MORGAN CREEK-EXOS RISK-MANAGED BITCOIN FUND

Bitcoin has laid the foundation for a new asset class that may become the biggest technological innovation since the internet.  However, most have not yet invested as it is perceived as new and unproven, volatile, and highly technical.

The Morgan Creek-Exos Risk-Managed Bitcoin Fund (the "Fund") seeks to reduce the volatility of an investment in Bitcoin by applying a systematic framework to manage risk.  The Fund:

• Provides exposure to Bitcoin
• Seeks to reduce volatility of returns by employing quantitative risk management techniques
• Handles technical details around trade, transfer, and custody of Bitcoin

The Fund is a collaboration between Morgan Creek Capital Management and Exos Financial, the Sub-Advisor.  Exos, a new institutional finance platform, was founded by Brady Dougan, the former CEO of Credit Suisse.  In addition to asset management, Exos operates a number of businesses including investment banking, sales & trading, wealth management, and M&A advisory.  The Fund brings together the expertise of both firms in managing digital asset investments.

The collaboration brings together a team with:

• Deep understanding of cryptocurrency and blockchain with extensive experience in mining, staking and trading
• Extensive experience in quantitative research, trading and risk management
• Diverse range of technical backgrounds including finance, engineering, computer science and physics

Despite increasing publicity in recent years, Bitcoin has yet to gain mass adoption by large traditional financial institutions. However, interest is growing rapidly with Bitcoin being more widely held and liquidity increasing.

Bitcoin remains notoriously volatile compared to traditional asset classes. During its short history, Bitcoin has undergone many significant changes with respect to liquidity, supply schedule, market structure, and regulation. Some changes are abrupt and others occur gradually over time. While the underlying trends have had an overall positive effect on the Bitcoin ecosystem, unexpected events in a non-mature market can have an amplifying effect on volatility.

The Exos team believes that active management of Bitcoin can produce better results over time than simply holding Bitcoin passively.

The Exos team comes from a range of technical backgrounds and has extensive experience in the financial markets, from low-latency quantitative algorithmic trading in equities to macro and relative-value trading in rates. In addition, Exos has been directly involved in the crypto space in various capacities including proof-of-work mining, staking, and trading. We believe that this combination of experience gives us our edge.

In nature, simple organisms often prove more robust over a wider range of environments than complex ones. Our approach to trading strategies draws from the same concept. We favor simple strategies that perform well over a range of environments and rely heavily on our systematic development process to ensure that correlations are not spurious.

The strategy is fully exposed to Bitcoin (beta) when several risk-reward metrics (alphas) suggest a future rise in price. Conversely, exposure is reduced when its indicators suggest a future fall in price. Exos has developed alphas which enable us to mitigate losses during downturns without sacrificing too much of the upside potential of Bitcoin.

This paradigm - data in, trading decision out - is the cornerstone of our research process.