The following general principles are common to our investment approach:

• Focus on fundamental value: In general, we target investments in companies that have a strong core business with proven operating experience. Key characteristics may include: established franchise and market share, recurring revenues, solid margins, low-cost production advantage, high-growth opportunity or superior synergies with existing portfolio investments.
   
• Focus on company management: This focus, while basic and familiar, remains critically important in all privately negotiated investments.  We seek management teams with a proven track record of operating in their market and will work to ensure that management’s interests are aligned with those of the Fund and oriented towards value creation. 
   
• Avoid start-up risk, technology risk, hostile situations: In general, we seek to avoid risks associated with “start-up” businesses, new technologies, or hostile takeovers. While these risks are usually manageable, we believe that we can secure superior returns by targeting neglected Micro Cap companies without assuming such risks, in part due to the significant shortage of long-term capital in these markets. 
   
• Size and Stake: Typical transaction size will range from approximately $2 to $10 million for growth oriented investments and $5 to $15 million for restructurings and control situations.  While we expect to play a meaningful role in all investments, control investments generally require a greater level of involvement, board representation and other corporate governance rights. 
   
• Sectors: While we have the flexibility to invest in all sectors, our primary focus is on the industry sectors in which we have direct operating or financial experience. These include:

- Information Technology
- Telecommunications
- Healthcare (excluding Biotechnology)