The Investment Manager uses an investment management approach based on broad economic fundamentals. The Investment Manager’s style will involve trading in a range of markets with the aim of identifying trends in specific markets and instruments. Accordingly, the Investment Manager will concentrate on a wide range of economic indicators during the formulation of its investment decisions. The interpretation and analysis of these economic indicators will provide the foundation of the Investment Manager’s core view.

The debt securities in which the Company may invest will include investment grade government and corporate bonds, debentures, convertible debt, mortgage-backed and asset-backed securities and such other debt securities similar in nature to the foregoing as may seem appropriate to the Investment Manager. Debt securities will be deemed to be of investment grade if they are rated BBB or higher by a recognised statistical rating organisation such as Moody’s Investor Services Inc. Debt securities may be short, medium or long-term and may be denominated in any currency.

The Company may seek exposure to specific equity positions through investment in contracts for differences for the purposes of equity index trading. Contracts for differences are over-the-counter derivative contracts between the Company and a counterpart (typically a large investment bank). A single contract for differences would be based on a set number of shares in a particular line of stock. The Company’s return (which may be positive or negative) will essentially be the difference between the price of the underlying stock on the day the contract is struck and the price on the day the contract is terminated. The Company will generally be required to post collateral to the counterparty. At any one time the Company will have a credit exposure to the counterparty equal to the value of this collateral modified by the unrealised profit or loss on this contract. The Company will only invest in such instruments where they are traded on organised markets or recognised over-the-counter markets with counter-parties acceptable to the Investment Manager.

In accordance with standard industry practice when purchasing derivative instruments (which for the avoidance of doubt may also include over-the-counter derivative instruments, repurchase agreements, reverse repurchase agreements and stock lending agreements), the Company will be required to secure its obligations to its counterparty. This may involve the placing of margin deposits or equivalent with the counterparty which may or may not be segregated from the counterparty’s own assets. The Company may have a right to the return of equivalent assets. These deposits or equivalent may exceed the value of the Company’s obligations to the counterparty as the counterparty may require excess margin or collateral.

All such counterparties will be regulated by a recognised regulatory authority and must have a minimum credit rating of A1/P1 by an RSRO. The aggregate of all obligations of the counterparty to the Company in respect of such derivatives transactions may not exceed the value of the obligations of the Company to the counterparty by an amount in excess of 30 per cent.

In determining the size of the obligation of the counterparty to the Company, the following shall be included:-

• aggregate margin deposits or equivalent held by the counterparty reduced by an amount of any unrealised loss suffered by the Company on the derivative transaction(s) and for which no variation margin or equivalent has been provided;

• the value of any securities or instruments held by the Company issued by the counterparty;

• in the case of any derivative transaction which is a swap contract or a similar transaction, the notional exposure upon which such contract is based;

• any unrealised profit owed to the Company by the counterparty under the terms of the derivative transaction;

•  any other outstanding indebtedness, including deposits, of the counterparty to the Company, whether incurred in the context of the derivative transaction or not.

• In determining the size of the obligation of the Company to the counterparty the foregoing provisions shall apply in reverse.

The level of exposure to each counterparty will be monitored by the Investment Manager and the Trustee on an ongoing basis. For the purposes of ensuring compliance with the exposure limits set out above, all derivative contracts entered into by the Company will incorporate a procedure to mark positions to market daily. In addition, such contracts will also provide that, in certain circumstances, the Company has a right to set-off its exposure to such counterparty against the amounts owed by the Company to the counterparty.

The Company may engage in leverage as a result of entering into such derivative instruments. The Company’s maximum net exposure through leverage (including borrowings) shall not exceed 100 per cent of its Net Asset Value.

The Investment Manager may also seek to achieve the investment objective of the Company by investing in a range of open and closed ended collective investment schemes where the investment objective and policies of such schemes are consistent with the investment objective and policies of the Company. Such schemes may be leveraged or unleveraged, may be established in OECD and non-OECD countries and may be regulated or unregulated. When domiciled in unregulated jurisdictions, such schemes will not provide a level of investor protection equivalent to schemes authorised under Irish laws and subject to Irish regulations and conditions. The investment objective of the Company may also be met by direct investments made by way of Managed Accounts. However, no more than 30 per cent of the Company’s Net Asset Value may be invested in collective investment schemes and/or Managed Accounts in aggregate.

The Investment Manager will invest in such collective investment schemes or utilise Managed Accounts for the purposes of generating better investment returns for the Company and for smoothing these investment returns by reducing the correlation of returns to specific indices. The Investment Manager will only use a Managed Account provided that appropriate controls are put in place and provided that any such third party investment adviser is subject to the standard risk policies of the Investment Manager as more particularly set out on page 14.

The Company will seek to actively manage currency positions by gaining exposure to long and short positions in a range of international currencies including but not limited to US Dollar, Euro, Japanese Yen, Canadian Dollar, Australian Dollar, Hong Kong Dollar, New Zealand Dollar, Norwegian Krone, Singapore Dollar, Swedish Krone and Swiss Franc. The Company will implement this by using futures and option, swap and forward contracts in accordance with the techniques and instruments for efficient portfolio management described on page 13.

The investments of the Company will be listed, traded or dealt in on a regulated market or exchange in any of the following countries:- a member state of the EU, Australia, Canada, Hong Kong, Japan, New Zealand, Norway, Switzerland and the US. The Company may also invest in securities traded on a recognised over-the-counter market in any of the foregoing countries.

The Company may also hold up to 100 per cent of its Net Asset Value in cash. To the extent that the Company holds cash, up to 30 per cent of the Net Asset Value of the Company may be deposits with, or securities evidencing deposits issued by, a Relevant Institution. Related companies and institutions are regarded as a single issuer for the purpose of this paragraph.

Subject to the investment restrictions set out on pages 11 to 13 below, no percentage limitations are imposed on the amount of the Company’s Net Asset Value that may be allocated to different asset classes. The Investment Manager may vary the percentage of assets invested in any one type of instrument in accordance with its interpretation of economic and market conditions.

The investment objectives and policies of the Company will be adhered to, and in the absence of any unforeseen circumstances will not be altered for a period of three years from the date of the admission of the Shares to the Official List of The Irish Stock Exchange. Any change in investment objectives and any material change in investment policy will be subject to Shareholders’ approval. In the event of a change in investment objectives and policies, the Company will provide a reasonable notification period to enable Shareholders to redeem their Shares prior to the implementation of these changes.