There are no short-cuts in developing effective long-term wealth accumulation strategies. Although investors may occasionally time the market successfully, no one has ever been able to consistently predict market movements. Prospero Capital carefully avoids the "flavor of the day" syndrome by subjecting each of our investments to a rigorous series of valuation tests, requiring each to satisfy our stringent standards of evaluation before we make an investment decision. Prospero's investment objective is to provide our investors with high net compound annual internal rates of returns, primarily in the form of long-term capital gains, over an extended number of years. Prospero's long-only fund, Antenor Fund, seeks to double its capital every five years through capital appreciation; our long/short fund, Beaumont Fund, seeks to double its capital every six years through capital appreciation at moderate risk; and our market neutral fund, Curan Fund, seeks to deliver annual returns of 10% per annum with a focus towards capital preservation. Prospero Capital also strives to minimize taxes by investing in companies with the potential for long-term growth and holding our positions for several years. Prospero adds value at each step of the investment process, including the sourcing of investment opportunities, the analysis of potential investments, the monitoring of investee companies, and the decision to exit an investment. Having the clear investment criteria below enables Prospero's investment team to quickly rule out companies that do not fit our model and instead concentrate on the most compelling opportunities. Long Investments: Prospero follows a highly differentiated investment strategy focused on investing in growing companies with (i) strong customer loyalty, (ii) recurring revenue business models, (iii) sustainable competitive advantages, (iv) potentially high cash returns on invested capital, and (v) excellent management teams. We believe that most companies do not meet these demanding criteria, but that the few companies that do have the potential for superior growth and superior value creation for shareholders over many years. Prospero invests in such companies, but only when we believe that the shares are trading at a discount to intrinsic value and that this intrinsic value is likely to increase significantly over the next five years. Prospero believes that our strategy of investing in superior companies when they are trading at discounts to intrinsic value provide our investors with significant downside protection. Short Investments: Two of Prospero's Funds, Beaumont Fund and Curan Fund involve selling individual securities short. The value of these short positions increases as the underlying stock price declines. Prospero strives to find companies that lack the five characteristics above and which are trading at prices above intrinsic value. We believe that our strategy of short selling companies when they are trading at premiums to intrinsic value provide these products with additional downside protection versus a long-only strategy. Just as important as making the decision to enter an investment is the strategy for exiting that position. Factors that lead our investment team to sell an existing investment include: (i) the market value of a security approaching or exceeding its intrinsic value, particularly when we believe the intrinsic value is growing at less than 20% per year; (ii) a change in management; (iii) a change in business strategy that causes us to lose confidence in a company and its management; (iv) concerns that the company's competitive advantages are likely to erode in the future; (v) the sale of the company; and (vi) a more compelling investment opportunity in another company. Prospero expects to hold most of its investments for three or more years.