Common use of SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER Clause in Contracts

SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER. The Purchase Price for Shares acquired pursuant to the Offer will not exceed $2,000,000. However, the actual Purchase Price per Share cannot be determined at this time because the price will be based on the NAV per Share on the Valuation Date, and the number of Shares to be purchased will depend on the amount of Shares tendered. If the NAV per Share on the Valuation Date were the same as the NAV per Share on April 30, 2006, and if Shareholders tender $2,000,000 of the Fund's outstanding Shares pursuant to the Offer, the Fund would purchase approximately 18,941 Shares for a Purchase Price of $2,000,000. See the Pro Forma Capitalization table below. The Fund expects that the monies to be used by the Fund to purchase Shares pursuant to the Offer will be obtained first from cash on hand and then from (a) the sale of portfolio securities and/or (b) borrowing, each in the amount or amounts determined by the Adviser, in its reasonable discretion, subject to restrictions or limitations contained in the Declaration of Trust, the Fund's private placement memorandum or material agreements, each as amended from time to time, or applicable laws, rules and regulations, including the rules and regulations promulgated under the 1940 Act. At this time, the Fund has not entered into any financing arrangement to enable any such borrowings. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS. Effect On NAV And Consideration Received By Tendering Shareholders The Fund invests its assets in investment funds ("Portfolio Funds") that are managed by various investment managers. If the Fund were required to sell a substantial amount of its investments in Portfolio Funds to raise cash to finance the Offer, the market prices of the Portfolio Funds being sold and/or the Fund's remaining Portfolio Funds may decline and, hence, the Fund's NAV may decline. If any such decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. If the value of the Portfolio Funds were to decline for any reason before the termination of the Offer, the NAV of the Shares would decline. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the Valuation Date, if such a decline continued up to the Valuation Date, the consideration received by tendering Shareholders would be reduced. In addition, the sale of the Fund's investments in Portfolio Funds could cause the Fund to incur increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of Portfolio Funds less than the then-current valuation by the Fund. Accordingly, obtaining the cash to consummate the Offer may result in a decrease in the Fund's NAV per Share, which would affect both tendering and non-tendering Shareholders. The Fund may sell Portfolio Funds during the pendency of the Offer, and possibly for a short time thereafter, to raise cash for the purchase of Shares. Thus, during the pendency of the Offer, and possibly for a short time thereafter, the Fund will likely hold a greater than normal percentage of its net assets in cash and cash equivalents. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. Recognition Of Capital Gains By The Fund As noted, the Fund may be required to sell its investments in Portfolio Funds to finance the Offer. If the Fund's tax basis for the securities sold is less than the sale proceeds, the Fund will recognize capital gains. The Fund would expect to declare and distribute any such gains to Shareholders of record (reduced by net capital losses realized during the fiscal year, if any). This recognition and distribution of gains, if any, would have certain negative consequences: first, Shareholders at the time of a declaration of distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities thereby possibly being forced to realize and recognize additional capital gains. It is impossible to predict what the amount of unrealized gains or losses would be in the Fund's portfolio at the time that the Fund is required to liquidate Portfolio Funds (and hence the amount of capital gains or losses that would be realized and recognized). In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the Shareholders at ordinary income rates. This could adversely affect the Fund's after-tax performance. Tax Consequences Of Repurchases To Shareholders The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering Shareholders and may have tax consequences for non-tendering Shareholders. See Section 8 of this Offer to Purchase.

SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER. The Purchase Price for Shares acquired pursuant to the Offer will not exceed $2,000,0001,000,000. However, the actual Purchase Price per Share cannot be determined at this time because the price will be based on the NAV per Share on the Valuation Date, and the number of Shares to be purchased will depend on the amount of Shares tendered. If the NAV per Share on the Valuation Date were the same as the NAV per Share on April 30January 31, 20062005, and if Shareholders tender $2,000,000 1,000,000 of the Fund's outstanding Shares pursuant to the Offer, the Fund would purchase approximately 18,941 9,703 Shares for a Purchase Price of $2,000,0001,000,000. See the Pro Forma Capitalization table below. The Fund expects that the monies to be used by the Fund to purchase Shares pursuant to the Offer will be obtained first from cash on hand and then from (a) the sale of portfolio securities and/or (b) borrowing, each in the amount or amounts determined by the Adviser, in its reasonable discretion, subject to restrictions or limitations contained in the Declaration of Trust, the Fund's private placement memorandum or material agreements, each as amended from time to time, or applicable laws, rules and regulations, including the rules and regulations promulgated under the 1940 Act. At this time, the Fund has not entered into any financing arrangement to enable any such borrowings. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS. Effect On NAV And Consideration Received By Tendering Shareholders The Fund invests its assets in investment funds ("Portfolio Funds") that are managed by various investment managers. If the Fund were required to sell a substantial amount of its investments in Portfolio Funds to raise cash to finance the Offer, the market prices of the Portfolio Funds being sold and/or the Fund's remaining Portfolio Funds may decline and, hence, the Fund's NAV may decline. If any such decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. If the value of the Portfolio Funds were to decline for any reason before the termination of the Offer, the NAV of the Shares would decline. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the Valuation Date, if such a decline continued up to the Valuation Date, the consideration received by tendering Shareholders would be reduced. In addition, the sale of the Fund's investments in Portfolio Funds could cause the Fund to incur increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of Portfolio Funds less than the then-current valuation by the Fund. Accordingly, obtaining the cash to consummate the Offer may result in a decrease in the Fund's NAV per Share, which would affect both tendering and non-tendering Shareholders. The Fund may sell Portfolio Funds during the pendency of the Offer, and possibly for a short time thereafter, to raise cash for the purchase of Shares. Thus, during the pendency of the Offer, and possibly for a short time thereafter, the Fund will likely hold a greater than normal percentage of its net assets in cash and cash equivalents. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. Recognition Of Capital Gains By The Fund As noted, the Fund may be required to sell its investments in Portfolio Funds to finance the Offer. If the Fund's tax basis for the securities sold is less than the sale proceeds, the Fund will recognize capital gains. The Fund would expect to declare and distribute any such gains to Shareholders of record (reduced by net capital losses realized during the fiscal year, if any). This recognition and distribution of gains, if any, would have certain negative consequences: first, Shareholders at the time of a declaration of distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities thereby possibly being forced to realize and recognize additional capital gains. It is impossible to predict what the amount of unrealized gains or losses would be in the Fund's portfolio at the time that the Fund is required to liquidate Portfolio Funds (and hence the amount of capital gains or losses that would be realized and recognized). In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the Shareholders at ordinary income rates. This could adversely affect the Fund's after-tax performance. Tax Consequences Of Repurchases To Shareholders The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering Shareholders and may have tax consequences for non-tendering Shareholders. See Section 8 of this Offer to Purchase.

SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER. The Purchase Price purchase price for Shares Interests acquired pursuant to the Offer will not exceed $2,000,000the NAV of 5% of the Fund's total outstanding Interests as of the Valuation Date. However, the actual Purchase Price per Share cost of the Offer to the Fund cannot be determined at this time because the price will be based on the NAV per Share on the Valuation Date, and the number amount of Shares Interests to be purchased will depend on the amount tendered and the price will be based on the NAV of Shares tenderedthe Interests on the Valuation Date. If the NAV per Share of all of the Members' outstanding Interests on the Valuation Date were the same as the NAV per Share of all the Members' outstanding Interests on April 30June 25, 20062002, and if Shareholders Members tender $2,000,000 5% of the Fund's outstanding Shares Interests pursuant to the Offer, the estimated payments by the Fund to the Members would purchase be approximately 18,941 Shares for a Purchase Price of $2,000,000. See the Pro Forma Capitalization table below750,000, not counting any offsetting allocations. The Fund expects that the monies to be used by the Fund to purchase Shares Interests pursuant to the Offer will be obtained first from cash on hand and then from (a) the sale of portfolio securities and/or (b) borrowing, each in the amount or amounts determined by the AdviserFund's Investment Advisers, in its their reasonable discretion, subject to restrictions or limitations contained in the Declaration Fund's LLC Agreement, any of Trust, the Fund's private placement memorandum material agreements or material agreements, each as amended from time to time, or applicable laws, rules and regulations, including the rules and regulations promulgated under the 1940 ActInvestment Company Act of 1940, as amended. At this timeNeither the Fund, the Board of Directors, nor the Investment Advisers have determined at this time to borrow funds to purchase Interests tendered in connection with the Offer. However, depending on the dollar amount of Interests tendered and prevailing general economic and market conditions, the Fund, in its sole discretion, may decide to fund any portion of the purchase price, subject to compliance with applicable law, through borrowings. If the Fund has not entered into funds any financing arrangement portion of the purchase price to enable that manner, it will deposit assets in a special custody account with its custodian, PFPC Trust Company, to serve as collateral for any amounts so borrowed, and if the Fund were to fail to repay any such borrowingsamounts, the lender would be entitled to satisfy the Fund's obligations from the collateral deposited in the special custody account. The Fund expects that the repayment of any amounts borrowed will be financed from additional funds contributed to the Fund by existing and/or new Members, withdrawal of capital from the investment funds in which it has invested or from the proceeds of the sale of securities and portfolio assets held by the Fund. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS. Effect On NAV And Consideration Received By Tendering Shareholders The Fund invests its assets in investment funds ("Portfolio Funds") that are managed by various investment managers. If the Fund were required to sell a substantial amount of its investments in Portfolio Funds to raise cash to finance the Offer, the market prices of the Portfolio Funds being sold and/or the Fund's remaining Portfolio Funds may decline and, hence, the Fund's NAV may decline. If any such decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. If the value of the Portfolio Funds were to decline for any reason before the termination of the Offer, the NAV of the Shares would decline. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the Valuation Date, if such a decline continued up to the Valuation Date, the consideration received by tendering Shareholders would be reduced. In addition, the sale of the Fund's investments in Portfolio Funds could cause the Fund to incur increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of Portfolio Funds less than the then-current valuation by the Fund. Accordingly, obtaining the cash to consummate the Offer may result in a decrease in the Fund's NAV per Share, which would affect both tendering and non-tendering Shareholders. The Fund may sell Portfolio Funds during the pendency of the Offer, and possibly for a short time thereafter, to raise cash for the purchase of Shares. Thus, during the pendency of the Offer, and possibly for a short time thereafter, the Fund will likely hold a greater than normal percentage of its net assets in cash and cash equivalents. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. Recognition Of Capital Gains By The Fund As noted, the Fund may be required to sell its investments in Portfolio Funds to finance the Offer. If the Fund's tax basis for the securities sold is less than the sale proceeds, the Fund will recognize capital gains. The Fund would expect to declare and distribute any such gains to Shareholders of record (reduced by net capital losses realized during the fiscal year, if any). This recognition and distribution of gains, if any, would have certain negative consequences: first, Shareholders at the time of a declaration of distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities thereby possibly being forced to realize and recognize additional capital gains. It is impossible to predict what the amount of unrealized gains or losses would be in the Fund's portfolio at the time that the Fund is required to liquidate Portfolio Funds (and hence the amount of capital gains or losses that would be realized and recognized). In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the Shareholders at ordinary income rates. This could adversely affect the Fund's after-tax performance. Tax Consequences Of Repurchases To Shareholders The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering Shareholders and may have tax consequences for non-tendering Shareholders. See Section 8 of this Offer to PurchaseMEMBERS.

SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER. The Purchase Price for Shares acquired pursuant to the Offer will not exceed $2,000,000. However, the actual Purchase Price per Share cannot be determined at this time because the price will be based on the NAV per Share on the Valuation Date, and the number of Shares to be purchased will depend on the amount of Shares tendered. If the NAV per Share on the Valuation Date were the same as the NAV per Share on April 30July 31, 2006, and if Shareholders tender $2,000,000 of the Fund's outstanding Shares pursuant to the Offer, the Fund would purchase approximately 18,941 18,650 Shares for a Purchase Price of $2,000,000. See the Pro Forma Capitalization table below. The Fund expects that the monies to be used by the Fund to purchase Shares pursuant to the Offer will be obtained first from cash on hand and then from (a) the sale of portfolio securities and/or (b) borrowing, each in the amount or amounts determined by the Adviser, in its reasonable discretion, subject to restrictions or limitations contained in the Declaration of Trust, the Fund's private placement memorandum or material agreements, each as amended from time to time, or applicable laws, rules and regulations, including the rules and regulations promulgated under the 1940 Act. At this time, the Fund has not entered into any financing arrangement to enable any such borrowings. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS. Effect On NAV And Consideration Received By Tendering Shareholders The Fund invests its assets in investment funds ("Portfolio Funds") that are managed by various investment managers. If the Fund were required to sell a substantial amount of its investments in Portfolio Funds to raise cash to finance the Offer, the market prices of the Portfolio Funds being sold and/or the Fund's remaining Portfolio Funds may decline and, hence, the Fund's NAV may decline. If any such decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. If the value of the Portfolio Funds were to decline for any reason before the termination of the Offer, the NAV of the Shares would decline. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the Valuation Date, if such a decline continued up to the Valuation Date, the consideration received by tendering Shareholders would be reduced. In addition, the sale of the Fund's investments in Portfolio Funds could cause the Fund to incur increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of Portfolio Funds less than the then-current valuation by the Fund. Accordingly, obtaining the cash to consummate the Offer may result in a decrease in the Fund's NAV per Share, which would affect both tendering and non-tendering Shareholders. The Fund may sell Portfolio Funds during the pendency of the Offer, and possibly for a short time thereafter, to raise cash for the purchase of Shares. Thus, during the pendency of the Offer, and possibly for a short time thereafter, the Fund will likely hold a greater than normal percentage of its net assets in cash and cash equivalents. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. Recognition Of Capital Gains By The Fund As noted, the Fund may be required to sell its investments in Portfolio Funds to finance the Offer. If the Fund's tax basis for the securities sold is less than the sale proceeds, the Fund will recognize capital gains. The Fund would expect to declare and distribute any such gains to Shareholders of record (reduced by net capital losses realized during the fiscal year, if any). This recognition and distribution of gains, if any, would have certain negative consequences: first, Shareholders at the time of a declaration of distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities thereby possibly being forced to realize and recognize additional capital gains. It is impossible to predict what the amount of unrealized gains or losses would be in the Fund's portfolio at the time that the Fund is required to liquidate Portfolio Funds (and hence the amount of capital gains or losses that would be realized and recognized). In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the Shareholders at ordinary income rates. This could adversely affect the Fund's after-tax performance. Tax Consequences Of Repurchases To Shareholders The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering Shareholders and may have tax consequences for non-tendering Shareholders. See Section 8 of this Offer to Purchase.

SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER. The Purchase Price for Shares acquired pursuant to the Offer will not exceed $2,000,0001,000,000. However, the actual Purchase Price per Share cannot be determined at this time because the price will be based on the NAV per Share on the Valuation Date, and the number of Shares to be purchased will depend on the amount of Shares tendered. If the NAV per Share on the Valuation Date were the same as the NAV per Share on April 30July 31, 20062005, and if Shareholders tender $2,000,000 1,000,000 of the Fund's outstanding Shares pursuant to the Offer, the Fund would purchase approximately 18,941 9,926 Shares for a Purchase Price of $2,000,0001,000,000. See the Pro Forma Capitalization table below. The Fund expects that the monies to be used by the Fund to purchase Shares pursuant to the Offer will be obtained first from cash on hand and then from (a) the sale of portfolio securities and/or (b) borrowing, each in the amount or amounts determined by the Adviser, in its reasonable discretion, subject to restrictions or limitations contained in the Declaration of Trust, the Fund's private placement memorandum or material agreements, each as amended from time to time, or applicable laws, rules and regulations, including the rules and regulations promulgated under the 1940 Act. At this time, the Fund has not entered into any financing arrangement to enable any such borrowings. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS. Effect On EFFECT ON NAV And Consideration Received By Tendering Shareholders AND CONSIDERATION RECEIVED BY TENDERING SHAREHOLDERS The Fund invests its assets in investment funds ("Portfolio FundsPORTFOLIO FUNDS") that are managed by various investment managers. If the Fund were required to sell a substantial amount of its investments in Portfolio Funds to raise cash to finance the Offer, the market prices of the Portfolio Funds being sold and/or the Fund's remaining Portfolio Funds may decline and, hence, the Fund's NAV may decline. If any such decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. If the value of the Portfolio Funds were to decline for any reason before the termination of the Offer, the NAV of the Shares would decline. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the Valuation Date, if such a decline continued up to the Valuation Date, the consideration received by tendering Shareholders would be reduced. In addition, the sale of the Fund's investments in Portfolio Funds could cause the Fund to incur increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of Portfolio Funds less than the then-current valuation by the Fund. Accordingly, obtaining the cash to consummate the Offer may result in a decrease in the Fund's NAV per Share, which would affect both tendering and non-tendering Shareholders. The Fund may sell Portfolio Funds during the pendency of the Offer, and possibly for a short time thereafter, to raise cash for the purchase of Shares. Thus, during the pendency of the Offer, and possibly for a short time thereafter, the Fund will likely hold a greater than normal percentage of its net assets in cash and cash equivalents. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. Recognition Of Capital Gains By The Fund RECOGNITION OF CAPITAL GAINS BY THE FUND As noted, the Fund may be required to sell its investments in Portfolio Funds to finance the Offer. If the Fund's tax basis for the securities sold is less than the sale proceeds, the Fund will recognize capital gains. The Fund would expect to declare and distribute any such gains to Shareholders of record (reduced by net capital losses realized during the fiscal year, if any). This recognition and distribution of gains, if any, would have certain negative consequences: first, Shareholders at the time of a declaration of distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities thereby possibly being forced to realize and recognize additional capital gains. It is impossible to predict what the amount of unrealized gains or losses would be in the Fund's portfolio at the time that the Fund is required to liquidate Portfolio Funds (and hence the amount of capital gains or losses that would be realized and recognized). In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the Shareholders at ordinary income rates. This could adversely affect the Fund's after-tax performance. Tax Consequences Of Repurchases To Shareholders The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering Shareholders and may have tax consequences for non-tendering Shareholders. See Section 8 of this Offer to Purchase.

SOURCE AND AMOUNT OF FUNDS; EFFECT OF THE OFFER. The Purchase Price for Shares acquired pursuant to the Offer will not exceed $2,000,0001,000,000. However, the actual Purchase Price per Share cannot be determined at this time because the price will be based on the NAV per Share on the Valuation Date, and the number of Shares to be purchased will depend on the amount of Shares tendered. If the NAV per Share on the Valuation Date were the same as the NAV per Share on April 30October 31, 20062005, and if Shareholders tender $2,000,000 1,000,000 of the Fund's outstanding Shares pursuant to the Offer, the Fund would purchase approximately 18,941 9,824 Shares for a Purchase Price of $2,000,0001,000,000. See the Pro Forma Capitalization table below. The Fund expects that the monies to be used by the Fund to purchase Shares pursuant to the Offer will be obtained first from cash on hand and then from (a) the sale of portfolio securities and/or (b) borrowing, each in the amount or amounts determined by the Adviser, in its reasonable discretion, subject to restrictions or limitations contained in the Declaration of Trust, the Fund's private placement memorandum or material agreements, each as amended from time to time, or applicable laws, rules and regulations, including the rules and regulations promulgated under the 1940 Act. At this time, the Fund has not entered into any financing arrangement to enable any such borrowings. THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND NON-TENDERING SHAREHOLDERS. Effect On EFFECT ON NAV And Consideration Received By Tendering Shareholders AND CONSIDERATION RECEIVED BY TENDERING SHAREHOLDERS The Fund invests its assets in investment funds ("Portfolio FundsPORTFOLIO FUNDS") that are managed by various investment managers. If the Fund were required to sell a substantial amount of its investments in Portfolio Funds to raise cash to finance the Offer, the market prices of the Portfolio Funds being sold and/or the Fund's remaining Portfolio Funds may decline and, hence, the Fund's NAV may decline. If any such decline occurs, the Fund cannot predict what its magnitude might be or whether such a decline would be temporary or continue to or beyond the Expiration Date. If the value of the Portfolio Funds were to decline for any reason before the termination of the Offer, the NAV of the Shares would decline. Because the price per Share to be paid in the Offer will be dependent upon the NAV per Share as determined on the Valuation Date, if such a decline continued up to the Valuation Date, the consideration received by tendering Shareholders would be reduced. In addition, the sale of the Fund's investments in Portfolio Funds could cause the Fund to incur increased brokerage and related transaction expenses, and the Fund may receive proceeds from the sale of Portfolio Funds less than the then-current valuation by the Fund. Accordingly, obtaining the cash to consummate the Offer may result in a decrease in the Fund's NAV per Share, which would affect both tendering and non-tendering Shareholders. The Fund may sell Portfolio Funds during the pendency of the Offer, and possibly for a short time thereafter, to raise cash for the purchase of Shares. Thus, during the pendency of the Offer, and possibly for a short time thereafter, the Fund will likely hold a greater than normal percentage of its net assets in cash and cash equivalents. Because the Fund will not know the number of Shares tendered until the Expiration Date, the Fund will not know until the Expiration Date the amount of cash required to pay for such Shares. Recognition Of Capital Gains By The Fund RECOGNITION OF CAPITAL GAINS BY THE FUND As noted, the Fund may be required to sell its investments in Portfolio Funds to finance the Offer. If the Fund's tax basis for the securities sold is less than the sale proceeds, the Fund will recognize capital gains. The Fund would expect to declare and distribute any such gains to Shareholders of record (reduced by net capital losses realized during the fiscal year, if any). This recognition and distribution of gains, if any, would have certain negative consequences: first, Shareholders at the time of a declaration of distributions would be required to pay taxes on a greater amount of capital gain distributions than otherwise would be the case; second, to raise cash to make the distributions, the Fund might need to sell additional portfolio securities thereby possibly being forced to realize and recognize additional capital gains. It is impossible to predict what the amount of unrealized gains or losses would be in the Fund's portfolio at the time that the Fund is required to liquidate Portfolio Funds (and hence the amount of capital gains or losses that would be realized and recognized). In addition, some of the distributed gains may be realized on securities held for one year or less, which would generate income taxable to the Shareholders at ordinary income rates. This could adversely affect the Fund's after-tax performance. Tax Consequences Of Repurchases To Shareholders The Fund's purchase of tendered Shares pursuant to the Offer will have tax consequences for tendering Shareholders and may have tax consequences for non-tendering Shareholders. See Section 8 of this Offer to Purchase.