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  • 1. The Opportunity for Alternative Investments and Credit in SRI November 12, 2010 Please see the back page for important disclosures
  • 2. Table of Contents I. Summary II. Eos Overview III. Current SRI Investment Universe IV. Details of ECO SRI Class V. Why Long / Short Credit? VI. 2010 / 2011 Macroeconomic Overview VII. Strategy VIII. Performance Eos Credit Funds 2
  • 3. I. Summary
  • 4. Summary Risk and Liquidity  Diversification Multi‐Strategy  Hedging  Approach Opportunity Why Credit  and Hedge Funds  in SRI? Active Investment  Balanced Management Portfolio Absolute Return /  Low Market  Correlation Eos Credit Funds 4
  • 5. II. Eos Overview
  • 6. Eos Firm Overview • Eos is a $1.8 billion asset management firm with substantial infrastructure to support business operations • Diversified asset management company with strong track record of investing across various asset classes throughout the investment cycle • Private equity approach to both public and private market investments • Formed in 1994 by Steven M. Friedman and Brian D. Young, formerly General Partners of Odyssey Partners • Strong principal vs. agent culture: approximately 55% of Eos Partners, L.P.’s capital is represented by principals and employees • Disciplined group of 30 professionals with an expertise in fixed income securities, bank loans, distressed debt, restructurings, private equity and long / short equity markets Eos Credit Funds 6
  • 7. Eos Credit Funds Summary • Eos Credit offers investors a multi‐strategy approach to investing in the credit markets • Eos Credit has achieved attractive risk adjusted absolute returns throughout the credit cycle  over the last 8 years by combining a strong culture of bottoms‐up analysis with intense focus  on global macroeconomic trends • Principals’ extensive experience / track record as investors across credit cycles, geographies  and asset classes is, in our opinion, a key competitive advantage to achieving superior risk  adjusted returns (over 100 years of investment experience) • Eos has substantial corporate finance expertise to take advantage of event driven opportunities • Investment team’s flexible investment style within the credit universe allows us to adapt to the  constantly changing investment environment • Culture of risk management at both the individual investment and portfolio level, utilizing both  quantitative and qualitative risk management techniques • We believe it is the combination of experience, bottoms‐up diligence, macroeconomic focus, flexible investment style and culture of risk management that allows Eos Credit to maximize risk adjusted relative returns throughout any economic / credit cycle Eos Credit Funds 7
  • 8. Eos Firm Overview Eos $1.8 billion Total Capital Firm‐Wide1 Eos Partners, L.P. 1 $380 million Capital Private Equity Credit Funds2 Public Equities $925 million Total Capital $712 million Total Capital $195 million Total Capital Eos Credit Opportunities (ECO)4 Eos Capital Partners III (ECP III, 2004)3 Eos Mortar Rock (EMR) $281 million Capital A Class $325 million Total Capital $145 million Total Capital $240 million Capital R Classes ECO SRI Eos Special Situations Equity (ESSE) Eos Capital Partners IV (ECP IV, 2007)3 (Separate Share Class within ECO)4 $50 million Eos Partners, L.P. $600 million Total Capital $37 million Total Capital (Internal Fund) Eos Senior Loans (ESL) $87 million Total Capital Note: Assets under management are approximate and as of October 31, 2010. (1) A substantial portion of Eos Partner’s capital is invested and included in the below funds.   (2) Includes Eos Credit Recovery $67 million total capital.  ECR is closed and is currently being wound‐down.   (3) Committed but not yet fully funded. (4) $558 million in ECO Master with $281 million in ECO A class, $37 million in ECO SRI class and $240 million in ECO R classes. Investors in the existing slow pay redemption classes, or “R” classes, have  realized a minimum of 80% of the original NAV of the R class that they are in.  Eos Credit Funds 8
  • 9. Eos Principles of Investing • Principal Culture – Approximately 55% of Eos Partners, L.P.’s capital is  represented by principals and employees • Objective is for top tier performance while focused on preservation of  capital, no use of leverage and strategic use of cash • Research‐driven, bottoms‐up diligence across all asset classes, including  private equity, credit and public equity • Macroeconomic overlay with focus on trends and themes in global  economy and industries Eos Credit Funds 9
  • 10. Eos Credit Funds  • We offer separate investor share classes and managed account opportunities for the following credit funds  • Returns generated without leverage Eos Credit Opportunities ‐ SRI  Eos Credit Opportunities (Socially Responsible Investing)  Eos Senior Loans Class Abbreviation ECO ECO SRI ESL AUM $281mm(1) $37mm $87mm Inception May 2002 November 2009 May 2008 Cumulative Return Since  172.9%(2)(3) 13.8%(3) 24.4%(3) Inception Annualized Return Since  12.6%(2)(3) 15.2%(3) 9.4%(3) Inception Strategy Invests in long / short across the  Invests in long / short across the  Long‐only subset of the senior  credit spectrum credit spectrum with SRI screen loan strategy within ECO.  Note: Assets under management are approximate and as of October 31, 2010 and performance as of September 30, 2010.  (1) $558 million in ECO Master with $281 million in ECO A class, $37 million in ECO SRI class and $240 million in ECO R classes. Investors in the existing slow pay redemption classes, or “R” classes, have realized a minimum of 80%  of the original NAV of the R class that they are in.  (2)  ECO’s returns until Oct. ’04 (included) represent Eos Partners’ Total Return fixed income portfolio (hereafter: TRFIP), a portfolio managed by the principals of ECO’s investment  manager using the same investment strategy as  ECO.  Returns are net of annual management fees of 1.5% and incentive fees applicable to an investment in ECO. Returns after Nov. ’04 (included) are actual ECO returns, initial Offshore Class A.  Cumulative monthly returns are  unaudited time‐weighted returns from May 2002 through October 2004 for Eos Partners’ TRFIP. Throughout this document the blended returns of both the Eos Partners’ TRFIP and ECO are used when describing historical  performance.  Many factors may cause ECO’s results to differ materially from the results of the TRFIP including the facts that no leverage was employed in the TRFIP; the data is based upon varying amounts of average capital  deployed from month to month and monthly performance data reflects return on average net invested capital (which Eos Partners could increase or decrease daily); and the data presented reflects Eos Partners’ judgment as to  the allocation of currency hedges and various expenses between the TRFIP and the Eos Partners Short Term Portfolio. Past performance of Eos’ Total Return fixed income portfolio is not an indication of future results for Eos  Credit Opportunities.  (3)  Returns are net of annual management fees (ECO 1.5% / ESL: 1.0%) and incentive fees applicable to an investment in ECO / ESL. Past performance of ECO / ESL is not an indication of future results. Eos Credit Funds 10
  • 11. ECO Historical Performance ECO has outperformed numerous benchmarks over the long‐term since its inception 180.0% (1) ECO 160.0% 140.0% Dow Jones Credit Suisse Hedge Fund Index 120.0% Barclays High Yield Cumulative Return 100.0% 10yr US Treasury 80.0% S&P 500 60.0% 40.0% S&P LCD (Loan Index) 20.0% Dow Jones Credit Suisse Event Driven Distressed Hedge Fund Index 0.0% 2002 2003 2004 2005 2006 2007 2008 2009 YTD 9/30/10 Barclay Event Driven Index ‐20.0% (1) Performance shown for onshore vehicle and for November 1, 2004 investor after high water mark. Returns until Oct. ’04 (included) represent Eos Partners’ Total Return fixed income portfolio, a portfolio managed by the principals of  ECO’s investment manager using the same investment strategy as ECO. *Returns are net of annual management fees (ECO 1.5%) and incentive fees applicable to an investment in ECO.  Past performance represents the reinvestment of all dividends, income and profits.  Past performance of ECO is not an  indication of future results. Source: Eos, Dow Jones Credit Suisse, Barclays Dow Jones Credit Suisse Hedge Fund Indices are compiled by Credit Suisse Hedge Index LLC and CME Group Index Services LLC.   They are asset‐weighted hedge fund indices and include only funds, as opposed to separate accounts. The  Indices use the Credit Suisse Hedge Fund Database, which tracks approximately 8000 funds, and consists only of funds with a minimum of US$50 million under management, a 12‐month track record, and audited financial statements. It  is calculated and rebalanced on a monthly basis, and shown net of all performance fees and expenses.  The Barclays High Yield Bond Index is an index that measures that performance of a broad universe of high yield bonds.  The index  includes all fixed‐income securities having a maximum quality rating of Ba1 (including defaulted issues), a minimum amount outstanding of $100mm, and at least one year to maturity.  It is not possible to invest directly in the Barclays  High Yield Bond Index.  The Barclays High Yield Bond Index is not subject to the fees and expenses applicable to the Fund.  It also should not be considered a comparable investment program to the Fund.  It is being presented for  comparison purposes to show how the Fund's performance compares with the performance of a broad universe of high yield bonds. The S&P LCD index is a derivative index which references the first lien debt for 100 of the largest  leveraged loan issuers. It is being presented for comparison purposes to show how the Fund's performance compares with the performance of a broad universe of first lien debt. The S&P 500 tracks the performance of the equity  securities of a representative sample of 500 U.S. based large‐cap companies.  The S&P 500 is an unmanaged, market‐value weighted index with each stock's weight in the index proportionate to its market value.  The Barclay Event  Driven Index is a measure of the average return of funds with a ‘special situations’ strategy (excludes Funds of Funds) in the Barclay database. The index is simply the arithmetic average of the net returns of all the funds that have  reported that month.  There are significant differences between the Funds’ investments and the indices.  The Funds may use leverage and have a greater degree of risk and volatility as well as less liquidity than securities that comprise  the indices.  Moreover, the indices do not reflect the reinvestment of dividends or income and, unlike the Funds, are not subject to fees or expenses.  It should not be assumed that the Fund will invest in any specific securities that  comprise any index, nor should it be understood to mean that there is a correlation between the Fund’s returns and the performance of any index presented. Eos Credit Funds 11
  • 12. III. Current SRI Investment Universe
  • 13. SRI Market Overview • The size of the SRI market can be difficult to quantify, but we look to the  United Nation’s Principles for Responsible Investment (PRI) as a proxy • The PRI has now been signed by 812 signatories globally, and the total  value of assets under signatories’ management now stands at $22 trillion  • Internally active managed assets subject to environmental, social and  governance factors via PRI signatories total approximately $6.8 trillion Sources: The Principles for Responsible Investment 2010 Report on Progress and www.unpri.org. Eos Credit Funds 13
  • 14. SRI Data Points According to PRI’s 2010 Report on Progress, the asset classes in which the lowest  percentage of signatories have integrated ESG issues are fixed income and hedge funds 30% Hedge funds 38% 39% Fixed income ‐ sovereign 52% 44% Fixed income ‐ corporate issuers 65% 58% Private equity 70% 61% Non‐listed real estate or property 72% 56% Listed real estate or property 73% 64% Listed equity (emerging markets) 81% 60% Infrastructure 83% Listed equity (developed markets) 72% 88% 20% 40% 60% 80% 100% Internal Integration External Integration Sources: The Principles for Responsible Investment 2010 Report on Progress. Eos Credit Funds 14
  • 15. SRI Data Points (Cont’d) Hedge Funds are currently only a very small percentage of the SRI market, as  measured by the PRI signatory holdings Average percentage of PRI signatory holdings by asset class 40% 34% 35% 30% 25% 19% 20% 15% 13% 9% 10% 8% 6% 5% 2% 2% 1% 1% 0% Hedge funds Commodities Infrastructure Listed real Non‐listed real Listed equity Private equity Fixed income ‐ Fixed income ‐ Listed equity estate or estate or (emerging corporate sovereign (developed property property markets) issuers markets) Sources: The Principles for Responsible Investment 2010 Report on Progress. Eos Credit Funds 15
  • 16. IV. Details of ECO SRI Class
  • 17. ECO SRI (Socially Responsible Investing) Class Overview • ECO SRI is a subset and separate share class within ECO launched on November 1, 2009 • Socially responsible investing describes an investment strategy which seeks to  maximize both financial return and social good in terms of environment, social justice,  and corporate governance • Belair is our screening partner for our ECO SRI class • Belair is a collaboration between Folksam/KPA, Storebrand and Harcourt • These three parties developed detailed and comprehensive criteria for socially  responsible investing • The Belair team screens all ECO investments and only compliant investments are  purchased for the ECO SRI fund • Folksam/KPA, Storebrand and Harcourt each have extensive expertise and experience  in the field of sustainable investing Eos Credit Funds 17
  • 18. ECO SRI Class Screening Process • Belair conducts a robust and thorough SRI screening process which  consists of the following multiple approaches: 8Negative Screening: Avoid investments in companies engaged in non  approved sectors or business activities 8Engagement: Engage with companies to improve their SRI compliance 8Positive Screening: Invest with companies with positive SRI attribute • Given the characteristics of credit, negative screening is the prominent  method that we use.  Nevertheless, as the market matures, we expect to  expand into positive screening further.  Eos Credit Funds 18
  • 19. ECO SRI Class Screening Criteria • The investments in this class adhere to the following criteria: 8Entities that respect international conventions in the areas of Human Rights,  Corruption and Environment 8Entities that do not produce Tobacco, Alcohol, Weapons or that do not have  material revenues from Gambling 8Commodity instruments sourced from non‐renewable energy sources are not  traded 8Instruments that originate from countries that are not subject to sanctions by  the UN Security Council • The SRI policy does not differentiate between long or short positions or between  ‘direct’ (e.g. bonds) or ‘indirect’ (e.g. derivatives) exposures Eos Credit Funds 19
  • 20. ECO SRI Class Screening Partner (Cont’d) Belair is a collaborative partnership between the following three parties: • Folksam is a leading Swedish insurance  • The Storebrand Group is a leading  • Harcourt is one of the globally  group. KPA Pension, part of Folksam  institution in the Nordic market for  leading providers of alternative  group, offers pension solutions to the  long‐term savings and insurance. investment solutions for  public sector. institutional investors. • As of 2009, the Storebrand Group  • Year‐end 2009, Folksam Group had  has USD 54 billion in assets under  • Harcourt manages in excess of USD  assets under management in excess of  management. 4.5 billion and employs a staff of  USD 35 billion.  over 70 professionals.  • Storebrand adopted an SRI Policy in  • Folksam and KPA Pension are leading  1995 and has developed a complete  • Harcourt has a long tradition of  SRI Investors. KPA have had a strict SRI  in‐house SRI research department  innovative solutions for  Policy which has been applied on all  which governs all investments done  professional investors why it is a  investments, both internally and  throughout the Storebrand group.  natural evolution to also unlock the  externally managed, since 1998.  global hedge fund space for  • As a co‐founding member of UNEP  professional SRI investors.  • As a co‐founding member of Principles  FI and a signatory of PRI; Storebrand  for Responsible Investment (“PRI”),  Folksam is actively engaged in the  is actively engaged in the global SRI  • As the first hedge fund manager to  global SRI industry. industry. sign PRI, Harcourt is influencing  other hedge funds to embrace SRI. Eos Credit Funds 20
  • 21. V. Why Long / Short Credit?
  • 22. Why Credit As Part Of An SRI Portfolio? Asset class diversity is key to a balanced portfolio given differing assets’ characteristics Public Debt1 Public Equity Venture Capital Risk Low High Venture Capital Public Equity Public Debt1 / Equity Stage Early Late Venture Capital Public Debt1 Public Equity Market / Issue Size Small Large Public Equity Public Debt1 Venture Capital Liquidity Liquid Less Liquid (1)  Non‐sovereign debt. Eos Credit Funds 22
  • 23. Why Long / Short Credit?  Fundamentals Remain Attractive • Current spreads imply higher default rates that are likely to be realized • As corporate profitability / cash flow generation stabilizes, many high  yield / levered loan issuers should be able to support valuations in excess  to those implied by their current debt trading levels • Therefore high yield / levered loans should still provide attractive return  opportunities on a fundamental basis • In a low growth environment, credit may outperform equities • Low growth environment likely to provide many liquid restructurings and  event driven opportunities Eos Credit Funds 23
  • 24. Why Long / Short Credit? Spreads Remain Elevated Credit spreads remain elevated compared to spreads in a normal growth environment, and if  the economy maintains positive GDP growth, spreads should tighten 2,000 10% HY Spread GDP %QoQ 2002: Corporate frauds 1,800 8% 1,600 6% 1,400 4% 1,200 2% 1,000 0% 800 ‐2% 600 400 ‐4% 200 ‐6% 0 ‐8% Dec 89 Jan 92 Feb 94 Mar 96 Apr 98 May 00 Jun 02 Jul 04 Aug 06 Sep 08 Sep 10 Source: S&P LCD & JPMorgan  Notes: HY spreads prior to 1999 from S&P, after 1999 from JPMorgan Eos Credit Funds 24
  • 25. Why Long / Short Credit? Technicals Remain Supportive • Low default activity – Defaults continued to decrease in October with the high‐yield par‐ weighted default rate declining to 2.4% from 2.5% and the loan par‐weighted default rate  dropping to 3.3% from 3.9%. • Positive mutual fund flows – October was another steady month of positive inflows for  leveraged credit.  High‐yield funds saw an inflow of $1.2 billion bringing YTD volume to $10.6  billion.  Bank loan mutual funds also saw solid inflows of $975 million bringing YTD volume to  $7.7 billion.  • Healthy capital markets  – High‐yield market conditions remain strong, pricing $34 billion of  bonds in October.  This is the 5th time this year where monthly volume has topped $30  billion, a feat never before reached prior to this year.  YTD new‐issue volume stands at $245  billion, which is $65 billion more than last year’s full‐year record.  Leveraged loan new‐issue  volume also remains healthy with $16 billion of volume.  YTD loan new‐issue volume stands  at $115 billion, which is 3x last year’s $38 billion of full year volume. Source of data: JPMorgan, LCD, AMG Data Services  Eos Credit Funds 25
  • 26. VI. 2010 / 2011 Macroeconomic Overview
  • 27. Below Trend Growth Macro Environment in US • Lower GDP growth than past 10 years • Persistent housing overhang • Higher unemployment • Higher savings rates • Higher government deficits / fiscal stimulus reversal Eos Credit Funds 27
  • 28. Macroeconomic Overview (Cont’d) ISI Company Surveys(1) 65 0 = Weak   100 = Strong 60 + 1 Standard Deviation 55 50 45 ‐ 1 Standard Deviation 40 35 30 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Recent Findings: After a strong move off the bottom in ISI’s Company Surveys(1) from March 2009 through March 2010, the surveys remain in a soft patch. A little better retail activity in late October boosted the Company Surveys slightly. Nonetheless, the overall tone from participants has not changed much in recent weeks despite the rise in the equity market. October sales for retailers were slower than last month. The auto dealers survey is softer. And housing sounds weaker. On the bright side, capital goods companies report better orders domestically and internationally – continuing a solid trend in demand. Staffing firms also report further strength in temp employment and some pickup in permanent staffing at the end of October. (ISI Group commentary) Note: As of October 31, 2010.  (1) Economists at the ISI group conduct ‘Company Surveys’ that indicate the strength / weakness of a particular sector. The industries they survey include: Broadline & Specialty  Retailers, Auto Dealers, Homebuilders, Shopping Guide Companies, Credit Card Companies, Banks, Airlines, Technology Companies, Capital Goods Companies and  Manufacturing Companies.  The chart is based on information for all of these industries combined.  Source: ISI Eos Credit Funds 28
  • 29. Below Trend Growth Macro Environment (Cont’d) Fiscal Policy Turns Restrictive Real Change in Private Inventories bil. 2005$, seasonally adjusted annual rate Last Point 2Q 2010: 68.8 150 100 50 0 -50 -100 -150 -200 1947-I 1957-I 1967-I 1977-I 1987-I 1997-I 2007-I Source: Goldman Sachs Global ECS Research Source: The Bureau of Economic Analysis and A. Gary Shilling Capacity Utilization Percentage of All Residential Mortgages Past Due seasonally adjusted Last Point Sept. 2010: 74.7% 90% seasonally adjusted Last Point 2Q 2010: 9.85% 11% 10% 85% 9% 80% 8% 7% 75% 6% 5% 70% 4% 65% 3% Jan-67 Jan-75 Jan-83 Jan-91 Jan-99 Jan-07 1972 1977 1982 1987 1992 1997 2002 2007 Source: The Federal Reserve and A. Gary Shilling Source: The Mortgage Bankers Association and A. Gary Shilling Eos Credit Funds 29
  • 30. Below Trend Growth Macro Environment (Cont’d) Initial Claims for Unemployment Initial Jobless Claims, in Thousands, Seasonally Adjusted, 4-wk Moving Ave 700 650 600 550 500 450 400 350 300 250 00 01 02 03 04 05 06 07 08 09 10 Source: The Levy Forecasting Center, LLC Eos Credit Funds 30
  • 31. Impact of “QE2” • Timing / size unclear • Transmission Mechanism is not well tested q Lower mortgage rates q Lower corporate yields q Higher stock prices q Higher house prices q Lower dollar q Higher consumers and business confidence • May be priced into markets Eos Credit Funds 31
  • 32. Investing Implications of Current Macro Environment Following are key characteristics of companies that we look for in this below trend growth macroeconomic environment: • Companies that do not require significant economic growth on a sustained basis to support their current capital structures • Companies that do not rely on robust consumer discretionary spending • Companies which will benefit / not be hindered by government intervention • Companies that are not overly reliant on the capital markets to fund future capital projects Eos Credit Funds 32
  • 33. Recession Watch  When GDP drops below 2% historically, it always has continued to drop, eventually reaching 0% or lower. U.S. Real GDP U.S. Real GDP U.S. Real GDP 1947 – 1963 1964 – 1978 1979 – 2010 Y/Y % Y/Y % Y/Y % 14 12 10 10 10 8 8 8 6 6 6 4 4 4 2 2 2 0 0 0 ‐2 ‐2 ‐2 ‐4 ‐4 ‐4 1947 1949 1951 1953 1955 1957 1959 1961 1963 1964 1966 1968 1970 1972 1974 1976 1978 1979 1982 1985 1988 1991 1994 1997 2000 2003 2006 2009 1949 1953 1956 1957 1960 1970 1973 1979 1981 1990 2001 2008 Source: ISI. Eos Credit Funds 33
  • 34. VII. Strategy
  • 35. Eos Strategy Emphasis Over Time 2002 2003 2004 2005 2006 2007 2008 2009 2010 Defensive  Aggressive  Market Cycle Going to  Aggressive Aggressive Aggressive Neutral Defensive Defensive Aggressive Going to  Aggressive Neutral US Going to  Europe  Geographic Focus US US Europe Europe Europe US US and UK Europe Going to US Senior Secured HY / Unsecured  and 2nd Liens Distressed and  Special Situations Investment Grade Convertible and  Preferreds Shorts / Hedges = High Emphasis = No Emphasis Eos Credit Funds 35
  • 36. ECO Long and Short Exposure Represents Opportunistic Approach Long (1) Short Net exposure 140% 120% 100% 80% 60% 40% 20% 0%  0 6  0 7  0 8  0 9 6 7 8 9 y  0 6 y  0 7 y  0 8 y  0 9 y  1 0 6 7 8 9 0 r  06 r  07 r  08 r  09 r  10 06 07 08 09 10  0  0  0  0  0  0  0  0  1 Jul  Jul  Jul  Jul  Jul  Sep Sep Sep Sep Nov Nov Nov Nov Jan Jan Jan Jan Jan Ma Ma Ma Ma Ma Ma Ma Ma Ma Ma ‐20% ‐40% ‐60% ‐80% Note: Long and short percentages defined as a percent of NAV, as of August 31, 2010 (1) Long exposure over 100% due to inclusion of face value of unfunded revolvers and full notional exposure on derivative products.  Eos Credit Funds 36
  • 37. VIII. Performance
  • 38. Credit Funds Historical Performance   Eos Credit Opportunities ("ECO")(1) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR 2002 0.1% (2.3%) 4.8% 2.9% (2.7%) 0.5% 2.7% 0.1% 6.0% 2003 2.6% 1.6% 0.3% 3.2% 1.9% 2.7% 1.0% 1.0% 1.0% 4.5% 3.1% 4.9% 31.6% 2004 3.9% 1.3% (1.4%) 3.9% (0.8%) 3.3% 1.3% 2.8% 3.9% 6.4% 2.5% 3.0% 34.2% 2005 0.9% 1.8% 1.5% 0.2% (0.9%) 3.2% 2.6% 1.8% 0.9% (0.0%) 0.3% 1.8% 15.2% 2006 2.0% 1.3% 2.9% 2.0% (0.2%) (1.6%) 0.0% (0.1%) 0.3% 0.9% 1.3% 1.0% 10.1% 2007 1.9% 2.3% 0.7% 0.7% 0.5% 1.0% 2.1% 0.7% 0.8% 0.6% 0.3% (0.5%) 11.7% 2008 (1.6%) (1.0%) (0.7%) 1.4% 0.1% (1.2%) (1.0%) 0.1% (3.5%) (4.5%) (4.8%) (10.1%) (24.2%) 2009 1.7% (1.0%) 1.0% 2.4% 3.4% 0.3% 2.1% 2.7% 3.7% 1.1% 0.9% 1.9% 21.9% (4) 2010 4.0% 0.1% 3.9% 1.9% (3.4%) 0.0% 2.2% 0.9% 1.6% 1.8% 13.4%   Eos Credit Opportunities ‐ SRI ("ECO SRI")(2) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR 2009 1.0% 2.5% 3.5% (4) 2010 2.7% (0.1%) 3.5% 1.9% (2.6%) 0.3% 2.0% 0.6% 1.3% 1.5% 11.6%   Eos Senior Loans ("ESL")(3) JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR 2008 0.9% 0.0% (1.2%) (0.1%) (2.9%) (11.5%) (2.8%) 0.9% (16.0%) 2009 4.6% (0.9%) 0.7% 7.1% 6.1% 3.6% 3.0% 2.2% 4.7% 0.6% 0.3% 2.2% 39.8% (4) 2010 2.3% (0.2%) 1.9% 1.1% (2.4%) (0.2%) 1.8% 0.3% 1.2% 1.4% 7.3% (1) Performance shown for onshore vehicle and for November 1, 2004 class A investor after high water mark. ECO returns until Oct. ’04 (included) represent Eos Partners’ Total Return fixed income portfolio (hereafter: TRFIP), a  portfolio managed by the principals of ECO’s investment  manager using the same investment strategy as ECO.  Returns are net of annual management fees of 1.5% and incentive fees applicable to an investment in ECO. Cumulative  monthly returns are unaudited time‐weighted returns from May 2002 through October 2004 for Eos Partners’ TRFIP. Throughout this document the blended returns of both the Eos Partners’ TRFIP and ECO are used when describing  historical performance.  Many factors may cause ECO’s results to differ materially from the results of the TRFIP including the facts that no leverage was employed in the TRFIP; the data is based upon varying amounts of average  capital deployed from month to month and monthly performance data reflects return on average net invested capital (which Eos Partners could increase or decrease daily); and the data presented reflects Eos Partners’ judgment as  to the allocation of currency hedges and various expenses between the TRFIP and the Eos Partners Short Term Portfolio. Past performance of Eos’ Total Return fixed income portfolio is not an indication of future results for Eos  Credit Opportunities.  (2) Performance shown for offshore vehicle and for November 1, 2009 investor. (3) Performance shown for onshore vehicle and for May 1, 2008 hypothetical third party investor after high water mark. (4) The October 31, 2010 unaudited data is an initial estimate that was internally determined, represents only a preliminary estimate of results for the period referenced, has not been reviewed by the Fund's Administrator or auditor  and is subject to change.  Note: Returns are net of annual management fees (ECO 1.5% / ESL: 1.0%) and incentive fees applicable to an investment in ECO / ESL. Past performance represents the reinvestment of all dividends, income and profits.  Past  performance of ECO / ESL is not an indication of future results. Eos Credit Funds 38
  • 39. Credit Funds Historical Performance (1) Net Returns* 2002 2003 2004 2005 2006 2007 2008 2009 2010 Cumulative (2) Eos Credit Opportunities 6.0% 31.6% 34.2% 15.2% 10.1% 11.7% (24.2%) 21.9% 11.4% 172.9% (3) Eos Credit Opportunities ‐ SRI 3.5% 9.9% 13.8% (4) Eos Senior Loans (15.9%) 39.8% 5.8% 24.4% Dow Jones Credit Suisse Hedge Fund Index 1.5% 15.4% 9.6% 7.6% 13.9% 12.6% (19.1%) 18.6% 6.0% 80.2% Barclays High Yield (4.5%) 29.0% 11.1% 2.7% 11.9% 1.9% (26.2%) 58.2% 11.5% 108.7% 10yr US Treasury 13.6% 1.3% 4.9% 2.1% 1.3% 9.7% 20.1% (9.8%) 14.4% 69.7% S&P 500 (18.3%) 26.4% 9.0% 3.0% 13.6% 3.5% (38.5%) 23.5% 2.3% 6.0% S&P LCD (Loan Index) 1.9% 10.0% 5.2% 5.1% 6.8% 2.0% (29.1%) 51.6% 6.8% 54.9% Barclay Event Driven Index (4.7%) 22.0% 16.1% 8.2% 15.6% 8.4% (17.5%) 29.1% 5.3% 105.3% Dow Jones Credit Suisse Event Driven Distressed  (3.7%) 25.1% 15.6% 11.7% 15.6% 8.4% (20.5%) 20.9% 5.6% 98.1% Hedge Fund Index *Returns are net of annual management fees (ECO 1.5% / ESL: 1.0%) and incentive fees applicable to an investment in ECO / ESL. Past performance represents the reinvestment of all dividends, income and profits.  Past performance of  ECO / ESL is not an indication of future results. (1) YTD as of September 30, 2010.  (2) Performance shown for onshore vehicle and for November 1, 2004 investor after high water mark. ECO returns until Oct. ’04 (included) represent Eos Partners’ Total Return fixed income portfolio, a portfolio managed by the  principals of ECO’s investment manager using the same investment strategy as ECO. (3) Performance shown for offshore vehicle and for November 1, 2009 investor. (4) Performance shown for onshore vehicle and for May 1, 2008 hypothetical third party investor after high water mark. Source: Eos, Dow Jones Credit Suisse, Barclays Dow Jones Credit Suisse Hedge Fund Indices are compiled by Credit Suisse Hedge Index LLC and CME Group Index Services LLC.   They are asset‐weighted hedge fund indices and include only funds, as opposed to separate accounts. The  Indices use the Credit Suisse Hedge Fund Database, which tracks approximately 8000 funds, and consists only of funds with a minimum of US$50 million under management, a 12‐month track record, and audited financial statements. It  is calculated and rebalanced on a monthly basis, and shown net of all performance fees and expenses.  The Barclays High Yield Bond Index is an index that measures that performance of a broad universe of high yield bonds.  The index  includes all fixed‐income securities having a maximum quality rating of Ba1 (including defaulted issues), a minimum amount outstanding of $100mm, and at least one year to maturity.  It is not possible to invest directly in the Barclays  High Yield Bond Index.  The Barclays High Yield Bond Index is not subject to the fees and expenses applicable to the Fund.  It also should not be considered a comparable investment program to the Fund.  It is being presented for  comparison purposes to show how the Fund's performance compares with the performance of a broad universe of high yield bonds. The S&P LCD index is a derivative index which references the first lien debt for 100 of the largest  leveraged loan issuers. It is being presented for comparison purposes to show how the Fund's performance compares with the performance of a broad universe of first lien debt. The S&P 500 tracks the performance of the equity  securities of a representative sample of 500 U.S. based large‐cap companies.  The S&P 500 is an unmanaged, market‐value weighted index with each stock's weight in the index proportionate to its market value.  The Barclay Event  Driven Index is a measure of the average return of funds with a ‘special situations’ strategy (excludes Funds of Funds) in the Barclay database. The index is simply the arithmetic average of the net returns of all the funds that have  reported that month.  There are significant differences between the Funds’ investments and the indices.  The Funds may use leverage and have a greater degree of risk and volatility as well as less liquidity than securities that comprise  the indices.  Moreover, the indices do not reflect the reinvestment of dividends or income and, unlike the Funds, are not subject to fees or expenses.  It should not be assumed that the Fund will invest in any specific securities that  comprise any index, nor should it be understood to mean that there is a correlation between the Fund’s returns and the performance of any index presented. Eos Credit Funds 39
  • 40. THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, A FUND INTEREST IN EOS CREDIT OPPORTUNITIES, L.P. OR IN EOS CREDIT OPPORTUNITIES OFFSHORE LIMITED AS DESCRIBED HEREIN. NO SUCH OFFER OR SOLICITATION WILL BE MADE PRIOR TO THE DELIVERY OF AN OFFERING MEMORANDUM AND OTHER MATERIALS (THE “OFFERING MATERIALS”) RELATING TO THE MATTERS MENTIONED HEREIN. THIS DOCUMENT CONTAINS A PRELIMINARY SUMMARY OF THE PURPOSE OF THE FUND AND ITS PRINCIPAL BUSINESS; THIS SUMMARY DOES NOT PURPORT TO BE COMPLETE, IS FOR DISCUSSION PURPOSES ONLY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED DISCUSSION CONTAINED IN THE ACTUAL OFFERING MATERIALS AND THE ACTUAL TEXT OF THE FUND’S PARTNERSHIP AGREEMENT. NO REPRESENTATION OR WARRANTY IS MADE BY THE FUND OR ANY OTHER PERSON (INCLUDING ANY OF ITS AGENTS OR OTHER REPRENTATIVES) AS TO THE ACCURACY OR COMPLETENESS OF THE INFORMATION CONTAINED HEREIN. ONLY THOSE PARTICULAR REPRESENTATIONS AND WARRANTIES WHICH MAY BE MADE IN DEFINITIVE AGREEMENTS RELATING TO THE FUND, WHEN, AS AND IF EXECUTED, AND SUBJECT TO SUCH LIMITATIONS AND RESTRICTIONS AS MAY BE SPECIFIED IN SUCH DEFINITIVE AGREEMENTS, SHALL HAVE ANY LEGAL EFFECT. INVESTING IN FINANCIAL MARKETS INVOLVES A SUBSTANTIAL DEGREE OF RISK. THERE CAN BE NO ASSURANCE THAT THE INVESTMENT OBJECTIVES DESCRIBED HEREIN WILL BE ACHIEVED. INVESTMENT LOSSES MAY OCCUR, AND INVESTORS COULD LOSE SOME OR ALL OF THEIR INVESTMENT. NOTHING HEREIN IS INTENDED TO IMPLY THAT AN INVESTMENT IN THE FUND OR THE FUND'S INVESTMENT STRATEGIES MAY BE CONSIDERED "CONSERVATIVE," "SAFE," "RISK FREE" OR "RISK AVERSE." NO REGULATORY AUTHORITY HAS PASSED UPON OR ENDORSED THIS SUMMARY OR THE MERITS OF AN INVESTMENT IN THE FUND. THIS DOCUMENT IS BEING PROVIDED TO YOU ON A CONFIDENTIAL BASIS. ACCORDINGLY, THIS DOCUMENT MAY NOT BE REPRODUCED IN WHOLE OR IN PART, AND MAY NOT BE DELIVERED TO ANY PERSON WITHOUT THE PRIOR WRITTEN CONSENT OF ECO MANAGEMENT L.P. Eos Credit Funds 40