Fund Description

The Fund was established in 2004 to capitalize on the speculative allure of fast -appreciating properties in the "Sun Belt" (specifically, Arizona, Florida, Nevada, North and South Carolina) region of the United States and the Caribbean. The Fund's objective is to seek positive returns for its investors by acquiring developed and undeveloped residential real property primarily in new resort communities, including acquisition of lots designated for development of homes and condominiums; in each case with a view toward developing, selling or leasing (or any combination thereof) the unimproved or improved property.

Criteria and Strategies for Investments

In identifying investments for the Fund to make, WWA will consider a variety of criteria. The Manager will evaluate the expected rate of return on investment in real property, including the time period required to realize the return and any charges, fees or expenses that would negatively impact the rate of returns.

The Manager will also seek to establish favorable relationships with financial institutions that provide the best interest rates available in the market place. The Manager will evaluate the terms, origination fees, application fees, underwriting fees, administrative fees, and appraisal fees and closing costs to minimize expenses that would negatively impact returns to Members. The Manager will conduct studies utilizing market research to determine the feasibility of an investment taking into consideration factors that may include developer reputation, community and development amenities such as country clubs, golf courses, community pools and equestrian centers. Further, the Manager will attempt to evaluate community support for developments and projects, market competitiveness, projected community growth, and the abundance of available housing with amenities similar to the target property.

The Manager may also seek the advice and counsel of experts from the development, building and construction industry, such as appraisers, contractors, inspectors and surveyors. From time to time, the Manager may consult with financial and business consultants in an effort to gauge reasonable estimates for returns on investments.

Although there is no formal agreement to purchase or sell, the Fund will seek to develop and maintain positive relationships with developers such as The Ginn Company, to obtain early information regarding investment opportunities.

The Ginn Company is the developer of Reunion Resort, and is also the leading developer of resort/residential communities in the United States. Principals of The Ginn Company have spent the past three decades creating resort communities located on rare parcels of land throughout the Southeast. These communities include Sandestin on Florida's Emerald Cost, Wild Dunes and Dunes West in Charleston, SC.

Criteria for Divestitures

As part of its strategy for divesting the Fund's investments, the Manager will consider a variety of factors to determine the appropriate time to sell an investment of the Fund and the value of such investment. For example, the Manager will examine county records to understand current and historical sales information for similar properties and will monitor real estate MLS listings of similar properties. While taking into account the effect of seasonal fluctuations on the impact of resort property value, the Manager will also monitor sales trends of resort properties to determine any impact on investments or prospective investments. The Manager may also hire real estate agents and appraisers to determine the appropriate market value of the Fund's investments. In addition to the foregoing examples, the Manager will consider the demand for such properties, interest rates, profit potential and financing terms in the relevant market.

For additional information please contact: privateequitygroup@waddellwilliams.com