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| Fund Description |
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Pharos Small Cap Fund seeks to take advantage of market inefficiencies by investing in illiquid securities of companies that are either
based in, or generating most of their revenue from, Russia and the CIS. The Fund's strategy is to benefit from the inefficiencies of
currently illiquid shares as Russia's economic expansion continues and the market efficiencies broaden. The investment manager is one
of the most experienced Russian investment fund managers, with an 11 year track record through up and down markets. These investments are likely to be volatile and are suitable for investors having a
long-term investment horizon.
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| Monthly performance since inception |
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Jan |
Feb |
Mar |
Apr |
May |
Jun |
Jul |
Aug |
Sep |
Oct |
Nov |
Dec |
YTD |
| 2008 |
-4.5% |
4.1% |
-7.5% |
5.7% |
6.3% |
3.2% |
-15.3% |
-8.8% |
-10.0% |
-27.4% |
-9.8% |
|
-51.8% |
| 2007 |
3.3% |
3.2% |
5.1% |
-0.1% |
-3.8% |
-1.1% |
3.2% |
-4.7% |
2.5% |
1.5% |
-3.0% |
2.0% |
7.8% |
| 2006 |
15.4% |
7.1% |
0.03% |
3.7% |
-9.7% |
-3.7% |
3.8% |
2.7% |
-2.2% |
5.2% |
5.5% |
7.4% |
39.4% |
| 2005 |
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3.7% |
3.7% |
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| Sector Allocations |
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| Structure | Open Ended Investment Fund |
| Domicile | Cayman Islands |
| Inception Date | November 2005 |
| Currency | US Dollar |
| Valuation | Monthly |
| Minimum investment | USD 500,000 |
| Prime Broker | Citigroup Prime Brokerage |
| Investment Advisor | Pharos Financial Advisors Ltd. |
| Fund administration | Custom House (Dublin) |
| Auditor | KPMG |
| Legal | Dechert LLP (New York). Walkers (Cayman Islands) |
| Management fee | 2% per annum |
| Perfomance fee | 20% |
| Subscription | Monthly |
| Redemptions | Monthly upon 30 days notice |
| Bloomberg | PHARSCF KY |
| ISIN Number | KYG 70610103 |
| CUSIP Number | G 706101030 |
| VALOR | 2 332 270 |
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| Subscription Information |
| Custom House Administration and Corporate Services |
25 Eden Quay Dublin 1, Ireland
Tel. +(353) 1 878 0807 Fax +(353) 1 878 0827
Attn: Michael Mockler michael.mockler@customhousegroup.com
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| Market Description |
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The Russian equity market has a total market capitalization of $750bn, of
which 15 stocks comprise 80% of the value. The Fund targets companies
with a free float of less than $500mm. There are 197 such companies which
are quoted and a further 681 which are public but not actively quoted. The
small cap universe thus comprises $160bn of market capitalization with
$43bn of free float. Additionally, the Fund seeks opportunities in other
markets in the region.
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| Outlook |
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The sustained economic growth in the region has resulted in a significant
expansion of market flows with daily trading volumes rising 15-fold from
$200mm several years ago to $3bn today. As smaller companies are
substantial beneficiaries of the new economic prosperity, the Manager
expects the market to broaden with a consequent re-rating for these
companies as liquidity discounts shrink and corporate transparencies
improve.
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| Portfolio Structure |
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The Fund seeks to diversify among 20-30 issuers with average position sizes
of 4%. The sector balance will vary depending upon such factors as
fundamental valuations and liquidity considerations.
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| PETER HALLORAN |
| Co-Portfolio Manager |
Twenty years financial markets experience, Russia resident since 1995. Pioneered Russian capital markets since their inception, including acquisition on 7.5% voucher market, first placement of local debt (GKOs) to westerners, 3bn privatization bids, 1st IPO in Russia and overall bringing $7.5bn of capital to the market. Founder of Pharos 1997. Ran CSFB brokerage with #1 market share in Moscow 1995-1997 including trading, research, sales and $300mm prop book. Adviser to Soros Fund Mgmt 1999-2000. Ran top-rated local investment bank Aton Capital 2000-2002. Earlier in New York with Morgan Grenfell and Salomon Brothers. B.A. '84 Yale University.
| | KEVIN DOUGHERTY |
| Co-Portfolio Manager |
Eleven years financial markets experience, Russia resident since 1997. Previously Director of International Sales for Deutsche Bank / UFG and Head of International Sales at Uralsib Investment Bank. Helped to create a sales desk at Aton Capital, top-rated local investment bank. Worked on IPO's for many Russian companies in the Consumer Goods and Telecoms, Media and Technology sectors. Earlier in New York with Chase Manhattan Corporation. B.A. '93 UCLA.
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For additional marketing information please contact us at (7 495) 221-4991 or e-mail info@pharosfund.com
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Disclamer: This document is for information purposes only and not constitute an offer or solicitation
to buy or sell any investments or to make any investment decition. Please refer to the confidential
privare placement memorandum for more information.
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