Private equity funds are pools of actively-managed capital that invest in public and private companies with the intent of creating value in the companies in which they invest by improving operations, reducing costs, selling non-core assets and maximizing cash flow. Private equity managers—who generally take an active role in the strategic management of the portfolio companies—construct their funds in a number of ways: by strategy (e.g., venture capital, growth capital, leveraged buyout or special situations), by industry (e.g., business services, retail or technology) or by geography (e.g., North America, Europe or Asia).

Objectives:

• Enhanced Return Potential: These funds generally seek returns superior to public equity markets through the purchase, creation of value and sale of a portfolio of companies.

Key Features:

• Value creation by exercising control over firms in which the manager invests.
• Capital calls may be made on short notice.
• Limited or no liquidity—capital is typically locked up for a period of years during which there is virtually no liquidity.
• Cash flow typically follows a "J-curve"—capital outflows generally occur in years one to three and capital distributions tend to occur in years three to ten of the investment cycle.
• Returns are typically cyclical.

Private Equity at UBS
UBS provides eligible and qualified investors access to the world's leading private equity managers who have deep investment management experience and demonstrated track records. We also offer:

• A Variety of Funds Across a Number of Strategies and Structures: Through various UBS proprietary funds, we offer access to managers that cover a number of strategies, including venture capital, growth capital, buyout and special situations. Both single-manager funds and more diversified funds-of-funds options—diversified by manager, investment stage/strategy and geography—are available.
• In-Depth Manager Due Diligence: Each fund that we recommend is subject to an initial investment and operational due diligence process, and after its selection, ongoing monitoring. The investment process combines data gathering and analyses, as well as onsite manager visits, with the qualitative judgment of our experienced and highly regarded professional team.

About Alternative Investments at UBS
A leader in the alternative investments arena, UBS offers high-net-worth, ultra-high-net-worth and institutional investors an array of alternative strategies to help them achieve more efficient diversification within their traditional investment portfolios. The Alternative Investments US team, headquartered in New York City, develops, manages, distributes and services a suite of best-in-class proprietary and third-party alternative investment offerings across a variety of asset classes and investment strategies for domestic and offshore clients.

Past performance is not indicative of future results.

Alternative investment funds ("Funds") are not appropriate for all investors, and carry specific risks above and beyond those associated with traditional asset classes.

Alternative Investments US provides investment management services to qualified high- and ultra-high-net-worth investors. Eligibility requirements for alternative investments begin, generally, at a net worth greater than $1.5 million (including a spouse) for individuals or $5 million for companies.

The Funds are not mutual funds and are not subject to the same regulatory requirements as mutual funds. The performance of the Funds may be volatile, and investors may lose all or a substantial amount of their investment in the Funds. The Funds may engage in leveraging and other speculative investment practices that may increase the risk of investment loss. Portfolio assets of these Funds typically will be illiquid. The Funds may not be required to provide periodic pricing or valuation information to investors. They generally involve complex tax strategies and there may be delays in distributing tax information to investors. The Funds may charge high fees that would reduce profits. Interests of the Funds are illiquid and subject to restriction and change. An investment in the Fund is long term; there is no secondary market for the interests of the Fund, and none is expected to develop. Interests of the Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank or other insured depository institution, and are not federally insured by the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other governmental agency. Investors should consider the Funds as a supplement to an overall investment program.

The information provided is an overview of alternative investments and structured products at UBS. The information is intended for educational purposes only and does not constitute investment advice. Among other things, it does not take into account your personal financial situation, your investment goals or your investment strategies. You should not construe any information provided here to be an investment recommendation for you to follow. You should contact your Financial Advisor for information or recommendations that may be useful specifically to you.