Choosing hedge fund managers can be a difficult task for the average investor. Fortunately, due to N1 Fund's ten years of experience in the hedge fund industry, the firm has successfully created a tool to systematically identify superior performing investment managers. Since inception, the firm has created and strengthened its network of hedge fund managers that have closed many of its funds to new asset allocations. One of our greatest assets is that we continue to have a great relationship and access to many of these closed funds.

The N1 Global Fund of Hedge Funds is the diversification tool for any traditional portfolio. While we never advise clients to allocate 100% of their assets in hedge funds, we do advise that a portion of any serious investor's portfolio to be allocated to hedge funds due to its non-correlative nature to the traditional equity and fixed income markets.

The N1 Fund Allocator is a proprietary hedge fund selection tool that identifies superior portfolio managers through a predetermined set of quantitative criteria dictated in the trading program. According to the N1 Fund Allocator, each potential target fund must meet not less than 85% of the following quantitative requirements and will be evaluated according to our internal rating system as per below:

• Return Criteria:
• A minimum of 85% positive months
• A minimum of 95% quarterly positive months
• Average monthly return is equal/greater than average monthly loss
• Annualized return to be greater than 1 month LIBOR + 5%
• Sharpe Ratio not less than 1.0
• Recovery period is less than 3 months
• Consecutive losing periods not to be greater than 3 months
• Risk Criteria:
• Correlation to MSCI World index not to be higher than 0.5
• Correlation to Lehman Aggregate Bond Index not to be higher than 0.4
• Annualized volatility not to be higher than 6%
• Maximum exposure to Emerging Market strategy not to exceed 25% of NAV
• Strategy Criteria:
• Maximum exposure to each investment mgmt company cannot exceed 10%
• Maximum exposure to each strategy cannot exceed 25%
• Minimum of 300 million in AUM
• Manager experience not less than 5 years in the hedge fund industry
  *If the target fund is closed, it receives 1 bonus point