Privileged Investors - BNP Paribas Investment Partners

Privileged Investors 

SICAV 

Audited Annual Report at 31/12/08


Table of Contents 

Page 

Management and Administration 3 

General Information 4 

Investment Manager’s Report 5 

Independent Auditor’s Report 8 

Consolidated 10 

Privileged Investors - Cadogan Market Neutral Fund USD 12 

Privileged Investors - Cadogan Market Neutral Fund EUR 19 

Privileged Investors - Cadogan Market Diversified Fund USD 39 

Privileged Investors - Cadogan Market Diversified Fund EUR 43 

Notes to the financial statements 47 

Supplementary Information (unaudited) 54 

No subscription can be received on the basis of financial reports. Subscriptions are only valid if made on the 

basis of the current prospectus accompanied by the latest annual and the most recent semi-annual report if 

published thereafter. 

Page 2


Management and Administration 

Registered office: 

50, avenue J.F. Kennedy, L-2951 Luxembourg, Grand Duchy of Luxembourg 

Board of Directors: 

Chairman 

Members 

Mr. James Wilmot-Smith, Managing Director, Cadogan Management (UK) Ltd 

(resigned at 15 December 2008) 

Mr. Jean-François Fortemps, Chief Executive Officer at Fortis Investment Management 

Luxembourg (from 06 February 2009) 

Mr. Arickx Marnix, Director, Head Product Management Group, Fortis Investment 

Management Belgium (from 06 February 2009) 

Mr. Jean Pfeiffenschneider, Director Private Banking at Fortis Banque Luxembourg 

(until 18 July 2008) 

Mrs. Claire Collet-Lambert, Head of Legal Fund Structuring at Fortis Investment 

Management Luxembourg 

Mrs. Sylvia Van de Kamp-Vergeer, Managing Director Investments, Fortis Bank 

Netherlands 

Mr. Philippe Dardart, Director of Investments at Fortis Banque Luxembourg 

(from 26 November 2008) 

Investment manager: 

Cadogan Management, LLC, 149 Fifth Avenue, 15th Floor, New York, New York 10010, 

United States of America 

Custodian bank and paying agent: 

BGL S.A. (named Fortis Banque Luxembourg S.A.), 50, avenue J.F. Kennedy, L-2951 Luxembourg, 

Grand Duchy of Luxembourg 

Central Administration, Transfer Agent and Registrar: 

BGL S.A. (named Fortis Banque Luxembourg S.A.), 50, avenue J.F. Kennedy, L-2951 Luxembourg, 


Distributor 

BGL S.A. (named Fortis Banque Luxembourg S.A.), 14 rue Aldringen, L-1118 Luxembourg, Grand Duchy of Luxembourg 

Independent Auditor: 

PricewaterhouseCoopers S.à r.l., Réviseur d’entreprises, 400, route d’Esch, BP 1443, L-1014 Luxembourg, 


Legal adviser in Luxembourg: 

Elvinger Hoss & Prussen, 2, Place Winston Churchill, L-2014 Luxembourg, Grand Duchy of Luxembourg 

Legal adviser in the Netherlands: 

De Brauw Blackstone Westbroek, Burgerweeshuispad 301, 1070 AB Amsterdam, The Netherlands 

Page 3


General Information 

Privileged Investors (the “Fund”) was incorporated under Part II of the Luxembourg law of March 30, 1988 regarding undertakings 

for collective investment as an open-ended investment company (société d’investissement à capital variable – SICAV) on 

October 26, 2001. On incorporation all of the shares representing the initial capital were subscribed for and were fully paid. The 

Articles were published in the Mémorial C, Recueil des Sociétés et Associations (the “Mémorial”) on November 22, 2001. The 

Articles are on file with the Luxembourg Commercial and Companies Register. As from February 13, 2004, the Fund is subject to 

Part II of the Luxembourg law of December 20, 2002 regarding undertakings for collective investment. The Articles were amended 

for the last time on July 3, 2006 and such amendment was published in the Mémorial on September 6, 2006. 

The Fund received a license in the Netherlands pursuant to the Act on the Supervision of Investment Institutions ("Wet toezicht 

beleggingsinstellingen", or "WTB"). This license has been converted into a registration under article 17c of the amended WTB. The 

Dutch Financial Market Supervision Act (Wet financieel toezicht) came into force on January 1, 2007 (the “FMSA”). The principle 

of the FMSA is transparency and accessibility with respect to legislation applicable to investment instructions. In the FMSA the 

WTB and the Decree on the Supervision of Investment Institutions ("Besluit toezicht beleggingsinstellingen", or "BTB") have been 

incorporated. With the entering into force of the FMSA the former laws expired. The registration of the Fund has been converted on 

January 1, 2007 into a notification under article 2:73 of the FMSA. 

Privileged Investors is a fund of funds organised as an umbrella “SICAV”. 

As at December 31, 2008, the following sub-funds and classes are available for sale: 

Cadogan Market Neutral Fund USD 

A a 

A d 

: accumulating retail class shares of no par value 

: distributing retail class shares of no par value 

Cadogan Market Neutral Fund EUR 

A a 

A d 

I a 

I d 



: accumulating institutional class shares of no par value 

: distributing institutional class shares of no par value 

Cadogan Market Diversified Fund USD 

A a 

A d 



Cadogan Market Diversified Fund EUR 

A a 

A d 

I a 

I d 





The financial year of the SICAV ends on December 31 in each year. 

Information of present interest about the Fund and the prospectus, the financial leaflet, the articles and the annual and semi-annual 

reports, may be obtained free of charge from the registered office of the SICAV in Luxembourg. This information as well as all other 

relevant information is also available on the website www.fortisinvestments.com. 

The annual report 2008, consisting of the annual report and the addendum for Dutch Shareholders, comprises the information that is 

required for investment institution with a notification under article 2:73 of the Dutch Financial Market Supervision Act. 

Page 4


Investment Manager’s Report 

Market Review 

Although only six months ago, the first half of 2008 seems like a lifetime ago. With so many major events occurring 

during the last six months of 2008, perspectives and perceptions over the last year have changed massively. The first six 

months saw many interesting developments that were leading indicators on what was to come. We saw continued 

volatility in equity and credit indices around the world, from spikes first witnessed in the second half of 2007. The 

Federal Reserve Open Market Committee started the year by cutting U.S. interest rates aggressively in an attempt to 

pump liquidity back into the system. However, this wasn’t enough to dampen fears of recession, and volatility remained 

dominant. The discovery of a rogue trader at Société Générale and the huge potential losses this could mean for the 

bank was the first major incident followed very closely by the collapse of Bear Stearns and JP Morgan’s subsequent 

Fed-induced purchase. As a result financial stocks were hit hard. Credit spreads displayed high levels of volatility, 

widening rapidly through March, contracting in April and May, and jumping back out again in June. Weak economic 

data from the U.S. and Europe in June meant that any rally in equities was relatively short-lived and lead to heightened 

volatility again. Currency markets displayed less volatility, the yen fell against the dollar initially, but then appreciated 

on speculation of the potential need to raise rates later in the year. The pound remained unchanged against the dollar as 

the euro gained significantly after the Fed’s aggressive rate-cutting. There was plenty of speculation in commodity 

markets and gold continued its strong run on the back of concerns with the global economy and the dollar’s weakness. 

Oil and natural gas also continued to rise sharply over fears of lack of supply. 

The second half of 2008 seemed to be a turning point. Looking back, there were many warning signs of the problems 

which lay ahead and the subsequent large scale deleveraging which was to follow. The foundations for this 

deleveraging were laid in 2007 when we first encountered the sub-prime debacle in the U.S.. July saw growing concerns 

over the state of U.S. mortgage lenders Fannie Mae and Freddie Mac, and it was also the turning point for commodity 

prices. Oil had nearly hit $150 a barrel but with signs of an impending global recession the upward trend of the previous 

18 months started to reverse. By the end of the year the price of a barrel of oil had fallen over $100 to around the $40 

mark. The collapse of Bear Stearns earlier in the year and growing fear that banks’ exposures to sub-prime would lead 

to large write-downs, led to the financial sector being heavily punished. This culminated in the collapse of Lehman 

Brothers. The absence of a government rescue package meant the fallout from this was on a scale that most had never 

witnessed. Suddenly many financial institutions were on the brink of collapse as widespread panic selling set in. As a 

result regulators around the world introduced new rules regarding a ban on the short selling of certain types of stocks, 

namely financials. Hedge funds were blamed for this phenomenon but as events unfolded and many banks continued to 

suffer after the imposition of these new regulations, it became clear the hedge fund industry was being used as a 

scapegoat. This turmoil has subsequently led to high levels of consolidation, Fortis has not been immune to this and at 

the time of writing the BNP Paribas deal is still pending. The latter part of the year saw continued deleveraging in the 

financial system, and although equity markets stabilised towards the very end of the year, credit markets continued to 

suffer as credit spreads widened to historic levels. Concerns, which were initially limited to the equity and credit 

markets started to spread to the broader economy as a series of data releases painted a decidedly negative picture. The 

hope was the emerging world would decouple from the developed world and help provide some level of support 

through a period of recession. As things stand it looks as if the emerging world is also falling into recession which could 

mean the impact is felt for longer and is more severe for those countries involved. One of the by-products of this has 

been central banks’ moves to counter the effect of slowing economies by aggressively cutting interest rates. The Federal 

Reserve cut rates from over 4% to between 0% and 0.25% at the end of December, similar moves were made by the 

Bank of England, where the interest rate stands at 2%, and the European Central Bank which is at 2.5%. All this has 

resulted in large moves in the currency markets with the U.S. dollar strengthening, especially against the pound which 

ended the year at $1.46 having started the year at around $1.98. 

Cadogan Market Neutral Fund 

Portfolio Review 

Performance at the beginning of 2008 was an indication of what was in store later on in the year. Continuing volatility 

in the global market place was reflected in the performance of the fund through the first quarter. Returns were mostly 

negative but there was a fairly high level of dispersion from month to month. The Bear Sterns debacle in March had 

knock-on effects on performance as investors were forced to deleverage as liquidity dried up. One fixed income fund 

lost 35% of its value through March as a result of unprecedented moves in the Japanese fixed income markets. Credit 

funds underperformed over the quarter as credit markets continued to experience difficulties. The one beacon of light 

was the global macro strategy which was able to identify macro trends in the uncertain environment. Although the 

Page 5



second quarter was positive for the fund, there remained an undercurrent of volatility and uncertainty over the health of 

the global economy. April and June displayed mixed returns whilst May was mostly positive. Global macro continued 

to provide decent returns and with the effect of occasional strong performances from equity long/short, equity market 

neutral, event driven distressed and multi-strategy, the fund made a respectable gain over the period. July was the 

turning point in 2008, the month was especially bad as a lot of hedge funds were caught in the long commodity short 

financial trade which had made them money over previous months. The fallout and short squeeze on financial stocks 

had widespread repercussions with most strategies negative for the month. This theme spread into August as many 

investors continued to unwind this relative value trade, ultimately leading to negative performance. Then came the 

collapse of Lehman Brothers, the fallout from this was widespread with most asset classes feeling the effects in some 

way. The hedge fund industry was not immune, with many hedge funds using Lehman Brothers as a prime broker or as 

some kind of counterparty. Fortunately the fund’s exposure to this was minimal although the subsequent large scale 

deleveraging that lasted through September, October and November was the root cause for the majority of the losses the 

fund sustained over the period. December’s performance although negative, was a little more encouraging. The majority 

of the losses in the portfolio were sustained through managers with exposure to the credit markets. Credit markets 

continued to deteriorate through December. Equities, on the other hand, showed signs of stabilization with the general 

market rally through December. Managers with exposure to equity markets benefitted on the back of this. Performance 

for the year was negative and the worst in the fund’s history. It was also the worst year for hedge fund industry as a 

whole. Given the backdrop, which was one of a rapidly declining stock market – one of the worst declines seen in a 

generation – the hedge fund industry held up relatively well. The Cadogan Market Neutral Fund USD AA share class 

was down -18.11% (estimated at time of writing) versus -20% for the HFRI Fund of Fund Composite and 

approximately -40% for most major equity indices including the MSCI World in U.S. dollars. 

Cadogan Market Diversified Fund 

Portfolio Review 

Performance at the beginning of 2008 was an indication of what was in store later on in the year. Continuing volatility 

in the global market place was reflected in the performance of the fund through the first quarter. Returns were mostly 

negative but there was a fairly high level of dispersion from month to month. The Bear Sterns debacle in March had 

knock-on effects on performance as investors were forced to deleverage as liquidity dried up. Global macro funds and 

event driven distressed funds suffered heavily. Global macro funds struggled as they faced technical selling pressure in 

fixed income markets. Event driven distressed managers struggled as the credit market deteriorated. The fund produced 

some strong performance through the second quarter. Global macro funds made some large gains on the back of 

commodity prices strengthening, equity long/short managers also made good gains through April and May as equity 

market conditions were fairly benign over the period. They didn’t fair so well in June as equities fell on negative 

sentiment concerning the global economy. Managers with credit related exposure made money over the quarter, this 

was through short exposure to consumer and financials sectors which lost value. July was the turning point in 2008, the 

month was especially bad as a lot of hedge funds were caught in the long commodity short financial trade which had 

made them money over previous months. The fallout and short squeeze on financial stocks had widespread 

repercussions with most strategies negative for the month. This theme spread into August as many investors continued 

to unwind this relative value trade, ultimately leading to negative performance. During these two months there was very 

little diversification to be found between different strategies. Then came the collapse of Lehman Brothers in September, 

the fallout from this was widespread with most asset classes feeling the effects in some way. The hedge fund industry 

was not immune, with many hedge funds using Lehman Brothers as a prime broker or as some kind of counterparty. 

Fortunately the fund’s exposure to this was minimal although the subsequent large scale deleveraging and technical 

selling pressure that lasted through September, October and November was the root cause for the majority of the losses 

the fund sustained over the period. December’s performance broke a five month negative run. The majority of the losses 

in the portfolio were sustained through managers with exposure to the credit markets. Credit markets continued to 

deteriorate through December, with some managers losing money through systemic exposure to these markets. Another 

cause of losses was of the basis widening between cash bonds and their derivatives. Equities, on the other hand, showed 

signs of stabilization with the general market rally through December. A number of managers with exposure to equity 

markets managed to make gains through the month on the back of this. Performance for the year was negative and the 

worst in the fund’s history. It was also the worst year for hedge fund industry as a whole. Given the backdrop, which 

was one of a rapidly declining stock market – one of the worst declines seen in a generation – the hedge fund industry 

held up relatively well. The Cadogan Market Diversified Fund USD AA share class was down -21% versus -20% for 

the HFRI Fund of Fund Composite and approximately -40% for most major equity indices including the MSCI World 

in U.S. dollars. 

Page 6



Outlook 

Moving into January and a new year, global markets remain volatile and the economic environment seems to worsen 

with every coming month. A global economic downturn is not a bad sign for the fund – as long as the markets are being 

driven by fundamentals this should provide hedge funds with a plethora of opportunities in 2009. Over the last six 

months the hedge fund industry has suffered extensively, some pundits have predicted the industry will halve in size 

from its peak at the beginning of the year. Whether this is true remains to be seen, but what is clear is that for those 

remaining when the turmoil finally subsides, this fall in assets will be a definite benefit. We see that the size of the 

opportunities mentioned above will far outweigh the money chasing the opportunities. Over the last quarter we have 

continued to raise cash levels in order to; reduce risk, manage liquidity and also to maintain fire power. We have not 

had any problems meeting redemptions and going into the first quarter of 2009, we have healthy cash balances. Whilst 

we have redeemed from several funds and reduced weights to other funds in the portfolio, we have also been visiting 

interesting and talented new managers. Should the selling pressure the industry currently faces abate, we then have the 

fire power to start adding to these managers later on in the quarter. The portfolio continues to be positioned 

conservatively with: lower levels of leverage, healthy cash levels and a decent liquidity profile. 

In October 2008, the Cadogan Market Neutral Fund made a $5 million investment in the Dynamic Decisions DD 

Growth Premium 2X Fund (the “Fund”), which represented approximately 42 basis points of MNF’s assets under 

management at the time of investment. 

On February 27, 2009 the Fund’s Board of Directors (the “Board”) communicated, among other matters, that it had 

suspended redemptions with immediate effect. The Fund’s Board communicated that the suspension decision had been 

made in light of what may be a significant illiquid investment which we believe is contrary to all representations by the 

management company, expectations of investors and the prospectus. The Fund’s Board indicated that this purported 

illiquid investment may have existed in the Fund’s portfolio since 2008. The manager of the Fund is regulated by the 

Financial Services Authority (FSA) in the UK. Unable to obtain satisfactory answers to our concerns that arose out of 

communications from the Fund’s Board, management company and service providers following the suspension 

announcement, and after thorough review and consideration, on March 9, Cadogan reported the matter to the FSA in the 

UK. 

On Tuesday, March 17, 2009 MNF, along with another investor, filed a joint petition with the Cayman Islands Court of 

Appeal, requesting the appointment of a provisional liquidator for the Fund (a feeder fund). On Friday, March 20, the 

Cayman court granted the application, immediately appointing the provisional liquidator to replace the investment 

manager entirely in connection with the feeder funds. The provisional liquidator subsequently petitioned (on behalf of 

the feeder funds) to appoint a provisional liquidator to the master fund in which all feeders participate, directly or 

indirectly. That petition is currently pending with the Cayman courts and is anticipated, as we understand it, to be heard 

imminently. 

The Board of Directors of MNF decided, on Cadogan’s advice, to write down virtually the entire value of the 

investment in the Fund as at the January NAV until new information is received on the value of the Fund. The impact of 

a full write down is approximately 80 basis points. 

We felt compelled to take the proactive courses of action described above in order to protect and safeguard our clients’ 

assets. 

Luxembourg, May 13, 2009 

Note : The information stated in this report is historical and not necessarily indicative of future performance. 

Page 7

Independent Auditor’s Report 

To the Shareholders of 


PricewaterhouseCoopers 

Société à responsabilité limitée 

Réviseur d'Entreprises 

400, route d’Esch 

B.P. 1443 

L-1014 Luxembourg 

Telephone +352 494848-1 

Facsimile +352 494848-2900 

www.pwc.com/lu 

info@lu.pwc.com 

We have audited the accompanying financial statements of Privileged Investors and of each of its 

sub-funds, which comprise the statement of net assets and the securities portfolio as at 

December 31, 2008 and the statement of operations and changes in net assets for the year then 

ended, and a summary of significant accounting policies and other explanatory notes to the 

financial statements 

Board of Directors of the SICAV’s responsibility for the financial statements 

The Board of Directors of the SICAV is responsible for the preparation and fair presentation of 

these financial statements in accordance with Luxembourg legal and regulatory requirements 

relating to the preparation of the financial statements. This responsibility includes: designing, 

implementing and maintaining internal control relevant to the preparation and fair presentation of 

financial statements that are free from material misstatement, whether due to fraud or error; 

selecting and applying appropriate accounting policies; and making accounting estimates that are 

reasonable in the circumstances. 

Auditor’s responsibility 

Our responsibility is to express an opinion on these financial statements based on our audit. We 

conducted our audit in accordance with International Standards on Auditing as adopted by the 

“Institut des Réviseurs d’Entreprises”. Those standards require that we comply with ethical 

requirements and plan and perform the audit to obtain reasonable assurance whether the financial 

statements are free from material misstatement. 

An audit involves performing procedures to obtain audit evidence about the amounts and 

disclosures in the financial statements. The procedures selected depend on the Auditor’s judgment, 

including the assessment of the risks of material misstatement of the financial statements, whether 

due to fraud or error. In making those risk assessments, the Auditor considers internal control 

relevant to the entity’s preparation and fair presentation of the financial statements in order to 

design audit procedures that are appropriate in the circumstances, but not for the purpose of 

expressing an opinion on the effectiveness of the entity’s internal control. 

An audit also includes evaluating the appropriateness of accounting policies used and the 

reasonableness of accounting estimates made by the Board of Directors of the SICAV, as well as 

evaluating the overall presentation of the financial statements. 

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis 

for our audit opinion. 

R.C.S. Luxembourg B 65 477 - TVA LU17564447 

Page 8


Consolidated statement of net assets at 31/12/08 

Expressed in '000s EUR 

Notes 

31/12/08 

EUR 

31/12/07 

EUR 

Assets 

Securities portfolio at market value 

2b 

Cost price 

Unrealised gain/(loss) on the securities portfolio 

Cash at sight 

Redemptions receivable 6 

Subscriptions/investments paid in advance 6 

Unrealised gain on forward foreign exchange contracts 2f,9 

Total assets 

792,383 1,218,411 

851,163 1,107,593 

(58,781) 110,818 

45,697 60,861 

22,016 13,940 

132,280 1,081 

83,008 0 

1,075,384 1,294,293 

Liabilities 

Bank overdrafts 

Performance fees payable 5 

Payable on redemptions 6 

Subscriptions received in advance 6 

Unrealised loss on forward foreign exchange contracts 2f,9 

Management fees payable 4 

Administrative & custodian fees payable 7 

Professional fees payable 

Other liabilities 10 

Total liabilities 

Net assets 

135,063 1,731 

0 965 

64,986 15,545 

0 6,385 

15 10,690 

1,949 2,663 

229 312 

20 33 

223 143 

202,484 38,467 

872,900 1,255,826 

The accompanying notes form an integral part of these financial statements 

Page 10


Consolidated statement of operations and changes 

in net assets from 01/01/08 to 31/12/08 


31/12/08 

31/12/07 

Notes 

EUR 

EUR 

Income 

Bank interest on cash account 1,925 

1,457 

Other income 6 

304 

Redemption fees 1,898 

874 

Total income 

Expenses 

Management fees 4 

3,829 

14,745 

2,635 

15,434 

Performance fees 5 0 

965 

Taxe d'abonnement 3 503 

557 

Administrative & custodian fees 7 1,728 

1,801 

Professional & legal fees 95 

162 

Bank interest on overdrafts 442 

85 

Other expenses 2h 2,070 

169 

Total expenses 

19,583 19,173 

Net gain/(loss) from investments (15,754) (16,538) 

Net realised gain/(loss) on sales of investment securities 2c 86,030 

61,878 

Net realised gain/(loss) on foreign exchange (54,741) 

(29,153) 

Net realised gain/(loss) on forward foreign exch. cont. (173,452) 

118,100 

Net realised gain/(loss) (157,917) 134,286 

Change in net unreal. apprec./deprec. on inv. sec. 2c (169,927) 

(24,832) 

Change in net unreal. apprec./deprec. on fwrd for. exch. cont. 2f,9 93,683 

(13,905) 

Change in net assets as a result of operations (234,161) 95,549 

Dividends paid 14 (29,863) 

(27,442) 

Subscription of accumulation shares 79,324 

117,147 

Subscription of distribution shares 38,924 

74,673 

Redemption of accumulation shares (169,100) (109,215) 

Redemption of distribution shares (70,102) 

(39,828) 

Change in net assets (384,978) 110,884 

Reevaluation of opening consolidated NAV 2g 2,052 (4,172) 

Net assets at the beginning of the year 1,255,826 1,149,063 

Net assets at the end of the year 

872,900 1,255,826 


Page 11


Statement of net assets at 31/12/08 

Expressed in '000s USD 

Notes 

31/12/08 

USD 

31/12/07 

USD 

Assets 


2b 

Cost price 


Cash at sight 



Total assets 

28,890 43,416 

31,156 36,457 

(2,266) 6,959 

0 1,822 

370 311 

5,524 0 

34,783 45,549 

Liabilities 










Net assets 

2,709 0 

0 50 

3,330 526 

21 0 

64 90 

8 11 

1 1 

8 5 

6,141 683 

28,642 44,866 

Changes in number of shares outstanding 

Shares 

outstanding at 

01/01/08 

Shares 

issued 

Shares 

redeemed 

Shares 


31/12/08 

Market Neutral Fund USD - Class A 

Accumulation shares 248,014 23,941 62,263 209,692 

Distribution shares 37,908 1,369 2,798 36,479 

Market Neutral Fund USD - Class I 

Accumulation shares 3,000 0 3,000 0 


Page 12


Key figures 

Year ending at 

31/12/08 


31/12/07 


31/12/06 

Total net assets USD 28,642,262 44,865,622 45,345,151 


Accumulation shares 

Number of shares 

Net asset value per share USD 

209,692 

121.25 

248,014 

148.06 

271,368 

135.80 

Distribution shares 


Net asset value per share 

Dividend per share 

USD 

USD 

36,479 

88.17 

6.70 

37,908 

114.44 

6.75 

45,003 

111.33 

6.00 





- 

- 

3,000 

1,268.69 

3,000 

1,160.83 


Page 13


Securities portfolio at 31/12/08 


Quantity Denomination Quotation 

currency 

Market value 

% of net 

assets 

Shares of Ucits 28,702 100.21 

Shares/units in Investment Funds 28,702 100.21 

1,194 ADVANTHEDGE FUND LTD 

USD 

1,163 4.07% 

8,352 BENNELONG ASIA PACIFIC MS EQUITY LTD -E- USD USD 

936 3.28% 

3,503 BREVAN HOWARD FUND LTD -A- USD 

USD 

760 2.65% 

983 BRIDGEWATER PURE AL FUND I -B- LEAD S. USD 

2,010 7.03% 

336 CANYON VALUE REALIZATION FUND -B- 

USD 

1,006 3.52% 

438 CANYON VALUE REALIZATION FUND -B DI- * USD 

371 1.30% 

7,852 CLARIUM CAPITAL FUND LTD -B- S.04/08 

USD 

624 2.18% 


USD 

153 0.54% 

1,483 DD GROWTH PREMIUM 2X FUND -USD- * 

USD 

182 0.64% 

229,463 DE SHAW COMP INT FUND / 44952 S.SPKT RES * USD 

229 0.80% 

1,694,350 DE SHAW COMPOSITE INTERNATIONAL FUND USD 

1,694 5.93% 

326 ENDEAVOUR FUND II LTD 2860D2- 04 * 

USD 

278 0.97% 

9,178 EPISODE INC -A- USD RED PRF CAP 

USD 

868 3.04% 

3,335 EPISODE INC -E- USD CAP 

USD 

235 0.82% 

1,724 FARRINGDON I SICAV ALPHA ONE EUR CAP EUR 

291 1.01% 

791 GLG EUROPEAN LONG SHORT SPE AS FUND -A- EUR 

85 0.30% 

546 GOLDENTREE CREDIT OPPORTUNITY LTD -A- S.1 * USD 

326 1.14% 

228 GOLDENTREE OFFSHORE FUND LTD -A- S.1 RES * USD 

322 1.13% 

130 GOLDENTREE OFFSHORE FUND LTD -B- S.1 RES * USD 

121 0.42% 

143 GOLDENTREE OFFSHORE FUND LTD -C- S.1 RES * USD 

111 0.39% 


14 0.05% 

1,564 HALCYON EUR STRU OPP OFF -A- USD REST USD 

650 2.27% 

570 HARD ASSETS 2X FUND LTD CL.-B- S.1 

USD 

839 2.93% 

603 LONGBOW CAPITAL INT FUND LTD -B- S.1 USD 

764 2.67% 

822 LONGBOW INFR LTD -D- S.1 01/03/07 

USD 

840 2.93% 

1,704 MASTER CREDIT OPPORTUNITIES I LTD -D- S.26 USD 

1,702 5.95% 

95 NEVSKY FUND LTD -A- RED PREF 

USD 

634 2.21% 

1,065 OZ OVERSEAS FUND II LTD -B- S.27 

USD 

1,353 4.73% 

3 OZ OVERSEAS FUND II LTD -C- S.202 

USD 

3 0.01% 


USD 

13 0.05% 


USD 

15 0.05% 


USD 

2 0.01% 


USD 

5 0.02% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

2 0.01% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

5 0.02% 


USD 

1 0.00% 


Page 14





currency 


USD 

26 0.09% 


USD 

1 0.00% 


USD 

1 0.00% 

4 OZ OVERSEAS FUND II LTD -C- S.337 / R B124 USD 

3 0.01% 


3 0.01% 


1 0.00% 


4 0.01% 


3 0.01% 


2 0.01% 


1 0.00% 


0 0.00% 


4 0.01% 


3 0.01% 


1 0.00% 

4 OZ OVERSEAS FUND II LTD -C- S.391 / R A50 USD 

3 0.01% 


1 0.00% 


1 0.00% 


3 0.01% 


1 0.00% 


2 0.01% 


1 0.00% 


0 0.00% 


1 0.00% 


2 0.01% 


0 0.00% 


3 0.01% 


2 0.01% 


1 0.00% 


1 0.00% 

2 OZ OVERSEAS FUND II LTD -C- S.528 / A 50 USD 

2 0.01% 


6 0.02% 


0 0.00% 


1 0.00% 


7 0.02% 


1 0.00% 


7 0.02% 


7 0.02% 


2 0.01% 


1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


2 0.01% 


7 0.02% 


2 0.01% 


2 0.01% 


Page 15 

Market value 

% of net 

assets





currency 


1 0.00% 


1 0.00% 


1 0.00% 


0 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


2 0.01% 


2 0.01% 


2 0.01% 

1 OZ OVERSEAS FUND LTD -C- S.109 

USD 

0 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

4 0.01% 


USD 

0 0.00% 


USD 

3 0.01% 


USD 

0 0.00% 


USD 

1 0.00% 


USD 

2 0.01% 


USD 

1 0.00% 


USD 

3 0.01% 


USD 

0 0.00% 


USD 

3 0.01% 


USD 

3 0.01% 


USD 

3 0.01% 


USD 

1 0.00% 


USD 

8 0.03% 

1 OZ OVERSEAS FUND LTD -C- S.389 / R B124 USD 

1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


2 0.01% 


1 0.00% 


USD 

5 0.02% 


1 0.00% 


1 0.00% 


0 0.00% 


1 0.00% 


2 0.01% 


2 0.01% 


2 0.01% 


2 0.01% 


2 0.01% 


1 0.00% 

829 PENTA ASIA LONG/SHORT FUND -A- S.1 

USD 

790 2.76% 

1,741 PLAINFIELD SPE SIT -II- SUB-A- S.1 05/05 

USD 

178 0.62% 


USD 

190 0.66% 


Page 16 

Market value 

% of net 

assets





currency 

Market value 

% of net 

assets 


USD 

271 0.95% 

3,414 PLAINFIELD SPE SIT -II- SUB-A-54 03/08 

USD 

277 0.97% 

794 RATIO EUROPEAN FUND-A-USD 

USD 

82 0.29% 

1,400 SCOGGIN WWD INVR S.1/07 VTG RED PTG RES USD 

1,179 4.13% 

2,152 SHEPHERD INVESTMENTS INT LTD -A-3- * 

USD 

1,766 6.18% 

649 SPM DIRECTIONAL MTG PREPAY OFF II S.9/08 USD 

497 1.74% 

273 STANDARD PACIFIC ASYM OPP LTD -B- S.11/08 USD 

279 0.97% 

682 STANDARD PACIFIC JAPAN TR -B- S.2 2006 USD 

840 2.94% 

3,760 STRATEGIC VALUE RESTRUC FUND -C- SUB-S.C1 USD 

780 2.72% 

7 STRATEGIC VALUE RESTRUC FUND -SP 15- C/ C1 USD 

1 0.00% 

302 STRATEGIC VALUE RESTRUC FUND -SP1- S.C1 USD 

28 0.10% 

60 STRATEGIC VALUE RESTRUC FUND -SP10- C/C1 USD 

4 0.01% 


33 0.12% 


29 0.10% 


1 0.00% 


2 0.01% 

51 STRATEGIC VALUE RESTRUC FUND -SP2- S.C1 USD 

10 0.04% 

190 STRATEGIC VALUE RESTRUC FUND -SP3- S.C/C1 USD 

15 0.05% 


24 0.08% 


16 0.06% 


4 0.01% 


1 0.00% 

477 STRATEGIC VALUE RESTRUC FUND -SP9- C/C1 1 USD 

38 0.13% 

4,438 TALARIS FUND -A- S.3 USD RESTRICTED 

USD 

339 1.18% 

4,096 TALARIS FUND -A- USD RESTRICTED 

USD 

319 1.11% 

329 WINTON FUTURES FUND LTD -B- LEAD SERIES USD 

241 0.84% 

13,747 ZADIG FUND -A- USD S.1205 DEC 2005 

USD 

1,655 5.79% 

Fractions 188 0.66% 

Total securities portfolio 28,890 100.86 


Page 17


Statement of operations and changes in net assets 

from 01/01/08 to 31/12/08 


31/12/08 

31/12/07 

Income 

Bank interest on cash account 48 

42 

Redemption fees 98 

60 

Total income 

Expenses 

146 102 

Management fees 4 479 

547 


50 


21 

Administrative & custodian fees 7 58 

67 


6 


0 

Other expenses 2h 77 

2 


Notes 

638 693 

Net gain/(loss) from investments (492) (591) 


3,416 

Net realised gain/(loss) on foreign exchange (1) 

0 

Net realised gain/(loss) on forward foreign exch. cont. 51 

0 

Net realised gain/(loss) 2,041 2,825 


1,067 

Change in net unreal. apprec./deprec. on fwrd for. exch. cont. 2f,9 (21) 

0 


Dividends paid 14 (246) 

(303) 


5,852 


3,495 5,852 

Subscription of distribution shares 141 

386 


141 386 

Redemption of accumulation shares (12,117) 

(9,130) 


(8,345) (9,130) 


(3,772) 0 

Redemption of distribution shares (292) 

(1,178) 


(292) (1,178) 

Change in net assets (16,223) (480) 

Net assets at the beginning of the year 44,866 45,345 

USD 

USD 


28,642 44,866 


Page 18




Notes 

31/12/08 

EUR 

31/12/07 

EUR 

Assets 


2b 

Cost price 


Cash at sight 




Total assets 

587,952 903,974 

631,818 838,625 

(43,866) 65,348 

45,697 48,479 

7,530 6,466 

111,970 1,081 

63,677 0 

816,827 960,000 

Liabilities 











Net assets 

121,644 0 

0 8 

52,806 10,968 

0 4,279 

0 8,187 

1,370 1,904 

169 233 

16 15 

165 107 

176,170 25,701 

640,658 934,299 


Shares 


01/01/08 

Shares 

issued 

Shares 

redeemed 

Shares 


31/12/08 

Market Neutral Fund EUR - Class A 

Accumulation shares 3,753,038 327,595 1,056,131 3,024,502 

Distribution shares 2,739,212 280,816 627,694 2,392,334 

Market Neutral Fund EUR - Class I 

Accumulation shares 40,942 11,397 130 52,209 

Distribution shares 40,000 25 0 40,025 


Page 19


Key figures 


31/12/08 


31/12/07 


31/12/06 

Total net assets EUR 640,657,590 934,299,024 858,191,998 




Net asset value per share EUR 

3,024,502 

116.54 

3,753,038 

143.36 

3,860,419 

133.33 





EUR 

EUR 

2,392,334 

83.84 

6.45 

2,739,212 

109.63 

6.50 

2,437,596 

108.14 

5.50 





52,209 

1,018.35 

40,942 

1,249.03 

30,859 

1,159.00 





EUR 

EUR 

40,025 

859.99 

66.00 

40,000 

1,121.17 

66.00 

40,000 

1,102.44 

55.00 


Page 20





currency 

Market value 

% of net 

assets 

Shares of Ucits 587,615 91.72% 

Shares/units in Investment Funds 587,615 91.72% 

33,805 ADVANTHEDGE FUND LTD 

USD 

23,694 3.71% 


19,043 2.98% 

99,114 BREVAN HOWARD FUND LTD -A- USD 

USD 

15,474 2.43% 

27,820 BRIDGEWATER PURE AL FUND I -B- LEAD S. USD 

40,918 6.40% 

9,529 CANYON VALUE REALIZATION FUND -B- 

USD 

20,527 3.21% 

12,398 CANYON VALUE REALIZATION FUND -B DI- * USD 

7,554 1.19% 


USD 

12,707 1.99% 


USD 

3,121 0.50% 

41,981 DD GROWTH PREMIUM 2X FUND -USD- * 

USD 

3,707 0.59% 

6,491,487 DE SHAW COMP INT FUND / 44952 S.SPKT RES * USD 

4,670 0.74% 

47,932,920 DE SHAW COMPOSITE INTERNATIONAL FUND USD 

34,484 5.39% 

9,224 ENDEAVOUR FUND II LTD 2860D2- 04 * 

USD 

5,668 0.89% 

259,667 EPISODE INC -A- USD RED PRF CAP 

USD 

17,675 2.77% 

94,368 EPISODE INC -E- USD CAP 

USD 

4,789 0.76% 

48,778 FARRINGDON I SICAV ALPHA ONE EUR CAP EUR 

5,917 0.93% 

22,377 GLG EUROPEAN LONG SHORT SPE AS FUND -A- EUR 

1,728 0.28% 

15,456 GOLDENTREE CREDIT OPPORTUNITY LTD -A- S.1 * USD 

6,639 1.05% 

6,451 GOLDENTREE OFFSHORE FUND LTD -A- S.1 RES * USD 

6,564 1.03% 

3,701 GOLDENTREE OFFSHORE FUND LTD -B- S.1 RES * USD 

2,482 0.40% 

4,058 GOLDENTREE OFFSHORE FUND LTD -C- S.1 RES * USD 

2,273 0.36% 


296 0.05% 

44,251 HALCYON EUR STRU OPP OFF -A- USD REST USD 

13,237 2.08% 

16,127 HARD ASSETS 2X FUND LTD CL.-B- S.1 

USD 

17,069 2.67% 

17,086 LONGBOW CAPITAL INT FUND LTD -B- S.1 USD 

15,569 2.44% 

23,270 LONGBOW INFR LTD -D- S.1 01/03/07 

USD 

17,097 2.68% 

48,206 MASTER CREDIT OPPORTUNITIES I LTD -D- S.26 USD 

34,641 5.42% 

2,707 NEVSKY FUND LTD -A- RED PREF 

USD 

12,997 2.04% 

30,129 OZ OVERSEAS FUND II LTD -B- S.27 

USD 

27,535 4.31% 


USD 

82 0.01% 


USD 

3 0.00% 


USD 

271 0.04% 


USD 

313 0.05% 


USD 

56 0.01% 


USD 

115 0.02% 


USD 

9 0.00% 


USD 

11 0.00% 


USD 

35 0.01% 


USD 

1 0.00% 


USD 

0 0.00% 


USD 

4 0.00% 


USD 

13 0.00% 


USD 

2 0.00% 


USD 

19 0.00% 


USD 

51 0.01% 


Page 21





currency 


USD 

21 0.00% 


USD 

18 0.00% 


USD 

21 0.00% 


USD 

19 0.00% 


USD 

1 0.00% 


USD 

6 0.00% 


USD 

36 0.01% 


USD 

27 0.00% 


USD 

8 0.00% 


USD 

2 0.00% 


USD 

2 0.00% 


USD 

1 0.00% 


USD 

0 0.00% 


USD 

16 0.00% 


USD 

2 0.00% 


USD 

15 0.00% 


USD 

1 0.00% 


USD 

9 0.00% 


USD 

8 0.00% 


USD 

4 0.00% 


USD 

1 0.00% 


USD 

32 0.00% 


USD 

0 0.00% 


USD 

1 0.00% 


USD 

108 0.02% 


USD 

22 0.00% 


USD 

4 0.00% 


USD 

0 0.00% 


USD 

3 0.00% 


USD 

3 0.00% 


USD 

6 0.00% 


USD 

521 0.09% 


USD 

1 0.00% 


USD 

29 0.00% 


USD 

17 0.00% 


USD 

12 0.00% 


USD 

8 0.00% 


USD 

0 0.00% 


USD 

2 0.00% 


USD 

11 0.00% 


USD 

23 0.00% 


USD 

12 0.00% 


USD 

5 0.00% 


67 0.01% 


58 0.01% 


9 0.00% 


2 0.00% 


Page 22 

Market value 

% of net 

assets





currency 


3 0.00% 


28 0.00% 


82 0.01% 


99 0.02% 


0 0.00% 


0 0.00% 


52 0.01% 


31 0.00% 


1 0.00% 


2 0.00% 


6 0.00% 


4 0.00% 


9 0.00% 


1 0.00% 


11 0.00% 


3 0.00% 


4 0.00% 


0 0.00% 


8 0.00% 


0 0.00% 


2 0.00% 


5 0.00% 


83 0.01% 


66 0.01% 


4 0.00% 


2 0.00% 


24 0.00% 


7 0.00% 


64 0.01% 


2 0.00% 


18 0.00% 


0 0.00% 


17 0.00% 


16 0.00% 


8 0.00% 


0 0.00% 


1 0.00% 


0 0.00% 


2 0.00% 


8 0.00% 


10 0.00% 


0 0.00% 


5 0.00% 


23 0.00% 


12 0.00% 


66 0.01% 


4 0.00% 


Page 23 

Market value 

% of net 

assets





currency 


23 0.00% 


5 0.00% 


41 0.01% 


13 0.00% 


9 0.00% 


1 0.00% 


18 0.00% 


11 0.00% 


3 0.00% 


38 0.01% 


5 0.00% 


44 0.01% 


0 0.00% 


13 0.00% 


9 0.00% 


14 0.00% 


0 0.00% 


0 0.00% 


0 0.00% 


0 0.00% 


4 0.00% 


2 0.00% 


4 0.00% 


8 0.00% 


0 0.00% 


0 0.00% 


9 0.00% 


3 0.00% 


7 0.00% 


1 0.00% 


62 0.01% 


15 0.00% 


7 0.00% 


40 0.01% 


22 0.00% 


11 0.00% 


11 0.00% 


11 0.00% 


1 0.00% 


16 0.00% 


0 0.00% 


9 0.00% 


7 0.00% 


0 0.00% 


2 0.00% 


0 0.00% 


0 0.00% 


Page 24 

Market value 

% of net 

assets





currency 


29 0.00% 


2 0.00% 


5 0.00% 


0 0.00% 


1 0.00% 


18 0.00% 


0 0.00% 


5 0.00% 


50 0.01% 


5 0.00% 


0 0.00% 


2 0.00% 


3 0.00% 


0 0.00% 


0 0.00% 


2 0.00% 


137 0.02% 


4 0.00% 


2 0.00% 


1 0.00% 


2 0.00% 


0 0.00% 


0 0.00% 


2 0.00% 


17 0.00% 


13 0.00% 


9 0.00% 


1 0.00% 


0 0.00% 


18 0.00% 


1 0.00% 


19 0.00% 


12 0.00% 


4 0.00% 


143 0.02% 


6 0.00% 


24 0.00% 


17 0.00% 


5 0.00% 


1 0.00% 


0 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


158 0.02% 


1 0.00% 


0 0.00% 


Page 25 

Market value 

% of net 

assets





currency 


157 0.02% 


6 0.00% 


10 0.00% 


34 0.01% 


6 0.00% 


13 0.00% 


8 0.00% 


2 0.00% 


1 0.00% 


24 0.00% 


10 0.00% 


1 0.00% 


7 0.00% 


0 0.00% 


31 0.00% 


1 0.00% 


7 0.00% 


11 0.00% 


1 0.00% 


3 0.00% 


3 0.00% 


27 0.00% 


34 0.01% 


8 0.00% 


3 0.00% 


1 0.00% 


4 0.00% 


12 0.00% 


43 0.01% 


147 0.02% 


3 0.00% 


1 0.00% 


49 0.01% 


5 0.00% 


0 0.00% 


1 0.00% 


1 0.00% 


0 0.00% 


42 0.01% 


31 0.00% 


7 0.00% 


6 0.00% 


22 0.00% 


5 0.00% 


1 0.00% 


0 0.00% 


29 0.00% 


Page 26 

Market value 

% of net 

assets





currency 


6 0.00% 


4 0.00% 


5 0.00% 


12 0.00% 


1 0.00% 


3 0.00% 


0 0.00% 


6 0.00% 


1 0.00% 


0 0.00% 


5 0.00% 


6 0.00% 


29 0.00% 


2 0.00% 


1 0.00% 


2 0.00% 


3 0.00% 


0 0.00% 


30 0.00% 


0 0.00% 


4 0.00% 


1 0.00% 


15 0.00% 


1 0.00% 


7 0.00% 


2 0.00% 


1 0.00% 


8 0.00% 


1 0.00% 


11 0.00% 


9 0.00% 


2 0.00% 


1 0.00% 


10 0.00% 


0 0.00% 


0 0.00% 


0 0.00% 


2 0.00% 


1 0.00% 


17 0.00% 


9 0.00% 


18 0.00% 


1 0.00% 


40 0.01% 


2 0.00% 


1 0.00% 


5 0.00% 


Page 27 

Market value 

% of net 

assets





currency 


0 0.00% 


5 0.00% 


6 0.00% 


2 0.00% 


2 0.00% 


3 0.00% 


7 0.00% 


1 0.00% 


3 0.00% 


1 0.00% 


1 0.00% 


46 0.01% 


2 0.00% 


3 0.00% 


7 0.00% 


1 0.00% 


2 0.00% 


17 0.00% 


2 0.00% 


2 0.00% 


0 0.00% 


6 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


2 0.00% 


1 0.00% 


57 0.01% 


3 0.00% 


5 0.00% 


1 0.00% 


4 0.00% 


13 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


2 0.00% 


1 0.00% 


9 0.00% 


1 0.00% 


8 0.00% 


1 0.00% 


5 0.00% 


6 0.00% 


2 0.00% 


Page 28 

Market value 

% of net 

assets





currency 


1 0.00% 


1 0.00% 


1 0.00% 


3 0.00% 


9 0.00% 


5 0.00% 

1 OZ OVERSEAS FUND II LTD -H- PRIME S.455 USD 

0 0.00% 


USD 

1 0.00% 


USD 

5 0.00% 


USD 

12 0.00% 


USD 

25 0.00% 


USD 

2 0.00% 


USD 

29 0.00% 


USD 

100 0.02% 


USD 

0 0.00% 


USD 

21 0.00% 


USD 

5 0.00% 


USD 

68 0.01% 


USD 

14 0.00% 


USD 

4 0.00% 


USD 

2 0.00% 


USD 

0 0.00% 


USD 

17 0.00% 


USD 

1 0.00% 


USD 

27 0.00% 


USD 

9 0.00% 


USD 

0 0.00% 


USD 

3 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

54 0.01% 


USD 

0 0.00% 


USD 

2 0.00% 


USD 

16 0.00% 


USD 

0 0.00% 


USD 

6 0.00% 


USD 

5 0.00% 


USD 

9 0.00% 


USD 

19 0.00% 


USD 

0 0.00% 


USD 

35 0.01% 


USD 

4 0.00% 


USD 

0 0.00% 


USD 

1 0.00% 


USD 

3 0.00% 


Page 29 

Market value 

% of net 

assets





currency 


USD 

53 0.01% 


USD 

8 0.00% 


USD 

0 0.00% 


USD 

6 0.00% 


USD 

0 0.00% 


USD 

2 0.00% 


USD 

0 0.00% 


USD 

5 0.00% 


USD 

2 0.00% 


USD 

2 0.00% 


USD 

1 0.00% 


USD 

20 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

14 0.00% 


USD 

14 0.00% 


USD 

2 0.00% 


USD 

2 0.00% 


USD 

65 0.01% 


USD 

75 0.01% 


USD 

4 0.00% 


USD 

12 0.00% 


USD 

7 0.00% 


USD 

4 0.00% 


USD 

5 0.00% 


USD 

4 0.00% 


USD 

3 0.00% 


USD 

66 0.01% 


USD 

1 0.00% 


USD 

8 0.00% 


USD 

0 0.00% 


USD 

2 0.00% 


USD 

10 0.00% 


USD 

8 0.00% 


USD 

17 0.00% 


USD 

2 0.00% 


USD 

2 0.00% 


USD 

1 0.00% 


USD 

0 0.00% 


USD 

4 0.00% 


USD 

0 0.00% 


USD 

1 0.00% 


USD 

8 0.00% 


USD 

1 0.00% 


USD 

2 0.00% 


USD 

2 0.00% 


USD 

1 0.00% 


Page 30 

Market value 

% of net 

assets





currency 


USD 

9 0.00% 


USD 

0 0.00% 


USD 

32 0.00% 


USD 

6 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

2 0.00% 


USD 

177 0.03% 


USD 

0 0.00% 


USD 

9 0.00% 


USD 

4 0.00% 


USD 

4 0.00% 


USD 

5 0.00% 


USD 

0 0.00% 


USD 

1 0.00% 


USD 

3 0.00% 


USD 

6 0.00% 


USD 

14 0.00% 


USD 

1 0.00% 


USD 

1 0.00% 


USD 

3 0.00% 


USD 

1 0.00% 


20 0.00% 


17 0.00% 


2 0.00% 


1 0.00% 


7 0.00% 


1 0.00% 


0 0.00% 


9 0.00% 


24 0.00% 


30 0.00% 


0 0.00% 


0 0.00% 


15 0.00% 


0 0.00% 


31 0.00% 


1 0.00% 


1 0.00% 


2 0.00% 


5 0.00% 


3 0.00% 


1 0.00% 


2 0.00% 


0 0.00% 


4 0.00% 


Page 31 

Market value 

% of net 

assets





currency 


0 0.00% 


1 0.00% 


0 0.00% 


1 0.00% 


56 0.01% 


23 0.00% 


1 0.00% 


3 0.00% 


1 0.00% 


2 0.00% 


8 0.00% 


USD 

112 0.02% 


2 0.00% 


19 0.00% 


0 0.00% 


5 0.00% 


0 0.00% 


5 0.00% 


17 0.00% 


4 0.00% 


0 0.00% 


0 0.00% 


0 0.00% 


3 0.00% 


1 0.00% 


1 0.00% 


7 0.00% 


3 0.00% 


23 0.00% 


1 0.00% 


1 0.00% 


6 0.00% 


1 0.00% 


0 0.00% 


13 0.00% 


4 0.00% 


3 0.00% 


13 0.00% 


5 0.00% 


1 0.00% 


1 0.00% 


9 0.00% 


1 0.00% 


4 0.00% 


13 0.00% 


3 0.00% 


4 0.00% 


Page 32 

Market value 

% of net 

assets





currency 


1 0.00% 


0 0.00% 


1 0.00% 


0 0.00% 


1 0.00% 


2 0.00% 


2 0.00% 


2 0.00% 


6 0.00% 


0 0.00% 


0 0.00% 


3 0.00% 


3 0.00% 


19 0.00% 


4 0.00% 


3 0.00% 


15 0.00% 


6 0.00% 


3 0.00% 


4 0.00% 


4 0.00% 


6 0.00% 


2 0.00% 


0 0.00% 


2 0.00% 


2 0.00% 


0 0.00% 


1 0.00% 


8 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


USD 

10 0.00% 


0 0.00% 


1 0.00% 


13 0.00% 


5 0.00% 


0 0.00% 


1 0.00% 


1 0.00% 


USD 

12 0.00% 


0 0.00% 


1 0.00% 


1 0.00% 


0 0.00% 


Page 33 

Market value 

% of net 

assets





currency 


42 0.01% 


1 0.00% 


2 0.00% 


1 0.00% 


15 0.00% 


0 0.00% 


1 0.00% 


7 0.00% 


5 0.00% 


4 0.00% 


1 0.00% 


3 0.00% 


5 0.00% 


6 0.00% 


4 0.00% 


1 0.00% 


5 0.00% 


7 0.00% 


3 0.00% 


1 0.00% 


2 0.00% 


1 0.00% 


44 0.01% 


5 0.00% 


47 0.01% 


0 0.00% 


47 0.01% 


2 0.00% 


4 0.00% 


4 0.00% 


10 0.00% 


2 0.00% 


3 0.00% 


7 0.00% 


1 0.00% 


2 0.00% 


3 0.00% 


3 0.00% 


3 0.00% 


10 0.00% 


6 0.00% 


2 0.00% 


4 0.00% 


1 0.00% 


USD 

5 0.00% 


1 0.00% 


1 0.00% 


Page 34 

Market value 

% of net 

assets





currency 


2 0.00% 


4 0.00% 


10 0.00% 


2 0.00% 


1 0.00% 


1 0.00% 


2 0.00% 


44 0.01% 


USD 

5 0.00% 


1 0.00% 


27 0.00% 


7 0.00% 


19 0.00% 


8 0.00% 


1 0.00% 


0 0.00% 


13 0.00% 


2 0.00% 


13 0.00% 


9 0.00% 


2 0.00% 


0 0.00% 


6 0.00% 


1 0.00% 


9 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


4 0.00% 


0 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


2 0.00% 


2 0.00% 


2 0.00% 


2 0.00% 


8 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


11 0.00% 


0 0.00% 


1 0.00% 


4 0.00% 


2 0.00% 


Page 35 

Market value 

% of net 

assets





currency 


1 0.00% 


1 0.00% 


4 0.00% 


3 0.00% 


3 0.00% 


1 0.00% 


1 0.00% 


4 0.00% 


0 0.00% 


1 0.00% 


6 0.00% 


2 0.00% 


5 0.00% 


12 0.00% 


2 0.00% 


1 0.00% 


0 0.00% 


2 0.00% 


1 0.00% 


USD 

4 0.00% 


1 0.00% 


2 0.00% 


1 0.00% 


14 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


3 0.00% 


1 0.00% 


1 0.00% 


5 0.00% 


0 0.00% 


1 0.00% 


1 0.00% 


2 0.00% 


7 0.00% 


USD 

8 0.00% 


1 0.00% 


14 0.00% 


1 0.00% 


2 0.00% 


1 0.00% 


1 0.00% 


1 0.00% 


2 0.00% 

23,473 PENTA ASIA LONG/SHORT FUND -A- S.1 

USD 

16,085 2.52% 


USD 

3,613 0.57% 


Page 36 

Market value 

% of net 

assets





currency 

Market value 

% of net 

assets 


USD 

3,862 0.61% 


USD 

5,519 0.87% 

96,585 PLAINFIELD SPE SIT -II- SUB-A-54 03/08 

USD 

5,629 0.89% 

22,485 RATIO EUROPEAN FUND-A-USD 

USD 

1,667 0.27% 

39,619 SCOGGIN WWD INVR S.1/07 VTG RED PTG RES USD 

23,998 3.76% 

60,882 SHEPHERD INVESTMENTS INT LTD -A-3- * 

USD 

35,950 5.62% 

18,376 SPM DIRECTIONAL MTG PREPAY OFF II S.9/08 USD 

10,123 1.59% 

7,726 STANDARD PACIFIC ASYM OPP LTD -B- S.11/08 USD 

5,685 0.90% 

19,317 STANDARD PACIFIC JAPAN TR -B- S.2 2006 USD 

17,122 2.68% 

106,383 STRATEGIC VALUE RESTRUC FUND -C- SUB-S.C1 USD 

15,881 2.49% 

224 STRATEGIC VALUE RESTRUC FUND -SP 15- C/ C1 USD 

29 0.00% 

8,555 STRATEGIC VALUE RESTRUC FUND -SP1- S.C1 USD 

575 0.10% 

1,716 STRATEGIC VALUE RESTRUC FUND -SP10- C/C1 USD 

81 0.01% 


679 0.12% 


599 0.10% 


22 0.00% 


40 0.01% 

1,455 STRATEGIC VALUE RESTRUC FUND -SP2- S.C1 USD 

207 0.03% 

5,384 STRATEGIC VALUE RESTRUC FUND -SP3- S.C/C1 USD 

305 0.05% 


485 0.08% 


336 0.05% 


84 0.01% 


13 0.00% 

13,502 STRATEGIC VALUE RESTRUC FUND -SP9- C/C1 1 USD 

767 0.13% 

125,561 TALARIS FUND -A- S.3 USD RESTRICTED 

USD 

6,906 1.09% 

115,903 TALARIS FUND -A- USD RESTRICTED 

USD 

6,493 1.02% 

9,322 WINTON FUTURES FUND LTD -B- LEAD SERIES USD 

4,918 0.78% 

388,902 ZADIG FUND -A- USD S.1205 DEC 2005 

USD 

33,686 5.27% 


Total securities portfolio 587,952 91.77% 


Page 37



from 01/01/08 to 31/12/08 


31/12/08 

31/12/07 

Income 

Bank interest on cash account 1,517 

1,002 

Redemption fees 1,575 

828 

Total income 

Expenses 

3,092 1,829 

Management fees 4 10,461 

11,081 


8 


420 

Administrative & custodian fees 7 1,283 

1,361 


125 


1 

Other expenses 2h 1,949 

16 


Notes 

14,474 13,013 



45,921 


(21,909) 


91,610 



(28,706) 


(10,712) 



(19,332) 


77,532 


46,411 65,133 


14,205 12,398 


57,851 


29,537 57,851 


27 0 


(80,212) 


(137,878) (80,212) 


(158) 0 


(24,752) 


(60,451) (24,752) 



EUR 

EUR 


640,658 934,299 


Page 38




Notes 

31/12/08 

USD 

31/12/07 

USD 

Assets 


2b 

Cost price 


Cash at sight 



Total assets 

5,334 6,840 

5,826 5,420 

(492) 1,419 

0 482 

413 174 

469 0 

6,216 7,496 

Liabilities 









Net assets 

329 0 

0 35 

191 28 

15 18 

1 2 

0 0 

2 1 

538 84 

5,678 7,412 


Shares 


01/01/08 

Shares 

issued 

Shares 

redeemed 

Shares 


31/12/08 

Market Diversified Fund USD-Class A 

Accumulation shares 44,304 2,462 2,076 44,690 

Distribution shares 9,156 474 2,117 7,513 


Page 39


Key figures 


31/12/08 


31/12/07 


31/12/06 

Total net assets USD 

5,678,400 7,411,762 6,799,898 





44,690 

112.34 

44,304 

142.19 

45,036 

126.20 





USD 

USD 

7,513 

87.59 

10.60 

9,156 

121.47 

9.25 

9,589 

116.43 

6.50 


Page 40





currency 

Market value 

% of net 

assets 



87 ABSOLUTE PARTNERS FUND LTD -B- 

USD 

129 2.28% 

91 ADMIRALTY FUND -B- BASISPLUS LEV S.216 USD 

198 3.48% 


368 6.50% 

40,352 BRICK CAPITAL PARTNERS LP RES PARTN ITR USD 

40 0.71% 

204 CAMULOS PARTN OFF LTD -L-/LIQUIDATING * USD 

95 1.68% 

626 CLARIUM CAPITAL FUND LTD -B- S.01/08 

USD 

60 1.05% 

417 CLARIUM CAPITAL FUND LTD -B- S.04/08 

USD 

33 0.58% 

833 CLARIUM CAPITAL FUND LTD -B- S.1 INITIAL USD 

187 3.29% 

239,815 DE SHAW OCULUS INTERNATIONAL FUND USD 

240 4.22% 

955 GLG MARKET NEUTRAL FUND -J- * 

USD 

87 1.53% 

417 GLG MARKET NEUTRAL -Q-MAIN VALOR RES USD * USD 

20 0.35% 

848 GRADIENT EUROPE FUND -A- 

USD 

67 1.17% 

235,251 HAYMAN CAPITAL OFF PARTN LP INTERESTS USD 

235 4.14% 

326 HORSEMAN GLOBAL FUND LTD -A- USD RED USD 

161 2.83% 

816 HORSEMAN GLOBAL FUND LTD -B- USD RED USD 

199 3.50% 

235 LYDIAN GLOBAL OPP FUND CL F SER 1 * 

USD 

101 1.79% 

104 MIURA GLOBAL FUND LTD -B- S.INITIAL RED USD 

305 5.38% 

27 NEVSKY FUND LTD -A- RED PREF 

USD 

180 3.17% 

112 OCEANIC HEDGE FUND -B- RED CAP 

USD 

309 5.44% 

558 PAULSON ADVANTAGE PLUS LTD -A- 

USD 

233 4.11% 

2,928 PELHAM LONG SHORT FUND LTD -A2- 

USD 

265 4.66% 

3,065 SFP VALUE REALIZATION FUND LTD -B- USD RED USD 

297 5.23% 

97 SOLA I -A- INITIAL SERIES * 

USD 

291 5.13% 

56 SOLA I -E- S.INITIAL * 

USD 

99 1.75% 

174 SPM DIRECTIONAL MTG PREPAY OFF II S.9/08 USD 

133 2.35% 

2,611 SYMMETRY PEAK OFFSHORE -B- S.1 2005 

USD 

87 1.54% 

86 THE DRAKE GLOBAL OPP FUND LTD -B- S.2 USD 

90 1.58% 

39 THE DRAKE GLOBAL OPP FUND LTD -D- S.11/07 USD 

22 0.39% 

8 THIRD POINT OFFSHORE FUND CLASS S SERIE 1 * USD 

1 0.01% 

848 THIRD POINT OFFSHORE FUND -D- S.18 

USD 

169 2.97% 

313 WHITNEY JAPAN SELECT INVESTORS -B- S.17 USD 

359 6.32% 

17,051 YORK EUROPEAN OPP UNITS TRUST -A- S.1 USD 

181 3.18% 


76 1.33% 




Page 41



from 01/01/08 to 31/12/08 


31/12/08 

31/12/07 

Income 


10 


8 

Total income 

Expenses 

16 18 

Management fees 4 102 

109 


35 


4 


11 


1 


3 


5 


Notes 

128 167 

Net gain/(loss) from investments (112) (149) 

Net realised gain/(loss) on sales of investment securities 2c 488 

819 

Net realised gain/(loss) on foreign exchange 0 

8 

Net realised gain/(loss) on forward foreign exch. cont. 0 

(2) 

Net realised gain/(loss) 376 675 


176 

Change in net unreal. apprec./deprec. on fwrd for. exch. cont. 2f,9 0 

1 

Change in net assets as a result of operations (1,535) 852 

Dividends paid 14 (75) 

(80) 

Subscription of accumulation shares 332 

705 


332 705 

Subscription of distribution shares 44 

63 


44 63 

Redemption of accumulation shares (244) 

(814) 


(244) (814) 

Redemption of distribution shares (256) 

(114) 


(256) (114) 

Change in net assets (1,733) 612 


USD 

USD 


5,678 7,412 


Page 42




Notes 

31/12/08 

EUR 

31/12/07 

EUR 

Assets 


2b 

Cost price 


Cash at sight 




Total assets 

179,839 280,298 

192,771 240,520 

(12,932) 39,778 

0 10,817 

13,923 7,144 

16,004 0 

19,331 0 

229,097 298,259 

Liabilities 











Net assets 

11,236 1,731 

0 899 

9,650 4,200 

0 2,107 

0 2,503 

522 686 

54 70 

3 17 

51 31 

21,516 12,245 

207,581 286,015 


Shares 


01/01/08 

Shares 

issued 

Shares 

redeemed 

Shares 


31/12/08 

Market Diversified Fund EUR-Class A 

Accumulation shares 1,338,778 112,121 186,072 1,264,827 

Distribution shares 549,410 84,824 93,369 540,865 

Market Diversified Fund EUR-Class I 

Accumulation shares 6,574 1,214 0 7,788 

Distribution shares 29,422 0 0 29,422 


Page 43


Key figures 


31/12/08 


31/12/07 


31/12/06 

Total net assets EUR 207,581,130 286,014,595 251,327,216 





1,264,827 

104.62 

1,338,778 

135.04 

1,293,720 

121.69 





EUR 

EUR 

540,865 

82.03 

10.10 

549,410 

115.94 

9.00 

532,127 

112.92 

6.00 





7,788 

795.63 

6,574 

1,024.04 

- 

- 





EUR 

EUR 

29,422 

839.25 

103.00 

29,422 

1,182.55 

92.00 

29,422 

1,148.79 

60.00 


Page 44





currency 

Market value 

% of net 

assets 



4,096 ABSOLUTE PARTNERS FUND LTD -B- 

USD 

4,379 2.11% 

4,280 ADMIRALTY FUND -B- BASISPLUS LEV S.216 USD 

6,683 3.22% 


12,432 5.98% 

1,891,115 BRICK CAPITAL PARTNERS LP RES PARTN ITR USD 

1,360 0.66% 

9,570 CAMULOS PARTN OFF LTD -L-/LIQUIDATING * USD 

3,221 1.55% 


USD 

2,018 0.97% 


USD 

1,120 0.54% 

39,082 CLARIUM CAPITAL FUND LTD -B- S.1 INITIAL USD 

6,298 3.03% 

11,239,065 DE SHAW OCULUS INTERNATIONAL FUND USD 

8,085 3.90% 

44,786 GLG MARKET NEUTRAL FUND -J- * 

USD 

2,932 1.41% 

19,582 GLG MARKET NEUTRAL -Q-MAIN VALOR RES USD * USD 

677 0.33% 

39,764 GRADIENT EUROPE FUND -A- 

USD 

2,248 1.08% 

11,025,194 HAYMAN CAPITAL OFF PARTN LP INTERESTS USD 

7,932 3.82% 

15,323 HORSEMAN GLOBAL FUND LTD -A- USD RED USD 

5,429 2.62% 

38,271 HORSEMAN GLOBAL FUND LTD -B- USD RED USD 

6,698 3.23% 

11,029 LYDIAN GLOBAL OPP FUND CL F SER 1 * 

USD 

3,423 1.65% 

4,906 MIURA GLOBAL FUND LTD -B- S.INITIAL RED USD 

10,366 4.99% 

1,291 NEVSKY FUND LTD -A- RED PREF 

USD 

6,199 2.99% 

5,282 OCEANIC HEDGE FUND -B- RED CAP 

USD 

10,473 5.05% 

26,171 PAULSON ADVANTAGE PLUS LTD -A- 

USD 

7,867 3.79% 

137,228 PELHAM LONG SHORT FUND LTD -A2- 

USD 

8,927 4.30% 

143,667 SFP VALUE REALIZATION FUND LTD -B- USD RED USD 

10,024 4.83% 

4,579 SOLA I -A- INITIAL SERIES * 

USD 

9,891 4.77% 

2,651 SOLA I -E- S.INITIAL * 

USD 

3,387 1.63% 

8,196 SPM DIRECTIONAL MTG PREPAY OFF II S.9/08 USD 

4,515 2.17% 

122,388 SYMMETRY PEAK OFFSHORE -B- S.1 2005 

USD 

2,940 1.42% 

4,068 THE DRAKE GLOBAL OPP FUND LTD -B- S.2 USD 

3,062 1.47% 

1,870 THE DRAKE GLOBAL OPP FUND LTD -D- S.11/07 USD 

765 0.37% 

380 THIRD POINT OFFSHORE FUND CLASS S SERIE 1 * USD 

19 0.01% 

39,754 THIRD POINT OFFSHORE FUND -D- S.18 

USD 

5,691 2.74% 

14,686 WHITNEY JAPAN SELECT INVESTORS -B- S.17 USD 

12,114 5.83% 


6,097 2.94% 


2,553 1.23% 




Page 45



from 01/01/08 to 31/12/08 


31/12/08 

31/12/07 

Income 


420 

Other income 6 

304 


0 

Total income 

Expenses 

620 724 

Management fees 4 3,867 

3,907 


899 


120 


387 


32 


82 


149 


Notes 

4,558 5,576 



13,080 


(7,250) 


26,491 



3,029 


(3,193) 



(7,850) 


35,160 


14,724 28,460 


1,234 6,700 


16,517 


9,226 16,517 


(22,247) 


(22,181) (22,247) 


(14,198) 


(9,257) (14,198) 



EUR 

EUR 


207,581 286,015 


Page 46


Notes to the financial statements 

Page 47


Notes to the financial statements as at December 31, 2008 

Note 1 - General Information 

Privileged Investors was incorporated as an open-ended investment company (Société d'Investissement à 

Capital Variable - SICAV) on October 26, 2001 for an unlimited period of time and registered under Part II 

of the Luxembourg Law of December 20, 2002 relating to undertakings for collective investments. 

Privileged Investors is a fund of funds organised as an umbrella “SICAV”. 

As at December 31, 2008, the following sub-funds and classes are subscribed: 

Market Neutral Fund USD 

Class A a 

Class A d 

Market Neutral Fund EUR 

Class A a 

Class A d 

Class I a 

Class I d 

Market Diversified Fund USD 

Class A a 

Class A d 

Market Diversified Fund EUR 

Class A a 

Class A d 

Class I a 

Class I d 

Class A shares refer to institutional and non institutional investors, while Class I shares may 

only be subscribed by institutional investors. 

Note 2 - Significant accounting policies 

a) Financial statements 

The SICAV’s financial statements are prepared in accordance with Luxembourg regulations concerning 

undertakings for collective investment. The consolidated financial statements of the SICAV are expressed in 

Euro. 

b) Valuation of securities portfolio 

The value of securities which are quoted, traded or dealt in on any stock exchange shall be based on the 

latest available price or, if appropriate, on the average price on the stock exchange which is normally the 

principal market of such securities. Each security traded on any other regulated market shall be valued in a 

manner as similar as possible to that provided for quoted securities. 

For non-quoted securities or securities not traded or dealt in on any stock exchange or other regulated market 

(including securities of closed-ended Underlying Funds), as well as quoted or non-quoted securities on such 

other market for which no valuation price is available, or securities for which the quoted prices are, in the 

opinion of the Directors, not representative of the fair market value, the value thereof shall be determined 

prudently and in good faith by the Directors on the basis of foreseeable sales prices. 

Page 48



The shares or units in Underlying Funds shall be valued at their last available net asset value, as reported or 

provided by such Underlying Funds or their agents. 

The SICAV will neither lend nor borrow financial instruments. 

The sub-funds portfolios of securities contain investment funds impacted by current market and liquidity 

events which can be considered at least temporarily less liquid. The potentially less liquid assets may consist 

of side-pockets shares as well as underlying funds that are temporarily or indefinitely suspended, funds in 

liquidation, gated fund, locked up or which are largely based on mark-to-model or thinly traded quoted 

securities. The affected securities are denoted in the Securities portfolio with an asterisk. However, the Board 

of Directors considered that fair valuation adjustment was not required for all investments as of 31 December 

2008. The Board of Directors decided to fair value one position by applying a discount of 15%; this is 

denoted in the security portfolio with two asterisks. The effect at year end on the net asset value amounts to 

-0.36% for Market Neutral Fund EUR and -0.40% for Market Neutral Fund USD. 

c) Net realised result on securities portfolio 

Net realised result on sales of securities is calculated on the average cost basis. 

d) Formation expenses 

Formation expenses have been fully amortised. 

e) Conversion of foreign currencies 

The value of assets denominated in a currency other than the reference currency of a given sub-fund or class 

shall be determined by taking into account the rate of exchange prevailing at the time of the determination of 

the net asset value. 

f) Valuation of forward foreign exchange contracts 

Unexpired forward foreign exchange contracts are valued at the forward exchange rates applicable to the 

remaining life of the relevant contracts and unrealised gains or losses resulting from them are included in the 

statement of net assets under the heading “Unrealised gain / loss on forward foreign exchange contracts”. 

g) Reevaluation of opening consolidated NAV 

For the consolidated statement of operations and changes in net assets, the Net Asset Value at the beginning 

of the year is converted into EUR on the basis of the exchange rates used at December 31, 2007. The 

exchange differences between the net asset value at the beginning of the year converted at the exchange rates 

used at December 31, 2007 and the net asset value at the beginning of the year converted at the exchange 

rates used at December 31, 2008 are included under the heading "Reevaluation of opening consolidated 

NAV" in the consolidated statement of operations and changes in net assets. 

h) Transaction costs 

Transaction costs are accounted for separately under the caption “other expenses” in the statement of 

operations and changes in net assets. 

Note 3 - Taxe d'abonnement 

The SICAV is liable in Luxembourg to a "taxe d'abonnement" of 0.05 % per annum of its net assets 

attributable to Class A a and Class A d Shares. In respect of Class I a and Class I d , the tax levied is at the rate of 

0.01% per annum. 

Page 49



This tax is not applicable for the portion of the assets of the Fund invested in other Luxembourg collective 

investment undertakings already subject to Taxe d’abonnement. 

Note 4 - Management fees 

The Investment Manager receives from each sub-fund, payable out of the assets attributable to the relevant 

class of shares, the following monthly management fees based on the net asset value of the assets attributable 

to the relevant class of shares on the relevant Valuation Day : 

Sub-funds Class A shares Class I shares 

Cadogan Market Neutral Fund USD 1.25 % (per annum) 1.00 % (per annum) 

Cadogan Market Neutral Fund EUR 1.25 % (per annum) 1.00 % (per annum) 

Cadogan Market Diversified Fund USD 1.50 % (per annum) 1.25 % (per annum) 

Cadogan Market Diversified Fund EUR 1.50 % (per annum) 1.25 % (per annum) 

Note 5 - Performance fees 

The Investment Manager receives a performance fee which is calculated and accrued monthly and paid per 

annum in arrears at the rate of 10 % over a "hurdle" rate of 8 % of the annual increase of the net asset value 

taking into account the outstanding shares on each Valuation Day. 

There are no performance fees for the period from January 1, 2008 to December 31, 2008. 

Note 6 - Subscriptions/investments paid in advance & Redemptions payable & Subscriptions 

received in advance 

Subscribers to the sub-funds are required to pay the full subscription amount prior to the month-end to which 

the subscription relates. The same applies for the Fund : the sub-funds are required to pay the full 

subscriptions amount in underlying Funds. 

"Subscriptions received in advance" reflects monies received for Valuation Day December 31, 2008 from 

subscribers. Shares will be issued as of January 1, 2009 and these monies received are reflected in cash at 

sight. 

"Payable on redemptions" reflects monies to be paid out on redemptions to the shareholders of the sub-fund. 

"Subscriptions/investments paid in advance" reflects monies paid out by the sub-fund on subscriptions. The 

whole purchase will be taken into account at the receipt of final information by the Fund (price per share, 

amount of the purchase). 

"Redemptions receivable" reflects monies to be received from the shareholders of the sub-fund. 

For Cadogan Market Diversified Fund EUR and Cadogan Market Diversified Fund USD, “Redemptions 

receivable” include mainly the fair value of proceeds expected to be received from Highland Crusader Fund 

II Ltd. as a result of a full redemption tendered for value date June 30, 2008. The receivable is subject to the 

performance fluctuations of the remaining assets from November 15, 2008 when the fund began liquidation 

of its assets. The fair value reflects estimated returns at each valuation date; the fair value at December 31, 

2008 was $11.5 million. 

Note 7 - Administration and Custodian fees 

In addition to the above-mentioned fees, the Investment Manager is also entitled to receive a fixed 

administration fee of 0.15 % per annum based on the Net Asset Value of the assets attributable to the 

relevant class of shares on the relevant Valuation Day. From this fee, the Investment Manager will pay the 

services of the Administrator and Custodian. 

Page 50



Note 8 - Co-Management 

In order to reduce operational and administrative charges while allowing a wider diversification of the 

investments, the Directors may decide that part or all of the assets of one or more Sub-Funds will be comanaged. 

The fractions appearing at the end of the securities portfolio are generated by the technique of comanagement. 

The value of the fractions are based on the market value of the corresponding equity 

at period end (see details in Note 13). 

Note 9 - Forward foreign exchange contracts 

At December 31, 2008, the SICAV has the following outstanding forward foreign exchange contracts : 


Purchase Sale Trade date 

Maturity Net unrealised 

date 

depreciation 

USD 261,318.90 EUR 204,000.00 29/10/08 28/01/09 (21,951.22) 

USD 102,344.48 EUR 73,600.00 31/12/08 28/01/09 145.07 

EUR 9,381.00 USD 12,421.85 11/12/08 28/01/09 604.41 

Total : (21,201.74) 



Maturity Net unrealised 

date 

depreciation 

EUR 837,096,742.72 USD 1,072,300,000.01 29/10/08 28/01/09 64,799,797.05 

USD 177,500,000.00 EUR 127,647,333.79 31/12/08 28/01/09 180,995.57 

USD 37,240,000.00 EUR 28,123,702.00 11/12/08 28/01/09 (1,303,537,29) 

Total : 63,677,255.33 



Maturity 

date 

Net unrealised 

depreciation 

EUR 261,675,676.73 USD 335,200,000.00 29/10/08 28/01/09 20,256,357.34 

USD 27,260,000.00 EUR 20,586,791.53 11/12/08 28/01/09 (954,200.49) 

USD 27,850,000.00 EUR 20,028,046.46 31/12/08 28/01/09 28,398.46 

Total : 19,330,555.31 

Note 10 - Other liabilities 

In the statements of net assets, the item "Other liabilities" includes provision to the taxe d'abonnement (cf. 

Note 3) and domiciliation fees. 

Note 11 - Exchange rates 

For the consolidated figures in EUR, the following exchange rate prevailing at December 31, 2008 was used: 

1 EUR = 1,3917 USD. 

Page 51



Note 12 - Changes in composition of portfolio 

The details of the changes in portfolio composition during the year under review are held at the disposal of 

the shareholders free of charge at the registered office of the SICAV. 

Note 13 - Details of fractions 

A Fraction corresponds to the decimal quantity of a share multiplied by the unit price asset, at the Valuation 

Day. 

The major holdings included in the item “Fractions“ (described in Note 8) of the portfolios are the following: 

Cadogan Market Neutral Fund USD : 

Quantity Fund Market value 

(in ' 000s USD) 

0.70653 NEVSKY FUND LTD -A- RED PREF 5 

0.96587 OZ OVERSEAS FUND II LTD -C- S.345 / R B124 2 

0.86668 CANYON VALUE REALIZATION FUND -B- 3 

OTHERS 178 

Total 188 

Cadogan Market Neutral Fund EUR : 


(in ' 000s EUR) 


0.90791 CANYON VALUE REALIZATION FUND -B- 2 

OTHERS 332 

Total 337 

Cadogan Market Diversified Fund USD : 


(in ' 000s USD) 

0.69614 MIURA GLOBAL FUND LTD -B- S.INITIAL RED 2 


0.72089 OCEANIC HEDGE FUND -B- RED CAP 2 

0.72282 SOLA I -A- INITIAL SERIES 2 

OTHERS 7 

Total 17 

Cadogan Market Diversified Fund EUR : 


(in ' 000s EUR) 


0.82619 SOLA I -A- INITIAL SERIES 2 

OTHERS 8 

Total 14 

Page 52



Note 14 - Dividends 

On June 06, 2008 the SICAV distributed the following dividends on shares in issue as of May 31, 2008 : 

Subfunds Currency Dividend 

CADOGAN MARKET NEUTRAL FUND USD class A d USD 6.70 

CADOGAN MARKET NEUTRAL FUND EUR class A d EUR 6.45 

CADOGAN MARKET NEUTRAL FUND EUR class I d EUR 66.00 

CADOGAN MARKET DIVERSIFIED FUND USD class A d USD 10.60 

CADOGAN MARKET DIVERSIFIED FUND EUR class A d EUR 10.10 

CADOGAN MARKET DIVERSIFIED FUND EUR class I d EUR 103.00 

Note 15 - Subsequent event 

The board of directors of Privileged Investors decided on 4 February 2009 to make a side pocket provision 

to meet the possible claim in relation to past investment. The CSSF approved the creation of the side pocket 

provisions on 18 March 2009. 

In Cadogan Market Neutral EUR Fund (CMNF EUR), $96.2 million included related costs was set aside in a 

side-pocketed provision. This amount represents to 10.81% of the December 31, 2008 NAV of CMNF EUR. 

In Cadogan Market Neutral USD Fund (CMNF USD), $3.1 million included related costs was set aside in a 

side-pocketed provision. This amount represents to 10.93% of the December 31, 2008 NAV of CMNF USD. 

Practically, a certain number of the shares held in CMNF EUR and CMNF USD were re-designated as 

special shares of a special class. This means that the amounts described above were segregated from the 

other assets and held as a separate pool (the side pocket) within CMNF EUR and CMNF USD. 

All the shareholders impacted by the creation of those special classes have received a detailed 

communication from the board of Directors. 

The special pool will be invested in USD denominated high quality money market UCITS with an AAAm 

rating from Moody’s or Standard & Poor’s. 

Subscriptions from existing or new investors as from December 31, 2008 NAV are and will not be affected 

by the possible claim. 

The board of directors diligently follows the legal development of the possible claim and will reassess the 

need for continuing the provision. If the board of directors determines in the future that a smaller provision is 

sufficient, it will reduce the provision and release cash to the investors of the special shares of CMNF USD 

and CMNF EUR. 

Page 53


Supplementary Information (unaudited) 

Substantial investors 

(Statement pursuant to article 21 BTB (Besluit toezicht beleggingsinstellingen), Decree on the 

supervision of Collective Investment Schemes) 

At the end of the reporting year, the SICAV acknowledges the below parties as being considered as a 

"substantial investor" within the meaning of this rule and as further defined in paragraph 3.26 of annex 

B to the BTB. 

Sub-fund Shareholder % of holding 

Market Neutral Fund USD Class A a Nominee 98.63% 

Market Neutral Fund USD Class A d Nominee 90.78% 

Market Neutral Fund EUR Class A a Nominee 97.46% 

Market Neutral Fund EUR Class A d Nominee 98.04% 

Market Neutral Fund EUR Class I a Nominee 100.00% 

Market Neutral Fund EUR Class I d Nominee 100.00% 

Market Diversified Fund USD Class A a Nominee 81.60% 

Market Diversified Fund USD Class A d Nominee 100.00% 

Market Diversified Fund EUR Class A a Nominee 97.94% 

Market Diversified Fund EUR Class A d Nominee 97.90% 

Market Diversified Fund EUR Class I a Nominee 100.00% 

Market Diversified Fund EUR Class I a Nominee 100.00% 

Joint interests of directors 

(Statement pursuant to article 21, paragraph 2, section (a) of the BTB) 

As at balance sheet date, no such interests have been reported to the SICAV. 

Page 54

______________________________________________________ 


(Previously named MeesPierson Privileged Investors) 

SICAV 

______________________________________________________ 

Dutch Addendum to the Annual Report at 31/12/2008

TABLE OF CONTENTS 

GENERAL INFORMATION ............................................................................................ 3 

ANNUAL REPORT........................................................................................................... 4 

(1) Movement schedule per asset class............................................................................ 4 

(2) Changes in net assets ................................................................................................. 5 

(3) Number and value of shares issued and redeemed during 2008................................ 5 

(4) 

NAV per Sub-Fund and per Class and total shares issued per Class during the 

reporting period.......................................................................................................... 5 

(5) Statement of net assets per 31/12/08.......................................................................... 5 

(6) Valuation of non-quoted securities policy ................................................................. 5 

(7) Hedging transactions.................................................................................................. 5 

(8) Redemptions .............................................................................................................. 5 

(9) Personal interests of the Directors of the Fund by transactions by the Fund............. 6 

(10) Fees and expenses of Privileged Investors................................................................. 6 

(11) Total expense ratio (TER)........................................................................................ 11 

(12) Turn-over ratio......................................................................................................... 12 

(13) 

Percentage of total transaction volume of the Fund transacted through parties 

affiliated to the investment manager or the custodian ............................................. 12 

(14) Transactions with affiliated parties.......................................................................... 12 

(15) Amount of transactions made in non regulated markets.......................................... 13 

(16) Subscription and redemption instruction procedure ................................................ 13 

(17) Retrocessions received by the Fund......................................................................... 14 

Independent Assurance Report ......................................................................................... 15 

2

GENERAL INFORMATION 

Privileged Investors (The “Fund”), previously named “MeesPierson Privileged Investors” was 

incorporated under Part II of the Luxembourg law of 30 March 1988 regarding undertakings 

for collective investment as an open-ended investment company (société d’investissement à 

capital variable – SICAV) on 26 October 2001. On incorporation all of the shares representing 

the initial capital were subscribed for and were fully paid. The Articles were published in the 

Mémorial C, Recueil des Sociétés et Associations (the “Mémorial”) on 22 November 2001. 

The Articles are on file with the Luxembourg Commercial and Companies Register. As from 

13 February 2004, the Fund is subject to Part II of the Luxembourg law of 20 December 2002 

regarding undertakings for collective investment. The Articles were amended for the last time 

on 3 July 2006 and such amendment was published in the Mémorial on 6 September 2006. 

In the Netherlands, this Fund has a registration under article 2:73 of the Dutch Financial 

Market Supervision Act. 

As of the date of this Addendum, the Fund has four sub-funds (“Sub-Funds”): 

Cadogan Market Neutral Fund USD (“MNF USD”) – started on 5 November 2001 

Cadogan Market Neutral Fund EUR (“MNF EUR”) – started on 5 November 2001 

Cadogan Market Diversified Fund USD (“MDF USD”) – started on 6 February 2004 

Cadogan Market Diversified Fund EUR (“MDF EUR”) – started on 6 February 2004 

For each of these Sub-Funds, the four following classes of shares are subscribed: 

A a 

A d 

I a 

I d 





Privileged Investors – Cadogan Market Neutral Fund Sub-Funds (EUR and USD) have 8 new 

classes of shares (these shares have not yet been launched). 

CMNF C a 

CMNF C d 

CMNF Q a 

CMNF Q d 

CMNF E a 

CMNF E d 

CMNF X a 

CMNF X d 

Privileged Investors – Cadogan Market Diversified Fund Sub-Funds (EUR and USD) have 8 

new classes of shares (these shares have not yet been launched). 

CMDF C a 

CMDF C d 

CMDF Q a 

CMDF Q d 

CMDF E a 

CMDF E d 

CMDF X a 

CMDF X d 

Information of present interest about the Fund and the prospectus, the financial leaflet, the 

articles and the annual and semi-annual reports, will be available free of charge with the 

3

Fund. This information as well as all other relevant information is also available on the 

website www.fortisinvestments.com. 

ANNUAL REPORT 

The annual report 2008, consisting of the annual report 2008 and this addendum for Dutch 

shareholders, comprises the information that is required for investment institutions with a 

notification under article 2:73 of the Dutch Financial Market Supervision Act. 

(1) Movement schedule per asset class 

According to the investment policy of Privileged Investors, investments are only made in 

Hedge Funds. Due to the cloning technique, the – Purchases - and – Sales - figures shown 

hereunder are not identical to those shown under (12) as there are re-balancing transactions 

between the cloned sub-funds on each valuation day which are taken into consideration in the 

calculations hereunder but not in that under (12). 

MNF USD 

Position 31/12/2007 USD 43.416.446 

Purchases USD 28.145.874 

Sales USD 35.937.607 

Net result USD -6.735.097 

Position 31/12/2008 USD 28.889.615 

MNF EUR 

Position 31/12/2007 EUR 903.973.670 

Purchases EUR 459.956.635 

Sales EUR 679.342.022 

Net result EUR -96.636.115 

Position 31/12/2008 EUR 587.952.168 

MDF USD 

Position 31/12/2007 USD 6.839.660 

Purchases USD 5.733.986 

Sales USD 5.878.515 

Net result 

USD-1.361.025 

Position 31/12/2008 USD 5.334.106 

MDF EUR 

Position 31/12/2007 EUR 280.298.482 

Purchases EUR 141.599.118 

Sales EUR 204.534.216 

Net result EUR -37.524.207 

Position 31/12/2008 EUR 179.839.176 

4

(2) Changes in net assets 

In the annual report the changes in net assets on a consolidated basis and per Sub-Fund are 

presented under “Statement of operations and changes in net assets from 01/01/08 to 

31/12/08”. 

(3) Number and value of shares issued and redeemed during 2008 

Also included in the “Statement of operations and changes in net assets from 01/01/08 to 

31/12/08” is the total value of the subscriptions and redemptions of each class of shares 

(“Class” or “Classes”) during the reporting period. The number of shares issued and 

redeemed per Class during 2008 are included in the annual report under “Changes in number 

of shares outstanding”. 

(4) NAV per Sub-Fund and per Class and total shares issued per Class during the 

reporting period 

In the annual report the total net asset value (“NAV”) per Sub-Fund, the NAV per share in 

each Class and the number of shares issued in each Class per the end of the reporting 

periods of the past 3 years have been included under “Key figures”. 

(5) Statement of net assets per 31/12/08 

In the annual report a “Statement of net assets at 31/12/08” is included. 

(6) Valuation of non-quoted securities policy 

For non-quoted securities or securities not traded or dealt on any stock exchange or other 

regulated market (including securities of closed-ended underlying funds), as well as quoted or 

non-quoted securities on other markets for which no valuation price is available, or securities 

for which the quoted prices are, in the opinion of the Directors, not representative of the fair 

market value, the value thereof shall be determined prudently and in good faith by the 

Directors on the basis of foreseeable sales prices. During the elapsed period there was need 

for the Directors to determine the price of some underlying investments on the basis of 

foreseeable sales prices. (See the notes to the financial statements.) 

The shares or units in underlying funds shall be valued at their last available net asset value, 

as reported or provided by such underlying funds or their agents. 

The Fund will neither lend nor borrow financial instruments. 

(7) Hedging transactions 

Unexpired forward foreign exchange contracts are valued at the forward exchange rates 

applicable to the remaining life of the relevant contracts and unrealised gains or losses 

resulting from them are included in the annual report under “Statement of net asset” under the 

heading “Unrealised gain / loss on forward foreign exchange contracts”. 

(8) Redemptions 

Each shareholder may apply for the redemption of all or part of his Shares or of a fixed Euro / 

USD amount as of the last calendar day of each month at the NAV per share determined as 

at that last calendar day. Redemption of shares of any Sub-Fund or Class will be suspended 

whenever the determination of the NAV of such Sub-Fund or Class is suspended. If 

applications for the redemption of more than 10% of the total number of Shares outstanding 

of any Class are received in respect of any last calendar day, the Directors may decide to 

defer any redemption request in whole or in part, so that the 10% limit is not exceeded. The 

limitation will be applied pro rata to all Shareholders who have requested redemptions to be 

effected on or as at such Redemption Day so that the proportion redeemed of each holding 

so requested is the same for all such Shareholders. 

5

(9) Personal interests of the Directors of the Fund by transactions by the Fund 

The Directors of the Fund have not reported any personal interest in any of the transactions 

by the Fund during the reporting period. 

(10) Fees and expenses of Privileged Investors 

 

General remark on the fee structure 

The Fund will bear the fees paid to the investment manager, being Cadogan Management 

LLC as from April 11, 2007, and other service providers as well as, indirectly, a pro rata 

portion of the fees paid by the underlying funds in which the Fund invests to their Sub 

managers or other service providers. 

Investors should be aware that the fees payable to the investment manager are in addition to 

the fees paid by the underlying funds to their Sub managers and that there will be a 

duplication of fees. There could be a triplication of fees in case of investment in underlying 

funds the investment policy of which is principally to invest in other collective investment 

undertakings. Below, the actual costs of 2008 are compared with the actual costs of 2007. 

During the concerned period, the Fund was not incurring any costs or expenses which were 

greater than 10% of the total expenses other than those mentioned hereafter. 

No retrocessions were paid by the underlying funds to the Fund, the investment manager or 

any of its affiliates. 

 

Consolidated Fees and Expenses 

Fees and Expenses EUR 

Management fees 14.745.063 

Performance fees 0 

Taxe d’abonnement 503.001 

Administrative & Custodian fees 1.727.615 

Professional & legal fees 94.535 

Bank interest on overdraft 442.838 

Other expenses 2.069.488 

Total expenses 19.582.541 

6

Management fees 

The investment manager receives from each Sub-Fund, payable out of the assets attributable 

to the relevant class of shares, the following monthly management fees based on the net 

asset value of the assets attributable to the relevant class of shares on the relevant valuation 

day. The management fees are booked in the Profit and Loss account. 

Sub-Funds Class A shares Class I shares 

MNF USD 1.25% (per annum) 1.00% (per annum) 

MNF EUR 1.25% (per annum) 1.00% (per annum) 

MDF USD 1.50% (per annum) 1.25% (per annum) 

MDF EUR 1.50% (per annum) 1.25% (per annum) 

MNF USD MNF EUR MDF USD MDF EUR 

2008 USD 479.357 EUR 10.460.633 USD 101.752 EUR 3.866.876 

2007 USD 547.131 EUR 11.081.409 USD 109.143 EUR 3.906.639 

Fees 2007 as 

per 

Prospectus 

EUR 15.434.000 

 

Performance fees 

The investment manager further receives a performance fee, which is calculated and accrued 

monthly and paid per annum in arrears at the rate of 10% over a "hurdle" rate of 8% of the 

annual increase of the NAV taking into account the outstanding shares on each valuation day. 

The performance fees are booked in the Profit and Loss account. 


2008 USD 0 EUR 0 USD 0 EUR 0 

2007 USD 49.802 EUR 8.074 USD 34.826 EUR 899.966 

Fees 2007 

as per 

Prospectus 

EUR 965.000 

 

Administration and custody fees 

The investment manager is also entitled to receive a fixed administration fee of 0.15% per 

annum based on the Net Asset Value of the assets attributable to the relevant class of shares 

on the relevant Valuation Day. From this fee, the investment manager will pay the services of 

the administrator and custodian, being Fortis Banque Luxembourg S.A. These fees are 

booked in the Profit and Loss account. 


2008 USD 57.685 EUR 1.283.307 USD 10.180 EUR 395.543 

2007 USD 67.084 EUR 1.361.472 USD 10.928 EUR 399.836 

Fees 2007 as 

per 

Prospectus 

EUR 1.801.000 

7

Audit fees 

The costs and expenses incurred with respect to audit fees vary each year and are paid 

against presentation of an invoice from the auditor and are brought to the books of each Sub- 

Fund on a pro-rata basis of their net assets. These fees are booked in the Profit and Loss 

account. 


2008 USD 2.844 EUR 63.668 USD 161 EUR 5.696 

2007 USD 5.448 EUR 109.486 USD 449 EUR 16.171 

Fees 2007 as per 

Prospectus 

EUR 131.554 

 

Fees credit facilities 

From September 27, 2007, the Fund is granted a credit facility from Fortis Bank (Nederland) 

N.V. which is secured by the Fund’s assets. Custody of the collateral required by the credit 

facility is with Fortis Banque Luxembourg S.A.. The Fund agreed to pay to Fortis Bank 

(Nederland) N.V. a commitment fee for providing the credit facility, which is as follows: 

Credit Size Fee in bps Fee amount p.a. Max.cum.amount 

EUR 0 - 10 mio 10.00 10.000 10.000 

EUR 10 - 25 mio 7.50 11.250 21.250 

EUR 25 - 50 mio 5.00 12.500 33.750 

EUR 50 - 75 mio 3.50 8.750 42.500 

EUR 75 -100 mio 2.00 5.000 47.500 

EUR > 100 mio 0.50 to be agreed to be agreed 

These fees are booked in the Profit and Loss account. 

In addition, each Sub-Fund paid to Fortis Bank (Nederland) N.V. accrued interest on the 

amounts drawn and outstanding under the credit facility at a floating interest rate per annum 

equal to (i) Fortis Bank rate, plus (ii) the margin equal to 0.90% per annum for USD, GBP, 

CHF and JPY respectively equal to (i) EONIA, plus (ii) the margin equal to 0.90% per annum 

for EUR. These fees are booked in the Profit and Loss account. 

From June 4, 2008 until December 31, 2008, the Fund is granted an uncommitted credit 

facility from Fortis Bank (Nederland) N.V. which is secured by the Fund’s assets. Custody of 

the collateral required by the credit facility is with Fortis Banque Luxembourg S.A.. As this is 

an uncommitted facility, no commitment fees are due by the Fund to Fortis Bank (Nederland) 

N.V.. 

Nevertheless each Sub-Fund paid to Fortis Bank (Nederland) N.V. accrued interest on the 

amounts drawn and outstanding under the credit facility at a floating interest rate per annum 

equal to (i) Fortis Bank rate, plus (ii) the margin equal to 0.90% per annum for USD, GBP, 

CHF and JPY respectively equal to (i) EONIA, plus (ii) the margin equal to 0.90% per annum 

for EUR. 

The credit facility agreement granted to each Sub-Fund of the Sicav and the pledge 

agreement in relation as well to each Sub-Fund of the Sicav were terminated with effect from 

January 30, 2009. 

8

The interest proceeds paid by the Fund during the reporting period are as follows: 


2008 USD 0 USD 161.660 USD 894 USD 127.824 

2007 USD 0 EUR 0 USD 1.773 EUR 52.487 

 

Fees supervisory authorities 

The fees charged by the Luxembourg and Dutch supervisory authorities may vary each year 

and are paid against the presentation of an invoice from the supervisory authorities and are 

brought to the Profit and Loss account of each Sub-Fund on a prorate basis of their net 

assets. 


2008 USD 111 EUR 2.448 USD 67 EUR 2.478 

2007 USD 127 EUR 2.411 USD 67 EUR 2.457 

Fees 2007 as 

per 

Prospectus 

EUR 5.062 

 

Transaction fees 

As from January 2008, these fees include penalty fees, equalization fees and any other fees 

paid by the Fund in relation with investments and divestments. These fees are booked in the 

Profit and Loss account . 

For 2008 

Purchase Fees 

Sales Fees 

MNF USD USD 653 USD 74.053 

MNF EUR EUR 14.755 EUR 1.655.509 

MDF USD USD 280 USD 1.054 

MDF EUR EUR 11.011 EUR 39.636 

For 2007 

Purchase Fees 

Sales Fees 

MNF USD USD 580 USD 104 

MNF EUR EUR 7.860 EUR 1.429 

MDF USD USD 375 USD 80 

MDF EUR EUR 9.061 EUR 2.657 

9

Formation fees 

The total costs and expenses of establishing the Fund of USD 90.000 have been paid by the 

Fund out of the proceeds of the initial issue of Shares. These costs and expenses were 

allocated to the Sub-Funds in accordance with the allocation rules set forth under section 15. 

“Net Asset Value” extract from the prospectus of October 2008. These costs and expenses 

have been amortized on a straight-line basis over 5 years from the date on which the Fund 

commenced business and have been booked in the Profit and Loss account. None of the 

formation expenses were for the benefit of the investment manager, custodian or any of its 

directors or affiliates. 




Fees 2007as 

per 

Prospectus 

Total cost of USD 90.000 was amortized over 5 years 

 

Marketing and promotional expenses 

No marketing and promotional expenses were charged to the Fund. 

 

Subscription fees 

A subscription charge of up to 5% of the aggregate subscription amount may be charged or 

waived in whole or in part at the discretion of the Directors. Subscription charges are 

generally paid by the subscribers directly to the financial intermediary through whom the 

subscription application was made and are thus not received as income by the Fund, unless 

the subscription is made directly to the Fund in which case these fees are forwarded by the 

Fund to the investment manager. 

The Fund is not paying any “aanbrengvergoedingen” to investors entering the Fund. 


2008 USD 0 EUR 159.384 USD 0 EUR 16.133 

2007 USD 1.851 EUR 47.220 USD 0 EUR 36.486 

 

Redemption fees 

A redemption fee of up to 0.80% of the aggregate redemption amount may be charged and 

paid to the Fund or may be waived in whole or in part at the discretion of the Directors. All 

redemption requests for the same Class of a Sub-Fund dealt with on the same Redemption 

Day are subject to the same redemption charge. The redemption fees are disclosed in the 

annual report under the “Statement of operations and changes in net assets” under “Income”. 

10

Conversion fees 

To cover any transaction costs which may arise from the conversion, the Directors may 

charge a conversion fee of up to 1% of the Net Asset Value of the Shares to be converted, to 

be shared amongst the Classes or Sub-Funds between which the conversion is effected. The 

same conversion fee will be charged in respect of all conversions of a Class or Sub-Fund 

effected on the same common Valuation Day. These fees are booked in the Profit and Loss 

account. 



2007 USD 0 EUR 0 USD 2.615 EUR 32.675 

 

Ucits taxes 

These fees are booked in the Profit and Loss account. The SICAV is liable in Luxembourg to 

a "taxe d'abonnement" of 0.05% per annum of its net assets attributable to Class A a and 

Class A d Shares. In respect of Class I a and Class I d , the tax levied is at the rate of 0.01% per 

annum. This tax is not applicable for the portion of the assets of the Fund invested in other 

Luxembourg collective investment undertakings already subject to taxe d’abonnement. 


2008 USD 17.789 EUR 374.294 USD 3.319 EUR 113.539 

2007 USD 27.170 EUR 420.148 USD 3.741 EUR 119.502 

Fees 2007 as 

per 

Prospectus 

EUR 557.000 

(11) Total expense ratio (TER) 

All the costs of whatever nature incurred by the Fund during the considered period are 

included in the TER. 

Total Expense Ratio: 

Operating cost 

NAV. 

average 

The NAV average is the total sum of the net asset values divided by the number of 

observations. The total sum of the net asset values is based on the figures as at 31 

December of the previous financial year and 31 March, 30 June, 30 September and 31 

December of the reporting period. The number of observations is five and the observations 

are to be regarded as a weighted average, whereby the aforementioned dates are weighted 

in the ratio 0.5:1:1:1:0.5 . 

The Operating costs are including all the costs incurred by the fund during the elapsed period, 

such as, but not limited to Administration fees, Management fees, Performance fees, Audit 

fees, Ucits taxes, Publication fees, Legal fees, etc. 

11

In the TER the costs of the underlying funds have not been included as the majority of the 

underlying funds are not required by law to calculate and publish a TER in the jurisdictions 

where they are located. Due to this lack of data the Fund is not able to calculate a synthetic 

TER. The costs of the underlying funds do however influence the performance of the Fund. 


2008 1.39% 1.42% 1.70% 1.65% 

2007 1.54% 1.44% 2.20% 1.99% 

2006 1.76% 1.44% 2.29% 1.88% 

(12) Turn-over ratio 

Total 

Purchases 

For 2008 

Total Sales 

Total 

Subscriptions 

Total 

Redemptions 

NAV average 

Turnover 

MNF USD USD 20.040.779 USD 29.343.556 USD 3.636.341 USD 12.309.293 USD 40.363.551 82.84% 

MNF EUR EUR444.573.996 EUR661.931.866 EUR 90.180.089 EUR 196.913.166 EUR 861.657.323 95.10% 

MDF USD USD 3.053.322 USD 4.573.937 USD 376.063 USD 495.347 USD 6.837.840 98.80% 

MDF EUR EUR120.620.552 EUR182.452.399 EUR 25.184.225 EUR 31.188.912 EUR 266.077.436 92.72% 

Turnover calculation = (Purchases + Sales) – (Subscriptions + Redemptions) / NAV average 

(see above) 

Total 

Purchases 

For 2007 

Total Sales 

Total 

Subscriptions 

12 

Total 

Redemptions 

NAV average 

Turnover 

MNF USD USD 14.989.400 USD 10.667.403 USD 6.239.442 USD 10.307.583 USD 44.544.168 20.45% 

MNF EUR EUR301.599.823 EUR 214.880.928 EUR 135.347.136 EUR 104.964.515 EUR 901.124.349 30.65% 

MDF USD USD 2.869.552 USD 2.207.812 USD 768.405 USD 928.559 USD 7.260.867 46.56% 

MDF EUR EUR 105.151.741 EUR 80.341.902 EUR 51.676.875 EUR 36.445.897 EUR 264.122.435 36.87% 

(13) Percentage of total transaction volume of the Fund transacted through parties 

affiliated to the investment manager or the custodian 

All asset transactions of the Fund have been made through Fortis Group entities of which 

Cadogan Management, LLC is a part. 

(14) Transactions with affiliated parties 

The following contracts, not being contracts entered during the ordinary course of business, 

have been entered into by the Fund with the investment manager. The provider of the 

currency hedging being BGL Société Anonyme (named Fortis Banque Luxembourg S.A.), the 

credit facility provider until April 2006 being Fortis Bank (Nederland) N.V., the custodian and 

the administrator which can be considered as affiliated parties to the Fund: 

1. An agreement dated April 11, 2007 between the Fund and Cadogan Management, LLC 

pursuant to which the latter was appointed (subject to the overall control and 

supervision of the Directors) to manage the Fund on a day to day basis. 

2. An agreement dated April 11, 2007 between the Fund, the investment manager and 

the custodian pursuant to which the latter was appointed as custodian of the assets of 

the Fund. The custodian is responsible for ensuring that in transactions involving the 

assets of the Fund the consideration is remitted to it within the usual time limits, that the

income of the Fund is applied in accordance with the Articles and that the sale, issue, 

redemption and cancellation of Shares is effected in accordance with the Luxembourg 

law and the Articles. 

3. An agreement dated April 11, 2007 between the Fund, the investment manager and the 

administrator pursuant to which the latter was appointed as the Fund’s administrator. 

The administrator is responsible for the general administrative functions required by 

Luxembourg law, such as the issue and repurchase of Shares, calculation of the Net 

Asset Value and maintenance of accounting records. 

4. An agreement dated 29 October 2001 between the Fund and the Listing Agent, being 

BGL Société Anonyme (named Fortis Banque Luxembourg S.A.), pursuant to which the 

latter was approved as the Fund's Listing Agent. 

From September 27, 2007, the Fund is granted a credit facility from Fortis Bank 

(Nederland) N.V. which is secured by the Fund’s assets. Custody of the collateral 

required by the credit facility is with Fortis Banque Luxembourg S.A.. 

From June 4, 2008 until December 31, 2008, the Fund is granted an uncommitted credit 

facility from Fortis Bank (Nederland) N.V. which is secured by the Fund’s assets. 

Custody of the collateral required by the credit facility is with BGL Société Anonyme 

(named Fortis Banque Luxembourg S.A.). As this is an uncommitted facility, no 

commitment fees are due by the Fund to Fortis Bank (Nederland) N.V.. 

The credit facility agreement granted to each sub-fund of the Sicav and the pledge 

agreement in relation as well to each sub-fund of the Sicav were terminated with effect 

from January 30, 2009. 

Regarding the fees to be paid by the Fund, please see Item (10) above heading “ Fees 

credit facilities “. 

No other agreements than those mentioned above and no outsourcing agreements with 

affiliated parties have been concluded by the Fund. 

The Fund does not hold any investments which qualify as a “deelneming”. 

In case transactions with affiliated parties are entered into outside a regulated market, 

securities exchange or other regulated market, which operates regularly and is recognised 

and open to the public, such transactions shall in all cases be conducted under usual market 

conditions and based on an independent valuation. 

(15) Amount of transactions made in non regulated markets 

All the transactions of the Fund have been made in regulated markets or on security stock 

exchanges. 

(16) Subscription and redemption instruction procedure 

Applicants who wish to subscribe or redeem CMNF A a Shares, CMNF A d Shares, CMNF I a 

Shares, CMNF I d Shares, CMNF C a Shares, CMNF C d Shares, CMNF Q a Shares, CMNF Q d 

Shares, CMNF E a Shares, CMNF E d Shares, CMNF X a Shares, CMNF X d Shares, CMDF A a 

Shares, CMDF A d Shares, CMDF I a Shares, CMDF I d Shares, CMDF C a Shares, CMDF C d 

Shares, CMDF Q a Shares, CMDF Q d Shares, CMDF E a Shares, CMDF E d Shares, CMDF X a 

Shares, CMDF X d Shares, 

must send the application to the administrator in Luxembourg. 

For the purpose of the prior notice requirements, all applications for subscriptions and 

redemptions shall be deemed to be received at the time they are received by the 

administrator in Luxembourg. 

13

Subscription applications can be made for a specified amount, or by exception granted by the 

Directors, for a specified maximum number of whole shares conditioned to a maximum 

subscription amount in which case the investor can not subscribe for fractional shares. 

(17) Retrocessions received by the Fund 

The Administrators of the underlying hedge funds pay no retrocessions. Accordingly, neither 

the Fund nor any other intervening entity linked to the Fund is collecting retrocessions. 

14

Independent Assurance Report 

To the Shareholders of 


PricewaterhouseCoopers 

Société à responsabilité limitée 

Réviseur d'entreprises 

400, route d’Esch 

B.P. 1443 

L-1014 Luxembourg 

Telephone +352 494848-1 

Facsimile +352 494848-2900 

www.pwc.com/lu 

info@lu.pwc.com 

We have examined the accompanying Dutch supplement to the audited annual report 

for the year ended December 31, 2008 (the “Supplement”) of Privileged Investors 

(“the Fund”), for the purpose of determining whether this supplement together with 

the audited annual report, at least contain the information which, to the extent 

applicable, is required to be included therein pursuant to sections 119 up to and 

including 124 of the Dutch Decree on Market Conduct Supervision of Financial 

Institutions in accordance with the Act on Financial Supervision (the “Decree”). 

This Supplement together with the audited annual report of the Fund are the 

responsibility of the Board of Directors of the Fund. Our responsibility is to express 

an opinion on the Supplement based on our examination. The definitions set out in 

sections 119 up to and including 124 of the Decree were the criteria used for our 

examination. 

Our engagement was undertaken in accordance with the International Standard on 

Assurance Engagements 3000 (“ISAE 3000”) and, accordingly, included examining, 

on a test basis, evidence supporting the compliance of the attached Supplement with 

the requirements of the Decree, and performing such other procedures as we 

considered necessary in the circumstances. We believe that our examination provides 

a reasonable basis for our opinion. 

In our opinion, the attached Supplement together with the audited annual report for 

the year ended December 31, 2008 of the Fund, at least contain, in all material 

respects, the information which, to the extent applicable, is required pursuant to 

sections 119 up to and including 124 of the Decree. 

PricewaterhouseCoopers S.à r.l. Luxembourg, July 06, 2009 

Réviseur d’entreprises 

Represented by 

Valérie Piastrelli 

R.C.S. Luxembourg B 65 477 - TVA LU17564447

Privileged Investors - BNP Paribas Investment Partners

Create successful ePaper yourself

Delete template?

Save as template?