Lou Gerken
January 26, 2009

Dear Friends & Co-investors,

We are very pleased to announce that we have signed a long-term and exclusive Agreement with China Merchant Securities (CMS) to serve as GCA Greater China Fund’s on-the-ground Regional Partner.  Based in Shenzhen China, CMS is one of China’s oldest investment firms.  It is majority-owned by China Merchant Group, China’s 11th largest State Owned Enterprise founded in 1872.  The Group’s business interests include a market leadership position in the transportation sector, property and finance.  CMS itself was spun off from China Merchant Bank, (China’s 6th largest bank established in 1987) in 1991 as part of the China Securities Regulatory Commission (CSRC) compliance initiative separating commercial banking from the securities business.  CSRC has also recently approved an A-Share listing for CMS in 2009.  CMS is fully licensed in Honk Kong and China to offer a full range of financial services including equity sales & trading, research, investment banking and asset management.  It is ranked top five in China for all sectors served.  The CMS Research Center has ninety dedicated analysts based in Hong Kong, Shenzhen, Shanghai and Beijing and is independently ranked annually as one of China’s best research houses.  Their analytical coverage spans thirty sectors and encompasses over 380 A-share and H-share listed companies.  CMS has 71 branches in 29 cities with total staff of 1838.  They have three million institutional and HNW clients.

The GCA/CMS Agreement was signed January 2009.  The Agreement provides GCA’s Portfolio Management Team with 24x7 on the ground access to one of China’s most prominent research houses providing extensive and time sensitive coverage of macro economic development in China, all important policy interpretation, sector coverage and company analysis. Beyond covering the well-known large cap Chinese companies CMS stands out for its specialization in covering the small-to mid cap sector companies which make up an estimated 50% of China’s future GDP growth.  CMS is also known to provide the most granular research coverage of sectors and companies due to their research analyst’s profiles where they have worked in-house for all relevant sectors.  The majority of CMS Analysts also have advanced degrees from prominent international universities.  All Fund investment decisions will continue to reside with GCA and its PM team.  Notwithstanding, the PM Teams’ regular regional visits combined with their 24x7 access to CMS enables GCA to materially improve the quality of information flow and investment decisions made on behalf of the Fund.

The Agreement also requires that CMS invest in the GCA Greater China Fund, and provides GCA the option to access the China A-share Market via QFII quota arranged by CMS.  QFII annual quotas are CSRC regulated and reserved for a finite group of approved foreign investors.  CMS has also agreed to market the GCA Greater China Fund through its distribution network in China and Hong Kong, as well as other GCA investment products.  Finally, we are in discussion with CMS regarding their possible minority equity investment in the GCA Parent Company.  For additional information on CMS please refer to www.newone.com.hk.

Best,
Lou C. Gerken