Long Short Australian Equities

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Auscap Asset Management Pty Ltd

Auscap Long Short Australian Equities Fund

Information Memorandum

Offering to Wholesale Clients7 November 2012

Auscap Asset Management Pty Ltd ACN 158 929 143 AFSL 428014


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Auscap Long Short Australian Equities FundInformation Memorandum - 1

Auscap Asset Management Pty LtdACN 158 929 143 AFSL 428014

Auscap Long Short Australian Equities FundInformation Memorandum

7 November 2012

The Auscap Long Short Australian Equities Fund is an unregistered managed investment scheme.

This offer is limited to wholesale clients as defined by the Corporations Act 2001 (Cth).

This offer is only open to investors who receive this Information Memorandum in Australia and

does not constitute an offer in any place in which, or to any person to whom, it would not be

lawful to make such an offer.


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1. ABOUT THIS INFORMATION MEMORANDUM

THIS INFORMATION MEMORANDUM IS AN IMPORTANT DOCUMENT THAT SHOULD BE READ IN ITS ENTIRETY.

INVESTORS SHOULD OBTAIN PROFESSIONAL ADVICE BEFORE MAKING AN INVESTMENT DECISION IN RELATION TO

THE FUND.

This Information Memorandum contains information about the Auscap Long Short Australian Equities Fund ( Fund)

and is dated 7 November 2012. This Information Memorandum is issued by Auscap Asset Management Pty Ltd ACN

158 929 143 AFSL 428014, the trustee and investment manager of the Fund (Auscap or the Trustee). This

Information Memorandum is intended solely for the use of the person to whom it has been delivered ( Recipient)

for the purpose of evaluating a possible investment in the Fund. It is not to be reproduced or distributed to any

other person (other than professional advisers of the Recipient).

Offers made under this Information Memorandum are made exclusively to wholesale clients, as defined by the

Corporations Act 2001 (Cth) (Act). This Information Memorandum is not, and is not required to be, a disclosure

document or product disclosure statement within the meaning of the Act. This Information Memorandum may not

contain the same level of disclosure as those documents and has not been, and is not required to be, lodged with

the Australian Securities & Investments Commission. This Information Memorandum is not a recommendation to

invest in the Fund and may not include all of the information that an investor needs to make an investment decision.

Auscap does not take into account the individual circumstances of any investor, nor does it give financial product

advice. Accordingly, investors should make their own enquiries and obtain professional legal, financial, tax and

accounting advice before making an investment decision. An investment in the Fund is subject to investment and

other risks, including loss of income and capital invested. Investors should read carefully the Risks of Investing inthe Fundon page 13 of this Information Memorandum.

The information in this Information Memorandum is up to date as at the time of preparation. Auscap may amend or

withdraw this Information Memorandum at any time and may issue a new or amended information memorandum

from time to time. A copy of the constitution for the Fund is available from Auscap. If you are unsure about anything

contained in this Information Memorandum or have any questions, please contact Auscap at [email protected].

Neither Auscap nor its respective affiliates, related bodies corporate, directors, officers, employees, representatives

or advisors (Specified Persons) accepts any liability for any loss or damage suffered or incurred by the Recipient or

any other person or entity however caused (including negligence) relating in any way to this Information

Memorandum including, without limitation, the information contained in it, any errors or omissions however caused

by the Recipient or any other person or entity placing any reliance on this Information Memorandum, its accuracy or

reliability.

Other than to the extent required by law, neither Auscap nor any of its Specified Persons makes any representations

or warranties, express or implied, as to the accuracy or completeness of any of the information contained in this

Information Memorandum or any other information (whether written or oral) made available to investors in theFund, and each of such parties expressly disclaims any and all liability relating to or resulting from the use of this

Information Memorandum or such other information by the Recipient. This Information Memorandum may contain

assumptions, opinions, estimates and forecasts. Except to the extent implied by law, no representation or warranty

as to the validity, certainty or completeness of any of the assumptions or the accuracy of the information, opinions,

estimates or forecasts contained in this Information Memorandum is made by Auscap or any of its Specified Persons.

Neither Auscap nor any of its Specified Persons guarantees any rate of return of any investment in the Fund, the

meeting of the investment objectives of the Fund, the performance of the Fund or the repayment of capital.

The Information Memorandum was last updated on 17 February 2014.


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2. WELCOME LETTER FROM THE PRINCIPALS

Dear Investor,

We are pleased to invite you to participate in the Auscap Long Short Australian Equities Fund.

The aim of the Fund is to deliver strong absolute returns that have a low correlation to the

performance of the Australian equities market.

The Fund will concentrate primarily on fundamental long investments and short positions, while

also utilising a multi-strategy approach to take advantage of short term market opportunities to

increase returns, hedge the portfolio, protect capital and minimise volatility where prudent.

Disciplined risk management is a key aspect of our investment process.

As the investment team, we have over 20 years combined experience in long and short investing in

financial markets in Australia, having previously worked at Goldman Sachs, Macquarie Group and

Merrill Lynch.

We believe that the market environment presents opportunities from both a long and short

perspective and have designed the Fund to best take advantage of these conditions. We are each

significantly co-invested in the Fund, ensuring the alignment of our interests with those of our

investors.

Our objective is to build long term compounding returns for our investors. As portfolio managers,

we will manage investor capital in a manner consistent with the investment strategy and the

process outlined in this Information Memorandum.

As principals of Auscap Asset Management, we intend to develop a leading funds management

business that has a reputation for consistent outperformance, strong risk management, a positive

culture and integrity.

We look forward to welcoming you into the Fund.

Kind regards,

Tim Carleton Matthew Parker

Principal & Portfolio Manager Principal & Portfolio Manager

Auscap Asset Management Auscap Asset Management


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3. CONTENTS

1.

About this Information Memorandum 2

2.

Welcome Letter from the Principals 3

3.

Contents 5

4.

Fund Directory 6

5. Fund Overview 7

6.

Investment Manager 8

7. Investment Objectives & Process 9

8.

Risks of Investing in the Fund 13

9. Fees and Expenses 15

10. Investing in the Fund 17

11. Tax Considerations 22

12. Additional Information 24

13. Glossary 30

14. How to Complete the Application Form 33

A. Application Form 35

B.

Additional Application Form 49

C. Redemption Request Form 51


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4. FUND DIRECTORY

Trustee & Investment Manager


ACN 158 929 143

AFSL 428014Level 24, 9 Castlereagh St

Sydney NSW 2000

Phone: +61 2 8005 8120

Email: [email protected]

Fund Administration & Unit Registry (Administrator)

White Outsourcing Pty Limited

Level 3, 99 Bathurst St

Sydney NSW 2000

Post: GPO Box 5482, Sydney NSW 2001

Phone: +61 2 8262 2800

Fax: +61 2 9221 1194

Email: [email protected]

Prime Broker & Custodian

Citigroup Global Markets Limited

Citigroup Centre

Canada Square

Canary Wharf

London E14 5LB England

Phone: +44 207 986 0454

Auditor

Ernst & Young

Ernst & Young Centre680 George St

Sydney NSW 2000

Phone: +61 2 9248 5555

Fax: +61 2 9248 5959

Legal Advisers

Henry Davis York

44 Martin Place

Sydney NSW 2000

Phone: +61 2 9947 6000

Fax: +61 2 9997 6999


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5. FUNDOVERVIEW

This is a summary of the key features of the Fund. Investors should read the entire Information

Memorandum for full details before investing.

Investment Vehicle Auscap Long Short Australian Equities Fund (Fund), an

Australian domiciled unregistered managed investment scheme

Investment Manager &

Trustee


Fund Administrator White Outsourcing Pty Limited

Custodian & Prime Broker Citigroup Global Markets Limited

Investment Strategy Long/Short equities, focusing on investments in Australia

Investment Objective To generate strong absolute returns in excess of the Benchmark

with low correlation to the Australian equities market

Benchmark Reserve Bank of Australia Cash Rate

Fund Holdings Typically 25-45 positions

Investment Horizon 3 years +

Investor Eligibility Wholesale Clients, as defined in the Act

Minimum Investment $250,0001

Minimum Additional

Investment

$100,0001

Commencement Date December 2012

Management Fee 1.5% of the NAV of the Fund, plus GST 2

Performance Fee 15% of Outperformance over the Benchmark plus GST2

Buy/Sell Spread 0.2% / 0.2%

Entry/Exit Fee Nil

Applications Monthly, due 5pm 3 Business Days before the end of the month

Redemptions Monthly, with 1 months notice

Valuations Monthly

Distributions Annually

1Auscap Asset Management reserves the right to accept lower amounts from wholesale clients2

For further information, please refer to Section 9, Fees and Expenses


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6. INVESTMENT MANAGER

Auscap Asset Management Pty Ltd (ABN 11 158 929 143) (Auscapor we) is the Trustee and

Investment Manager for the Fund. Auscap is an investment management company founded in 2012

and based in Sydney, Australia. Auscap holds an Australian financial services licence (AFS Licence

number 428014). Auscap was founded by Tim Carleton and Matthew Parker (the "Principals"), whohave worked together for a number of years and have considerable experience in and knowledge of

financial markets, particularly in Australian equities. Both Tim and Matthew are substantially co-

invested in the Fund.

Tim Carleton

Principal & Portfolio Manager

Tim has over 9 years experience in the financial services industry working in investment banking

and equities portfolio management. Tim was previously an executive director within the

proprietary strategies team at Goldman Sachs, responsible for managing a long short Australian

equities portfolio using Goldman Sachs proprietary funds.

Prior to joining Goldman Sachs in 2007, Tim worked at Macquarie Bank within the Investment

Banking Group. He was involved in significant principal transactions using Macquarie Bank fundsand in advising ASX listed companies. Tim is a CFA charterholder, has a Bachelor of Laws (Hons)

from the University of Sydney and a Bachelor of Commerce (Finance and Economics) from the

University of Sydney.

Matthew Parker

Principal & Portfolio Manager

Matthew has over 15 years experience in the financial services industry working within equities

trading, dealing and portfolio management. Matthew was previously an executive director within

the proprietary strategies team at Goldman Sachs responsible for managing a long/short equity

portfolio using Goldman Sachs proprietary funds.

Prior to joining Goldman Sachs in 2008, Matthew spent 9 years at Merrill Lynch Australia as a

director responsible for managing a long short equity portfolio using Merrill Lynch Australiaproprietary funds.

Auscap Team

Auscap uses a dual manager approach to the investment and portfolio management decision

making process. This involves both Principals collaborating to determine significant portfolio

investments and positions. Auscap believes the dual portfolio manager approach has considerable

benefits in terms of idea generation, investment decision making, utilising the Principals

complementary skills and qualities, market coverage, accountability, portfolio risk management

and business continuity. The Principals have considerable experience in equities portfolio

management including: the use of fundamental and technical analysis; disciplined risk analysis and

management; conducting their own independent research across market sectors and companies;

and leveraging relationships across a broad network of analysts, brokers and investment

professionals.

Further, Auscap has engaged top tier independent service providers to manage the prime

brokerage, custody, fund administration, unit registry, risk reporting, accounting, legal and audit

requirements of the business (as discussed in section 12, Additional Information). This ensures that

best practice principles are followed in all aspects of the investment and operational management

of the Fund.


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7. INVESTMENT OBJECTIVES & PROCESS

Fund Details

The Fund is a wholesale Australian domiciled unregistered managed investment scheme. Auscap is

Trustee and Investment Manager of the Fund. Citigroup Global Markets Limited has beenappointed as Custodian and Prime Broker. White Outsourcing Pty Ltd has been appointed to

provide fund administration and unit registry services for the Fund. The governing rules of the Fund

are detailed in the Funds Constitution, a copy of which is available upon request from Auscap.

Auscap, in its capacity as investment manager of the Fund, is responsible for directing the

investment of the Fund's assets in accordance with the investment objective and the investment

strategy.

Investment Objective

The Funds investment objective is to generate strong absolute returns in excess of the benchmark,

being the Reserve Bank of Australia Cash Rate (Benchmark), with low correlation to equity

markets.

Investment Strategy

The Fund utilises an investment strategy that seeks to deliver consistent returns in excess of the

Fund Benchmark. The Fund is an Australian equities fund that focuses on fundamental long and

short investments while utilising a multi-strategy approach to take advantage of shorter term

market opportunities to increase returns, hedge the portfolio, protect capital and minimise

volatility where prudent. Disciplined risk management is a key aspect of our investment process.

The Fund is a high conviction fund and the combined portfolio will typically have 25-45 positions,

investing primarily in stocks in the ASX200. The Fund may be net long, short or neutral depending

on the strategies being employed by Auscap at the time. Auscap will allocate capital in accordance

with expected performance and risk measures.

The Fund may hold cash so that it is in a position to take advantage of market volatility and

compelling investment and market opportunities as and when they arise.

Opportunistic

Multi-strategy

Investments

Fundamental

Investments

Macroeconomic

Analysis

Sector Review

Fundamental

Valuation

Identify Catalysts

Position Size

& Target Return

Portfolio

Hedging

Earnings Revision

Candidates

Changing Industry

Structure

Risk

Arbitrage

Event

Positions


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Fundamental Investment Process

The fundamental investment process involves the following steps, which may include:

Recognising key macroeconomic variables including growth,

inflation, interest rates, unemployment and availability of

finance, and their influence on business and asset prices

Understanding global trends and themes, geopolitical and

business cycles, reserve/central bank policies

Identifying structural attributes of a particular industry

including key determinants of, and current dynamics

affecting, sector profitability

Determining the relative value proposition between sectors

and industries

Reviewing Government regulatory influence and risks

Conducting quantitative and qualitative research into and

evaluation of: mid-cycle earnings; return on capital and

equity; sustainable competitive advantages; strength of

company management; capital position; and competition

Estimating fair value and ensuring sufficient margin of safety

between valuation and purchase/sale price

Identifying factors that will return a stock to fair value

Maintaining an awareness of key corporate events, lead

indicators, momentum, extremes in sentiment or security

mispricing due to one-off incidents

Utilising technical indicators to gain good entry into, and exit

out of, core positions

Determining appropriate position size given expected

performance, risk characteristics and stock liquidity

Initiating positions and setting target valuations

Constantly monitoring, evaluating and re-assessing positions

Disciplined risk management

In order to maximise investor returns, Auscap will take into consideration tax and income benefits,

including franking credits, that can be passed through to Australian investors.

Macroeconomic

Analysis

Sector

Review

Fundamental

Valuation

Identify

Catalysts

Position Size &

Target Return


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Opportunistic Multi-Strategy Investment Process

The opportunistic multi-strategy approach will employ a number of strategies that aim to both

enhance returns and reduce the volatility of the Fund. Strategies may include:

Reducing market risk and exposure during periods when the

market looks expensive, or during periods of uncertainty, to

reduce the volatility of, and enhance the returns for, investors

Hedging against specific industry exposures

Purchasing protection to mitigate tail or event risk

Recognising and taking advantage of discrepancies between

investment community expectations and the economic

reality/current circumstances

Looking to benefit from company and industry momentum as

a result of the change in the company outlook and anchoring

of expectations

Identifying crowded positioning

Recognising industries with structural changes impacting the

sustainability of earnings; barriers to entry; profit margins;

cost of production; and/or capital expenditure requirements

Identifying companies within industries that are undergoing

structural adjustments due to: technological developments;

product competition; development of substitute products;

changing social attitudes/behaviour; and/or regulation

Discovery and recognition of opportunities with respect to:

company restructurings; spin-offs; asset sales; stock splits;

and other corporate activity

Understanding valuation outcomes that result from

significant announcements

Identifying value based on changing circumstances

Dual listed arbitrage, which involves taking advantage of

discrepancies between a security that is listed on multiple

exchanges and at times trades at different prices Identifying arbitrage opportunities with respect to mergers

and takeovers, with strict conditions for a risk-arbitrage to be

considered favourable

Portfolio

Hedging

Earnings RevisionsCandidates

Event

Positions

Risk

Arbitrage

Changing

Industry

Structure


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Risk Management

Strong and disciplined risk management is a key focus for the Investment Manager. The Investment

Manager will seek to monitor and minimise risk to reduce the volatility of returns. The riskmanagement process will include:

Daily internal reporting of portfolio risk and liquidity measures;

Monitoring of risk parameters with automatic breach notification by the Administrator;

Calculating and monitoring risk via internal control systems utilising aggregate, sector and

single name exposure and scenario analysis risk management tools;

Focusing on liquid securities where there is less pricing and liquidity risk;

A quarterly review of the risk management processes by the Auscap board; and

Monthly reporting of Fund returns to investors.

Fund Instruments

Along with Australian listed equities, the Fund may from time to time have exposure to the

following financial products:

Listed futures (predominantly on listed equities, trusts, funds and indices)

Foreign exchange and related instruments (such as forwards, futures or swaps)

Foreign listed equities, including Australian dual listed equities, fungible equities, American

Depositary Receipts (ADRs) and pooled investment vehicles

Derivatives (predominantly exchange traded options on listed equities, indices and on

occasion other assets)

At times the Fund may invest in other financial products where the Investment Manager deems it

appropriate.

Derivatives

Derivatives may be used by the Fund for hedging and non-hedging purposes such as:

to manage particular risks;

to implement an investment strategy in a cost efficient manner; as a substitute for direct investment in securities; or

to reduce risk or gain exposure to other types of investments where appropriate.

Leverage

The Fund may be geared up to 200% gross long or gross short and up to 150% net long or net short.

Gearing has the potential to enhance both returns and losses and its use may increase the risk

profile of the Fund. As an illustration only, if we assume the Fund has $100m in funds under

management, the Investment Manager could implement strategies that result in the Fund having

up to $200m of gross long positions and up to $200m of gross short positions. However, the net

position of the Fund (the delta of gross longs less gross shorts) could never exceed $150m net long

or $150m net short. Auscap does not intend to utilise these percentage limits on a regular basis.

Underwriting and Sub-Underwriting

Auscap may identify investment opportunities that involve underwriting or sub-underwriting

arrangements. Auscap may make such investments not for the purposes of providing underwriting

but rather for investing in accordance with the investment strategy of the Fund. Should the

Investment Manager earn a fee for underwriting services, these fees will reduce the fees it receives

from the Fund in the following fee calculation period.


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8. RISKS OF INVESTING IN THE FUND

All investments have an inherent level of risk. While Auscap has established risk management and

investment processes that seek to mitigate the risks associated with the Fund, investment in the

Fund carries certain risks. There is no guarantee that the Fund will achieve its investment objective

and investors should fully understand and be capable of assuming the risks of investing in the Fund.In deciding whether to invest in the Fund, you should consider that you may lose some or all of your

investment, the value of your investment may go down, you could receive little or no income and

there may be delays in repayment. The key risks outlined below do not purport to be a complete

explanation of all the risks associated with investing in the Fund.

Market Risk

Market risk is the risk that the market value of a security may move up and/or down, sometimes

rapidly and unpredictably.

Long and Short Equity Risk

The Investment Manager will be engaged in the purchase and short sale of securities. This means

that investors may lose money on long positions due to unpredictable drops in a security's value orperiods of below-average performance in a given security or in the securities market as a whole.

Conversely, investors may lose money on short positions due to unpredictable appreciation in a

securitys value or periods of above-average performance in a security or the securities market as a

whole.

Management Risk

Management risk is the risk that the Investment Manager's investment strategy could fail to

achieve the Fund's investment objective and could result in a decrease in the value of an

investment in the Fund. The Fund is subject to management risk because it is actively managed. In

making investment decisions for the Fund, the Investment Manager will apply the Fund s

investment strategy, but there is no guarantee that the Investment Manager's decisions will

produce the intended result.

Concentration Risk

The Fund may invest a relatively high percentage of its assets in a limited number of securities, or in

securities in a limited number of industries, which may cause the value of the Fund's investments to

be more affected by any single adverse economic, political or regulatory event than the

investments of a more diversified investment portfolio.

Liquidity Risk

Liquidity risk arises when investments are made in securities which are traded on an infrequent

basis, or in securities which are not traded regularly on any financial market. Should the Fund hold

illiquid securities then it may not be able to sell them at a fair price at the time it may wish to do so.

Foreign Currency Risk

The Fund may have exposure to foreign assets or assets with foreign currency earnings. These

assets and earnings may be subject to currency fluctuations between the Australian dollar and the

currency in which the investment is denominated which may cause the value of an investment in

the Fund to fall. The Investment Manager will evaluate foreign exchange exposure of the Fund and

may choose to undertake transactions that aim to reduce the impact of movements in exchange

rates on the value of the Funds assets. However, there is no guarantee that the strategy will be

successful or that currency risks will be mitigated. It may not be possible or practicable to hedge

successfully against currency exposure in all circumstances. The cost of hedging is an expense that

is borne by the Fund.


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Borrowing and Leverage Risk

The Fund may leverage its capital, in accordance with the investment strategy (as outlined on page

12), because the Investment Manager believes that the use of leverage may enable the Fund toachieve a higher rate of return. In order to do so, the Fund may pledge its securities to borrow

additional funds for investment purposes. The Fund may leverage its capital through the use of

derivatives and short sales. Leverage can magnify both the gains and losses and investors may

experience increased volatility in the value of their investments.

Personnel Risk

Key personnel of the Investment Manager, who are significant to the management of the Fund and

its underlying portfolios, may become unable or unavailable to perform their role.

Derivatives Risk

Derivatives are used to adjust security and portfolio risk-reward profiles and, as a result, have

various risks attached to them. The risk of using derivatives might include: the value of thederivative failing to move in line with the underlying asset; potential illiquidity of the derivative; the

possibility that the derivative position is difficult or costly to reverse; the derivative not performing

as expected; premium decay over time; capital loss; or counterparty risk.

Counterparty Risk

Counterparty risk is the risk that the counterparty to a transaction or contract (such as a broker or

other agent of Auscap) may default on their obligations and that the Fund may, as a result,

experience an adverse investment outcome or liability.

Fund Risk

Common risks associated with most managed funds include the risk that: the Fund may be

terminated; the fees and expenses could change; or the Trustee, or the investment professionals,could change. The Trustee has the discretion to compulsorily redeem Units. In addition, the results

of investing in the Fund may lead to different results compared with investing directly in securities

because of income or capital gains accrued in the Fund and the consequences of other investors

investing in, or withdrawing from, the Fund. As the Fund has no operating history, there is no basis

on which to predict the future performance of the Fund or its underlying portfolios.

Legal, Regulatory & Tax Risk

Legal, regulatory and tax changes could occur during the term of the Fund, which may adversely

affect the Fund and its underlying investments. The value or tax treatment of an investment, or the

effectiveness of the Fund's trading or investment strategy may be adversely affected by changes in

government (including taxation) policies, regulations and laws, or changes in generally accepted

accounting policies or valuation methods.

Withdrawal Risk

If market events reduce the liquidity of a security or asset class, the generally applicable timeframe

for meeting withdrawal requests may not be met. It may take longer to sell these types of

investments at an acceptable price. In addition, if an investor or a group of investors seek to make

large withdrawals, then selling assets to meet those withdrawals may result in a detrimental impact

on the price received by the Fund for those assets. In certain circumstances it may be necessary to

suspend withdrawals to allow sufficient time for liquidation of assets to meet withdrawals.


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9. FEES & EXPENSES

Auscap, as Trustee and Investment Manager, is entitled to receive management fees as listed

below. These fees are applicable as at the date of this Information Memorandum. Auscap will give

investors prior written notice of any variation of fees or charges by the Fund.

Management Fee

A management fee of 1.5% per annum (excluding GST) of the net asset value (NAV) of the Fund

accrues and is payable by the Fund to Auscap monthly in arrears. The NAV of the Fund is the value

of all its assets less all its liabilities.

Performance Fee

A performance fee of 15% Outperformance (excluding GST) is payable to Auscap. The performance

fee is referable to the Series you have invested in. Outperformance is calculated as the amount by

which the NAV per Unit of the relevant Series exceeds the High Watermark increased by the Hurdle

Rate. The High Watermark means, until a performance fee for that Series first becomes payable,

the Issue Price or otherwise, the highest NAV per Unit of the Series at the beginning of any

Performance Period. The Hurdle Rate is the Reserve Bank of Australia cash rate.

The performance fee is calculated and accrues monthly against the relevant Series and is paid in

arrears at the end of each half-year (Performance Period). Any accrued performance fee payable

in respect of the Units redeemed is calculated as at the Valuation Day on which the Units are

redeemed.

Performance Fee and Series Accounting

In order to ensure that Unitholders bear the performance fee according to the actual performance

of their Units, having regard to the different dates and prices at which such Units were acquired, a

new Series of Units will be issued in respect of each Subscription Day.

As soon as practicable after the last Valuation Day in each Performance Period, all Units in all Series

which have borne a performance fee in respect of the relevant Performance Period will normally beconsolidated into a single Series, being the oldest Series of such Class to have borne a performance

fee in respect of the relevant Performance Period. The High Watermark for all Units of the

consolidated Series will be the NAV per Unit of that consolidated Series as at the last Valuation Day

in the relevant Performance Period, after payment of the performance fee. If a performance fee is

not payable for a particular Series at the end of the Performance Period, the Series will not be

consolidated.

Other Fees

Buy/Sell Spread

Apart from the initial application for Units prior to commencement of the operation of the Fund, a

buy/sell spread of 0.2% is charged on all applications and redemptions for the costs of acquiring

and selling assets of the Fund to issue and redeem Units in the Fund. This is paid into the Fund tothe benefit of other Unitholders. This amount represents the expected average brokerage, clearing

and market impact costs incurred by the Fund to accommodate the issue and redemption of Units

in the Fund. Please see the section on Unit Pricing under Section 10, Investing in the Fund, for

further details.

Application Fee

There will be no application fee for applications for Units in the Fund for the life of this Information

Memorandum.


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Exit Fee

There will be no exit fee for the redemption of Units in the Fund for the life of this Information

Memorandum.

Goods and Services Tax

Fees and charges quoted in this Information Memorandum are subject to GST where applicable, at

the rate applying on the date of the fee or charge, unless otherwise stated. The Fund may be

entitled to claim back reduced input tax credits on some of its expenses as applicable in line with

GST legislation.

Commission Payments

To the extent permitted by law, Auscap may pay fees, commissions and/or trailing commissions to

financial intermediaries who introduce capital to the Fund. Some financial intermediaries may elect

to rebate all or some of their fee or commission and waive any trailing commission as part of their

fee arrangement with investors. Such independent financial intermediaries are not agents ofAuscap, and Auscap is not liable for their acts or omissions.

Soft Commissions

Auscap may have soft commission arrangements in place with brokers and counterparties it uses to

execute transactions. Auscap may receive a benefit based on certain metrics, such as number of

trades executed through the respective broker or counterparty. Benefits received may include,

among other things: research and information services; portfolio risk and trade analysis; or

particular trade execution capabilities. While the benefits of such arrangements are generally used

to assist Auscap in managing the Fund, Auscap is entitled to retain, and is not accountable in any

way, to the Fund nor to any Unitholders, for soft commissions.

Other Fees and Expenses

The Fund will pay out of Fund assets other ordinary direct expenses such as custodial,

administrative, accounting, registry, legal, banking and audit expenses properly incurred in respect

of the Fund. These represent the operating expenses and outgoings in connection with the start-up

costs and day-to-day operation of the Fund. Extraordinary expenses, such as the costs of convening

Unitholder meetings or defending a third party claim made against the Fund, will also be paid by

the Fund.

Fees Waiver, Deferral or Reduction

Auscap retains the sole discretion to elect to waive, defer or reduce any fees from time to time. Any

such waiver, deferral or reduction will in no way affect the right to receive any fees payable. Auscap

retains the absolute discretion to rebate, waive, defer or reduce all or any part of any fees

applicable to Units for certain Unitholders and/or pay all or part of such fees to third parties for

services related to the placement of Units.


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10.INVESTING IN THE FUND

Who can invest?

The Fund is a wholesale fund. Unless otherwise determined by Auscap at its sole and unfettered

discretion, only wholesale clients within the meaning of section 761G(7) or 761GA of the Act mayinvest in the Fund. Accordingly, Auscap will only accept investments in the Fund from, and transfers

of Units to, investors who satisfy the criteria set out below.

Under the Act, an investor is a wholesale client if the investor satisfies one of the following criteria:

(i) the investor invests an initial amount of $500,000 or more;

(ii) the investor has net assets of at least $2,500,000 (the investor must provide the Investment

Manager with a copy of a qualified accountants certificate dated within the preceding two

(2) years that certifies the required net assets);

(iii) the investor has earned at least $250,000 per annum (gross income) for each of the last two

(2) financial years (the investor must provide the Investment Manager with a copy of a

qualified accountants certificate dated within the preceding two (2) years that certifies the

required level of income); or

(iv) the investor qualifies as a professional investor within the meaning of the Act, which

includes:

A financial services licensee;

A body regulated by APRA;

A body registered under the Financial Corporations Act;

A trustee of a superannuation fund, approved deposit fund, pooled superannuation trust

or public sector superannuation scheme which has net assets of at least $10 million;

A person who has or controls gross assets of at least $10 million (including any assets

held by an associate or under a trust that the person manages);

A listed entity or related body corporate of a listed entity;

An exempt public authority;

A body corporate or unincorporated body that carries on the business of investment infinancial products, interest in land or other investments and invests funds received

following an invitation or offer to the public under section 82 of the Corporations Act;

A foreign entity that, if established or incorporated in Australia, would be covered by one

of the above

Auscap will accept investments in the Fund from investors who qualify as wholesale clients

pursuant to any amendments to the Act and Corporations Regulations 2001 (Cth) from time to

time.


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Applications

Minimum Initial Investment

Applications, which must be for a minimum investment of $250,000, may be made only by written

application using the accompanying Application Form. Auscap has absolute discretion to accept or

reject any application. A confirmation advice of the Unit holding will be issued as soon as

practicable following the determination of the applicable unit price. Auscap may waive the

minimum amount requirement in respect of certain investors.

Minimum Additional Investment

Additional investments, which must be for a minimum investment of $100,000, may be made by

completing an Additional Application Form. Auscap may waive the minimum amount requirement

in respect of certain investors.

Application Acceptances

In respect of each initial and additional investment, an investor must qualify as a Wholesale client,

as defined under the Act. Applications are accepted at the absolute discretion of Auscap. Rejected,

invalid or incomplete applications will be returned to applicants as soon as possible. Interest is not

payable on rejected application monies.

Application Process & Cut-off Times

Applications can be made by completing the attached Application Form, or the Additional

Application Form for subsequent additional investments, and forwarding it to the Administrator.

Applications will generally be processed on the first Business Day of each month ("Subscription

Day"). The Issue Price will be based on the NAV of the Fund at the immediately preceding Valuation

Day (see Unit Pricing below). Cleared funds must be electronically transferred into the Auscap Long

Short Australian Equities Funds Application Account no later than 5pm AEST at least three (3)

Business Days prior to the end of the month or such earlier or later time as Auscap may determine.The Fund will retain any interest earned on any application monies. Units in the same Class issued

on the same Subscription Day will be in the same Series. Units issued on different Subscription

Days will be issued in different Series.

The relevant Application Form or Additional Application Form must be received by the

Administrator no later than 5pm AEST at least three (3) Business Days prior to the end of the month

or such earlier or later time as Auscap may determine. Initial Application Forms and relevant

identification documentation must be sent as originals to the Administrator. The Administrator will

not process any new applications until it has received a properly completed and signed original

Application Form and originals or original certified copies of applicable identification

documentation required under Anti-Money Laundering and Counter Terrorism Financing

Legislation.

For Additional Applications, a copy of the completed Additional Application Form must be sent,faxed or emailed to the Administrator (see Fund Administrator details in the Fund Directory). If

Unitholders choose to send Additional Application Forms by post, facsimile or email, they bear the

risk of such requests not being received. Neither the Administrator nor Auscap accept any

responsibility or liability for any loss caused as a result of non-receipt or ineligibility of any mail,

facsimile notice or email or for any loss caused in respect of any action taken as a consequence of

such instruction believed in good faith to have originated from properly authorised persons.


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Auscap Rights

Unitholders may be admitted to the Fund upon such terms and conditions as are permitted by

Auscap, without the consent of any other Unitholders, which terms and conditions may differ fromthose applicable to other Unitholders on matters relating to, without limitation, notice periods, fee

waivers, rebates or reductions and information rights. New classes of Units in the Fund may be

established by Auscap without the approval of the existing Unitholders. However, Auscap will

provide existing Unitholders with written notice of any classification or reclassification of their

existing Units in the Fund.

Unit pricing

When money is invested in the Fund, a number of Units are allocated in the Fund. Units in the

initial Series of Units in the Fund are issued at an Issue Price of $1.00 (the Reference Series).

The Issue Price of a Unit issued in a subsequent Series of Units in the Fund is calculated by

reference to:

the NAV of the Fund as apportioned to the Reference Series, including the deduction of anyaccrued performance fees;

dividing the result by the number of Units on issue in the Reference Series to determine the

value of each Unit in the Series; and

adding the buy spread per Unit.

The buy/sell spread (being an amount added to/deducted from application/redemption unit prices

to account for transaction costs) will amount to +0.2%/-0.2%. The buy-sell spread will apply to the

Fund for the life of this Information Memorandum to applications received after the

commencement of the Fund.

Distributions

Any Fund income available for distribution, less expenses, will be distributed annually, as soon as

practicable after each 30 June or otherwise as determined by Auscap. Where a Unitholder redeemsits units, Auscap may determine the amount of the Fund net income that is referable to those

redeemed units. Where income is referable to redeemed Units, the redemption proceeds may

comprise capital and income in proportions determined by Auscap pursuant to the Fund

Constitution. Auscap will notify the Unitholder of the composition of the redemption proceeds.

For Unitholders who remain invested at a Distribution Date, Auscap will calculate distributions

referable to each Class and Series. Distributions will be based on the Funds income for that tax

year, after taking into account any income that may have been distributed as redemption proceeds.

Distributions will be automatically reinvested into the Fund. Unitholders may elect to have their

distributions paid to them as cash, or change their existing distribution option, by notifying the

Administrator, in writing, at least thirty (30) Business Days before 30 June. Units issued for

reinvestment of distributions will be issued at the unit price applicable on the Subscription Day

after the distribution entitlement arises. No buy/sell spread is applied in respect of such Units.Distributions may be made up of both income and capital.

Auscap may in its absolute discretion accept or reject a written direction from a Unitholder and is

not required to give any reasons. Auscap reserves the right to cancel distribution reinvestments.

Unitholders will be notified if this occurs.


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Transfer of Units

Transfer requests should be made in writing to the Administrator. Auscap may require transfer

documentation to be completed by the transferor including the completion of an Application Formand/or other documentation. Units must not be sold or transferred without prior written consent

from Auscap, which may be granted, subject to certain terms and conditions, or withheld in its sole

and absolute discretion. Units sold or transferred without such consent may be compulsorily

redeemed by Auscap. Unitholders should consider the taxation implications of any such transfer of

Units.

Redemptions

Partial Redemption

For a partial redemption request, instructions must specify the amount of Units or the amount to

be withdrawn. If a partial withdrawal request will result in the Unitholder holding less than the

minimum investment amount, Auscap may treat the redemption request as a redemption in

respect of all of the Unitholder's Units. Redemption requests in relation to the Fund may only bewithdrawn with Auscaps consent. Auscap may determine in its discretion a minimum redemption

amount.

Redemptions Processes and Cut Off Times

If a Unitholder redeems Units in the Fund, Auscap will, to the extent necessary, liquidate listed

securities it holds as long and short positions in the Fund. Auscap will use the proceeds of the

redemption in the assets to Fund the Unitholder's request.

Redemption requests must be submitted and received by the Administrator by 5pm AEST at least

one month ahead of the last Business Day of each month ( "Redemption Day"). Auscap has the

discretion to allow redemptions at other times and with longer or shorter notice periods. The

redemption price will be the unit price as at the Valuation Day immediately preceding the

Redemption Day. If the original request is received by the Administrator after the deadline forreceipt of requests for any particular Redemption Day, it will be treated as a request for

redemption on the next Redemption Day.

Unitholders will only be able to redeem Units in the Fund if they have correctly completed and

submitted the attached Redemption Request Form, and it must be signed by the Unitholder. The

Redemption Request Form should be sent, faxed or emailed to the Administrator (see

Administrator details in the Fund Directory). In normal circumstances, proceeds from redemptions

will be available within twenty (20) Business Days after the redemption has been processed.

Redemptions will occur by way of electronic funds transfer to the nominated bank account in the

name of the Unitholder from which the application funds derived. Normal bank charges will apply.

If Unitholders choose to send Redemption Request Forms by post, facsimile or email, they bear the

risk of such requests not being received. Neither the Administrator nor Auscap accept any

responsibility or liability for any loss caused as a result of non-receipt or ineligibility of any mail,facsimile notice or email or for any loss caused in respect of any action taken as a consequence of

such instruction believed in good faith to have originated from properly authorised persons.

Suspension of redemptions

Auscap may suspend the redemption of Units and the payment of redemptions if it believes that it

is in the best interests of Unitholders as a whole. Redemption requests received during a

suspension period will be processed at the next Redemption Day after the end of the suspension.


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Valuation

Under International Financial Reporting Standards, investments are valued at fair value. Bid and

offer pricing is considered to be representative of fair value for listed investments. The valuationpolicy of the Fund is that listed investments are valued at the last traded price. This may lead to

minor differences in the Fund valuation compared with the valuation performed for International

Financial Reporting Standards at financial year end.

Unitholder Communication

Unitholders in the Fund will receive correspondence as outlined below.

Unitholder Receipt

The Unitholder receipt will set out details of the Unitholder, Subscription Day, unit price, the Unit

Series and number of Units the Unitholder holds in the Fund upon initial or subsequent application.

Monthly Report

A monthly newsletter will be available to all Unitholders discussing the performance of the Fund

with disclosure of returns during the month.

Tax and Distribution Statements

A taxation and distribution statement will be sent to all Unitholders at least annually.


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11.TAX CONSIDERATIONS

Investing in the Fund has tax implications, depending upon your particular situation. Auscap

cannot give tax advice and we recommend that you obtain professional advice on the tax

implications of investing. This Information Memorandum provides Australian residents with

general information only, and should not be relied upon by you as it may not relate to yourparticular situation and tax laws may have changed since the issue of this Information

Memorandum.

Taxation of Distributions

The Fund is resident in Australia for tax purposes. The Fund should not generally be liable for

income tax, as it will distribute all the income of the Fund to investors each year. Your share of

taxable income of the Fund for each year ended 30 June should be included as assessable income

in your tax return for each such year, even if your distribution is reinvested as additional Units in

the Fund in the next year. Distributions may represent realised gains on disposal of investments as

well as dividend income.

At the end of each year investors will be sent a tax statement that will indicate the composition of

the income distributed. This will include details of assessable income, capital gains, tax credits andany other relevant tax information to include in your tax return.

The Fund will seek to pass on any benefits of franking credits in respect of distributions including

franked dividends from the Fund. Investors receiving distributions including franked dividends will

be required to include their share of dividend income and franking credits in their assessable

income. However, investors may be denied franking credits in respect of distributions on Units

which the investor has not owned at risk generally for a continuous period of forty five (45) days

(ignoring the days of acquisition and disposal).

Your assessable income for each year includes net capital gains (capital gains less offsetting capital

losses). Any capital gains distributed by the Fund may benefit from the discount available for

shares held on capital account for 12 months or more. This discount is currently 50% for

individuals, and 33.3% for complying superannuation funds. The discount is not available to

companies.

Taxation of Disposal of Units

If you dispose of your Units in the Fund (by way of redemption or otherwise) you may be subject

to tax on any gain arising. A discount may be available on the capital gain on Units held for 12

months or more by individuals, trusts or complying superannuation funds.

Foreign Tax Credits

Australian residents are required to include in their assessable income their share of any foreign

taxes paid by the Fund. Investors will normally be entitled to a tax credit for foreign taxes paid by

the Fund.

Tax File Number

It is not compulsory for investors to provide their Tax File Number (TFN) or Australian Business

Number (ABN) if investing on behalf of an enterprise. However, if you do not provide a TFN or

ABN then the Trustee is required to deduct tax from any income distribution payable to you at the

maximum personal tax rate plus Medicare levy and any other applicable government charges.


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Australian Goods and Services Tax

GST should not be payable on the issue and redemption of Units in the Fund and the resulting

income distributions to investors.

Non-Resident Taxation

Statutory deductions of Australian withholding tax and income tax will be made from distributions

of Australian sourced taxable income for non-resident investors. The exact amount cannot be

determined as the rate of withholding tax depends on the type of income.

Non-residents will only be subject to capital gains tax in Australia on the disposal of Units where

either:

they have an interest of 10% or more and the Fund has more than 50% attributable to

(either direct or indirect) Australian real property; or

the Units are used in carrying on business through an Australian permanent establishment.

Non-residents seeking to invest in the Fund should obtain tax advice in relation to their specificcircumstances.

FATCA

Under the U.S. Foreign Account Tax Compliance Act (FATCA), certain foreign financial

institutions(FFIs) are required to comply with requirements discussed below in order to avoid

imposition of a 30% United States withholding tax on payments of US income or gross proceeds

from the sale of particular US securities, commencing in 2014. Based on the guidance available to

date, it appears that the Fund may be an FFI. In the future the Fund may have to obtain and

disclose information about certain US and US-owned investors to the US tax authorities and the

Fund may also request that you provide certain information about yourself in order for the Fund

to comply with its obligations. To the extent that all requested information is obtained, this

withholding tax should not apply to the Fund or its investors. Although the Fund may attempt to

take steps to avoid the imposition of this withholding tax, no assurance can be given that the Fund

will be successful.


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12.ADDITIONAL INFORMATION

Constitution of the Fund

The Fund is governed by a constitution which binds the Trustee and the Unitholders of the Fund

("Constitution"). The Constitution sets out the conditions under which the Trustee operatesand the rights, responsibilities and duties of the Trustee in respect of the Fund. In particular,

the right of the Trustee to retire and the ability of the Trustee to charge fees and recover

expenses are included in the Constitution.

The Trustee may alter the Constitution in certain circumstances if the Trustee reasonably

considers that the change will not adversely affect Unitholdersrights. Otherwise, the Trustee

must obtain Unitholders written consent, or approval by special resolution at a meeting

convened for that purpose. The Fund may be terminated in certain circumstances stated in its

Constitution.

The Constitution contains provisions limiting the requirement of the Trustee to compensate

Unitholders. Generally, if the Trustee complies with its duties, it will not be required to

compensate a Unitholder for the loss unless required by law. The Constitution also contains

provisions regarding the Trustees liabilities and rights for reimbursement out of the Fund.

UnitholdersRights

The rights of a Unitholder in the Fund are outlined in the Constitution. Subject to the other

terms of the Constitution and this Information Memorandum, these include the right to:

withdraw Units;

receive income and capital distributions;

participate in distributions upon termination or winding up of the Fund; and

call, attend and vote at Unitholder meetings.

Each Unit a Unitholder holds in the Fund gives that Unitholder a beneficial interest in the Fund

as a whole, but not in any particular asset of the Fund. Holding Units in the Fund does not give

a Unitholder the right to participate in the management or operation of the Fund.

Classes of Units

The Trustee may issue different classes of Units and may determine the rights, obligations and

restrictions which will attach to the Units within each Class.

Transfer of Units

Please contact Auscap if you would like to transfer Units. Auscap may refuse to register any

transfer of Units by a Unitholder without providing any reason.

Register of Unitholders

The register of Unitholders is maintained by the Administrator or their affiliates.

Period and Termination of the Fund

The Trustee may terminate the Fund in a number of circumstances provided for in the

Constitution including on written notice to Unitholders.

Trustees Indemnity and Liability

The Trustee is entitled to be continually indemnified against all expenses, losses and liabilities

that are incurred as a direct or indirect result of anything done or not done under the Fund

Constitution.


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Amending the Constitution

The Trustee may amend or replace the Constitution in accordance with the Constitution.

Limitation of UnitholdersLiability

The Fund Constitution provides that a Unitholders liability to the Trustee is limited to their

investment in the Fund. However, investors should note that the courts have not finally

determined the extent of liability of Unitholders in unit trusts.

Further Information

Please contact Auscap if you would like a copy of the Constitution.

Anti-money laundering and counter-terrorism financing laws

The Anti Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML Law)

regulates financial services and transactions in a way that is designed to detect and preventmoney laundering and terrorism financing. The AML Law is administered by the Australian

Transaction Reports and Analysis Centre (AUSTRAC).

Under the AML Law, the Trustee is required to:

verify a Unitholders identity before providing services and to re-identify a Unitholder if

they consider it necessary to do so; and

keep a record of any documentation Unitholders supply relating to the verification of

their identity for 7 years.

The Trustee has implemented a number of measures and controls to ensure it complies with its

obligations under the AML Law, including carefully identifying and monitoring Unitholders. As a

result of the implementation of these measures and controls:

transactions may be delayed, blocked, frozen or refused where Auscap has reasonable

grounds to believe that the transaction breaches the law or sanctions of Australia or anyother country. Applications cannot be processed unless all the necessary information is

provided;

where transactions are delayed, blocked, frozen or refused, Auscap is not liable for any

loss Unitholders suffer (including consequential loss) as a result of its compliance with

the AML Law as it applies to Auscap; and

Auscap may at times require additional information from you to assist it in this process.

Auscap has certain reporting obligations under the AML Law and is prevented from informing

Unitholders that any such reporting has taken place. Where required by law, Auscap and/or the

Administrator may disclose the information gathered to regulatory or law enforcement

agencies, including AUSTRAC.

Conflicts of Interest

The Trustee has established internal policies and procedures to ensure that any conflicts of

interest arising in relation to the Fund are adequately identified and appropriately managed.

Where the Trustee considers that a particular conflict of interest is likely to have a materially

adverse effect on Unitholders, it will seek to implement adequate arrangements to mitigate,

prevent and/or minimise (where practicable) adverse effects on Unitholders.


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Privacy Policy

Privacy laws apply to the handling of personal information by the Trustee. The Trustee may

collect personal information about a Unitholder from their Application Form to establish andsupport the ongoing administration of their investment in the Fund, comply with Australian

taxation laws, the Act, AML Law and other laws and regulations. It will also be used to advise

Unitholders of new developments relevant to their investment in the Fund. For legal and

practical reasons, the Trustee will not be able to process an application or administer an

investment without certain prescribed information.

The Trustee may disclose a Unitholders personal information to external parties who provide

services to the Trustee in relation to the Fund. For example, this may include the Administrator

or its associates, related group entities or related bodies corporate, to the extent that any of

these are involved with the Fund, or other parties such as providers of printing or postal

services. Otherwise the Trustee will not disclose your personal information to any other

external party unless required by law.

Any personal information you provide to the Administrator will be collected and handled inaccordance with White Outsourcing's privacy policy, a copy of which can be found at

www.whiteoutsourcing.com.au or posted / emailed to you if you contact White Outsourcing on

+612 8262 2800 or [email protected]. By submitting paperwork relating to

your investment you consent to your personal information being collected and handled by the

unit registry in accordance with that policy.

You may be entitled to gain access to your personal information held by the Trustee.

Unitholders have the right to ask the Trustee to correct information about them which is

inaccurate, incomplete or out of date.

Unitholders who would like access to their personal information or who have questions should

contact Auscap at the contact details specified in the Fund Directory.

Authorised Representatives

Appointment of authorised representative to operate account

You may elect to appoint an authorised representative to operate your account. The relevant

sections on the Application Form need to be completed, including the name and signature of

the authorised representative, the signature of the Unitholder and the date. Only Unitholders

can appoint authorised representatives.

By completing and lodging the relevant sections on authorised representatives on the

Application Form you release, discharge and agree to indemnify the Trustee from and against

any and all losses, liabilities, actions, proceedings, account claims and demands arising from the

Trustee acting on the instructions of your authorised representative.

You also agree that any instructions of your authorised representative to the Trustee, which arefollowed by the Trustee, shall be a complete satisfaction of the obligations of the Trustee,

notwithstanding any fact or circumstance, including that the instructions were made without

your knowledge or authority. You agree that if an authorised representatives instructions are

followed by the Trustee, you and any person claiming through or under you shall have no claim

against the Trustee in relation to the i nstructions.

Powers of an authorised representative

An authorised representative can, among other things:

apply for additional Units;

withdraw all or part of your investment; and


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enquire as to the status of your investment and obtain copies of any statements to which

they are entitled.

Withdrawal payments will not be made to third parties. If a company is appointed as anauthorised representative, the powers will extend to any director and authorised officer of the

company. If a partnership is appointed as an authorised representative, the powers will extend

to all partners.

Complaints

If you have any queries or complaints, please contact Auscap or the Administrator in writing.

Please refer to the contact details on page 6 of the Fund Directory. We will acknowledge your

query or complaint in writing within ten (10) Business Days. We will then give proper

consideration to the complaint and advise you of the outcome as soon as possible.

Service Providers

Administration

The Trustee has delegated some administrative functions by appointing White Outsourcing Pty

Ltd (Whites) to provide fund administration and unit registry services. Whites is a specialist

provider of outsourced middle and back office administration and accounting services to over

50 clients with around $20 billion of funds under administration. White Outsourcing will

provide administrative services including:

Fund accounting services including trade confirmation and reconciliation;

regulatory and administrative services;

compliance, performance and analytical services; and

unit pricing and registry services.

As administrator, Whites is contactable for all application and redemption forms. Their contact

details are listed in the Fund Directory.

Audit & Tax

The Trustee has appointed Ernst & Young to provide tax and audit services for the Fund. These

services include:

annual audit of financial statements;

review of income tax return; and

review of net income calculations for distributions.

These services will be provided after the end of each Financial Year.

Custody and Prime Brokerage

The Trustee has appointed Citigroup Global Markets Limited (CGML) as a prime broker under

the terms of a Customer Agreement for Australian Prime Brokerage Services (the PB

Agreement) and Citigroup Global Markets Australia Pty Ltd (

CGMA

) as a cash lender underthe terms of a Customer Agreement for Australian Cash Loans (the Cash Loan Agreement),

each of CGML and CGMA are wholly owned indirect subsidiaries of Citigroup Inc. The services

which CGML will provide under the PB Agreement include various custodial services, securities

lending and the clearance and settlement of securities transactions. The services which CGMA

will provide under the Cash Loan Agreement include cash financing in connection with

transactions under the PB Agreement. CGML and CGMA, in their capacities as prime broker and

cash lender, as applicable, will have no decision-making discretion relating to the investment of

the assets of the Fund and will not provide any investment advice in relation to the assets of

the Fund.


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Under the terms of the PB Agreement, subject to CGMLs right to utilise the same described

below, CGML will identify, record on its books and hold on a segregated basis all investments

(and collect any dividends and other payments in respect thereto) and other assets of the Fund

excluding cash (collectively, the Assets) in such manner that the identity and location of theAssets can be readily identified at any time as the property of a customer of CGML and

separate from CGML's own property. Accordingly, such Assets which have not been utilised as

described below should be unavailable to the creditors of CGML. Certain Assets may be co-

mingled with similar assets of other customers of CGML. Accordingly, the Fund may not have

the right to the return of specific assets but to their equivalent.

CGML may hold Assets with a sub-custodian, depository or clearing agent (each, a "sub-

custodian") in one or more accounts identified as belonging to customers of CGML. CGML will

identify on its books and records all Assets held by a sub-custodian as being held for the Fund.

CGML has undertaken to exercise reasonable care, skill and diligence in the selection of any

sub-custodian. CGML will make appropriate inquiries periodically to satisfy itself as to the

ongoing suitability of such sub-custodian to provide custodial services to the Fund.

The Fund has authorised CGML at any time, without prior notice to the Fund, to transfer Assets(as defined above) to the Funds separate custody account with Citibank N.A., Hong Kong

Branch (the Prime Custody Account). Securities that are transferred by CGML from the prime

brokerage Custody Account under the PB Agreement to the Prime Custody Account shall be

released from the security created by the Cash Loan Agreement upon such transfer and

accordingly shall cease to be Secured Property (as defined below). The Fund has authorised

Citibank N.A., Hong Kong Branch, as custodian of the Prime Custody Account, to accept

requests from CGML to re-transfer Assets and assets of the Fund comprising cash from the

Prime Custody Account to the prime brokerage Custody Account or Cash Account, as

appropriate, in order to meet the Funds obligations or as otherwise permitted under the PB

Agreement and Assets so re-transferred shall again become subject to the security interest

created by the Cash Loan Agreement upon such transfer and accordingly shall become Secured

Property.

The Fund acknowledges that cash received by CGML for credit to the prime brokerage CashAccount either from the Fund or on the Funds behalf will be collateral for the purpose of

securing or otherwise covering the secured liabilities under the Cash Loan Agreement and full

ownership in such cash will be absolutely transferred to CGML, and all right, title and interest in

and to such cash will pass to CGML outright and absolutely for the purposes of covering those

secured liabilities. Upon such transfer CGML will become obliged, subject to and in accordance

with the provisions of the PB Agreement to re-transfer to the Fund an equivalent amount of

cash. CGMLs obligation will be reduced to the extent that such cash is applied in accordance

with the security and/or close-out arrangements provided in the PB Agreement and Cash Loan

Agreement.

The Fund's obligations to CGMA under and in connection with the Cash Loan Agreement will be

secured by a first fixed charge over the Customer s right, title and interest in connection with

the Cash Account and the Custody Account and over certain other assets (together the

Secured Property

). CGML will be entitled to sell, loan or otherwise use any and all Secured

Property in the form of securities (securities so used being referred to herein as Utilised

Securities) and selected by CGML in its absolute discretion [provided the value of the Utilised

Securities shall not exceed 140 per cent of the Funds liabilities and obligations under the PB

Agreement and Cash Loan Agreement from time to time] for its own purposes or the purposes

of any third party, and the Fund will have a contractual right against CGML for the return of

assets equivalent to the Utilised Securities. Utilised Securities may not, therefore, be

recoverable in full in the event of CGMLs insolvency.


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The PB Agreement and Cash Loan Agreement provide that CGML and CGMA will not be liable

for any loss, liability or cost incurred by the Fund as a result of any act or omission of CGML or

CGMA unless such loss, liability or cost is caused by CGMLs or CGMAs, as applicable, own

fraud, gross negligence, or wilful default. Neither CGML nor CGMA shall be responsible for theloss, liability or cost which the Fund may suffer or incur arising from the negligence, wilful

default or fraud of any third party (including any executing broker, bank, agent, custodian,

investment exchange, depositary or clearing house, but subject to the obligations concerning

the selection of such sub-custodian described above). Neither CGML, CGMA nor any third party

which acts on their behalf, whether an affiliate of CGML or CGMA or not, nor its directors,

officers, servants, agents or representatives, will be liable to the Fund, except in the case of

fraud, for any consequential loss, liability or cost which the Fund may suffer or incur arising out

of their acts or omissions, howsoever the loss, liability or cost is caused and regardless of

whether it was foreseeable or not.

The Fund has agreed to indemnify CGML, CGMA and any sub-custodian, nominee or agent

appointed by it against any loss, liability and expenses (including without limitation the costs of

any investigation or legal proceedings) arising out of or in connection with the PB Agreement or

Cash Loan Agreement except where arising primarily out of its or, as the case may be, such sub-custodians', nominees' or agents' own gross negligence or willful default, all as more fully

detailed in the PB Agreement and Cash Loan Agreement. The PB Agreement and Cash Loan

Agreement will remain in full force and effect until terminated at any time by either of the

parties upon 3 Business Dayswritten notice to the other. CGML and CGMA are paid service

providers to the Fund and are not responsible for the preparation of this document or the

activities of the Fund and therefore accept no responsibility for any information in this

document. The Fund reserves the right to change the prime brokerage, cash loan and custodial

arrangements described above by agreement with CGML and CGMA and/or, in i ts discretion, to

appoint additional or alternative prime broker(s), cash lender(s) and custodian(s). The Fund

may also utilise Citi and/or other brokers and dealers for the purposes of executing transactions

for the Fund.


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13.GLOSSARY

Act The Corporations Act 2001 (Cth) as amended from time to

time

Administrator The administrator appointed by the Trustee, which is WhiteOutsourcing Pty Limited as at the date of this Information

Memorandum, responsible for providing fund administration

and unit registry services.

AFSL Australian Financial Services Licence

Application Form The application form included in or accompanying this

Information Memorandum relating to the purchase of Units

Business Day A day other than a Saturday or Sunday on which Australian

Banks are open for general banking business in Sydney,

Australia

Class Refers to a class of units in the Fund

Constitution The constitution governing the Fund, as amended from timeto time

delta The notional exposure to a security or financial instrument

given the current price of the security or underlying asset

Distribution Date The day on which distributions from the Fund are paid

and/or reinvested

Financial Year The year ending 30 June

Fund or Auscap Fund Auscap Long Short Australian Equities Fund

Half Year The six month period finishing either 30 June or 31

December

hedging Transactions entered into (usually opposite transactions

within the same asset class or market) that protect against

adverse price movements and limit the exposure to a

specific risk

High Watermark The previous highest NAV per Unit in a Series immediately

after payment of a performance fee (or if none has been

paid, the initial Issue Price of the Units)

Hurdle Rate The Reserve Bank of Australia Cash Rate published monthly

Investment Manager Auscap Asset Management Pty Ltd

ABN 11 158 929 143 AFSL 428014

Issue Price The price at which new Units are issued

leverage/gearing Borrowing funds or securities to increase the amount of

capital available for investment.

long position Holding a positive amount of an asset in the expectation that

the value of that asset will appreciate

management fee Has the meaning as expressed in section 9


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NAV The net asset value of a Fund, Class or Series as referred to

in section 9

NAV per Class The value of the assets less liabilities attributable to the unitsof the relevant Class

NAV per Series The value of the assets less liabilities attributable to the units

of the relevant Series

NAV per Unit Has the meaning as expressed in section 9

Outperformance Outperformance is calculated as the amount by which the

NAV per Unit of the relevant Series exceeds the High

Watermark increased by the Hurdle Rate

Performance Period A period in which a performance fee has accrued

Redemption Day The first day of the month where Unitholders are able to

redeem Units based on the preceding Valuation Day

Redemption Price The NAV per Unit on the last Valuation Day immediately

before the Redemption Day, adjusted for the bid or ask

spread (if any) as calculated under the Constitution

Reference Series The first issue of Units in the Fund

Series Unit valuation based on different Subscription Days

short position Borrowing an asset and then selling it in the expectation that

the value of the asset will depreciate. The short position is

covered by buying back the asset, theoretically at a lower

price (but may be at a higher price) thereby crystallising a

profit (or loss). The borrowed asset is then returned.

Subscription Day The Valuation Day on which Units are first priced and

application monies accepted into the Fund

Trustee Auscap Asset Management Pty Ltd

ABN 11 158 929 143 AFSL 428014

Unit or Units A Unit or Units in the Fund offered under this Information

Memorandum

Unitholder or Unitholders Persons who are indicated on the register of holders as the

holder of a Unit or Units in the Fund

Valuation Day The last day of each calendar month on which the NAV is

calculated.

Wholesale Client Has the meaning provided in the Act


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14.HOW TO COMPLETE THE APPLICATION FORM

How to Invest

To invest in the Fund you will need to complete and sign the attached Application Form. Please note that:

The supply of Tax File Numbers (TFN) is discretionary. It is not an offence if you decide not to supplyyour TFN. If you do not supply your TFN, however, tax will be deducted from your income earned at the

highest marginal tax rate (plus Medicare levy) and forwarded to the Australian Taxation Office. These

deductions will appear on your statements. A form is attached for your convenience.

Joint applications must be signed by all applicants. Joint investments will be deemed to be held as joint

tenants.

Applications under power of attorney must be accompanied by a certified copy or the original of the

Power of Attorney with specimen signatures.

The minimum initial investment in the Fund is $250,000 and the minimum additional investment is

$100,000. All investors will need to qualify as a Wholesale Client. The Trustee may vary these minimum

investment amounts from time to time.

Application monies should be received by 5.00pm (AEST) three (3) Business Days prior to the last calendar

day of the month by cheque or electronic transfer to:

Account Name: Auscap Asset Management ATF Auscap Long Short Australian Equities Fund

Bank: ANZ

BSB: 012 006

Account number: 836165921

Application forms received and monies received 3 Business Days prior to the last calendar day of the

month will receive the unit price that is calculated for the next Valuation Day. Generally this unit price will

be available within 10 Business Days of month end. Please send completed Application Forms (and cheques

if applicable) to:

White Outsourcing Pty Limited

Attention: Auscap Fund Unit Registry

GPO Box 5482Sydney NSW 2001

How do you qualify as a Wholesale Investor

If you are applying for Units worth $500,000 or more you will be automatically deemed a Wholesale Client

and no additional documentation is required. If you are investing less than $500,000 and you are an

Australian Investor, additional documentation will be required to certify that you are a Wholesale Client in

the form of one of the following:

1. An accountants certificate certifying that the proposed Unitholder has:

net assets of at least A$2.5million; or

gross income for each of the last two financial years of at least $250,000.

OR

2. A statutory declaration that the proposed Unitholder:

is a trustee of a superannuation fund within the meaning of the Superannuation Industry

(Supervision) Act 1993 (Cth) with net assets of at least A$10 million;

controls at least A$10 million (including any amount held by an associate or under a trust that

the investing entity manages);

is a manufacturer and employs 100 or more people, or the investing entity is not a manufacturer

and employs 20 or more people;

holds an Australian financial services licence; or

is a professional investoras otherwise defined in the Corporations Act.


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Please contact Auscap if you need us to assist you in providing the appropriate documentation to certify

that you are a Wholesale Client.

Regular InformationFollowing acceptance of your application, you will be sent an application advice. You should check the

details on the advice carefully and contact the Administrator, White Outsou

Documents

Long Short Australian Equities