 12496690
Global Umbrella Fund - Advanced Sciences Fund
Account Name: GUFAdvanced Sciences Fd-Opps Acc
Account Number 12496682
In order to facilitate prompt and accurate credit of subscription payments, subscribers must notify the
Administrator, prior to remitting payment, of the details of the subscription payment, indicating the:
1.

name of the subscriber;

2.

US$ amount subscribed;

3.

subscriber's address (included a fax number if available);

4.

name and address of the financial institution remitting the subscription payment; and

5.

approximate date as of which the payment is being wired to the Fund's account.

(Separate notification is not required if the Subscription Form is received prior to the payment date).
Confirmations
Confirmations will be sent to subscribers showing the details of each subscription and redemption.
Any investor who has not given the necessary status and residence declarations and confirmations
will be required to complete and return a form of Subscription Form to the Administrator as soon as
possible thereafter. Confirmations of faxed Subscription Forms will be deemed provisional and will be
subject to cancellation unless the Administrator has received the original.
30

COPY NUMBER:

_____________________

APPENDIX A

* Obtain copy number from front cover of Offering Memorandum.

SUBSCRIPTION FORM
GLOBAL UMBRELLA FUND
(The "Fund")

This form duly completed should be sent to:

Citi Hedge Fund Services (Ireland), Limited (the "Administrator")
1 North Wall Quay, Dublin 1
Ireland
Email: [email protected]
I/We the undersigned, having received and read a copy of the Private Placement Memorandum of the
Fund dated March 2010 (the "Offering Memorandum") hereby apply for the following Participating
Shares:
(check one)
_____

the number of Participating Shares of the U.S. Hedge Fund which, on the first
appropriate Dealing Day following receipt of this form, have an aggregate value of
$__________**

_____

the number of Participating Shares of the European Hedge Fund which, on the first
appropriate Dealing Day following receipt of this form, have an aggregate value of
$__________**

_____

the number of Participating Shares of the Japan Asia Hedge Fund which, on the first
appropriate Dealing Day following receipt of this form, have an aggregate value of
$__________**

_____

the number of Participating Shares of the Advanced Sciences Fund which, on the
first appropriate Dealing Day following receipt of this form, have an aggregate value
of $__________**

at the Net Asset Value per Share, determined as provided in the Articles, on the first
appropriate Dealing Day following receipt of this letter. In the event that (i) after such
purchase the value on such Dealing Day of the Participating Shares registered in the
undersigneds name would be less than $50,000 and (ii) the Board of Directors do not
consent to the undersigneds remaining investment being reduced to less than $50,000,
please:
_____

disregard this Request for Redemption

_____

purchase from the undersigned on such Dealing Day all of the remaining
Participating Shares of the Company registered in the undersigneds name at the
redemption price of said Participating Shares, determined as provided in your
Articles. The above request represents all of the Participating Shares of the
Company registered in the undersigneds name.

** Partial redemption of Participating Shares of the Global Umbrella Fund owned by a Shareholder (i)
having an aggregate redemption price of less than $10,000 or (ii) having the effect of reducing a
Participating Shareholders remaining investment to less than $50,000 will not be permitted.
This form must be received at least 10 days before the last calendar day of the month for the
redemption of Participating Shares of the U.S. Hedge Fund, the European Hedge Fund or the Japan
Asia Hedge Fund to be effected as of the next following Monthly Dealing Day. This letter must be
31

received at least 45 days before the last day of the calendar quarter for the redemption of
Participating Shares of the Advanced Sciences Fund to be effected as of the next following Quarterly
Dealing Day.
NOTE: Requests for redemption must be unconditional. No request to redeem Participating Shares
subject to a price limit can be accepted.
The Participating Shares in the Fund hereby subscribed for are herein referred to as the "Shares".
I/We acknowledge that due to money laundering requirements operating within its jurisdiction and/or
the requirements of the Money Laundering Regulations, (as amended) of the Cayman Islands and the
Guidance Notes issued pursuant thereto the Administrator may require further identification of the
applicant(s) before the application can be processed and the Administrator shall be held harmless and
indemnified against any loss arising as a result of a failure to process the application if such
information has been requested by the Administrator and has not been provided by me/us.
I/We hereby agree to be bound by the Offering Memorandum and the Memorandum and Articles of
the Fund ("Articles").
In consideration of the Administrator processing this Subscription Form and the Fund making a
provisional allotment of Shares, I/we hereby agree to indemnify and hold harmless the Fund, the
Administrator, the Directors of the Fund and the Investment Manager against any loss, costs or
expenses incurred by it or them as a result of my/our failure to pay the required subscription monies
for the application of Shares within the time required by the Administrator.
I/We confirm that I am/we are 18 years of age or over (natural persons only).
I/We confirm that I/we am/are not a Restricted Person (as such term is defined in the Offering
Memorandum) and am/are not acquiring Shares on behalf of, nor for the benefit of, a Restricted
Person nor do I/we intend selling or transferring any Shares which I/we may purchase to any person
who is a Restricted Person.
I/We warrant that (a) I/we have the knowledge, expertise and experience in financial matters to
evaluate the risks of investing in the Fund; (b) I am/we are aware of the risks inherent in investing in
the Shares and the method by which the assets of the Fund are held and/or traded; and (c) I/we can
bear the risk of loss of my/our entire investment.
I/We warrant that I am/we are able to acquire Shares without violating applicable laws.
I/We hereby accept such lesser number of Shares, if any, than may be specified above in respect of
which this application may be accepted.
I/We having received and considered a copy of the Offering Memorandum, hereby confirm that this
application is based solely on the Offering Memorandum and any supplemental Memorandum current
at the date of this Subscription Form, the material contracts therein and the Articles, together (where
applicable) with the most recent financial statements of the Fund.
I/We request that the Shares issued pursuant to this application be registered in the name(s) and
address set out below.
The Administrator is hereby authorised and instructed to accept and execute any instructions in
respect of the Shares to which this application relates given by me/us in written form. If the
instructions are given by me/us by facsimile, I/we undertake to confirm them in writing. I/We hereby
agree to indemnify the Administrator and agree to keep it indemnified against any loss of any nature
whatsoever arising to any of them as a result of it acting upon facsimile instructions. The
Administrator may rely conclusively upon and shall incur no liability in respect of any action taken
upon any notice, consent, request, instruction or other instrument believed in good faith to be genuine
or to be signed by properly authorised persons.

32

I/We are fully empowered and have authority to make this investment whether the investment is on
my/our own behalf or on the behalf of another person or institution.
I/We confirm that I/we have the right and authority to request a redemption of Shares and confirm that
I/we will comply with the redemption procedures set out in the Offering Memorandum. All redemption
instructions may be made in writing. Any applications for redemption made by telephone must be
confirmed in writing.
I/We agree that the issue and allotment to me/us of Shares is subject to the provisions of the Offering
Memorandum and the Articles, that subscription for Shares will be governed and construed in
accordance with Cayman Islands law and I/we confirm that by subscribing for Shares, I/we are not
relying on any information or representation other than such as may be contained in the Offering
Memorandum.
I/We hereby agree to indemnify and keep indemnified the Fund and the Administrator against any loss
arising to either of them as a result of any breach of any representation, warranty, covenant or
confirmation by me/us in this Subscription Form or of my/our failure to disclose any relevant details or
provide them with all information requested by either of them.
In the case of delay or failure to provide satisfactory information, the Administrator may take such
action (including declining to accept an application) as it thinks fit.
I/We agree to notify the Administrator immediately if I/we become aware that any of these
confirmations are no longer accurate and complete in all respects and agree immediately either to sell
or to tender to the Administrator for redemption a sufficient number of Shares to allow the confirmation
to be made.
I/We acknowledge and agree that pursuant to the Articles, the Directors shall, if lawfully required to do
so under the laws of any jurisdiction to which the Fund, or any service provider to the Fund is subject,
be entitled to disclose any information regarding the affairs of the Fund including without limitation
information contained in the Register of Members of the Fund and books of the Fund. The Directors,
any person acting as a service provider to the Fund and any other person authorised by the Directors
shall have the right to access all information belonging to the Fund.
I/We agree to provide the above confirmations to the Administrator at such times as the Administrator
may request, and to provide on request such certifications, documents or other evidence as the
Administrator may reasonably require to substantiate such representations.
(In respect of joint applicants only) We direct that on the death of one of us the Shares for which we
hereby apply be held in the name of and to the order of the survivor or survivors of us or the executor
or manager of such survivor or survivors.
This Subscription Agreement shall be governed by and construed in accordance with the laws of the
Cayman Islands.
(COMPLETE IN BLOCK LETTERS PLEASE)
Applicant's name(s) (in full).....
Applicant's name(s) (in full) (if joint Applicants) ..
.
Address
.
.

33

Telephone No ..Fax No
Email Address ...
Applicant's Bank Account details (for settlement of redemption of Shares):
Bank ..................................................................
Address .
SWIFT address .................................................................
Account number
Account name ...................................................................
Applicant's signature .........................................................
Applicant's signature (if joint Applicants)
.
NOTES
1.

To be valid, Subscription Forms must be signed by each applicant.

2.

In the case of a firm (not a limited company) applications should be in the name(s) of and
signed by the proprietor(s).

3.

A corporation should complete this Subscription Form under seal or under the hand of a duly
authorised official who should state his capacity and furnish a certified copy of the authority
pursuant to which such official is authorised.

4.

If this Subscription Form is signed under a power of attorney, such power of attorney or a duly
certified copy thereof and confirmation from a local lawyer as to the validity of such power of
attorney under its proper or governing law must accompany this Subscription Form.

5.

If this Subscription Form is not fully completed to the satisfaction of the Administrator, the
application may not be accepted.

34

COPY NUMBER*:

_____________________

APPENDIX B

* Obtain copy number from front cover of Offering Memorandum.

GLOBAL UMBRELLA FUND
(THE "FUND")
REDEMPTION NOTICE
FOR PARTICIPATING SHARES

Please fax and mail the original to:

Citi Hedge Fund Services (Ireland), Limited
1 North Wall Quay
Dublin 1
Email: [email protected]
Facsimile: +353-1-6226896/97

I/We ____________________________________________________________________________
of ______________________________________________________________________________
give notice that I/we wish to redeem my/our following Participating Shares in the Fund as set out
below:
(check one)
_____

all of the Participating Shares of the Fund registered in the undersigneds name

_____

the number of Participating Shares of the U.S. Hedge Fund which, on the first
appropriate Dealing Day following receipt of this notice, have an aggregate value of
$__________**

_____

the number of Participating Shares of the European Hedge Fund which, on the first
appropriate Dealing Day following receipt of this notice, have an aggregate value of
$__________**

_____

the number of Participating Shares of the Japan Asia Hedge Fund which, on the first
appropriate Dealing Day following receipt of this notice, have an aggregate value of
$__________**

_____

the number of Participating Shares of the Advanced Sciences Fund which, on the
first appropriate Dealing Day following receipt of this notice, have an aggregate value
of $__________**

at the Net Asset Value per Share, determined as provided in the Articles, on the first
appropriate Dealing Day following receipt of this notice. In the event that (i) after such
purchase the value on such Dealing Day of the Participating Shares of the Fund registered in
the undersigneds name would be less than $50,000 and (ii) the Board of Directors does not
consent to the undersigneds remaining investment being reduced to less than $50,000,
please:
_____

disregard this Redemption Notice

_____

purchase from the undersigned on such Dealing Day all of the remaining
Participating Shares of the Fund registered in the undersigneds name at the

35

redemption price of said Participating Shares, determined as provided in the Articles.

The above request represents all of the Participating Shares of the Fund registered
in the undersigneds name.
** Partial redemption of Participating Shares of the Fund owned by a Participating Shareholder (i)
having an aggregate redemption price of less than $10,000 or (ii) having the effect of reducing a
Participating Shareholders remaining investment to less than $50,000 will not be permitted.
This notice must be received at least 10 days before the last calendar day of the month for the
redemption of Participating Shares of the U.S. Hedge Fund, the European Hedge Fund or the Japan
Asia Hedge Fund to be effected as of the next following Monthly Dealing Day. This notice must be
received at least 45 days before the last day of the calendar quarter for the redemption of
Participating Shares of the Advanced Sciences Fund to be effected as of the next following Quarterly
Dealing Day.
NOTE: Requests for redemption must be unconditional. No request to redeem Participating Shares
subject to a price limit can be accepted

REDEMPTION INSTRUCTIONS
Please wire transfer funds to:
Bank name

__________________________________________________________

Bank address

__________________________________________________________

ABA#/Sort Code

__________________________________________________________

Account name

__________________________________________________________

Account number

__________________________________________________________

*Sub-account name

__________________________________________________________

*Sub-account number

__________________________________________________________

* if required
PLEASE SIGN HERE
Please ensure that all the registered shareholders or authorised signatories sign this Redemption
Notice.
Name of signatory/signatories

Signature

_______________________________ ________________________________
_______________________________ ________________________________
Date: _________________________________
NOTE
1.

The Administrator shall not process this Redemption Notice unless and until the original
signed Subscription Form has been received (rather than a fax copy) in respect of the
Participating Shares which are the subject of this Redemption Notice.

36

2.

To be valid, joint Redemption Notices must be signed by each shareholder if more than one
shareholder.

3.

In the case of an investor which is a partnership, Redemption Notices should be in the

name(s) of and signed by all the partners.

4.

Investors which are corporations must submit certified corporate resolutions authorising the
redemption and identifying the corporate officer empowered to sign this Redemption Notice.
Partnerships must submit a certified copy of the partnership certificate (in the case of limited
partnerships) or partnership agreement identifying the partners if such documents have
changed since the partnership's subscription to the Fund. Employee benefit plans must
submit a certificate of an appropriate officer certifying that the redemption has been
authorised and identifying the individual empowered to sign the redemption documents.

5.

If this Redemption Notice is signed under a power of attorney, such power of attorney or a
duly certified copy thereof must accompany this application form.

6.

If this Redemption Notice is not fully completed to the satisfaction of the Administrator, the
notice may not be accepted.

37

ADDENDUM A TO
PRIVATE PLACEMENT
MEMORANDUM
Relating to:
relating to Participating Shares in
Global Umbrella Fund
(a Cayman Islands exempted company with limited liability)
Updated March 2010

March 2010
U.S. Hedge Fund

U.S. Hedge Fund, Investment Portfolio

Altima Global Special Situations Fund
Centaurus Alpha Fund
D.E. Shaw Composite Intl. Fund
Goldman Sachs Financial Mutual Fund
Lyxor 2X Paulson Advantage Fund
Lyxor Paulson Advantage Fund
Meditor European Hedge Fund (B)
Pardus Euro Special Opportunities Fund
SAB Overseas Fund
Strategic Value Restructing Fund

Note: This Addendum will be updated from time to time after the above date, to reflect among other
things, changes in the identity of the Subportfolios of the relevant Sub-Fund.

ADDENDUM B TO
PRIVATE PLACEMENT
MEMORANDUM
Relating to:
relating to Participating Shares in
Global Umbrella Fund
(a Cayman Islands exempted company with limited liability)
Updated March 2010
March 2010
European Hedge Fund

European Hedge Fund, Investment Portfolio

Blenheim Global Markets Fund
D.E. Shaw Composite Intl. Fund
Goldman Sachs Financial Mutual Fund
Lyxor Paulson Advantage Fund
Trafalgar Catalyst Fund
Note: This Addendum will be updated from time to time after the above date, to reflect among other
things, changes in the identity of the Subportfolios of the relevant Sub-Fund.

ADDENDUM C TO
PRIVATE PLACEMENT
MEMORANDUM
Relating to:
relating to Participating Shares in
Global Umbrella Fund
(a Cayman Islands exempted company with limited liability)
Updated March 2010
March 2010
Japan Asia Hedge Fund

Japan Asia Hedge Fund, Investment Portfolio

Asian Credit Hedge Fund
D.E. Shaw Composite Intl. Fund
Doric Focus Fund
Goldman Sachs Financial Mutual Fund
Leverage Certificate on 2823 HK in USD
SR Global Fund Class B (Asia)
The ADM Galleus Fund
The Arcus Zensen Fund

Note: This Addendum will be updated from time to time after the above date, to reflect among other
things, changes in the identity of the Subportfolios of the relevant Sub-Fund.

ADDENDUM D TO
PRIVATE PLACEMENT
MEMORANDUM
Relating to:
relating to Participating Shares in
Global Umbrella Fund
(a Cayman Islands exempted company with limited liability)
Updated March 2010
March 2010
Advanced Sciences Fund

Advanced Sciences Fund, Investment Portfolio

Cash only: $989,277.78

Note: This Addendum will be updated from time to time after the above date, to reflect among other
things, changes in the identity of the Subportfolios of the relevant Sub-Fund.