PHILOSOPHY

Cornerstone Investment Principles

Cornerstone offers fixed income investment opportunities that leverage our expertise across different strategies based on market conditions. We provide a contrarian management style, with a dynamic and flexible market-oriented approach to managing risk.

Our investment philosophy recognizes that temporary market inefficiencies, arising from normal interest rate cycles as well as investor segmentation, create attractive investment opportunities. As a small investment firm with experienced professionals, Cornerstone believes that it possesses the capability to identify, and the flexibility to effectively exploit, such investment opportunities.

Cornerstone Risk Management

Cornerstone strongly believes that absolute returns can be obtained through prudent management of portfolios that hold many uncorrelated positions, as opposed to fewer investments with larger risk exposure.

With this portfolio construction framework in mind, Cornerstone’s dedicated risk management team focuses on incremental returns, using disciplined risk management processes that have defined market entrance and exit points. Cornerstone’s risk management process is continuous, and includes three levels of pre-investment and post-investment analysis.

Cornerstone’s multi-disciplined risk-management process is augmented with a daily, independent market risk and liquidity management review.

Cornerstone Operations

At Cornerstone, our high quality professional staff complements the senior operational team. Operational staff report separately to the CFO, with no reporting responsibilities to investment personnel. Daily operational performance reports are reviewed by the CFO and President, with spot tests performed periodically.

Each component of Cornerstone’s operational and investment systems has a back-up and disaster recovery plan maintained by reputable third party vendors.

The five founding principles of Cornerstone Capital Partners L.P. are:

1. Our clients’ interests come first

2. Integrity

3. Respect for the individual

4. Standard of excellence

5. Teamwork