1. Idea Generation and Initial Vetting
   • Fundamental and non-fundamental screens
   • Value chain analysis
   • Industry “heat map” analysis
   • Incidental discovery through related research
2. Manager Discretion
   • Lead Manager exercises discretion to place selected issuers into research queue
   • Lead Manager typically makes basic assessment of valuation, fitness for strategy, governance issues, and diversification benefit
3. Fundamental Research
   • Review of primary documents (i.e. annual reports, corporate materials)
   • Industry surveys
   • Initial financial modeling, including governance risks and benefits
4. Form Understanding
   • Typically includes some or all of the following:
     • Key drivers of business success
     • Key drivers of cash flow
     • Control party
     • Sources of corporate value
     • Governance risks and benefits
5. Test Assumptions
   • Gather factual evidence and observations to test assumptions critical to understanding
   • Typically involves onsite visit
6. Valuation and Research Refinement
   • Final modeling
   • Conclusion of research materials
7. Group Presentation
   • Group session to review research and conclusions
   • Team incentivized to offer constructive criticism, not support
8. Manager Decision
   • Lead Manager has final authority over strategy
9. Monitor Holding
   • Further onsite visits and / or management interaction
   • Review of material news and regular financial disclosures
10. Search for Superior Replacement
    • Exit triggered by:
      • Unanticipated and material deterioration in fundamental prospects for business
      • Excessive valuation
    • Search for superior replacement defined by:
      • Cheaper valuation and / or better prospective returns
      • Higher quality business (i.e. less cyclical, better margins, or more secure competitive advantage)
      • Higher growth prospect

Seafarer employs a bottom-up, fundamental investment approach.

Seafarer may utilize emerging markets growth, value, or growth and income strategies on behalf of its clients. Seafarer is a “long only” investor, meaning that it does not short-sell securities.

Seafarer finds ideas for its portfolios from a variety of methods, including but not limited to:

• Company meetings and interviews
• First-hand observations in overseas markets, combined with understanding of various regional, country and sector trends
• External and internal research
• Financial screening and analysis

Seafarer prioritizes its research activities based on its findings regarding its clients’ benchmark indices. If Seafarer perceives that a given client’s index suffers from certain shortcomings, biases or flaws (e.g., it under-represents a given sector or country), Seafarer will attempt to exploit such flaws by prioritizing its research accordingly.

Apart from its research on its benchmark indices, Seafarer’s research process is “bottom-up” in its orientation. This means that Seafarer assesses the specific merits of individual securities and the companies that issued them. Seafarer believes that the best way to capitalize on security mispricings and market inefficiencies is to focus on the business fundamentals of individual companies – their growth, their financial health, and their long-term prospects. Macro opportunities and risks are considered via their potential impact on a given company’s business model and financial performance.

As Seafarer researches companies, it conducts onsite visits to investigate most companies’ prospects firsthand. Doing so allows Seafarer to challenge its own assumptions and to build a deeper understanding of each company’s economic model and corresponding value.

When researching a security with the intent to add it to a client’s portfolio, Seafarer’s objective is to hold it over an extended period of time. In doing so, Seafarer’s intent is for the client to capture returns arising from both improved valuations and the intrinsic growth of the underlying business.

As Seafarer’s investment team researches companies, the team concentrates on five questions:

1. What are the key drivers of business success?
2. What are the key drivers of cash flow?
3. What is the control structure of the company?
4. What are the sources of corporate value?
5. What are the governance (e.g. corporate governance, environmental stewardship, and social impact) risks and benefits?

These questions help Seafarer assess the potential value of a given issuer’s business, the likelihood that the potential value could be realized in a manner beneficial to minority investors, and that the various risks associated with the issuer’s securities (e.g., liquidity, financial, governance) may be reasonable in light of the potential returns available from those securities.

Based on its research findings, Seafarer attempts to construct diversified portfolios for its clients, with the intent to balance exposures to multiple sources of risk (e.g., geography, sector, currency, liquidity, company size). Seafarer attempts to avoid excess turnover so as to reduce associated costs.

Seafarer aims to build diversified and low-turnover portfolios that closely resemble the market portfolio – in other words, Seafarer intends for its portfolios to represent the underlying economic activity in select developing markets, and avoid the biases and shortcomings that Seafarer believes are inherent in standard benchmarks in the developing world. Emerging market index providers place a high premium on facilitating scalable investment within their benchmarks; in doing so, they often sacrifice fidelity to economic reality.

Under normal market conditions, Seafarer manages clients’ portfolios toward full investment. Seafarer’s aim is to invest across cycles, so as to capture the long-term benefits of perceived market inefficiencies. In practical terms, Seafarer believes that such cycles last between three and ten years. Seafarer encourages clients to invest over long-term horizons so as to match the duration of Seafarer’s investment process.