Ownership/Structure PAAMCO Prisma, LLC (the “Filing Adviser”), formerly Pacific Alternative Asset Management Company, LLC, was originally founded, and registered as an investment adviser with the Securities and Exchange Commission (“SEC”) in 2000.

Prisma Capital Partners LP (“Prisma”) was originally founded in 2003 and registered as an investment adviser with the SEC in 2004. Prisma has elected to stop filing a separate Form ADV with the SEC and is now a “relying adviser” of the Filing Adviser. The term “PAAMCO Prisma” as used in this brochure refers, collectively, to the Filing Adviser and Prisma, and to each of their respective subsidiaries to the extent the context requires.

Each of the Filing Adviser and Prisma is a wholly-owned subsidiary of PAAMCO Prisma Holdings, LLC (“PPH”), a holding company owned (A) 60.1% by PHoldings, LLC, a Delaware limited liability company, which in turn is owned by certain employees of PAAMCO Prisma, and (B) 39.9% by KKR Topaz LLC, an affiliate of KKR & Co. Inc. (together with its affiliates, “KKR”).

PAAMCO Prisma is led by an executive committee comprised of six individuals representing the firm who are responsible for day-to-day management (the “Executive Committee”). Eric Wolfe is the Chairperson of the Executive Committee and the Chief Executive Officer of each of the Filing Adviser and Prisma, and most U.S.-based employees of the Filing Adviser and Prisma are “dual- hatted” and considered supervised persons of both entities.

Please refer to Item 10 for further information regarding PAAMCO Prisma, KKR and the ownership structure of PAAMCO Prisma.

Advisory Services

As of December 31, 2018, PAAMCO Prisma had approximately $12.7 billion in discretionary assets under management and approximately $186.7 million in non-discretionary assets under management.1

The term “Client” as used in this brochure means the Funds and Accounts (which term includes, collectively, the FoF Vehicles, the FoF Accounts, the Apex Funds and the Apex Accounts), Managed Account Platform Funds, and any other investment advisory accounts of PAAMCO Prisma, including accounts managed by the Direct Trading division, the PAAMCO Launchpad Funds, the Strategic Advisory Clients, and accounts for whom PAAMCO Prisma provides Client- Directed Managed Account Services, as each of these terms is defined below. This list of Clients is not exhaustive, and PAAMCO Prisma may provide advisory services to other types of clients. 1 As of December 31, 2018, PAAMCO Launchpad, LLC (“PAAMCO Launchpad”) managed, on a discretionary basis, a private fund with $150 million in capital commitments, which is included in the aggregate discretionary assets under management of PAAMCO Prisma. The aggregate discretionary assets under management as of December 31, 2018 also include the assets of Pacific Alternative Beta Master Fund, LP (which is now Martlet Alternative Beta Master Fund, LP) (the “Alt Beta Fund”) of approximately $104.4 million. The Filing Adviser acted as investment manager to the Alt Beta Fund through December 31, 2018. Martlet Asset Management, LLC was appointed as the investment manager to the Alt Beta Fund effective January 1, 2019. PAAMCO Prisma works with each Client to determine such Client’s specific investment objectives. During the course of these discussions, a Client may place various types of restrictions on the management of its account. For example, a Client may restrict investment in a certain industry, in Portfolio Funds (as defined below) that implement specific strategies or in a specific region of the world. Investors in commingled funds may not generally impose restrictions on PAAMCO Prisma’s investment discretion. Clients and their respective beneficial owners have varying business terms, including, but not limited to, differences in fees charged, redemption rights, information about the positions held by the Portfolio Funds (as may be permitted by PAAMCO Prisma’s procedures and by the Portfolio Fund’s unaffiliated manager), functional currency, investment objectives and guidelines, and investment minimums.

PAAMCO Prisma provides advisory services to a variety of Clients on either a discretionary or non- discretionary basis through four divisions: the Fund of Hedge Funds Division, the Apex Division, the Direct Trading Division and the Seeding Division.

Fund of Hedge Funds Division

Within its Fund of Hedge Funds division, PAAMCO Prisma primarily advises clients with respect to diversified portfolios that are composed of private investment partnerships or similar vehicles (each, a “Portfolio Fund”) managed by unaffiliated third-parties (each a “Portfolio Manager”). Portfolio Funds pursue a variety of investment strategies, including Convertible Bond Hedging, Distressed Debt, Event-Driven Equity, Equity Market Neutral, Fixed Income Relative Value, Long/Short Credit, Long/Short Equity, Opportunistic, Global Macro, Managed Futures and Short Bias. These diversified portfolios of Portfolio Funds are commonly referred to as “funds of funds.” These funds of funds may be organized as pooled investment vehicles and single-owner investment vehicles (“FoF Vehicles”) or separately managed accounts (“FoF Accounts” and, together with FoF Vehicles, “FoF Vehicles and Accounts”).

The term “Portfolio Fund” also includes each segregated portfolio of certain Cayman Islands segregated portfolio companies managed and advised by the Filing Adviser that contract with unaffiliated third-party managers (each a “Subadviser”) that exercise discretionary trading authority over these segregated portfolios (“Managed Account Platform Funds”). Under the terms of the subadvisory agreement among the Managed Account Platform Fund, the Filing Adviser, and the Subadviser (“Subadvisory Agreement”), the Subadviser is responsible for determining the specific securities and other investments to be bought and sold and arranging the execution of all orders for the purchase and sale of such securities and other investments with respect to the applicable Managed Account Platform Fund in accordance with the agreed upon mandate and investment guidelines. Generally, only clients advised by PAAMCO Prisma are permitted to invest in Managed Account Platform Funds. As part of its ongoing evaluation of Portfolio Funds and Managed Account Platform Funds, PAAMCO Prisma may determine from time to time that a customized and dynamic investment mandate may be appropriate. PAAMCO Prisma reaches that determination in consultation with the applicable Portfolio Manager or Subadviser and provides that Portfolio Manager or Subadviser the discretion to implement and pursue the agreed-upon mandate. For Core and completeAlpha Clients (as defined below), operational and risk diligence is performed on a consolidated basis. Apex Division PAAMCO Prisma advises clients with respect to direct investments in securities and other financial instruments through the following strategies:
• PAAMCO Prisma Apex Credit (“Apex Credit”): co-investments in public and private market transactions including, but not limited to, mezzanine securities and mezzanine-like instruments, structured and illiquid credit, private debt and public debt, and pre-IPO equity (each, a “Co-Investment”).
• PAAMCO Prisma Apex Tactical (“Apex Tactical”): thematic tactical opportunities that are generally unconstrained by geography or asset type. In connection with the foregoing, Prisma may strategically delegate trading authority with respect to specific investment themes to third-party subadvisers pursuant to separate sub-investment management agreements.

The clients participating in Apex Credit and/or Apex Tactical strategies may be organized as pooled investment vehicles or single-owner investment vehicles (“Apex Funds”) or separately managed accounts (“Apex Accounts”). Each of the Apex Funds and the Apex Accounts is referred to as an “Apex Division Client.” Investors in the Apex Funds may include FoF Vehicles and FoF Accounts. The FoF Vehicles and Apex Funds are referred to collectively as “Funds”). The FoF Accounts and Apex Accounts are referred to collectively as (“Accounts”). The Apex Funds and the Apex Accounts, together with the FoF Vehicles and the FoF Accounts, are referred to, collectively, as “Funds and Accounts.” Direct Trading Division

In November 2015, the Filing Adviser established a direct trading division (“Direct Trading”). As part of its operations, Direct Trading provides investment management services with respect to emerging market equity securities, primarily focusing on Mexican and Turkish securities, but also involving other emerging market equities and, from time to time, equities in some developed markets (“PAAMCO Miren”). The Filing Adviser currently provides this service directly to one Client (the “PAAMCO Miren Client”). The Filing Adviser has engaged its subsidiary, PAAMCO Turkey, to provide discretionary investment advice and trade execution services for PAAMCO Miren. The Filing Adviser also receives research and analysis from its subsidiary PAAMCO Mexico, which provides such services exclusively to affiliates in accordance with the law and regulations applicable to such subsidiary. Each of these entities is an indirect, wholly-owned subsidiary of the Filing Adviser, except that an individual working in the PAAMCO Mexico office has a small minority ownership position in PAAMCO Mexico.

In February 2018, Direct Trading expanded its investment management services to include a global equity derivatives relative value strategy offered through a feeder fund and a master fund (collectively, the “West70 Funds”). Each of the PAAMCO Miren Client and the West70 Funds is referred to as a “Direct Trading
Client.”
For PAAMCO Miren, the Filing Adviser contracts with a Client to directly manage and trade portfolios of securities on such Client’s behalf. For the West70 Funds, the Filing Adviser trades both commodity interests and securities for these Clients. PAAMCO Prisma may, in the future, commence other direct trading strategies in addition to those described above. Seeding Division PAAMCO Launchpad, a wholly-owned subsidiary of the Filing Adviser, launched in May 2018 as the manager of a hedge fund seeding platform. PAAMCO Launchpad’s clients can include private funds or separately managed accounts that have a single investor or group of affiliated investors, or commingled funds (collectively, “PAAMCO Launchpad Funds” or “Seeding Division Clients”) that invest in private funds (“Seeded Funds”) operated by third-party investment managers (“Seeded Managers”). The PAAMCO Launchpad Funds intend to receive a share of the revenues received by the Seeded Managers from other investors in the Seeded Funds as well as other investment funds and accounts managed by the Seeded Managers. It is generally anticipated that the Seeded Managers will be newly-formed entities that have not yet raised significant outside capital. Where the context so requires, the term “Portfolio Funds” as used in this Brochure also refers to Seeded Funds in which PAAMCO Launchpad Funds invest. The Filing Adviser acts as subadviser to PAAMCO Launchpad and the PAAMCO Launchpad Funds. Further details regarding PAAMCO Launchpad’s business can be found in Item 8.

Strategic Advisory Services

PAAMCO Prisma also provides advisory or consulting services to advisory clients (“Strategic
Advisory Clients”) regarding their investment portfolios, or a specific asset class allocation within
their investment portfolios. The relevant investment portfolios of the Strategic Advisory Clients receiving such advisory or consulting services represented an aggregate amount of approximately $18.9 billion as of December 31, 2018. These arrangements may be structured as stand-alone arrangements or delineated in the respective asset management contracts with these Clients, and the fees for such services are typically included as part of the Clients’ overall asset management fee. Advisory or consulting services performed by PAAMCO Prisma for a Strategic Advisory Client may vary during the term of the relevant agreement based on specific requests of the Strategic Advisory Client. Advisory or consulting services may include, but are not limited to: defining the goals and objectives of a specific asset class allocation with the Strategic Advisory Client; guidance on workouts or restructurings; providing general and investment-specific market insight and data; assistance in sourcing ideas; and providing general guidance on selection, execution and exit of a specific asset class allocation. Client-Directed Managed Account Services

Additionally, PAAMCO Prisma may also provide client-directed managed account services (“Client-Directed Managed Account Services”) to certain investors in Clients. These services are intended to provide assistance to investors with their respective in-house direct hedge-fund programs. Client-Directed Managed Account Services are typically obtained by investing in a Managed Account Platform Fund. The investor identifies and selects a Portfolio Manager to act as a subadviser or adviser to the Managed Account Platform Fund. The investor is responsible for the following with respect to the vehicle: (i) determination of the investment mandate along with investment guidelines, (ii) determination of the fee and redemption terms, (iii) date of investment and redemption, and (iv) other business terms (such as key man provisions and notice provisions) that the investor/client deems important. The assets of such vehicle are managed on a day-to-day basis by the selected Portfolio Manager pursuant to the investment mandate determined by the investor. New Business Lines PAAMCO Prisma may develop new business lines in the future that could differ immaterially or materially from the business lines disclosed in this brochure. If such business lines differ materially, PAAMCO Prisma will amend this brochure to provide applicable disclosures. PAAMCO Prisma does not participate in any wrap fee programs. please register to get more info

PAAMCO Prisma Fees

This brochure is delivered only to Clients that are “qualified purchasers” as defined in section 2(a)(51)(A) of the Investment Company Act of 1940, as amended (“Investment Company Act”).

For discretionary services provided to Funds, PAAMCO Prisma and certain other subsidiaries of PPH generally receive management or administration fees, payable either quarterly in advance or monthly in arrears; and, in some cases, receive performance-based compensation, which is generally payable annually. In certain circumstances, these fees are subject to minimum annual amounts. The fees applicable to each Fund are more fully described in the relevant Fund’s offering materials, disclosure documents, investment management agreements, and/or governing documents. In certain cases, these documents also include side letters or other similar agreements with particular investors in a Fund, which would have the effect of establishing rights under, altering, or supplementing the terms of such Fund’s governing documents with respect to such investors in a manner more favorable to such investors than those applicable to other investors (see Item 11 for additional information regarding side letters and other arrangements).

Management and administration fees are adjusted for additions made to a Fund by an investor that occur during a calendar month or quarter, as applicable. In addition, if management or administration fees are paid in advance, and an investor withdraws assets from the Fund mid- period, any unearned fee will be refunded. Fees payable by the Funds are generally deducted directly from the investors’ accounts. Fees payable by a Fund with respect to certain large or other strategic investors (and borne by such investors), as well as other terms related to redemption rights, transfers and reporting are subject to negotiation based upon various factors such as the size of the investment or regulatory status of a particular investor. Any such arrangements or terms that differ from the applicable Fund’s standard terms are generally set forth in a side letter or similar agreement with the specific investor. In addition, investments in Funds by employees and other associated persons of PAAMCO Prisma, as discussed below in Item 6, are not subject to such fees.

The fees charged, and the terms of payment, for Accounts are subject to negotiation with each respective Client. Factors that are considered in the course of these negotiations include the size of the Account, the services provided, the reporting requirements of the underlying Client, and the Account’s investment strategy, among other factors, and are set forth in the investment management agreements and/or other governing documents relating to such Account. Fees are generally payable quarterly in advance or monthly in arrears, as negotiated with the particular Client, and any performance-based compensation is generally paid annually. If Accounts are initiated during a calendar quarter, the Client will be charged a prorated fee. If fees are paid in advance and assets are withdrawn from an Account or the Account is terminated prior to the end of the period to which such fees relate, PAAMCO Prisma refunds any unearned fees. Investors in Accounts may be billed directly for fees or may authorize PAAMCO Prisma to directly debit fees from the Accounts, as negotiated with the particular Client. PAAMCO Prisma does not receive a management or incentive fee with regard to the Managed Account Platform Funds. Each Subadviser generally receives (i) management fees in the range of 0.3 – 1.5% of, typically, net asset value, or, in some instances, a notional trading amount and (ii) incentive fees in the range of 0 – 20%, at times, subject to a high water mark and/or a hurdle. In certain situations, a Subadviser may not receive a management fee, but rather the Subadviser may receive a draw or advance on its performance fee (a “Draw”). In some cases, for a Subadviser entitled to a Draw, if a performance fee is earned but it is less than the amount of the Draw, the difference between the Draw paid and the performance fee will carry over into subsequent years (an “Accumulated Draw Deficit”). In such a case, subsequent performance fees will be reduced by both the amount of the Draw in that year and any Accumulated Draw Deficit, until such Accumulated Draw Deficit has been reduced to zero (much like a high water mark operates). In circumstances where a Subadviser receives a Draw, and typically no management fee, the Subadviser’s incentive fee may exceed 20%.

On occasion, a Subadviser will not receive a Draw or management fee, but rather the Portfolio Fund for which the Subadviser conducts investment activities will be responsible for the “pass through” expenses of the Subadviser pertaining to its management of the relevant Portfolio Fund. Pass through expenses would include, in addition to any of the types of expenses described below in “Expenses”, the Portfolio Fund’s share of Subadviser overhead expenses such as, without limitation, employee compensation (including, without limitation, salaries and draws, guarantees, “signing bonuses,” deferred compensation, bonuses and benefits, severance arrangements, relocation arrangements and non-competition covenant costs), office rent, computer hardware and software, research, travel, insurance costs and general operations and administration costs of the Subadviser’s business. Depending on the size of the Subadviser’s firm, this could equate to pass through expenses in excess of the typical 0.3 – 1.5% management fee typically charged by other Subadvisers.

PAAMCO Prisma negotiates these fees with each Subadviser independently, and such fees are ultimately approved by the Board of Directors of the respective umbrella fund or stand-alone fund. In certain circumstances, while a Managed Account Platform Fund is in liquidation, the fees paid by the Managed Account Platform Fund may be different than the fees described in the Subadvisory Agreement.

If a FoF Vehicle or FoF Account invests in an Apex Fund, compensation to PAAMCO Prisma will be paid either at the FoF Vehicle or FoF Account level, as applicable, or at the Apex Fund level, but not both, unless otherwise agreed to by the Client.

Clients of the Filing Advisor and Prisma may participate in the same Portfolio Funds or Managed Account Platform Funds on different fee or other terms at the Client level. PAAMCO Prisma’s fees and its compensation for its Strategic Advisory Clients are negotiated on a case-by-case basis. The PAAMCO Miren Client currently pays an asset-based management fee and a performance fee. For the West70 Funds, the Filing Adviser receives compensation based on its expenses of providing services to the West70 Funds and a performance fee. The PAAMCO Launchpad Funds charge a management fee based on invested capital. PAAMCO Launchpad may pay all or a portion of the management fee that it receives to the Filing Adviser. No additional fees are paid by PAAMCO Launchpad Funds in connection with PAAMCO Launchpad’s delegation of any of its duties or responsibilities to the Filing Adviser. In addition, the Filing Adviser or an affiliate will receive a percentage of the revenue share negotiated with the Seeded Managers. Because Seeded Managers may manage money for other business lines of PAAMCO Prisma, such as the Fund of Hedge Funds division, a conflict of interest exists between PAAMCO Prisma’s financial incentive to allocate investments to managers where they participate in a revenue share and its fiduciary duty to all Clients. As further described in Item 10, the firm maintains a policy pursuant to which none of PAAMCO Prisma, PAAMCO Launchpad or any of their respective Clients will earn a revenue share on any capital allocated to a Seeded Manager by PAAMCO Prisma’s other business lines (including, for the avoidance of doubt, Clients of Prisma). To the extent a Strategic Advisory Client or an investor in a Fund, Account or Direct Trading Client makes an independent investment decision (i.e., a decision not based on investment advice provided by PAAMCO Prisma) to allocate assets directly to a Seeded Manager, it is expected that the Filing Adviser and/or PAAMCO Launchpad would earn a revenue share on such investment.

PAAMCO Prisma’s fees and compensation may be negotiated and thus may vary from the descriptions above.

Expenses

Each investor in a Fund and each Account that invests in Portfolio Funds will also pay its pro rata portion of its and/or underlying Portfolio Funds’ ongoing expenses. Ongoing expenses include transaction (e.g., brokerage commissions), administrative, directors’ fees and expenses, insurance, fidelity bonds, custody, legal, expenses related to regulatory filings, compliance reporting obligations, tax preparation, audit and accounting expenses, the fees and expenses of third-party service providers as may be considered necessary by PAAMCO Prisma, pricing and valuation agents and other expenses that are reasonably incurred in connection with the operation of the business and maintenance of the Clients and/or underlying Portfolio Funds. Some Portfolio Funds may also pay consultants’ fees, litigation expenses, research expenses and/or reasonable investment-related entertainment and/or travel. In certain cases, a Portfolio Fund may pay the costs associated with insurance and the fidelity bond, if any. Funds and Accounts may also be subject to different or additional expenses as are more fully described in the offering materials, disclosure documents, investment management agreements, and/or governing documents of such Clients. Investors in PAAMCO Launchpad Funds or Direct Trading Clients may also incur similar expenses.

Additional Expenses Relating to Co-Investments. Clients participating in Co-Investments will bear their pro rata share of expenses related to such Co-Investments in accordance with PAAMCO Prisma’s expense allocation policy and in accordance with the governing documents of the respective Client. Three general categories of expenses may be allocated to and among Clients that participate in joint Co-Investments. These categories are discussed below under: (1) portfolio company-related expenses, (2) fund organizational, direct operational, and indirect operational expenses, and (3) sourcing and diligence expenses. The offering and governing documents of each Client contain more detailed information on the type of expenses that will be charged to such Client. If a Client is not permitted to bear all or a portion of any expenses related to Co-Investments under its governing documents or due to certain regulatory considerations, the pro rata share of such expenses that would otherwise be borne by such Client will be borne by PAAMCO Prisma. To the extent permitted under a Client’s governing documents, in addition to using existing capital or, if applicable, calling capital to pay expenses, PAAMCO Prisma may advance funds on behalf of Clients for the payment of expenses and then be reimbursed through a reduction of subsequent distributions to the relevant Client or by reducing the amount of monitoring fees, transaction fees, and breakup fees allocable to such Client that would otherwise reduce management fees. Portfolio Company-Related Expenses. When a portfolio company in which a Client is co-invested bears an expense directly, each direct and indirect equity owner of such company will indirectly bear a portion of such expenses. However, expenses may also be borne by (i) holding companies or other vehicles through which certain, but not all, of the direct and indirect equity owners of the portfolio company (including the Client) invest or (ii) the relevant Client. These expenses include those that are incurred in connection with the oversight of portfolio companies by third-party managers. When such expenses are borne by such holding companies or other vehicles or by a specific Fund or Account, such holding companies or the Fund or Account, as applicable, will bear a greater portion of such expenses than would be the case if the relevant portfolio company paid such expenses.

Co-Investment Organizational and Direct and Indirect Operational Expenses. These expenses are related to the organization, operation, and administration of vehicles through which a Client may participate in a Co-Investment and are not directly related to sourcing investments or to any particular portfolio company. These include expenses related to activities, operations, meetings, and eventual termination and liquidation of vehicles through which a Client may participate in a Co- Investment. Other situations and expenses may arise in the course of operation of the vehicles through which a Client may participate in a Co-Investment. Vehicles through which a Client participates in a Co-Investment will also pay comparable costs, fees, and expenses relating to any feeder funds, alternative vehicles, portfolio companies, or entities through which a Client invests that are not otherwise borne by such entities.

Sourcing and Diligence Expenses. These expenses relate more generally to investment sourcing and diligence for a particular investment strategy and include fees, costs, and expenses of identifying, investigating (including conducting diligence with respect to), evaluating, structuring, and negotiating potential investments for such strategy including, without limitation, finders fees and other fees and expense reimbursements payable to third parties for sourcing transactions, and/or success fees, carried interest distributions in respect of specific investments, and/or other compensation tied to the success of investments sourced by such parties. These amounts include expenses incurred with respect to the pursuit of particular investments that are consummated as well as those investments that are not actually consummated (sometimes referred to as “broken deals”). Such expenses include fees and expenses of any legal, financial, accounting, consulting, or other advisors; fees and expenses of any lenders, investment banks, and other financing sources; any travel and accommodation expenses; and any deposits or down payments that are forfeited in connection with, or amounts paid as a penalty for, unconsummated transactions. Sourcing and diligence expenses for unconsummated transactions, under an established threshold, are generally charged to the Clients participating in the relevant strategy for which the particular investment opportunity relates based on several factors, including, but not limited to, such Clients’ available capacity for the relevant investment strategy based on their respective governing documents and investment mandate as well as their current net asset value, as applicable. If a Client’s governing documents do not permit “broken deal” expenses to be borne by such Client, then the pro rata share of such broken deal expenses that would otherwise be borne by the Client will be borne by PAAMCO Prisma. Other sourcing and diligence expenses include certain organizational expenses (for example, those related to the establishment of a multi-investment platform for a strategy); legal, accounting, and other professional fees and expenses; travel costs (including first or business class airfare), lodging (including first class lodging), ground transportation (including black car services), and premium meals; costs and expenses of attending trade association meetings, conferences, or similar meetings to source and evaluate investment opportunities; fees and expenses of consultants; and costs and expenses of research and technology (including costs of specialty data subscription and license-based services and risk analysis software). Transaction expenses for consummated investments not reimbursed by a third party are generally allocated to the Clients based on the percentages of the investment held by the relevant vehicle. Other Fees and Expenses

Each Client also pays its pro rata portion of the management fees, incentive fees (including any draws on unearned incentive fees) or incentive allocations, redemption fees, and expenses in respect of each Portfolio Fund (including a Seeded Fund) in which such Client is invested. These additional fees vary by Portfolio Manager, but are generally in the range of 0% per annum to 2.5% per annum for the management fees and 0% to 30% for the performance-based compensation, subject, at times, to a high water mark and/or hurdle. PAAMCO Prisma uses commercially reasonable efforts to negotiate the lowest possible fees when allocating the assets of Clients to Portfolio Funds but may not always be successful in doing so. In certain circumstances, while a Portfolio Fund is in liquidation, Clients may pay different fees than the fees described in the Portfolio Fund’s governing documents.

Each Direct Trading Client pays its own brokerage fees, stamp duties and other charges and or expenses (together with any value added, goods and services, sales or other tax applicable) or reimburses PAAMCO Prisma for such expenses it incurs on the Direct Trading Client’s behalf.

If a particular Client and PAAMCO Prisma adopt a fee arrangement that calls for payment of fees in advance, upon redemption or termination of the advisory relationship or upon investment other than at the beginning of the normal payment cycle, PAAMCO Prisma will refund fees for the period of time that PAAMCO Prisma did not provide advisory services and/or charge that Client (or the investors in such Client) only for the actual period of time that PAAMCO Prisma provided advisory services.

PAAMCO Prisma Europe, PAAMCO Turkey and PAAMCO Mexico each receive fees for services from the Filing Adviser and do not receive any fees directly from any Clients. In addition, PAAMCO Prisma Europe receives a percentage of management fees, incentive fees and/or other fees paid to the Filing Adviser by any Client of the Filing Adviser referred by PAAMCO Prisma Europe. PAAMCO Prisma Europe may also receive compensation from Prisma.

Please see the response to Item 12 for additional information about brokerage commissions.

Assets of the Funds and Accounts may be invested in Martlet Alternative Beta Master Fund, LP (formerly known as Pacific Alternative Beta Master Fund, LP) or into a feeder fund that invests substantially all of its assets in such fund (collectively, the “Alt Beta Fund”). The Alt Beta Fund is managed by Martlet Asset Management, LLC (“Martlet”). The senior principals of Martlet are persons who were employees of the Filing Adviser through December 31, 2018. Martlet has a solicitation agreement in principle with the Filing Adviser whereby the Filing Adviser will share in management fees earned by Martlet with respect to certain Clients (and certain prospective Clients or Fund investors) of the Filing Adviser who invest in the Alt Beta Fund but were unable to invest prior to December 31, 2018 due to timing. This arrangement creates a potential conflict of interest, as PAAMCO Prisma is incentivized to allocate assets of certain Clients to the Alt Beta Fund to earn additional compensation. The applicable compensation arrangements will be provided in writing to any affected Client or Fund investor, as applicable. Except as described in the preceding paragraph, neither PAAMCO Prisma nor any of its supervised persons accepts compensation for the sale of securities or other investment products, including asset-based sales charges or service fees from the sale of mutual funds. please register to get more info

As stated in Item 5 above, PAAMCO Prisma charges some Clients performance-based fees, which are fees based on a share of capital gains on or capital appreciation of the Client’s assets. The fact that PAAMCO Prisma is compensated based on trading profits may create an incentive for PAAMCO Prisma to make investments on behalf of certain Clients that are riskier or more speculative than would be the case in the absence of such compensation. In addition, the performance-based fee received by PAAMCO Prisma is based primarily on realized and unrealized gains and losses. As a result, the performance-based fee earned could be based on unrealized gains that Clients may never realize. Because PAAMCO Prisma receives performance-based fees from some Clients and not from others, there is a conflict of interest between PAAMCO Prisma’s financial incentive to favor the higher fee-paying account and its duty to treat all clients fairly.

PAAMCO Prisma has adopted controls that are intended to ensure that no Clients are favored or disadvantaged on the basis of fees or for any other reason. PAAMCO Prisma’s general allocation policy for the Fund of Hedge Funds division is to allocate investments and redemptions in Portfolio Funds based on the appropriateness of the purchase or sale of a particular Portfolio Fund for each Client. PAAMCO Prisma may consider not only its Clients’ guiding allocation objectives, but may also consider specific circumstances related to an account or an investment, including, among other considerations, cash available for investment in each client account, regulatory restrictions (such as capacity for investments subject to ERISA (as defined below)), timing of notice for subscription or redemption for each client account, allocation to Portfolio Funds with similar market exposures, asset mix of each account, objectives and restrictions of each account, regulatory considerations, de minimis investment amounts, investment style and other investment considerations. As a result, PAAMCO Prisma may give advice or take action with respect to one Client that may differ from the advice given or action taken with respect to another Client having similar or differing investment objectives. Reallocations to and from Portfolio Funds may cause Clients to crystalize and pay the Portfolio Managers’ performance fees and reset Portfolio Funds’ high water marks.

In the case where limited investment or redemption capacity is available for a given Portfolio Fund, the most commonly used methodologies to allocate investment opportunities to Clients over time on a fair and equitable basis over time are pro rata and “fill/drain the pool.” In applying a “fill the pool method”, a Client in the pool with the smallest percentage allocation receives a fractional capacity amount until it is brought even with the next smallest participant, and so on, until the investment opportunity is filled, subscription demand is exhausted, or a minimum investment target is reached. Further, where an investor submits a full redemption to liquidate an Account or investment in a Fund, PAAMCO Prisma may allow another Client to acquire all active Portfolio Funds from which the redeeming Client wishes to redeem, where such Portfolio Funds are not currently in liquidation. This is generally accomplished by netting subscriptions and redemptions rather than through a cross-trade. In situations where multiple Clients could acquire all the aforementioned active Portfolio Funds in the aggregate, the Portfolio Funds would be allocated on a pro rata basis among such Clients. Certain Clients are treated as “plan assets” for purposes of the fiduciary responsibility standards and prohibited transaction restrictions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and/or the parallel prohibited transaction excise tax provisions of Section 4975 of the Internal Revenue Code of 1986. For compliance and other reasons, certain Portfolio Funds may limit the amount of the investment made by a “plan assets” fund, or may prohibit such investments altogether. As a result, allocations of investments to and redemptions from Portfolio Funds for “plan assets” and non-“plan assets” Clients may be different due to the ability or inability of different Portfolio Funds to accept assets subject to ERISA.

Employees and other associated persons of PAAMCO Prisma may invest directly into certain Funds. Such investors are generally not subject to management fees or performance based fees, but are subject to their pro rata share of Fund expenses. As these investments are made directly into Funds, PAAMCO Prisma does not view these arrangements as giving rise to the types of potential conflict of interest described above.

There are performance-based fees for one Direct Trading Client; however there are no current concerns regarding allocation of investment opportunities because each of the Direct Trading Clients is managed by a different team within the Direct Trading division and invests using different investment strategies and in different financial instruments. In the future, if there are multiple Direct Trading Clients managed by the same team or that invest in the same instruments, PAAMCO Prisma will adopt an allocation policy that is appropriate for the Direct Trading division under the circumstances. please register to get more info

As noted in Item 4, PAAMCO Prisma provides investment management and advisory services to Clients that are generally organized as private pooled investment vehicles or single-owner investment vehicles, and to separately managed accounts established for institutional investors. With limited exception, interests in Client vehicles are generally only available to institutional investors and certain high net worth investors that are “accredited investors” and “qualified purchasers” or non-“U.S. persons” or in the case of employees, “knowledgeable employees”, within the meaning of the Securities Act of 1933, as amended, and the Investment Company Act, as applicable. Clients generally have a specified minimum investment amount as set forth in the offering materials, disclosure documents, and/or governing documents. These minimum amounts are subject to discretion, on the part of PAAMCO Prisma, and, as applicable, the board of directors and/or general partner of a Fund, to permit investment of a smaller amount generally with respect to any investor.

A broad range of U.S. and non-U.S institutional investors, including, among others, governmental and corporate pension and profit sharing plans (including investors regulated under ERISA), endowments and foundations, insurance companies, financial institutions, sovereign wealth funds, private wealth and other third-party distribution platforms, and certain high net worth individuals (including trusts, estates, 401(k) plans and IRAs of such individuals or their family members) and family offices, may be Clients or investors in Funds. Investors in Accounts generally must maintain a minimum account size as mutually agreed between the investor and PAAMCO Prisma. PAAMCO Prisma also provides consulting services on Portfolio Fund investments to a limited number of institutional clients. These institutional clients include pension plans, endowments, and other institutions. All of the Filing Adviser’s relying advisers, with the exception of Prisma, PCA, PCM and PAAMCO Launchpad, currently only provide advisory services to the Filing Adviser, or to both the Filing Adviser and Prisma. The Filing Adviser acts as subadviser to PAAMCO Launchpad and the PAAMCO Launchpad Funds. please register to get more info

Methods of Analysis

Fund of Hedge Funds Division

For Clients in the Fund of Hedge Funds division, PAAMCO Prisma pursues the applicable Client’s investment objectives by investing substantially all of the Client’s assets in a variety of Portfolio Funds covering many different investing styles. PAAMCO Prisma systematically evaluates prospective Portfolio Managers (which, for purposes of this Item 8, includes Subadvisers) prior to investing Client assets in a Portfolio Fund.

Prospective Portfolio Managers are presented to the relevant investment committee (“IC”), as described below, for a vote on eligibility for investment by Clients. PAAMCO Prisma typically conducts independent reviews of each potential Portfolio Manager by dedicated investment, risk, legal, and operations teams prior to making an initial allocation decision in respect of such Portfolio Manager. Depending on the structure, and thus operational risk profile, of a potential Portfolio Fund investment (e.g. a Managed Account Platform Fund, a Portfolio Fund established for only PAAMCO Prisma Clients or a commingled Portfolio Fund) certain processes may vary. The teams conduct on-site and/or telephonic meetings as part of the review process. In addition, PAAMCO Prisma uses a third-party provider to conduct background reviews of key personnel of prospective Portfolio Managers, and legal counsel reviews the offering materials, disclosure documents, investment management agreements, and/or governing documents of the potential Portfolio Fund. Generally, Portfolio Managers are registered as an investment adviser with the SEC or registered with a comparable regulatory body in their local jurisdiction (e.g. U.K. - Financial Conduct Authority, Singapore – Monetary Authority of Singapore, Hong Kong – Securities & Futures Commission). If a Portfolio Manager does not pass any one of these reviews, the Portfolio Manager will typically not be considered for investment, and each team must approve a prospective Portfolio Manager before it can be recommended to the relevant IC (or ICs) for investment by Clients.

Within the Fund of Hedge Funds division, there are two separate ICs that oversee the investment due diligence and approval process for a particular strategy: (i) the Investment Oversight Committee (“IOC”), which oversees the Funds and Accounts managed by the Filing Adviser (“completeAlpha Clients”), and (ii) the Core Investment Committee (“Core IC”), which oversees the Funds and Accounts managed by Prisma (“Core Clients”). The IC serve as an integrity check to seek to ensure that the due diligence process is complete, meets PAAMCO Prisma’s standards, and that the terms agreed to are consistent with PAAMCO Prisma’s investment policies, restrictions and guidelines. For the avoidance of doubt, for a Portfolio Manager to be considered eligible for investment by completeAlpha Clients or Core Clients, a Portfolio Manager must be separately approved by the IOC, with respect to the completeAlpha Clients, and/or the Core IC, with respect to Core Clients. For completeAlpha Clients, the Portfolio Construction Group (“PCG”) is responsible for top-down investment strategy allocation and the completeAlpha model Moderate Multi-Strategy (“MMS”) portfolio. The PCG receives input on risks, markets, and opportunities from other senior research professionals at PAAMCO Prisma. Once a Portfolio Fund is made eligible by the IOC, the research team lead (formerly referred to as a “sector specialist”) is responsible for allocation decisions. For Core Clients, the research team lead is responsible for making investment and redemption recommendations to the Core IC who, in turn, is ultimately responsible for making specific allocation decisions for Core Clients. Each research team lead generally focuses on an investment strategy, asset class and/or geographic area, and will have primary ongoing responsibility for the relationship with the relevant Portfolio Managers within his or her area of focus. On an ongoing basis, PAAMCO Prisma analyzes Portfolio Funds and Portfolio Managers in which completeAlpha Clients and Core Clients invest using a variety of quantitative and qualitative criteria including historic performance, portfolio risk measures, exposure data, position concentrations and limits, the relevant experience of the Portfolio Managers, the business model of the Portfolio Managers’ organizations, the operational risk of the Portfolio Managers, and the financial commitment of the Portfolio Managers. PAAMCO Prisma maintains a proprietary database of qualitative and quantitative information. PAAMCO Prisma obtains such information regarding current and potential Portfolio Funds and Portfolio Managers from its business network (which includes investment managers, consultants, prime brokers and other service providers), various online data services, industry publications, reports and other materials prepared by Portfolio Managers, and direct conversations with Portfolio Managers and their service providers.

It is expected, at some point during 2019, that the IOC and Core IC will be combined into a single IC that oversees the investment due diligence and approval process for all Portfolio Managers eligible for investment by the Fund of Hedge Funds division. This group will ultimately be responsible for making allocation decisions to both completeAlpha Clients and Core Clients.

Apex Division Within the Apex division, there are two separate ICs that oversee the investment due diligence and approval process: (i) the Apex Credit Investment Committee (“Apex Credit IC”), and (ii) the Apex Tactical Investment Committee (“Apex Tactical IC”).

Apex Credit focuses on Co-investments sourced from or sponsored by: (i) Portfolio Managers of Portfolio Funds in which FoF Vehicles and Accounts invest; (ii) other investment managers that are not on PAAMCO Prisma’s FoF platform, but with which PAAMCO Prisma has a business relationship; and (iii) certain funds and other investment vehicles managed by KKR Credit Fund Advisors LLC (“KKR Credit”), based on investment allocations offered on an excess capacity basis only, after eligible KKR Credit and other relevant funds and accounts have obtained their target allocations. Co-Investments generally consist of specific targeted investments on behalf of a Fund or Account that are made typically through a separate co-investment vehicle or through a new class, series, or tranche of a Portfolio Fund, or directly in the asset itself. In formulating its investment determination for Co-Investments made through Apex Credit, PAAMCO Prisma reviews and relies on the investment analysis and research conducted by the relevant research team comprised of investment management professionals. PAAMCO Prisma performs a thorough review and analysis of the information that it obtains from these parties in connection with a potential Co-Investment in order to determine whether the relevant Funds and Accounts should participate in such transaction. PAAMCO Prisma may conduct additional investment due diligence as it determines necessary to make such determination. Additionally, a portion of Apex Credit’s investments may be in investments that are sourced by PAAMCO Prisma or, to a limited extent, by KKR Credit. Investment decisions solely with respect to the Apex Credit are made by the Apex Credit IC, which is comprised of representatives from the Core IC and individuals from the PAAMCO Prisma research team that specialize in the credit sector. Apex Tactical is designed to be a highly opportunistic strategy encompassing investments that generally arise from market dislocations, regulatory shifts, and similar circumstances, among other factors, and that are diversified primarily by three stylistic buckets: arbitrage and relative value, niche and uncorrelated opportunities, and directional opportunities. Apex Tactical seeks to make investments that are: (i) sourced and executed by Portfolio Managers with respect to which PAAMCO Prisma undertakes a robust due diligence process and which PAAMCO Prisma believes are best positioned to capitalize on a market opportunity within their specialized areas of expertise; (ii) sourced and executed through hedge fund managers that are not on PAAMCO Prisma’s FoF platform, but which are subject to due diligence efforts focused on the specific prospective transactions; (iii) sourced and executed directly by the Apex Tactical investment team, primarily in liquid credit and credit-linked securities, or in liquid, tradable equity and equity-linked securities; or (iv) executed as a Co-Investment.

Apex Tactical employs a highly opportunistic mandate that seeks to actively rotate (subject to underlying liquidity of Portfolio Funds, as applicable) into themes in which PAAMCO Prisma believes the greatest risk-adjusted returns exist, and where PAAMCO Prisma believes it is critical to leverage industry experts to execute opportunities. Apex Tactical’s trade themes and investments are likely to be diversified primarily by three stylistic buckets: (i) arbitrage and relative value, (ii) niche and uncorrelated opportunities, and (iii) directional opportunities. PAAMCO Prisma’s allocation to each type of opportunity will likely evolve with the firm’s macroeconomic views. Similarly, region and sector positioning is also expected to be driven by PAAMCO Prisma’s assessment of risk-adjusted returns. Apex Tactical’s investment program is not constrained by asset type or rating and has the flexibility to allocate across private and public markets to enable the strategy to seek to best capture market dislocations as they arise. In assessing investments for Apex Tactical, PAAMCO Prisma employs both “top-down” and “bottom-up” analyses. PAAMCO Prisma’s top-down analysis involves a macro analysis of relative asset valuations, long-term industry trends, business cycles, interest rate expectations, credit fundamentals, and technical factors to target specific industry sectors and asset classes in which to invest.

Certain members of the PAAMCO Prisma research team will make recommendations to the Apex Tactical IC, but final portfolio management decisions regarding Apex Tactical are solely the responsibility of the Apex Tactical IC, which meets periodically to review and establish targets for performance, volatility, and regional and sector exposure. This includes discussions around performance attribution, portfolio risk, allocation or implementation of risk changes, and other business-related matters. The Apex Tactical IC is comprised of senior investment professionals of PAAMCO Prisma, including the lead portfolio manager for the strategy. Customized Solutions PAAMCO Prisma also provides customized solutions which consists of one or more of the above strategies. For customized Client portfolios, PAAMCO Prisma receives input from a combination of ICs and the relevant relationship manager when making a decision to allocate investment opportunities to the respective Client taking into account such Client’s investment guidelines and risk tolerances. Strategic Advisory Clients PAAMCO Prisma provides advice to Strategic Advisory Clients regarding (1) defining the goals and objectives of a broad portfolio or specific asset class allocation; (2) workouts or restructurings; (3) general and investment-specific market insight and data; (4) sourcing ideas; and (5) selection, execution and exit of specific asset class allocations. For Strategic Advisory Clients, there generally will be processes agreed to with respect to Portfolio Funds and Portfolio Manager selection that are different than (and usually not as robust as) those described above, as provided in the relevant agreement with the applicable Strategic Advisory Client.

Direct Trading Division

PAAMCO Miren pursues a long-only strategy in order to achieve long-term capital appreciation. PAAMCO Miren’s investment process combines various methods of analysis including fundamental, technical, quantitative modeling, and macro-economic analysis. Fundamental analysis of multiple factors, including earnings growth prospects, financial strength, cash flow generation, capital allocation, competitive market position, and profitability, is conducted by PAAMCO Miren. Sources of information analyzed include annual and quarterly reports, prospectuses, filings with various regulators, company press releases and conference calls, third- party research, reports and industry conferences, company interviews, websites and financial publications.

The West70 Funds pursue a global equity derivatives relative value strategy focusing on volatility and volatility-related instruments. The investment process combines various methods of analysis including quantitative modeling, fundamental analysis as well as assessment of market dislocations in derivatives space caused by major thematic flows. Sources of information include historical returns and history of implied volatility for an underlying, annual and quarterly reports, company press releases, news articles, third-party research, industry conferences, financial publications and market color obtained from derivative dealers.

Seeding Division

PAAMCO Launchpad operates as a distinct business line with certain shared resources. Specifically, PAAMCO Launchpad will exchange certain information with and rely on certain of PAAMCO Prisma’s other business lines described in this Item for purposes of performing services for the PAAMCO Launchpad Funds, and the Filing Adviser will act as subadviser to PAAMCO Launchpad and the PAAMCO Launchpad Funds. The Chief Executive Officer of PAAMCO Launchpad (“Launchpad CEO”), who will also serve as the Chair of the PAAMCO Launchpad Investment Committee, will have final investment decision-making authority and will not have any separate responsibilities to PAAMCO Prisma.

PAAMCO Launchpad begins with the sourcing of a potential Seeded Manager based on research from within PAAMCO Launchpad, PAAMCO Prisma or from discussions with investors in a PAAMCO Launchpad Fund. This is followed by the development of preliminary reports and analyses that are used to assess the potential Seeded Manager. If a decision is made to move forward following the preliminary evaluation, PAAMCO Launchpad will negotiate a term sheet with the Seeded Manager. Such negotiations may be parallel or in conjunction with a separate negotiation between the same Seeded Manager and PAAMCO Prisma’s Fund of Hedge Funds business line. After PAAMCO Launchpad and the Seeded Manager have agreed upon the term sheet (which will, in some circumstances, be subject to investor approval), PAAMCO Launchpad will then perform full due diligence on the potential investment by leveraging PAAMCO Prisma’s existing Fund of Hedge Funds division’s operational and risk due diligence processes while also conducting additional diligence, including an investment memorandum prepared by the Launchpad CEO. Upon the completion of due diligence, attestations from legal, risk, compliance, operational due diligence and the portfolio management team are presented to the Launchpad Investment Committee. The Launchpad Investment Committee is comprised of senior professionals from portfolio management and operations. Following deliberations and approval by the Launchpad CEO, the investment recommendation will, if agreed between PAAMCO Launchpad and an investor in a PAAMCO Launchpad Fund, be presented to the investor for final review prior to investment.

The discussion above summarizes our investment process in effect as of the date of this Brochure. We have previously refined our investment process and expect to continue to refine our investment process from time to time. We may make material modifications to our investment process without notice to our Clients, unless notice is otherwise required. Investment Strategies

With respect to completeAlpha Clients and Core Clients, the Portfolio Managers employ investment strategies that cover a broad range of asset classes including private funds and other investment styles and strategies. PAAMCO Prisma generally divides the private fund universe into the following broad categories: Credit, Directional, Equity, Relative Value and Niche/Tactical. Certain investment strategies that fall under these categories are described below. In some cases, an investment strategy may fall under more than one category.

Credit
• Distressed Debt: Portfolio Managers that focus on distressed debt strategies invest in the securities of companies that are experiencing financial or operational difficulties. Typically, based on manager style, a distressed debt hedge fund invests in bank debt, corporate debt, trade claims, common stock, or warrants. Distressed situations can include reorganizations, bankruptcies, distressed sales, and other corporate restructurings. The mispricing of these securities often occurs because traditional buyers often must sell the securities of troubled companies. When this happens, distressed debt Portfolio Managers attempt to capture substantial discounts to securities’ intrinsic value.
• Long/Short Credit: This area focuses on fixed income securities where the majority of the return is derived from corporate credit exposure and selection as opposed to the general term structure of interest rates. Strategies utilized by long/short credit include the purchase or short sale of stressed and distressed bonds, bank loans, high-yield debt and securities from recently reorganized firms (including equities). Long/short credit Portfolio Managers employ a wide variety of strategies to invest across the capital structure on a long and short basis. Typically, Portfolio Managers take positions as a result of bottom-up, fundamental credit analysis on the company and its capital structure. The strategy attempts to capitalize on inefficiencies in the marketplace while maintaining a lower degree of cyclicality and directionality than a typical distressed debt investment. Directional
• Global Macro: Global Macro Portfolio Managers analyze how political, geopolitical and macroeconomic trends influence the valuations of financial instruments. Typically, these Portfolio Managers gain exposure to a wide array of instruments across global markets within a relatively flexible mandate.
• Managed Futures: Portfolio Managers that use a Managed Futures strategy generally employ a defined trading program that uses futures contracts and other instruments to gain exposures to a number of industries in a way that seeks to offer negative correlation with traditional stock and bond markets.
• Short Bias: Short Bias Portfolio Managers seek to build portfolios that are net short so that they can achieve returns when markets decline. They selectively hedge their portfolios with long positions to seek to minimize losses when the relevant markets are rising.
• Fixed Income Relative Value: Portfolio Managers employing these strategies seek to capture profit from structural inefficiencies in global, high-grade fixed income, foreign exchange, and relevant derivatives markets. Portfolio Managers can utilize macro strategies which rely on directional views based on policy or market technicals to create alpha. Portfolio Managers can also employ financial leverage to take advantage of pricing discrepancies between closely linked fixed income instruments. Generally, these strategies are positioned with moderate risk and attempt to take advantage of volatility and trends in interest rates, foreign exchange, and high-grade fixed income bond markets.
• Opportunistic Investments: This area aims to capitalize on exposures that lie outside of other sectors or that take advantage of shorter term dislocations. Investments are typically made via focused mandates with asset-class specific, specialist Portfolio Managers. Opportunistic investments may also include hedging mandates or the pursuit of other asymmetric investments. Equity
• Long/Short Equity: Long/short equity Portfolio Managers construct net long or net short portfolios by using equity hedging strategies. These strategies typically involve taking a long position in a stock while shorting an individual stock or broad based market instrument. Net and gross exposures are managed in order to take advantage of both current market conditions and the resulting investment opportunity set. Long/short equity Portfolio Managers use short positions to hedge against a general stock market decline as well as to generate alpha.
• Event-Driven Equity: This broad strategy area focuses on event-driven trades implemented mainly through equity positions. In executing this strategy, Portfolio Managers seek to profit from discontinuities in the valuation of securities caused by “events.” These discontinuities may occur as a result of pending traditional merger and acquisitions negotiations, but also through pending restructurings, reorganizations, spin-offs, asset sales, liquidations and share class or company holdings being discounted. In the case of merger arbitrage, typically the trade is to buy the equity of the target and sell short the equity of the acquirer, making a profit (capturing the “merger spread”) if the deal closes as expected. Portfolio Managers may go long or short the affected securities and will generally seek to hedge out risk on a position by position basis; in addition many managers have overlay hedges at the portfolio level. Relative Value
• Equity Market Neutral: Equity market neutral Portfolio Managers construct portfolios that balance long and short positions in order to hedge systemic factors or exposures. Portfolios are generally constructed to be neutral across sectors, industries, and investment styles. Many equity market neutral Portfolio Managers use sophisticated, computer-run quantitative models to select stocks. These models are used to create both a statistical advantage in picking stocks and a strategic advantage in controlling exposure to systemic risk.
• Fixed Income Relative Value: Portfolio Managers employing these strategies seek to capture profit from structural inefficiencies in global, high-grade fixed income, foreign exchange, and relevant derivatives markets. Portfolio Managers can utilize macro strategies which rely on directional views based on policy or market technicals to create alpha. Portfolio Managers can also employ financial leverage to take advantage of pricing discrepancies between closely linked fixed income instruments. Generally, these strategies are positioned with moderate risk and attempt to take advantage of volatility and trends in interest rates, foreign exchange, and high-grade fixed income bond markets.
• Convertible Bond Hedging: The convertible bond hedging sector seeks to generate profits by exploiting the change in relationship between a convertible bond and the underlying equity as the price of the underlying equity changes (i.e., aiming to profit from the equity volatility in a hedged fashion). Typically the trade is to be long a convertible bond and short a modeled ratio of stock against it. As the stock moves, the hedge ratio changes and stock is shorted or covered depending on the movement of the stock. The sector also incorporates other hedged trades and aims to make money by exploiting relationships or dependencies within and between asset classes while avoiding direct market bias or directionality.
• Opportunistic Investments: This area aims to capitalize on exposures that lie outside of other sectors or that take advantage of shorter term dislocations. Investments are typically made via focused mandates with asset-class specific, specialist Portfolio Managers. Opportunistic investments may also include hedging mandates or the pursuit of other asymmetric investments. Niche/Tactical
• Investment strategies falling under the Niche/Tactical area may include any strategy or combination of the investment strategies described above. In addition to pursuing one or more of the above strategies, one or more Portfolio Managers may also engage in an activist strategy (an “Activist Strategy”), which involves shareholder activism that will attempt to influence the directors and/or management of target companies. This section gives more information on the material risks that may apply to a Client depending on its investment strategy. The following summaries do not purport to be a complete list or explanation of the risks involved in an investment in a Client or any underlying Portfolio Fund. The offering materials, disclosure documents and/or governing documents of each Client will typically include a more detailed summary of material risks applicable to such Client and its investment strategy and structure, as applicable, and should be read in conjunction with the discussion of risks below. With respect to Clients of the Fund of Hedge Funds, Apex and Seeding divisions, the risks discussed below may be experienced directly or indirectly through Portfolio Funds.

Risks Related to an Investment include:

Risk of Loss. Investing in securities and other assets involves a risk of loss that Clients (and the investors in them) should be prepared to bear. There can be no assurance that the investment objectives of a Client, including risk monitoring and diversification goals, will be achieved, and results may vary substantially over time.

Investment Risks in General. With the exception of Strategic Advisory Clients (where PAAMCO Prisma does not have discretion), Clients will engage in speculative investment strategies directly or through their investment in the Portfolio Funds. The prices of securities and other assets in which the Portfolio Funds, the Direct Trading Clients and Clients within the Apex division will invest may be volatile. Market movements are difficult to predict and are influenced by, among other things, government trade, fiscal, monetary and exchange control programs and policies; changing supply and demand relationships; national and international political and economic events; changes in interest rates; and the inherent volatility of the marketplace. In addition, governments from time to time intervene, directly and by regulation, in certain markets, often with the intent to influence prices directly. The effects of governmental intervention may be particularly significant at certain times in the financial instrument and currency markets, and such intervention (as well as other factors) may cause these markets and related investments to move rapidly.

Investment Selection. Each Portfolio Fund, each Direct Trading Client and Clients within the Apex division will acquire investment assets that have not yet been identified. Accordingly, prospective investors do not have an opportunity to review the terms upon which any assets are acquired prior to investing. The likelihood that a Client will realize gain depends on the skill and expertise of PAAMCO Prisma in selecting Portfolio Managers and/or Portfolio Funds and of a Portfolio Manager in investing its Managed Account Platform Fund’s assets, and, for Direct Trading Clients and Clients within the Apex division, the skill and expertise of PAAMCO Prisma’s Direct Trading division and Apex division, respectively.

Some Portfolio Managers select investments in part on the basis of information and data filed by the issuers of such securities with various government regulators or made directly available to the Portfolio Managers by the issuers of securities or through sources other than the issuers. A Portfolio Manager is not in a position to confirm the completeness, genuineness or accuracy of such information and data, and in some cases, complete and accurate information is not readily available. Multi-Manager Concept. As noted above, the Funds and Accounts and Seeding Division Clients invest substantially all of their assets in Portfolio Funds. While providing Clients with diversification, this multi-Manager approach also exposes Clients to several layers of fees and expenses. In addition to the management fees and performance fees, if any, charged by PAAMCO Prisma, each Portfolio Fund will generally charge a management fee and/or a performance fee and generally incur expenses. These fees and expenses reduce the returns generated by the Funds and Accounts and Seeding Division Clients and may, in the aggregate, be higher than fees and expenses charged by Portfolio Funds of a single Portfolio Manager. Moreover, because the Funds and Accounts and the Seeding Division Clients invest in Portfolio Funds whose Portfolio Managers make their trading decisions independently, it is theoretically possible that one or more of such Portfolio Managers may, at any time, take investment positions that are opposite of positions taken by other Portfolio Managers. It is also possible that these Portfolio Managers may, on occasion, be competing with each other for similar positions at the same time. Also, a particular Portfolio Manager may take positions for its other clients that are opposite to positions taken for the Portfolio Fund in which a Fund or an Account invests.

Investment Strategies. The success of the Funds and Accounts and the Seeding Division Clients depends on PAAMCO Prisma’s ability to select and allocate assets to individual Portfolio Funds. Success also depends on each Portfolio Manager’s ability to select individual investments, to correctly interpret market data, predict future market movements and otherwise implement its investment strategy. In addition, the success of the Direct Trading Division Clients and certain Apex Division Clients depends on PAAMCO Prisma’s ability to select individual investments, to correctly interpret market data, predict future market movements and otherwise implement the applicable Client’s investment strategy

PAAMCO Prisma will actively allocate and reallocate assets among various Portfolio Funds. There can be no assurance that the Funds and Accounts or Seeding Division Clients will always be able to invest in a particular Portfolio Fund. No assurance can be given that the investment strategies to be used by the Funds and Accounts and Seeding Division Clients or a Portfolio Fund will be successful under all or any market conditions. Dependence on Portfolio Managers. None of PAAMCO Prisma, a Fund, Account or Seeding Division Client will have direct control over a Fund’s, Account’s or a Seeding Division Client’s assets once they are allocated to Portfolio Funds; therefore, each such Fund, Account and Seeding Division Client is highly dependent upon the expertise and abilities of the Portfolio Managers who have investment discretion over a Client’s assets invested with them. Therefore, the death, incapacity or retirement of the employees or principals of the Portfolio Manager of any Portfolio Fund, as well as the investment decisions made by any Portfolio Manager, may adversely affect a Client’s investment results. Furthermore, even though PAAMCO Prisma analyzes Portfolio Funds and their Portfolio Managers prior to investing Client assets, and monitors Portfolio Managers’ performance and generally receives portfolio information from each Portfolio Manager on an ongoing basis, there is no guarantee that the information PAAMCO Prisma receives will always be complete or accurate. As such, it may not be possible for PAAMCO Prisma to uncover fraudulent activity perpetrated by one or more Portfolio Funds or their Portfolio Managers. Segregated Portfolio Structure Untested. With respect to the Managed Account Platform Funds, each segregated portfolio company can operate its segregated portfolios with the benefit of statutory segregation under Cayman Islands law of assets and liabilities between each segregated portfolio. Although not judicially tested, the principal advantage of a Cayman Islands segregated portfolio company is that it protects the assets of one segregated portfolio from the liabilities of other segregated portfolios under the law of the Cayman Islands. However, it is uncertain whether such segregation of assets and liabilities would be enforced in jurisdictions outside of the Cayman Islands. Limited Asset Allocation Flexibility. A Client may be restricted in its ability to allocate capital and control risk given various limitations on the liquidity of Portfolio Funds. Portfolio Funds may permit redemptions only on a semi-annual, annual, or less frequent basis and/or be subject to “lock- ups” (where investors are prohibited from redeeming their capital for a specified period following investment in such fund or, in certain cases, subject to a redemption fee with respect to any redemptions during such period) and/or “gates.” A Client could be unable to redeem its capital from Portfolio Funds in which it invests for an extended period after it is determined that the Portfolio Manager operating such Portfolio Fund has begun to deviate from its announced trading policies and strategy.

Reliability of Valuations. A Client’s interest in a Portfolio Fund is generally valued at an amount equal to the Client’s pro rata interest in such Portfolio Fund, as determined pursuant to the instrument governing such Portfolio Fund, and reported by the Portfolio Manager of the relevant Portfolio Fund or its administrator. As a general matter, the governing instruments of the Portfolio Funds provide that any securities or investments that are illiquid, not traded on an exchange or in an established market, or for which no value can be readily determined are assigned such fair value as the respective Portfolio Managers may determine in their judgment based on various factors, which include, but are not limited to, dealer quotes or independent appraisals, and may include estimates. PAAMCO Prisma generally relies on these valuations in calculating a Client’s net asset value for reporting, withdrawals, fees and other purposes. Such valuations may not be indicative of what actual fair market value would be in an active, liquid, or established market.

Variations in Valuation. The value of an instrument held by a Client directly or though a Portfolio Fund may vary from the value of the same or a similar instrument held by another Client or Portfolio Fund for various reasons including, but not limited to, the pricing vendors used and/or pricing methods adhered to by the administrator of one Client or Portfolio Fund versus the administrator used by another Client or Portfolio Fund.

Early Stage or Emerging Portfolio Managers. A Client will often directly or indirectly invest a portion of its assets in Portfolio Funds managed by “Early Stage” or “Emerging Portfolio Managers.” PAAMCO Prisma generally classifies a Portfolio Manager as early stage or emerging if it is less than two years old and/or has less than $500 million in assets under management at the time of initial investment by the first Client. Early Stage or Emerging Portfolio Managers may have less experience managing their respective Portfolio Funds and in operating an investment management firm than other Portfolio Managers that have been in business for a longer period of time. The relatively shorter operational experience of Early Stage or Emerging Portfolio Managers could lead to greater losses for their respective Portfolio Funds and for a Client than if the Client had invested in funds managed by more experienced Portfolio Managers under similar circumstances.

Client-Directed Managed Account Services. With respect to Client-Directed Managed Account Services, PAAMCO Prisma performs operational due diligence on each Portfolio Manager. However, PAAMCO Prisma will generally not provide investment advice regarding the selection of the Portfolio Manager, propose investment guidelines, perform investment risk analytics or otherwise monitor a Portfolio Fund from an investment performance standpoint. PAAMCO Prisma’s duties with respect to the provision of Client-Directed Managed Account Services are limited and, accordingly, PAAMCO Prisma has no liability to the investor/client, its members or shareholders or otherwise for the selection of the Portfolio Manager to a Portfolio Fund, the decision to invest in a Portfolio Fund, the investment performance of a Portfolio Fund or for the failure to redeem from a Portfolio Fund. Third-Party Data. In performing its duties with respect to Clients, PAAMCO Prisma will rely upon information provided by the Portfolio Funds, the Portfolio Managers or Subadvisers to the Portfolio Funds, their respective agents and representatives and other third parties (all such information, the “Third-Party Data”). PAAMCO Prisma makes no representations or warranties to any investor with regard to any Third-Party Data or any derivative information and analyses based on such Third-Party Data, including, but not limited to, any warranty as to the general accuracy, time accuracy, historical accuracy, completeness, integrity or any other aspect of the Third-Party Data or its content. PAAMCO Prisma will also be entitled to rely upon such Third-Party Data in performing its duties with respect to clients.

Risk Management Control Issues. Portfolio Managers of the Portfolio Funds may use proprietary investment strategies that are not fully disclosed to PAAMCO Prisma. These strategies may involve risks under certain market conditions that have not been anticipated by the Portfolio Managers of the Portfolio Funds. PAAMCO Prisma’s inability to control the frequency, quantity or quality of information obtained from Portfolio Funds regarding their investment portfolios may make it difficult or impossible for PAAMCO Prisma to implement its risk management strategies as intended. There can be no assurance or guarantee that a Portfolio Fund, and, therefore, a Client, will be profitable even if PAAMCO Prisma is able to implement its risk management strategies as intended.

Concentration Risk. PAAMCO Prisma, from time to time, consults with the Subadvisers or Portfolio Managers of the Portfolio Funds (other than commingled Portfolio Funds that are not created for investment solely by PAAMCO Prisma Clients) about making tactical changes that are often short-term in nature, such as the decision to exceed an investment guideline by making concentrated investments, increasing or decreasing exposure to a specific asset class, increasing or decreasing exposure to a theme and/or increasing or decreasing a hedge position in a Portfolio Fund. Concentrating the assets of a Client or a Portfolio Fund in a specific asset class, theme or financial instrument means there is less diversification in that portfolio and a change in value of the asset class, theme or financial instrument could be magnified as a result of such concentration.

Cybersecurity Risk. The information and technology systems of PAAMCO Prisma and of key service providers to PAAMCO Prisma and/or its Clients may be vulnerable to potential damage or interruption from computer viruses, network failures, computer and telecommunication failures, infiltration by unauthorized persons and security breaches, usage errors by their respective professionals, power outages, and catastrophic events such as fires, tornadoes, floods, hurricanes, and earthquakes. Although PAAMCO Prisma has implemented various measures designed to mitigate risks relating to these types of events, if these systems are compromised, become inoperable for extended periods of time, or cease to function properly, it may be necessary for PAAMCO Prisma to make a significant investment to fix or replace them and to seek to remedy the effect of these issues. The failure of these systems and/or of disaster recovery plans for any reason could cause significant interruptions in the operations of PAAMCO Prisma and/or its Clients and result in a failure to maintain the security, confidentiality, or privacy of sensitive data, including personal information. Risks Related to the Portfolio Funds, the Apex Division and the Direct Trading Division. The following additional risks apply to investments by Portfolio Funds (including the Seeded Funds and Managed Account Platform Funds), Apex Division Clients, Direct Trading Clients and Seeding Division Clients, where applicable: Equity Securities. The value of the securities held by a Client, directly or through the Portfolio Funds, is subject to market risk, including changes in economic conditions, growth rates, profits, interest rates and the market’s perception of these securities. A Client’s net asset value will increase and decrease, reflecting fluctuations in the value of securities held by such Client or by a Portfolio Fund in which such Client is invested. Long Only Strategies. Some Portfolio Funds, certain Direct Trading Clients and certain other Clients will engage in long only strategies. Consequently, the relevant Portfolio Funds, Direct Trading Clients or other Clients may be less hedged than other private investment funds that engage in short selling or hedging techniques. Accordingly, the relevant Portfolio Funds, Direct Trading Clients or other Clients may be subject to more rapid change in value than would be the case if required to maintain a wider diversification among types of securities and other instruments, or if the relevant Portfolio Funds, Direct Trading Clients or other Clients engaged in short selling or hedging techniques.

Short Selling. Some of the Portfolio Funds, certain Direct Trading Clients and certain other Clients will engage in short selling, both as part of their general investment strategy and for hedging purposes. Short selling involves selling securities that are not owned and borrowing the same securities for delivery to the purchaser, with an obligation to replace the borrowed securities at a later date. Short selling allows a Portfolio Fund, the Direct Trading Client or Apex Division Client, as applicable, to profit from declines in market prices to the extent such decline exceeds the transaction costs and the costs of borrowing the securities. However, since the borrowed securities must be replaced by purchases at market prices in order to close out the short position, any appreciation in the price of the borrowed securities would result in a loss upon such repurchase. A Portfolio Fund’s, a Direct Trading Client’s or an Apex Division Client’s obligations under its securities loans will be marked to market daily and collateralized by that Portfolio Fund’s assets, or the Direct Trading Client’s or Apex Division Client’s assets, held at the broker, including its cash balance and its long securities positions. Because securities loans must be marked-to-market daily, there may be periods when the securities loan must be settled prematurely, and a substantial loss would occur.

Purchasing securities to close out the short position can itself cause the price of the securities to rise further, thereby exacerbating the loss. Short-selling exposes a Portfolio Fund, Direct Trading Client or Apex Division Client to unlimited risk with respect to that security due to the lack of an upper limit on the price to which an instrument can rise.

Repurchase Agreements and Reverse Repurchase Agreements. The Portfolio Funds, certain Direct Trading Clients and certain Apex Division Clients may use repurchase agreements and reverse repurchase agreements to finance the purchase of assets. In a reverse repurchase agreement, the Portfolio Fund, Direct Trading Client or Apex Division Client, as applicable, sells a financial instrument at one price and simultaneously agrees to buy it back from the purchaser at a higher price on a later date. This type of arrangement is effectively a secured borrowing by the Portfolio Fund, the Direct Trading Client or the Apex Division Client. The Clients’ use of reverse repurchase agreements involves many of the same risks of leverage since the proceeds derived from such reverse repurchase agreements may be invested in additional investments. Reverse repurchase agreements involve the risk that the market value of the investments acquired with the proceeds of the reverse repurchase agreement may decline below the price of the financial instrument the Client has sold but are obligated to repurchase. If the buyer of the financial instrument under a reverse repurchase agreement files for bankruptcy or becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine whether to enforce the Client’s obligation to repurchase the financial instrument, and the Client’s use of the proceeds of the reverse repurchase agreement may effectively be restricted pending such decision. Also, the Client would bear the risk of loss to the extent that the proceeds of the reverse repurchase agreement are less than the value of the financial instrument subject to such agreement. In a repurchase agreement, a Client buys a financial instrument at one price and simultaneously agrees to sell it back to the seller at a higher price on a later date. Repurchase agreements could involve risks in the event of a default or insolvency of the other party to the agreement, including possible delays or restrictions upon the Portfolio Fund’s, the Direct Trading Client’s or the Apex Division Client’s ability to dispose of the underlying financial instrument.

Debt and Other Income Securities. Some of the Portfolio Funds, certain Apex Division Clients and certain other Clients may invest in fixed-income and adjustable rate securities. Income securities are subject to interest rate, market and credit risk. Interest rate risk relates to changes in a security’s value as a result of changes in interest rates generally. Even though such instruments are investments that may promise a stable stream of income, the prices of such securities are inversely affected by changes in interest rates and, therefore, are subject to the risk of market price fluctuations. In general, the values of fixed income securities increase when prevailing interest rates fall and decrease when interest rates rise. Because of the resetting of interest rates, adjustable rate securities are less likely than non-adjustable rate securities of comparable quality and maturity to increase or decrease significantly in value when market interest rates fall or rise, respectively. Market risk relates to the changes in the risk or perceived risk of an issuer, country or region. Credit risk relates to the ability of the issuer to make payments of principal and interest. The values of income securities may be affected by changes in the credit rating or financial condition of the issuing entities. Income securities denominated in non-U.S. currencies are also subject to the risk of a decline in the value of the denominating currency relative to the U.S. dollar. The debt securities in which the Portfolio Funds, the Apex Division Clients and certain other Clients may invest are not necessarily required to satisfy any minimum credit rating standard, and may include instruments that are rated lower than investment grade, which can be considered speculative and at an enhanced risk of default. Please see the risk factor for high yield securities below, which describes additional risks.

Mortgage-Related Securities. The Portfolio Funds, certain Direct Trading Clients, and certain Apex Division Clients may invest in various types of mortgage-related securities. Mortgage- related securities are collateralized by residential or commercial mortgages or pools of residential or commercial mortgages. Pools of mortgage loans are assembled as securities for sale to investors by various governmental, government-related and private organizations. These securities may include complex instruments such as collateralized mortgage obligations, stripped mortgage-backed securities (“SMBS”), mortgage pass-through securities, interests in real estate mortgage investment conduits, as well as other real estate related securities, which are subject to credit risks associated with the performance of the mortgagors. Additionally, mortgage-related securities can have fixed, adjustable, floating or variable interest rates. They may also have interest rates that change based on changes, or multiples of changes, in a specified index of interest rates or interest rates that change inversely to changes in interest rates. Certain mortgage-related securities do not bear interest at all. Convertible Securities. Some Clients will invest, directly or indirectly through a Portfolio Fund, in convertible securities (“Convertibles”), which are generally debt securities or preferred stocks that may be converted into common stock. Convertibles typically pay current income as either interest (debt security convertibles) or dividends (preferred stocks). A Convertible’s value usually reflects both the stream of current income payments and the value of the underlying common stock. The market value of a Convertible performs like that of a regular debt security; that is, if market interest rates rise, the value of a Convertible usually falls. Since it is convertible into common stock, the Convertible generally has the same types of market and issuer risk as the underlying common stock. Convertibles that are debt securities are also subject to the normal risks associated with debt securities, such as interest rate risks, credit spread expansion and ultimately default risk, as discussed below. Convertibles are also prone to liquidity risk as demand can dry up periodically, and bid/ask spreads on bonds can widen significantly.

An issuer may be more likely to fail to make regular payments on a Convertible than on its other debt because other debt securities may have a prior claim on the issuer’s assets, particularly if the Convertible is preferred stock. However, Convertibles usually have a claim prior to the issuer’s common stock.

In addition, for some Convertibles, the issuer can choose when to convert to common stock, or can “call” (redeem) the Convertible. An issuer may convert or call a Convertible when it is disadvantageous for a Client or Portfolio Fund, causing that Client or Portfolio Fund to lose an opportunity for gain. For other Convertibles, a Client or Portfolio Fund can choose when to convert the security to common stock or to put (sell) the Convertible back to the issuer.

Because convertible arbitrage also involves the short sale of underlying common stock, the strategy is also subject to stock-borrow risk, which is the risk that the Portfolio Fund and/or the Client will be unable to sustain the short position in the underlying common shares.

High-Yield Securities. Portfolio Funds, certain Apex Division Clients and certain other Clients may invest in high-yield securities, which are generally unrated or rated below investment grade and may be considered speculative. Such securities are generally not exchange-traded and, as a result, these instruments trade in the over-the-counter marketplace, which is less transparent than the exchange-traded marketplace. In addition, a Portfolio Fund, an Apex Division Client or certain other Clients may invest in bonds of issuers that do not have publicly traded equity securities, making it more difficult to hedge the risks associated with such investments. High-yield securities face ongoing uncertainties and exposure to adverse business, financial or economic conditions, which could lead to the issuer’s inability to meet timely interest and principal payments. The market values of certain of these lower-rated and unrated debt securities tend to reflect individual corporate developments to a greater extent than do higher rated securities (which react primarily to fluctuations in the general lever of interest rates) and tend to be more sensitive to economic conditions than are higher-rated securities. Companies that issue such securities are often highly leveraged and may not have available to them more traditional methods of financing. A major economic recession could disrupt severely the market for such securities and may have an adverse impact on the value of such securities. In addition, it is possible that any such economic downturn could adversely affect the ability of the issuers of such securities to repay principal and pay interest thereon and increase the incidence of default of such securities. Distressed Securities. Portfolio Funds, certain Apex Division Clients and certain other Clients may invest in “below investment grade” securities and obligations of issuers in weak financial condition, experiencing poor operating results, having substantial capital needs or negative net worth, facing special competitive or product obsolescence problems, including companies involved in bankruptcy or other reorganization and liquidation proceedings. These securities are likely to be particularly risky investments although they may also offer the potential for correspondingly high returns. Among the risks inherent in investments in troubled entities is the fact that it frequently may be difficult to obtain information as to the true condition of such issuers. Such investments may also be adversely affected by laws relating to, among other things, fraudulent transfers and other voidable transfers or payments, lender liability and the bankruptcy court’s power to disallow, reduce, subordinate or disenfranchise particular claims. Such companies’ securities may be considered speculative, and the ability of such companies to pay their debts on schedule could be affected by adverse interest rate movements, changes in the general economic climate, economic factors affecting a particular industry or specific developments within such companies. In addition, often there is no minimum credit standard that is a prerequisite to a Portfolio Fund’s, an Apex Division Client’s or other Client’s investment in any instrument, and a significant portion of the obligations and securities in which a Portfolio Fund, an Apex Division Client or other Client invests may be less than investment grade. The level of analytical sophistication, both financial and legal, necessary for successful investment in companies experiencing significant business and financial difficulties is particularly high. There is no assurance that a Portfolio Manager or PAAMCO Prisma will correctly evaluate the prospects for a successful reorganization or similar action. In any reorganization or liquidation proceeding relating to a company in which a Portfolio Fund, Apex Division Client or other Client invests, the Portfolio Fund, the Apex Division Client or other Client may lose the entire investment, may be required to accept cash or securities with a value less than the Portfolio Fund’s, the Apex Division Client’s or other Client’s original investment and/or may be required to accept payment over an extended period of time. Under such circumstances, the returns generated from the Portfolio Fund’s, the Apex Division Client’s or other Client’s investments in such securities may not compensate the Portfolio Fund, the Apex Division Client or other Client adequately for the risks assumed.

Foreign Sovereign Debt. Sovereign debt includes bonds that are issued by foreign governments or their agencies, instrumentalities or political subdivisions or by foreign central banks. Sovereign debt also may be issued by quasi-governmental entities that are owned by foreign governments but are not backed by their full faith and credit or general taxing powers. Investment in sovereign debt involves special risks. The issuer of the debt or the governmental authorities that control the repayment of the debt may be unable or unwilling to repay principal and/or interest when due in accordance with terms of such debt, and a Portfolio Fund, a Direct Trading Client or an Apex Division Client may have limited legal recourse in the event of a default because, among other reasons, remedies must be pursued in the courts of the defaulting party. In addition, political conditions, especially a sovereign entity’s willingness to meet the terms of its debt obligations, are of considerable significance.

A sovereign debtor’s willingness or ability to repay principal and interest due in a timely manner may be affected by, among other factors, its cash flow situation, the extent of its foreign reserves, the availability of sufficient foreign exchange on the date a payment is due, the relative size of the debt service burden to the economy as a whole, the sovereign debtor’s policy toward principal international lenders and the political constraints to which a sovereign debtor may be subject.

The occurrence of political, social or diplomatic changes in one or more of the countries issuing sovereign debt could adversely affect a Portfolio Fund, a Direct Trading Client or an Apex Division Client. Political changes or a deterioration of a country’s domestic economy or balance of trade may affect the willingness of countries to service their sovereign debt. Non-U.S. Exchanges and Markets. A Client, directly or indirectly through a Portfolio Fund, may engage in trading on non-U.S. exchanges and markets. Trading on such exchanges and markets may involve certain risks not applicable to trading on U.S. exchanges and is frequently less regulated. For example, certain of those exchanges may not provide the same assurances of the integrity (financial and otherwise) of the marketplace and its participants, as do U.S. exchanges. There also may be less regulatory oversight and supervision by the exchanges themselves over transactions and participants in such transactions on those exchanges. Some non-U.S. exchanges, in contrast to U.S. exchanges, are “principals’ markets” in which performance is the responsibility only of the individual member with whom the trader has dealt and is not the responsibility of an exchange or clearing association. Furthermore, trading on certain non-U.S. exchanges may be conducted in such a manner that all participants are not afforded an equal opportunity to execute certain trades and may also be subject to a variety of political influences and the possibility of direct government intervention. Investment in non-U.S. markets would also be subject to the risk of fluctuations in the exchange rate between the local currency and the dollar and to the possibility of exchange controls. Foreign brokerage commissions and other fees are also generally higher than in the United States.

Non-U.S. Investments. Investment in non-U.S. issuers or securities principally traded outside the United States may involve certain special risks due to economic, political and legal developments, including favorable or unfavorable changes in currency exchange rates, exchange control regulations (including currency blockage), expropriation of assets or nationalization, imposition of withholding taxes on dividend or interest payments, and possible difficulty in obtaining and enforcing judgments against non-U.S. entities. Furthermore, issuers of non-U.S. securities are subject to different, often less comprehensive, accounting reporting and disclosure requirements than domestic issuers. The securities of some foreign governments and companies and foreign securities markets are less liquid and at times more volatile than comparable U.S. securities and securities markets. The foregoing risks associated with non-U.S. investments are even greater in emerging markets.

Currency Risk. The value of a Client’s assets, directly or indirectly through a Portfolio Fund, may be affected favorably or unfavorably by the changes in currency rates and exchange control regulations. Some currency exchange costs may be incurred when a Client or a Portfolio Fund changes investments from one country to another. Currency exchange rates may fluctuate significantly over short periods of time. They generally are determined by the forces of supply and demand in the respective markets and the relative merits of investments in different countries, actual or perceived changes in interest rates and other complex factors, as seen from an international perspective. Currency exchange rates can also be affected unpredictably by intervention by governments or central banks (or the failure to intervene) or by currency controls or political developments. A Portfolio Fund or a Client may enter into “hedges” against some of these fluctuations, but such hedges, if avai please register to get more info

PAAMCO Prisma is required to disclose all material facts regarding any legal or disciplinary events that would be material to the evaluation of PAAMCO Prisma’s advisory business or the integrity of PAAMCO Prisma’s management. PAAMCO Prisma has no information applicable to this Item. please register to get more info

Each of the Filing Adviser and Prisma is a wholly-owned subsidiary of PAAMCO Prisma Holdings, LLC (“PPH”), a holding company owned (A) 60.1% by PHoldings, LLC, a Delaware limited liability company, which in turn is owned by certain employees of PAAMCO Prisma, and (B) 39.9% by KKR Topaz LLC, an affiliate of KKR.

KKR’s affiliated investment advisers other than PAAMCO Prisma (“KKR Advisers”) primarily advise private equity funds and other investment vehicles. The KKR Advisers also provide investment services to institutional investors or investment vehicles with respect to publicly traded equity and debt securities, real assets such as infrastructure, energy, and real estate, real estate debt, and growth capital investments. KKR also sponsors and manages investment funds and other vehicles that facilitate co-investment along-side proprietary investments or in specific or multiple portfolio companies and other assets invested in by investment funds managed by KKR Advisers. KKR also owns KKR Capital Markets LLC and MCS Capital Markets LLC, each of which is a U.S. registered broker-dealer, and certain non-US entities authorized to conduct broker-dealer activities. PAAMCO Prisma Clients (including the Apex Funds and Apex Accounts) may enter into co-investments alongside investment vehicles managed by KKR or may invest in, or alongside of, Portfolio Funds advised by Portfolio Managers in which KKR holds an ownership stake or has a strategic relationship. In addition, KKR’s affiliated broker-dealers may manage or otherwise participate in private placements, underwriting syndicates and/or selling groups with respect to investments of Portfolio Funds. In these situations, KKR may receive management fees, transaction fees, underwriting fees, financing fees, or other compensation with respect to the investment activities of the Portfolio Funds, and KKR will typically control the entity in which the co- investment is made. In such circumstances, KKR is not a fiduciary of the Portfolio Fund or the co- investment vehicle, and is not obligated to act in the best interest of the Portfolio Fund or the co- investment vehicle when exercising control over such entity.

Although PAAMCO Prisma and KKR operate independently, their common ownership interests may in certain circumstances create conflicts of interest or the appearance of conflicts of interest. Please refer to Item 11 for a discussion of the potential conflicts that may be raised by PAAMCO Prisma’s relationship with KKR and the policies and procedures PAAMCO Prisma has adopted to address such potential conflicts, including an information barrier policy and review by the Conflicts Committee.

Assets of the Funds and Accounts may be invested in the Alt Beta Fund, which is managed by Martlet. The senior principals of Martlet are persons who were employees of the Filing Adviser through December 31, 2018. Please see the response to Item 5 for additional information about Martlet and the Alt Beta Fund. Neither PAAMCO Prisma nor any of its management persons is registered, or has an application pending to register, as a broker-dealer or a registered representative of a broker-dealer. The Filing Adviser is currently registered as a commodity pool operator and as a commodity trading advisor with the Commodity Futures Trading Commission (“CFTC”). As required by the CFTC rules, certain management persons of the Filing Adviser are registered as “associated persons” of the Filing Adviser. The Filing Adviser is also a registered cross-border discretionary investment management and investment advisory company with the Financial Services Commission in Korea. The Filing Adviser is related to the following entities: Prisma Capital Partners LP. Prisma is a wholly-owned subsidiary of PPH. The Filing Adviser and Prisma collectively conduct a single advisory business. Prisma is a “relying adviser” of the Filing Adviser. Prisma Capital Advisors LLC. Prisma Capital Advisors LLC, a subsidiary of Prisma, provides investment management services to certain Funds and Accounts. Prisma Capital Advisors LLC is a “relying adviser” of the Filing Adviser.

Prisma Capital Management LLC. Prisma Capital Management LLC, a subsidiary of Prisma, provides investment management services to certain Funds and Accounts. Prisma Capital Management LLC is a “relying adviser” of the Filing Adviser.

Prisma Capital Partners LLC. Prisma Capital Partners LLC, a subsidiary of Prisma, acts as sponsor or general partner of certain Funds and Accounts.

Prisma Associates GP LP. Prisma Associates GP LP, a subsidiary of Prisma, acts as sponsor or general partner of certain Funds and Accounts.

PAAMCO Prisma Europe LLP. PAAMCO Prisma Europe, a subsidiary of the Filing Adviser, located in London, United Kingdom, is authorized and regulated by the U.K. Financial Conduct Authority. PAAMCO Prisma Europe’s only clients are the Filing Adviser and Prisma. PAAMCO Prisma Europe refers potential investment advisory clients, and for which it performs due diligence on hedge fund managers, primarily those located in Europe. PAAMCO Prisma Europe is a “relying adviser” of the Filing Adviser.

PAAMCO Miren Portföy Yönetimi A.Ş. PAAMCO Turkey, a subsidiary of the Filing Adviser, is an authorized and regulated portfolio management company by the Capital Markets Board of Turkey and its business scope is limited to establishment and management of foreign collective investment scheme, shares which will exclusively be marketed to persons resident abroad and provision of portfolio management services to persons resident abroad. PAAMCO Turkey is a “relying adviser” of the Filing Adviser.

Pacific Alternative Asset Management Company Mexico, S.C. PAAMCO Mexico is a subsidiary of the Filing Adviser. PAAMCO Mexico is a “relying adviser” of the Filing Adviser. West70 GP, Ltd. West 70 GP, Ltd, a subsidiary of the Filing Adviser, acts as sponsor or general partner of certain Direct Trading Clients. Pacific Atlantic GP, LTD. Pacific Atlantic GP, LTD., a subsidiary of the Filing Adviser, acts as sponsor or general partner of certain FoF Vehicles. PAAMCO Next Gen Technologies. A new technology venture created around PAAMCO Prisma’s proprietary portfolio analytics platform (“Portfolio Explorer”). Portfolio Explorer is a platform for institutional investors that aims to solve the problem of aggregating performance, risk and monitoring across equities, fixed income and alternatives. The initial roll-out of Portfolio Explorer includes transaction and position-based information and is expected to involve a limited number of Portfolio Managers, as well as a portion of external direct hedge fund and long-only portfolios. Portfolio Explorer provides certain underlying investors with access to certain information available to PAAMCO Prisma but not otherwise generally available to other underlying investors. At the request of the investor in a Fund, an Account, or a PAAMCO Launchpad Fund, PAAMCO Prisma (and/or its employees and affiliates) may also invest in such Fund, Account, or PAAMCO Launchpad Fund. Accordingly, PAAMCO Prisma may be viewed as having an incentive to favor the Fund, Account, or PAAMCO Launchpad Fund over its other Clients. Similarly, PAAMCO Prisma may be viewed as having an incentive to favor the Clients where PAAMCO Prisma has established an affiliate general partner or managing member if that entity has an economic investment in the Client. As described in the response to Item 6, however, PAAMCO Prisma has adopted controls, such as its allocation policy, that are intended to ensure that no Clients are favored over others.

As described in more detail in the response to Item 8 above, PAAMCO Prisma invests the assets of Clients in Portfolio Funds managed by other investment advisers. Except in connection with the business of PAAMCO Launchpad and in connection with investments in the Alt Beta Fund, as described above, PAAMCO does not receive compensation from the other investment advisers in connection with such investments.

Seeding Division PAAMCO Launchpad’s Seeded Managers may manage money for other business lines of PAAMCO Prisma, such as PAAMCO Prisma’s Fund of Hedge Funds division. The terms applicable to such other investments will likely be different than those applicable to PAAMCO Launchpad Funds. It is expected that the PAAMCO Launchpad Funds will have less liquidity, but may have lower fees when factoring in the revenue sharing arrangements, than PAAMCO Prisma’s other Clients.

It is anticipated that some of the capacity negotiated by PAAMCO Launchpad with a Seeded Manager will be available to Clients of PAAMCO Prisma’s Fund of Hedge Funds division and other business lines; however, neither PAAMCO Launchpad nor the PAAMCO Launchpad Funds will directly benefit from any other Client investments with the same managers. In other words, neither PAAMCO Launchpad nor any PAAMCO Launchpad Fund will receive any share of management fees, performance fees, performance allocations or other compensation paid by Clients (including, for the avoidance of doubt, Clients of Prisma) to a Seeded Manager. To the extent a Strategic Advisory Client or investor in a Fund, an Account or a Direct Trading Client makes an independent investment decision (i.e., a decision not based on investment advice provided by PAAMCO Prisma) to allocate assets directly to a Seeded Manager, it is expected that the Filing Adviser and/or PAAMCO Launchpad would earn a revenue share on such investment. Where the same Portfolio Manager manages Portfolio Funds that are held by a PAAMCO Launchpad Fund and either a Fund or Account, each business line faces a conflict of interest regarding redemption and termination rights because the decision to redeem from or terminate a manager, while in the best interest of one business line, could be seen to adversely impact the clients of another business line. To mitigate these conflicts of interest, each business line will be led by separate final decision makers with a separate investment process meant to address the unique needs of the Clients of each business line. There are not currently information barriers between the Fund of Hedge Funds division and the Seeding division (but certain information controls have been implemented). Where appropriate, certain functions will be performed by other members of the PAAMCO Prisma group. It is possible that a prospective Seeded Manager may be presented concurrently with capital from a PAAMCO Launchpad Fund as well as the Fund of Hedge Funds business. There is a conflict that the Fund of Hedge Funds business could allocate to a Seeded Fund based in part on the decision to promote a Seeded Manager. This conflict is mitigated by maintaining a separate investment process with different final decision makers, as described above. Further, it is anticipated that prospective Seeded Managers will themselves mitigate this risk by deciding which business lines, if any, to accept. PAAMCO Prisma may consider implementing additional controls to manage and monitor such conflicts of interest on an ongoing basis, as appropriate under the circumstances. please register to get more info

Trading
Under the Code of Ethics, PAAMCO Prisma employees are not permitted to trade in most securities without the prior approval of the PAAMCO Prisma Compliance Department. In addition, PAAMCO Prisma employees and their family members are not permitted to acquire interests in any limited offering (including any PAAMCO Prisma Client) or initial public offering without the prior approval of the Chief Compliance Officer or an employee of the PAAMCO Prisma Compliance Department designated by the Chief Compliance Officer. It is also PAAMCO Prisma’s general policy not to permit employees to invest in Portfolio Funds held by Clients, unless such investment has been reviewed and approved by the Conflicts Committee. Finally, the Code of Ethics also contains additional restrictions and controls with regard to PAAMCO Prisma employee investments in (i) Clients, (ii) investments held by Managed Account Platform Funds, (iii) investments held by Apex Funds and Accounts and (iv) investments held in the accounts of the Direct Trading Clients.

PAAMCO Prisma is committed to complying with applicable laws and regulations and to maintaining the highest ethical standards in connection with the management of PAAMCO Prisma. The Code of Ethics reflects PAAMCO Prisma’s view on dishonesty, self-dealing, conflicts of interest and trading on material, non-public information, which is not tolerated. The Code of Ethics also requires employees to provide initial and annual securities holdings reports as well as quarterly securities transaction reports. PAAMCO Prisma will provide any client or prospective client with a copy of the Code of Ethics upon request.

Subject to the pre-approval requirements noted above, selected PAAMCO Prisma employees, officers, members and/or managers may invest in certain Clients, in underlying securities in which Clients also invest directly or indirectly through the Portfolio Funds, and in securities in which Direct Trading Clients invest in directly. The investments of PAAMCO Prisma employees, officers, members and/or managers, as well as a PAAMCO Prisma-affiliated general partner/managing member/member, in various Clients creates a conflict of interest because PAAMCO Prisma and its principals have an incentive to act in its or their own self-interest as opposed to that of the applicable Client. However, PAAMCO Prisma has adopted a Code of Ethics, as described above and, as described in the response to Item 6, PAAMCO Prisma has adopted controls, such as its allocation policy, that are intended to ensure that no Clients are favored over others. Pursuant to its discretionary authority with respect to discretionary Clients, PAAMCO Prisma may direct Clients to invest in certain Managed Account Platform Funds. However, neither the Client nor the Managed Account Platform Fund pay a fee to PAAMCO Prisma for their investment in those Managed Account Platform Funds. Certain senior employees of PAAMCO Prisma, as well as two former employees of the Filing Adviser, serve as directors of Managed Account Platform Funds, Portfolio Funds formed for investment solely by PAAMCO Prisma Clients, and certain PAAMCO Prisma Clients. The PAAMCO Prisma principals do not receive compensation for their service as directors. Former employees of the Filing Adviser serving in these director roles are compensated by Clients at a rate consistent with market.

Upon obtaining proper direction and subject to its fiduciary duties and compliance with applicable law, PAAMCO Prisma may effect a transfer of interests in or shares of a Portfolio Fund between Clients.

In addition to managing conflicts of interest with respect to trading and preventing self-dealing, PAAMCO Prisma has adopted and implemented various policies and procedures regarding employees’ non-PAAMCO Prisma activities, political contributions, giving and receipt of gifts and entertainment, and affiliations with third-party service providers. The intent of these policies and procedures is to minimize the opportunities for conflicts of interest to arise.

Employees may benefit from educational events sponsored by industry service providers such as prime brokers, administrators, law firms, audit firms, and other such professional service firms.

Relationship with KKR

PAAMCO Prisma has adopted information controls and other policies and procedures to provide for the proper handling of confidential information (i.e., nonpublic information received or created by PAAMCO Prisma in connection with its activities) to prevent violations of laws and regulations prohibiting the misuse of such information and to avoid situations that might create an appearance of such misuse. While there is no general information barrier between PAAMCO Prisma’s various investment strategies (other than with respect to the Direct Trading division), PAAMCO Prisma does have a “need to know” policy whereby information developed or received by one area of the firm is only shared, subject to applicable contractual restrictions, with those individuals who have a legitimate business reason for accessing such information.

In addition, PAAMCO Prisma, on the one hand, and KKR, on the other hand, have established an information barrier policy that restricts the flow of information between PAAMCO Prisma, on the one hand, and KKR, on the other, to ensure the independent operation of PAAMCO Prisma from KKR, and to mitigate the potential for conflicts of interest. Although KKR owns an indirect stake in PPH, PAAMCO Prisma acts autonomously and separately from KKR. The information barrier policy is in place in order to support the separation between KKR, on the one hand, and PAAMCO Prisma, on the other hand, for legal, regulatory and compliance purposes, and the policy enables PAAMCO Prisma and KKR to avail themselves of certain regulatory relief (such as avoiding the aggregation of certain holdings of KKR with those of PAAMCO Prisma). Among other controls designed to safeguard the independence of PAAMCO Prisma, on the one hand, and KKR, on the other, the policy generally prohibits the communication of material non-public information, information regarding investments held or intended to be bought or sold, voting decisions, and investment allocations. Although cooperation and certain limited information flow between KKR, on the one hand, and PAAMCO Prisma, on the other, is permissible under the information barrier policy, such cooperation and information flow must be in accordance with the policy, and is generally undertaken in coordination with PAAMCO Prisma’s legal/compliance team to ensure adherence to the principles of the policy. PAAMCO Prisma’s Compliance Department is responsible for establishing and administering the information barriers described above on behalf of PAAMCO Prisma. Conflicts Committee PAAMCO Prisma has established a Conflicts Committee that is responsible for considering, analyzing, and addressing actual, potential, and perceived conflicts of interest that may arise in PAAMCO Prisma’s business. The Conflicts Committee is composed of members representing cross-functional business, investment management, investment operations, legal and compliance responsibilities. The Conflicts Committee will typically meet on a quarterly basis, and at such other times as necessary to review and address material conflicts to the extent that such conflicts are not otherwise resolved internally.

The investment programs employed by PAAMCO Prisma for certain Clients may conflict from time to time with the transactions and strategies in managing the assets of other Clients. For example, completeAlpha Clients and Core Clients may invest with the same Portfolio Managers or in the same Portfolio Funds. In any circumstance where PAAMCO Prisma proposes to redeem the assets of completeAlpha Clients but not Core Clients, or vice versa, from a Portfolio Fund, the Conflicts Committee will review the transaction and determine mitigation of associated conflicts.

Other than pursuant to investments in fund vehicles or accounts managed or advised by third parties, PAAMCO Prisma may invest Client assets directly (i) in a broad range of asset classes throughout the corporate capital structure of an issuer, including issuers in which in which a Client may have an existing or proposed investment, and (ii) on behalf of two or more Clients in an issuer such that the Clients are invested in different levels of the issuer’s capital structure. When PAAMCO Prisma and its Clients, or when two or more Clients, invest in different levels of the capital structure of an issuer, their respective interests may diverge significantly, including in the case of financial distress of the company or corporate action/amendments. Prior to PAAMCO Prisma investing Clients’ capital across different levels of an issuer’s capital structure, the PAAMCO Prisma portfolio manager responsible for the particular strategy or strategies involved will review such potential investment with the Conflicts Committee to determine if an actual conflict of interest is reasonably likely to occur in the near term (defined as six-to-nine months) considering, among other things, the current financial status of the issuer in which the investment will be made.

Any transactions between a completeAlpha Client, on one hand, and a Core Client, on the other, must be approved by the Conflicts Committee.

In certain circumstances, if potential conflicts are present, the Conflicts Committee may review or override allocation decisions made pursuant to PAAMCO Prisma’s general allocation policy (as described in Item 6 above) for the Fund of Hedge Funds division. As described in response to Item 10, KKR owns an indirect, non-controlling interest in PPH. KKR also sponsors private funds and owns part of certain asset management firms that operate Portfolio Funds in which PAAMCO Prisma Clients may invest. Clients may enter into co-investments alongside these private funds. Additionally, KKR is affiliated with broker-dealers that may manage or otherwise participate in private placements, underwriting syndicates and/or selling groups with respect to investments of the Portfolio Funds. In any or all of these situations, KKR may receive management fees, underwriting fees, financing fees, or other compensation with respect to the investment activities of the Portfolio Funds. Portfolio Funds in which Clients invest may pursue a broad range of investment strategies and invest in a broad range of securities and instruments and other assets globally. KKR is a major participant in the global markets and may from time to time be actively engaged in transactions in the same securities and financial instruments in which Portfolio Funds are invested, or in other securities and financial instruments issued by the same issuers in which Portfolio Funds are invested. Any such investment activities by the Portfolio Managers of the Portfolio Funds in which Clients invest are outside the control of PAAMCO Prisma. When PAAMCO Prisma makes investment decisions on behalf of PAAMCO Prisma Clients, PAAMCO Prisma will generally seek to act in the best interests of such PAAMCO Prisma Clients without consideration of the involvement of KKR in these transactions or the fees or other compensation that may accrue to KKR as a result.

In addition, PAAMCO Prisma may also invest assets of PAAMCO Prisma Clients in Portfolio Funds advised by Portfolio Managers in which KKR holds an ownership stake or with whom KKR has a strategic relationship. PAAMCO Prisma does not believe that the PAAMCO Prisma Clients would receive fee concessions from a Portfolio Manager as a result of such a relationship. PAAMCO Prisma may have an incentive to allocate assets of PAAMCO Prisma Clients to such Portfolio Funds since KKR has an indirect financial interest in the success of such Portfolio Funds. Any decision by PAAMCO Prisma to retain a Portfolio Manager in which KKR retains an ownership stake or with which it has a strategic relationship, or to invest in such a Portfolio Fund, will be subject to review as described in Item 8 and Item 10 above and may also be reviewed by the Conflicts Committee.

PAAMCO Prisma may also invest assets of Clients in Portfolio Funds advised by Portfolio Managers that are affiliated with an investor or prospective investor in a Client. This creates a conflict of interest where PAAMCO Prisma may be incentivized to allocate to that Portfolio Fund to secure the relationship with the aforementioned investor or prospective investor. If this issue arises, PAAMCO Prisma will seek to mitigate this conflict by having the issue discussed within the Conflicts Committee.

As described above, it is PAAMCO Prisma’s general policy not to permit employees to invest in Portfolio Funds held by Clients; however, employees may be permitted to make such investments in certain circumstances if such investment has been reviewed and approved by the Conflicts Committee. please register to get more info

Fund of Hedge Funds Division As a general matter, PAAMCO Prisma does not direct brokerage or have any soft dollar arrangements with respect to its Fund of Hedge Funds division. Other than completing subscription agreements on behalf of its Clients for their respective investments in Portfolio Funds, PAAMCO Prisma generally does not execute trades on behalf of FoF Vehicles and Accounts (except to the extent PAAMCO Prisma manages a Client’s cash or cash equivalents or engages in currency hedges and spot currency purchases and sales). Rather, PAAMCO Prisma invests FoF Vehicle and Account assets through private placements in Portfolio Funds at the prevailing monthly net asset value. Interests in Portfolio Funds are not generally available for purchase or sale through a broker-dealer. As part of the due diligence process, PAAMCO Prisma reviews the brokerage practices and soft dollar arrangements of the Portfolio Funds. In addition to managing a Client’s cash or cash equivalents at the level of a PAAMCO Prisma Client Account or Fund, in certain cases PAAMCO Prisma manages the cash or cash equivalents held at the level of a Managed Account Platform Fund in its capacity as investment adviser. The cash or cash equivalents referred to in the previous sentence can also include mutual fund shares, exchange-traded fund shares and other short duration products expected to have low volatility. Subject to its fiduciary duties and compliance with applicable law, PAAMCO Prisma may purchase interests in or shares of a Portfolio Fund for one Client at the same time it is redeeming interests in or shares of such Portfolio Fund for another Client. Additionally, subject to its fiduciary duties and compliance with applicable law (and, in the case of transactions between a completeAlpha Client, on one hand, and a Core Client, on the other, approval by the Conflicts Committee), PAAMCO Prisma may transfer interests in or shares of a Portfolio Fund between Clients. Such transactions generally will be accomplished not through a cross-trade, but rather by netting subscriptions and redemptions.

On rare occasions, a Client may receive in-kind redemptions from Portfolio Funds (which could include securities or other financial instruments held by a Managed Account Platform Fund), in which case PAAMCO Prisma will liquidate such amounts. On other rare occasions, PAAMCO Prisma may need to liquidate the assets of a Managed Account Platform Fund upon termination of the related Subadviser if the Subadviser does not liquidate the Managed Account Platform Fund by the effective date of termination. In those cases, PAAMCO Prisma’s Investment Operations department will affect the liquidation or oversee the hiring of a third party to manage or liquidate the investments.

The Subadvisers also engage in brokerage activities for the Managed Account Platform Funds. As part of the initial due diligence process and on an ongoing basis, PAAMCO Prisma reviews the brokerage practices and soft dollar arrangements of the Subadvisers. The prime brokers, futures commission merchants, and other derivatives counterparties of each Managed Account Platform Fund are selected by PAAMCO Prisma and the Board of Directors of the applicable fund in consultation with the relevant Subadviser based on factors such as the prime broker’s or counterparty’s overall performance, pricing, and operational capabilities.

Under the terms of each Subadvisory Agreement, each Subadviser is responsible for arranging for the execution of all orders for the purchase and sale of securities and other investments with respect to the applicable Managed Account Platform Fund. The Subadviser is required to seek best execution for that Managed Account Platform Fund. The Subadviser, to the extent permitted by applicable laws and regulations, may aggregate the investments to be purchased or sold on behalf of its clients to attempt to obtain a more favorable price, lower brokerage commissions or efficient execution.

Pursuant to each Subadvisory Agreement, the Filing Adviser directs a Subadviser to select one or more preapproved prime brokers with respect to the applicable Managed Account Platform Fund. These prime brokers are preapproved for use as they have been previously approved by the Board of Directors of the applicable Managed Account Platform Fund. Under the terms of each Subadvisory Agreement, if a Subadviser generates “soft dollars” with respect to the trades of the applicable Managed Account Platform Fund, the Subadviser must comply with the safe harbor of Section 28(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), with respect to such trades. Apex Division With respect to the Apex Funds and Apex Accounts, it is PAAMCO Prisma’s policy to seek to obtain best execution of trades (if any) in public equity and debt securities and other marketable securities traded on behalf of applicable Apex Funds and Apex Accounts by a selected broker-dealer. If a subadviser is hired to execute trades on behalf of an Apex Fund or Apex Account, it is PAAMCO Prisma’s policy to require the subadviser also to seek best execution. In seeking best execution, the determinative factor is not always the lowest possible per security price or commission but whether, in PAAMCO Prisma’s view, the transaction represents the best overall qualitative and quantitative execution for the relevant Apex Funds and Apex Accounts. PAAMCO Prisma’s process of determining best execution involves not only an assessment of brokerage commissions or bid/offer spreads, but also an evaluation of broker-dealer ancillary services. PAAMCO Prisma may consider the full range of a broker-dealer’s services in assessing best execution, including:
• competitiveness of commission rates and spreads;
• promptness of execution;
• past history in executing orders;
• clearance and settlement capabilities;
• research capabilities and quality;
• access to markets, investments (including access to new issues) and distribution network;
• trade error rate and ability or willingness to correct errors;
• anonymity /confidentiality;
• market impact:
• liquidity;
• speed of execution;
• expertise with complex transactions;
• trading style and strategy; and
• geographic location.

Accordingly, although PAAMCO Prisma will seek competitive commissions and spreads, it may not necessarily obtain the lowest possible rates for applicable Apex Funds or Apex Account transactions. The commissions, spreads, or other transaction or financial advisory fees charged by an executing broker-dealer may be higher or lower than those charged by other broker-dealers. The Apex Funds and Apex Accounts do not directly engage in cross trade transactions although any subadvisers retained by them may do so.

Direct Trading Division

Best Execution. The following factors may be, as relevant, considered when executing a trade on behalf of a Client: listed bids and asks; the opportunity for price improvement; transaction costs; anonymity; liquidity; speed of execution; likelihood of execution and settlement; quality of research; expertise with difficult securities; trading style and strategy; geographic location; frequency of errors; access to new issues; size; and taking into account the relevant factors previously listed, commission rates. PAAMCO Prisma, where applicable, will take all reasonable steps to obtain, when executing orders or arranging the execution of orders, the best possible result for its Clients taking into account relevant execution factors (a non-exhaustive list, set forth in the above paragraph). Notwithstanding this, where there is a specific instruction from a Direct Trading Client, it must be followed. When executing a Client order or arranging its execution, PAAMCO Prisma will consider the relative importance of the execution factors (listed above), taking into account: the characteristics of the Client; the characteristics of the Client order; characteristics of the financial instrument that is subject to that order; and characteristics of the execution venues to which that order can be directed. Ordinarily, in considering best execution, price will be an important factor in seeking to obtain the best possible result for Clients. However, this will not always be the case.

Soft Dollars. PAAMCO Prisma will only use soft dollars to obtain products and services that fall within the safe harbor provided by Section 28(e) of the Exchange Act.

Investor Referrals. Direct Trading may receive Client referrals from registered representatives of broker-dealers that trade on behalf of Direct Trading’s Clients. PAAMCO Prisma is aware that such referrals pose a conflict of interest; Direct Trading could have an incentive to direct brokerage to broker-dealers that fail to achieve best execution in order to continue receiving referrals. The Direct Trading division will review referral relationships and the associated conflicts of interest during its periodic and systematic evaluations of execution quality.

PAAMCO Prisma’s receipt of benefits from brokers, as described above, creates an incentive for PAAMCO Prisma to trade with brokers based on these benefits, whether or not pursuant to soft dollar arrangements, rather than the interests of PAAMCO Prisma’s Clients in receiving best execution.

Cross Trades. Each of the Direct Trading division Clients is managed by a different team within the Direct Trading division. Consequently, no cross trades are currently anticipated between or among any of these Direct Trading Clients. In the event that further mandates are accepted by one or more of these programs, Direct Trading (particularly PAAMCO Miren) may use an unaffiliated broker-dealer or custodian to cross investments and/or cash between Client accounts when such a transaction is advantageous for each participant. However, no account subject to ERISA with less than $100 million in assets may be included in any cross trade unless an independent fiduciary acts on behalf of such account. In addition, cross trades involving ERISA accounts with at least $100 million in assets may be permissible, so long as certain policies and procedures are adopted and implemented. please register to get more info

Each investor in a Fund or Account generally receives monthly, quarterly or other periodic reports that may include investment commentary and a review of performance. Each investor in a Fund receives audited financial statements with respect to that Fund after the end of such Fund’s fiscal year. Each direct investor in a Managed Account Platform Fund receives audited financial statements after the end of such Fund’s fiscal year. Each Strategic Advisory Client receives such reports as agreed to between PAAMCO Prisma and such Strategic Advisory Client, which may take the form of periodic telephone calls or written reports and analysis. Fund of Hedge Funds Division Each Client within the Fund of Hedge Funds division is reviewed by a PAAMCO Prisma portfolio/account manager. The portfolio/account manager’s review process may include constructing the Client portfolio and monitoring adherence to the Client’s investment objectives and guidelines as well as reporting. In addition, there is a research team lead assigned to particular investment categories (as described in Item 8 above). The research team lead and his or her team members monitor the investment strategies, performance, and other activities of the Portfolio Funds within the applicable sector, including personal visits to the Portfolio Managers’ offices, electronic communications, and/or telephone conversations with the Portfolio Manager and staff. The portfolio/account managers are accountable for their respective Client portfolios and ensuring that the portfolios are managed in accordance with their stated investment guidelines. An Investment Guidelines Report for each Client portfolio that is not in liquidation is issued to PAAMCO Prisma’s Compliance Department on a monthly basis. The Compliance Department, or in the case of the Managed Account Platform Funds, the relevant investment operations professional, reviews and logs any variation from a Client’s guidelines and requires the applicable portfolio/account manager to address any variation with an explanation and a follow- up to ensure that a Client notification is sent, if required, and any necessary changes to the guidelines are considered, if applicable. The Chief Compliance Officer (or an employee of the Compliance Department designated by the Chief Compliance Officer) then reviews the final Investment Guidelines Reports. Apex Division

With respect to Apex Funds and Apex Accounts, meetings of the relevant ICs occur on a recurring and ad-hoc basis. The portfolios of the Apex Funds and Apex Accounts are typically reviewed on a periodic basis by the relevant portfolio managers, who are responsible for the day-to-day risk management and investment oversight of the applicable portfolio. On a quarterly basis, all portfolios of the Apex Funds and Apex Accounts are formally reviewed by the Apex Credit IC or Apex Tactical IC, as appropriate, with input from PAAMCO Prisma’s Risk Management team. Direct Trading Division

Direct Trading Client accounts are reviewed by the Direct Trading COO or designate. The nature and frequency of reporting on accounts is specific to the particular contractual agreement and goals of the account. Reports may include, but are not limited to, a summary of the account’s positions, a listing of the transactions occurring in the account, various performance measures and/or other information independently negotiated with the Direct Trading Clients.

Seeding Division PAAMCO Launchpad Funds are reviewed by the Launchpad CEO or his designate. Each investor in a PAAMCO Launchpad Fund generally receives monthly, quarterly or other periodic reports that may include investment commentary and a review of performance. Each investor in a PAAMCO Launchpad Fund receives audited financial statements with respect to that PAAMCO Launchpad Fund after the end of such fund’s fiscal year. PAAMCO Launchpad and investors in the PAAMCO Launchpad Funds may also agree that PAAMCO Launchpad or PAAMCO Prisma will provide certain other reports. please register to get more info

As further described in the response to Item 5, to the extent a Strategic Advisory Client or investor in a Fund, Account or Direct Trading Client makes an independent investment decision to allocate assets directly to a Seeded Manager, it is expected that the Filing Adviser and/or PAAMCO Launchpad would earn a revenue share on such investment. As further described in response to Item 11 above, PAAMCO Prisma may also invest assets of PAAMCO Prisma Clients in Portfolio Funds advised by Portfolio Managers in which KKR holds an ownership stake or with whom KKR has a strategic relationship. PAAMCO Prisma does not believe that the PAAMCO Prisma Clients would receive fee concessions from a Portfolio Manager as a result of such a relationship; however, PAAMCO Prisma may have an incentive to allocate assets of PAAMCO Prisma Clients to such Portfolio Funds since KKR has an indirect financial interest in the success of such Portfolio Funds. Any decision by PAAMCO Prisma to retain as a Portfolio Manager, or to invest in a Portfolio Fund advised by a Portfolio Manager in which KKR retains an ownership stake or a strategic relationship will be subject to review as described in Item 8 and Item 10 above and may also be reviewed by the Conflicts Committee as described in Item 11.

PAAMCO Prisma may also invest assets of Clients in Portfolio Funds advised by Portfolio Managers that are affiliated with an investor or prospective investor in a Client. This creates a conflict of interest where PAAMCO Prisma may be tempted to allocate to that Portfolio Fund to secure the relationship with aforementioned investor or prospective investor. If this issue arises, PAAMCO Prisma will seek to mitigate this conflict by having the issue discussed within the Conflicts Committee as described in Item 11.

PAAMCO Prisma has entered into contracts pursuant to which it compensates third parties for investor referrals. In general, any such arrangement will be pursuant to a written agreement with the third party, the third party will be required to provide the prospective client with a copy of PAAMCO Prisma’s Form ADV Part 2A and a separate written disclosure document describing the arrangement between PAAMCO Prisma and the third party, and PAAMCO Prisma must obtain the client's acknowledgement that it has received the written disclosure document at the time of the initial solicitation.

Such arrangements generally provide for payments to the solicitor based upon a percentage of fees paid to PAAMCO Prisma. Such fees are not paid by Clients. However, these arrangements present potential conflicts of interest on the part of the solicitor to favor the Clients they have referred to PAAMCO Prisma over other investments with respect to which it receives less compensation.

Further, in certain non-U.S. markets, when required by local regulations, PAAMCO Prisma engages a third-party distributor. Such distributor is compensated with a flat fee per annum and an additional flat fee per investor who subscribes through the distributor, all of which is paid directly by PAAMCO Prisma. In addition, PAAMCO Prisma Europe receives a percentage of management fees, performance fees and/or other fees paid to PAAMCO Prisma by any Client referred by PAAMCO Prisma Europe.

From time to time, PAAMCO Prisma may engage one or more consultants to provide PAAMCO Prisma with market research and consulting services relating to possible prospective clients. The Filing Adviser has a solicitation agreement in principle with Martlet whereby the Filing Adviser will share in management fees earned by Martlet with respect to certain Clients of the Filing Adviser who invest in the Alt Beta Fund. The applicable compensation arrangements will be provided in writing to any affected Client or Fund investor, as applicable. Please see the response to Item 5 for additional information about Martlet and the Alt Beta Fund. please register to get more info

Rule 206(4)-2 under the Advisers Act (the “Custody Rule”) defines custody as holding client securities or assets or having any authority to obtain possession of them. With the exception of the initial Client with a PAAMCO Miren separate managed account, PAAMCO Prisma is deemed to have custody of the assets of each Fund and Account over which PAAMCO Prisma exercises discretion. Each of PAAMCO Launchpad and PAAMCO Prisma is deemed to have custody of the assets of each PAAMCO Launchpad Fund.

To comply with the requirements of the Advisers Act, Funds and Accounts for which PAAMCO Prisma is deemed to have custody are audited each year by an independent public accountant and the audited financial statements are provided directly to investors in these Funds and Accounts within 120 to 180 days (as required) of the Fund’s fiscal year end. To the extent a Client relies on CFTC 4.7(b) exemption, such as the West70 Funds, the audited financial statements are provided within 90 days of fiscal year end. For Accounts, account statements are sent directly by the custodian of the Account’s assets. please register to get more info

For certain Clients such as FoF Accounts, PAAMCO Prisma negotiates the level of investment discretion with the investor at the outset of the advisory relationship. PAAMCO Prisma could have complete discretionary authority to select the identity and amount of Portfolio Fund interests to be bought or sold or PAAMCO Prisma’s discretion could be limited such that it must be exercised within specific investment parameters and restrictions. In some instances, the investor may have final approval or a veto right over all or some investment decisions for the Client. For those Clients where PAAMCO Prisma has complete investment discretion, PAAMCO Prisma typically receives express discretionary authority, including a power of attorney, through a limited liability company agreement, limited partnership agreement, subscription agreement, investment management or similar agreement relating to the Client. Regardless of the level of discretion PAAMCO Prisma has with respect to any one Client, such discretion is to be exercised in a manner consistent with the stated investment objectives, limitations and restrictions for the particular Client and PAAMCO Prisma’s internal policies and procedures.

PAAMCO Prisma exercises this discretion by subscribing to and redeeming from various types of Portfolio Funds on behalf of the PAAMCO Prisma FoF Vehicles and Accounts and PAAMCO Launchpad. As alluded to above, for certain FoF Vehicles and Accounts, PAAMCO Prisma must obtain the approval of the investor prior to subscribing to a Portfolio Fund, in which case these assets would be classified as non-discretionary. However, to the extent FoF Vehicles and Accounts’ assets are invested in Portfolio Funds over which PAAMCO Prisma maintains discretion, such FoF Vehicles and Accounts assets are included in total discretionary regulatory assets under management. For certain Apex Division Clients, Prisma serves as discretionary investment manager, but strategically delegates trading authority with respect to specific investment themes to third-party subadvisers pursuant to separate sub-investment management agreements. Subject to the terms of the applicable sub-investment management agreement (including the agreed upon investment parameters) and at the oversight of Prisma, each subadviser exercises discretion with respect to the portion of the Client portfolio allocated to it. Prisma retains discretion in such Apex Funds and Apex Accounts to manage the portion of such Fund's or Account’s portfolio not allocated to Sub- Advisors and to allocate and reallocate such Client's assets among Sub-Advisors. For certain Clients employing the Apex Credit strategy, PAAMCO Prisma, as the sole investment manager of such Apex Funds, determines the Co-Investment transactions in which to invest and the allocation of assets to each Co-Investment in its sole discretion. For Apex Accounts employing the Apex Credit strategy, Prisma may negotiate the level of investment discretion with the investor at the outset of the advisory relationship. For certain Apex Accounts, Prisma may have complete discretionary authority to select the identity and amount of Co-Investment transactions to be bought or sold. For other applicable Apex Accounts, Prisma’s discretion may be limited such that it must be exercised within specific investment parameters and restrictions and, in some circumstances, the investor may have final approval over all or some investment decisions for its Apex Account. please register to get more info

The SEC adopted Rule 206(4)-6 under the Advisers Act, which requires registered investment advisers that exercise voting authority over client securities to implement proxy voting policies. In compliance with such rule, PAAMCO Prisma has adopted proxy voting policies and procedures. In the case of interests held by PAAMCO Prisma Clients in Portfolio Funds, the general policy is to vote proxy proposals, amendments, consents or resolutions (collectively, “proxies”) in a manner that serves the best interests of the PAAMCO Prisma Clients, determined by PAAMCO Prisma in its discretion, taking into account relevant factors, including, but not limited to: (i) the impact on the value of the expected returns from the Portfolio Fund; (ii) the attraction of additional capital to the underlying Portfolio Fund; (iii) the alignment of the Portfolio Manager’s interests with the interests of the underlying investors in the Portfolio Funds, including establishing appropriate incentives for the Portfolio Manager; (iv) the costs associated with the proxy; (v) the impact on redemption or withdrawal rights; (vi) the continued or increased availability of portfolio information; and (vii) business and industry practices.

With the exception of PAAMCO Miren, PAAMCO Prisma has the authority to vote proxies in all PAAMCO Prisma Client Accounts but generally does not vote proxies for Strategic Advisory Clients. In the case of Managed Account Platform Funds, the relevant Subadviser is generally required to vote proxies with regard to the related Managed Account Platform Fund pursuant to the applicable Subadvisory Agreement. PAAMCO Launchpad has the authority to vote proxies in the PAAMCO Launchpad Funds.

Where PAAMCO Prisma or PAAMCO Launchpad has proxy voting authority, PAAMCO Prisma or PAAMCO Launchpad, as applicable, considers each proxy proposal on its own merits, and makes an independent determination whether to support or oppose management’s position. Any actual or apparent conflict of interest between the interests of PAAMCO Prisma and its Clients is sought to be resolved in a manner that is consistent with the best interests of PAAMCO Prisma’s Clients and in a manner not affected by such actual or apparent conflict of interest.

In connection with Apex Funds and Apex Accounts for which Prisma retains proxy voting obligations, PAAMCO Prisma has adopted policies with respect to voting client securities, and Prisma has engaged an independent third-party proxy voting specialist, Institutional Shareholder Services, Inc. (“ISS”), to assist Prisma in certain proxy votes. The services provided by ISS include in-depth research, global issuer analysis, and voting recommendations as well as vote execution, reporting and recordkeeping with respect to both U.S. and non-U.S. securities. Prisma, however, retains ultimate voting discretion with respect to client securities. It is the general policy of Prisma to vote client proxies in the interest of maximizing shareholder value. To that end, Prisma will vote in a way that it believes is consistent with its obligations to the Apex Fund or Account, and will cause the value of the relevant investment to increase the most or decrease the least. Positions traded by Sub-Advisors for the Apex Equity strategy will be voted by the Sub-Advisor or by Prisma as recommended by the Sub-Advisor. Prisma maintains documentation to support its proxy voting position on its proxy matters. Prisma may depart from the ISS guidelines in order to avoid voting decisions believed to be contrary to the best interests of the Apex Funds and Apex Accounts or if it has agreed otherwise with the relevant underlying investors. Any such exceptions will be documented by Prisma and reported to the Chief Compliance Officer. Investors may request a copy of PAAMCO Prisma’s proxy voting policies and the proxy voting record relating to the Client in which the investor is invested by contacting PAAMCO Prisma at the address, telephone number or email on the cover of this Brochure. please register to get more info

PAAMCO Prisma does not require or solicit prepayment of more than $1,200 in fees per Client six months or more in advance. As of the date of this Brochure, PAAMCO Prisma is not aware of any financial condition reasonably likely to impair its ability to meet contractual commitments to PAAMCO Prisma Clients. please register to get more info