1. Histogram of Simulated Monthly Returns 18,199 1578 1388 Nova Simulated Monthly Performance Golden Globe Asset Management Performance Update Golden Globe Asset Management, Inc. October 2009 www.goldenglobe.us Inquiries: Golden Globe Asset Management, Inc. Christy Harding-Smith [email_address] www.goldenglobe.us The Performance of Funds of Hedge Funds: Do Experience and Size Matter? (an excerpt from a white paper written by Roland Füss, Dieter G. Kiser, and Anthony Strittmatter taken from www.barclayhedge.com) Institutional investors have become increasingly interested in hedge funds over the last two decades. These products have progressed from being exclusively for high-net worth individuals to being an investment alterative for institutional investors like endowments and pension funds. In addition, capital is now flowing into the hedge fund industry at an unprecedented rate. The number of funds is also growing, as well as the amount of research on their risk and return characteristics. Funds of hedge funds (FHFs), or funds investing in other hedge funds, play a special role within the hedge fund industry. The first FHF was created in Switzerland in 1969, and Europe is still the preferred location for larger FHFs (see Ineichen (2004)). FHFs charge fees charged by the underlying single hedge fund manager. According to Fothergill and Coke (2001), FHF management fees are generally equivalent to 1% - 2% of the assets under management. The performance fee, also called an incentive fee, typically ranges from 15% - 25%. We would expect that the information advantage of experienced FHF managers would more than compensate investors for these fees. However, Brown et al. (2004) find that single hedge funds dominate funds of funds on an after-fee return basis or Sharpe ratio basis. They argue that the disappointing after-fee performance of some FHFs might be explained by the nature of this fee arrangement. Ineichen (2002) posits that the value-added of a FHF manager is attributable more to manager selection and monitoring than to portfolio construction or management. Also in this strategy allocation for hedge fund investing. Beckers et al. (2007) show empirically that, over the past fifteen years, FHFs were able to deliver alphas with a high information ratio. (continued on page 2) 3132 Nova Simulated Monthly Performance Christy Harding-Smith Jan. Feb. Mar. Apr. May Jun Jul Aug Sept Oct Nov Dec. Total Ann Ret. 2003 3.96 12.41 8.12 3.08 6.43 6.13 1.13 3.21 5.19 3.75 2.06 2.79 58.25 2004 5.69 6.60 1.24 4.39 2.78 1.61 4.48 3.85 10.07 5.94 3.97 2.55 53.15 2005 0.54 1.82 3.37 0.25 1.81 3.61 2.08 6.99 3.21 -0.11 4.13 1.62 29.31 2006 1.82 0.39 2.32 5.62 2.52 1.46 1.25 3.40 2.06 2.18 2.22 4.06 29.32 2007 4.07 2.83 0.12 3.71 8.64 6.57 -0.76 2.43 4.51 3.52 1.10 3.63 40.57 2008 0.38 1.25 2.76 3.20 0.33 1.39 -2.30 -0.86 1.82 1.60 0.64 2.36 17.82 2009 1.86 2.50 -0.56 1.11 12.19 -3.04 2.64 4.31 4.61 25.63

2. Starburst Simulated Monthly Performance Page 2 of 2 Simulated Draw Down Analysis The Starburst Portfolio Golden Globe asset management Performance Update Depth Length Recovery Peak Valley 3.24 2 3 12/01 2/02 3.05 2 1 9/02 11/02 2.08 1 2 6/08 7/08 (continued from page 1) However, FHFs may be the solution to the problem of negative skewness and positive excess kurtosis of non-normally distributed returns that is associated with single hedge funds. 1 For example, Kat (2002) shows that the diversification potential of FHFs provides skewness protection. FHFs are the preferred way for most investors to gain exposure to the hedge fund asset class for the first time. They are ideal for investors who are unfamiliar with hedge funds, or are reluctant to build the infrastructure needed to run a professional selection and portfolio management team. According to Hedge Fund Research (HFR) 2 , as of the end of 2007, $798.6 billion of the $1.87 trillion total invested in single hedge funds (SHFs) were invested through FHFs. During 2007, FHFs saw net new inflows of $59.2 billion, compared to $49.7 billion n 2006 and $9.5 billion in 2005. However, the bulk of research on hedge funds thus far has focused mainly on SHFs. In this paper, we focus on the FHF characteristics age and experience, since investors are most likely to pay close attention to them. As Lhabitant and Larned (2003) show, most FHFs hold a similar number of underlying single manager hedge funds in their portfolios, usually between fifteen and forty. Thus, one could also argue that smaller FHFs should outperform larger FHFs on a return basis, as there is empirical evidence that smaller, younger, single hedge funds outperform older, larger ones (see, for example, Harri and Brorsen (2002) and Getmansky (2004). (The entire white paper is attached to this email or contact us at admin@goldenglobe.us) Contact Us: Phone: (616)805-3494 2719 Northvale Dr. Suite 201 Grand Rapids, Mi 49525 Jan. Feb. Mar. Apr. May Jun Jul Aug Sept Oct Nov Dec. Total Ann Ret. 2003 4.82 1.14 -0.19 1.25 3.86 6.81 -1.15 -0.49 2.44 3.03 -0.64 3.68 24.56 2004 3.30 3.39 1.50 0.467 -0.15 -0.03 1.05 0.82 0.93 0.72 2.77 0.14 14.91 2005 -0.56 -0.02 0.61 -1.22 0.78 0.86 1.09 2.85 1.38 0.55 3.49 0.91 10.74 2006 0.26 -0.31 0.99 3.83 0.96 -0.76 -0.58 3.75 1.89 0.74 1.93 1.90 14.59 2007 1.39 -1.11 -0.44 1.82 4.44 1.90 -1.24 0.43 0.66 0.81 0.40 0.45 9.52 2008 1.67 0.20 1.23 0.39 0.22 0.43 -2.08 1.09 2.65 1.94 034 1.37 8.54 2009 0.28 1.50 -1.56 3.03 6.64 0.03 -0.18 3.09 2.01 14.84 Simulated Performance History Average Annual Return 14.47% Highest Monthly Return 7.41% Average Monthly Return 1.21% 12 Month Rolling Return 18.50% Largest Peak to Valley 3.24% Recovery period 3 month