DEFINED BENEFITS FUND

ACCELERATED CLASS

Today's Presentation

An overview of Traded Life Policies (TLP’s) as an asset class

What are TLP’s? Why TLP’s are an important asset class Why people sell their policies The TLP market place How TLP’s are purchased How TLP’s are valued within a fund

What are TLP’s?

United States Issued Life Assurance Policies

Policy purchased at discount from fixed maturity value, generating guaranteed profit when the policy pays out

Example Holdings

Lincoln National Life Columbus Life

Minnesota Mutual Life Security Life of Denver

American General Life New York Life

Sun Life John Hancock Life

Security of Conn Canada Life

Important Asset Class?

TLPs offer a fixed return to the investor Unaffected by other investment fluctuations Returns in the fund are extremely smooth Natural maturity point eliminating the need to find a

future buyer Net historic returns 9% p.a.

Market Today

Policies purchased from those aged 65 or over

More accurate and finite life expectancy tables

Policies in force two years plus – beyond contestability

Regulated market maker gives competitive pricing and protects buyer and seller

Why do people sell their policies?

Estate planning Change original beneficiary Strip out accumulated value to provide

income replace with cheaper term Key-Man Premiums no longer affordable

Market Growth

----------- 1990 $ 50 million

------------ 1999 $ 1 billion

------------ 2001 $ 4 billion

------------ 2007 $ 20 billion

------------ 2030 $161 billion

Source Financial Times, October 2007

How are TLP’s purchased?

A life expectancy (LE) is obtained

Illustration made to establish future premium liability

Offer made for policy – US law requires 3 offers before a policy is traded

Example of Policy Selected for Fund

LE 64 Months

Sum Assured $1,000,000

Purchase Price $ 629,215

Includes Premium to LE $ 97,275

Net Purchase Price $ 531,940

Return 58.93%

81 Year old – New York Life.

Open Ended Investment

Aurora is an open ended investment

Flexible investment term

Shares redeemable upon demand

Monthly fund valuations provided

Regulated mutual fund

Invest

USD class minimum $10,000

110% allocation from day one (e.g. $11,000 invested)

7 Year investment (No exit penalties after 7 years)

1.25% p.a. management charge

Target 7 – 9% annual growth

10% EXTRA ALLOCATION

• INVEST $50,000

• DAY ONE BECOMES $55,000

• YEAR END TARGET MINIMUM

•17%

Double your Money in 9 years!

Growth Estimated at 7% p.a.

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

Day One Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9

$100,000 invested with a steady compound growth of 7% p.a.