Regional Investment Focus

Methodology:

HFR's Regional Investment Focus is designed to reflect the primary focus of the Fund's strategic exposure, over various market cycles, independent of the investment manager's physical location or the domiciled registration location of the fund. The Regions have been constructed based on primary continental economic association, as well as actual continental geographic location. In completing a fund profile for inclusion in HFR Database, an investment manager qualitatively selects one of the four following primary Regions:

While most strategies in some manner do contain exposures outside of the primary region, we encourage managers to classify strategies on the basis of the expected primary focus (containing greater than 50% of portfolio exposure) over a number of market cycles.

In addition, we also request sub-regional classification, defined as follows:

Asia

Japan - Primary focus on Japan, typically >75% exposure.
Asia ex-Japan - Primary focus on Asia, typically with <10% exposure in Japan.
Asia w/Japan - Primary focus on Asia, with between 10% and 75% exposure in Japan.

Europe

Western Europe / UK - Primary focus in region, with greater than 50% exposure in these areas.
Russia / Eastern Europe - Primary focus in region, with greater than 50% exposure in these areas.
Northern Europe - Primary focus in region, typically >50% exposure
Pan European - > 75% exposure in all European regions.

Americas

North America - Primary focus, with greater than 50% exposure in these areas.
Latin America - Primary focus, with greater than 50% exposure in these areas.
Pan American > 75% exposure in the Americas.

Other

Africa - Greater than 50% exposure in African region.
Middle East - Greater than 50% exposure in Middle East region.
Global - No greater than 50% exposure in any specific geographic region.
Multiple Emerging Markets - No greater than 50% exposure in any specific emerging market.

Geographic Classification notes:

Asia - Includes a diverse range of nations that border the Pacific and Indian oceans. For our purposes the nations that transverse this region include: Japan, China, Korea, Australia, India, Hong Kong, Singapore, etc...

Europe - Includes Western, Eastern and Northern European (Scandinavian) nations, as well as Russia and Turkey

Americas - North America includes the USA, Canada and Greenland. Latin America includes Mexico, Central and South America as well as the nations of the Caribbean.

Africa - Includes all of Africa except for Egypt which is classified as Middle East

Middle East - for our purposes this area ranges from Egypt to Israel to Syria to Iran and includes all the nations of the Arabian Peninsula

Other - HFR reserves the inclusion of a fund in "Global" to those funds which have no greater than 50% exposure to ANY of the more-specific geographic regions provided and the inclusion of a fund in "Multiple Emerging Markets" to those funds which have no greater than 50% exposure to ANY of the more-specific emerging markets regions provided.

Thematic Indices

Thematic Indices are designed to reflect the performance of funds grouped by a specific criterion that falls outside the scope of our standard investment strategy or regional classifications. Examples of theme-specific indices include: The ethnic origin or gender of the person or persons which own the management firm or are the portfolio manager of a fund (Diversity and Woman Indices); Indices based on funds focused on a particular niche sector or industry (MLP or Alternative Energy Indices); or funds that fall across multiple sub-strategies or regions (Fixed Income - Credit Index). The constituents of Thematic Indices must also meet the general basic inclusion criteria as specified in the particular index methodology.

Directional Indices are a Thematic Index type and comprised of funds with correlated sub-strategy types which, when aggregated, highlight directional trends within the overall strategy universe.

Minority-Owned

A hedge fund management company is deemed to be a minority-owned business if: Greater than 50% of the management company is owned by one or more minorities, or in the case of a publicly owned business, greater than 50% of all issued stock is owned by one or more minorities; and whose management and daily business operations are controlled by one or more such individuals.

A 'minority' is defined for our purposes as a U.S. citizen who is: (A) a woman; or (B) a person whose origin is from one of the following minority groups:

1. African-American: a U.S. citizen whose origin is from any of the racial groups of Sub-Sahara Africa;
2. Hispanic-American: a U.S. citizen whose origin is from any of the Spanish-speaking countries of Latin America, Mexico, Central America, South America, the Caribbean and Brazil (Afro-Brazilian and Brazilian Indians only);
3. American Indian: a U.S. citizen whose origin is from Eskimo, Aleut, or Native Hawaiian, or Native Americans. Native Americans must be documented members of a North American tribe, band or organized group of native people indigenous to the continental United States;
4. Asian-American, Pacific Islanders, Asian Indian-Americans: a U.S. citizen whose origin is from Bangladesh, Cambodia, China, Guam, India, Indonesia, Japan, Korea, Laos, Malaysia, Pakistan, the Philippines, Samoa, Thailand, Sri Lanka, Taiwan, the U.S. Trust Territories of the Pacific or the Northern Marianas and Vietnam.