Van Negris & Company, Inc. 766 Madison Avenue New York, NY 10021 USA Tel: (212) 396.0606 Fax: (212) 396.9025 E-Mail: info@vnegris.com Web site: www.vnegris.com

Hedge Fund Strategic Financial Communications Van Negris & Company, Inc. in Action Situation - Retained to formulate and initiate a strategic financial communications plan to adjust and manage the expectations of domestic and foreign investors in a real estate opportunity fund.  Investors' principal concerns focused on the impact of the September 11th terrorist attacks on asset values, additional costs associated with insurance ane security, and the impact on consumer confidence and how it would impact the hedge fund's retail and residential assets. Challenges The fund was going to fall below historical and stated yields.  Yield expectations had to be adjusted to 8%, down from the historical average of 16.6%. The fund lacked transparency and the proper infrastructure to effectively communicate with its investors and potential investors. The portfolio was expanding the target asset class to invest in different products to better balance the portfolio and reconfigure it to perform well in varied economic climates. The fund needed to communicate that the core investment strategy and discipline was transferable to the new asset class. The fund structure was being amended to reflect a new fee structure and new liquidity rules.  While the fund typically averaged $2.5 million in redemptions annually, redemptions rose to $40 million during the current year. Primary Audiences - Current investors, the fund's marketing team, potential investors and their investment advisors. Communications Messages The fund's portfolio composition was expanding. The fund's structure was being revised to reflect a new fee structure and new liquidity rules. Manage investors' yield expectations. Educate investors that asset sales are not the only mechanism for value creation. Strategic Financial Communications Tools - NAV letters, annual report, white papers, economic updates, investment narratives, FAQs, annual meeting presentation, breaking news updates (during 9/11) via e-mail, fax, and personal contact. Actions Taken Prepared FAQs (frequently asked questions with answers) for the fund's marketing team and web site. Adapted internal fund management reports into investor communications pieces, such as white papers, where were used to address investor concerns through transparency and education, thereby effectively making investors partners in the process. The annual report management letter echoed the key themes. Fund benchmarks were expanded to include both "event driven" and "distressed" indices from Hennessee, Hedge Fund Research, and CSFB/Tremont. The fund hosted special investor conference calls and expanded the frequency of economic updates distributed by mail and e-mail. The fund's marketing group was trained by using simulated investor meetings. | Board members received regular updates and were trained as spokespeople for the fund in dealing with key investors. NAV letters were enhanced with sophisticated graphical content. The fund hosted informational meetings in key cities. The fund reemphasized and reeducated investors on the fund's value creation formula. Copyright © 2002 by Van Negris & Company, Inc. – All Rights Reserved.