TAUSSIG CAPITAL Outperformance & Permanent Capital EFTA00506380

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The General Idea TAUSSIG CAPITAL With all 4 elements in place, IRRs should exceed the ROEs of a fund or managed account with the same asset strategy as well as the ROEs of a traditional (re)insurer or bank that is in the same line of business Via a 144A offering, the asset manager should secure $200 million to $5 billion in permanent capital (some or all of which would be new AuM) with a high degree of certainty EFTA00506381

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= Buffett — from hedge fund manager to (re)insurer/banker = Capital in fund structure works only once Q) = Inat NAV; Returns compound; Out at NAV QO) ~=High levels of taxation for investors in the UK, Canada, and the U.S. = Same Capital in insurer, reinsurer, or bank works twice Once - equity capital is invested in the given asset strategy Twice — allows premiums or deposits to generate operating profits If operations break even, (re)insurer or bank earns the same as fund 4 million people in the U.S. generate 10% ROEs in operating profits Traditionals — buy and hold high grade fixed income to maturity Fixed income (5%) + operating profits = pre-tax 15% (a-tax 8%-10%) Fund strategy+operating profits = higher ROEs than fund/traditionals In addition to higher ROEs, shares should trade at premium to book No K-1s and capital gains treatment in the UK, Canada, and the U.S. = Proof of concept — Greenlight Capital Re (symbol — GLRE) OOOOOOOOD 2 EFTA00506382

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TAUSSIG CAPITAL 144A Offerings Hybrid private placement and public offering Simpler/quicker/cheaper than private placements or IPOs Primarily used for structured products and foreign equities 91 U.S.- centric equity offerings in last 10 years - $25 billion FBR has done 51 of the 91 offerings totaling $16 billion () FBR treats 144A like a business -— all other IBs treat it as a hobby O) Qualified institutional/accredited/offshore investor universe of 1,200 4) Dedicated sales force specializing in 144A offerings 4) Commits own capital to market making via NASDAQ‘s Portal System Profile of FBR transactions 8 Minimum of $200 million — (One $1 billion + deal in each of last 3 years) O) 70% are financial services — 50% are startups Q) 3 Bermuda reinsurance startups totaling $1.25 billion in equity capital EFTA00506383

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. TAUSSIG CAPITAL (Re)Insurers Needing Sponsors ™ Insurance and reinsurance without letters of credit Private placement variable universal life insurance (operational) Cat reinsurer/ILS hybrid (1 startup, 2 acquisitions) GigaLife - PPVULs of $1 billion or more (1 startup) * Residual value insurance (1 startup, 1 acquisition) Trade finance insurance (MGA conversion) Letter of credit liberation (early stage operational — Berkshire connection) Risk Retention Groups paired with matching reinsuers (multiple startups) * Sharia compliant reinsurer (1 startup) m Insurance and reinsurance requiring letters of credit GLRE clones (virtually unlimited number but a crowded trade) * Life and annuity reinsurance (1 acquisition, 2 books of business) Assuming Pension liabilites and running them off (1 startup) * Synthetic acquisitions (virtually unlimimted number) * Reinsuring captives (1 strategic relationship, several acquisitions) Point of sale reinsurance (car rentals, trip, warranties, credit life) * MGA profit sharing (startup) OOUOKWOUOOUOD OUOoOOUOD * Will need to recruit a management team 4 EFTA00506384

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TAUSSIG CAPITAL Banks Needing Sponsors = Commercial Banking Converting asset based lending funds into banks (virtually unlimited number) Specialty Lenders — all would be startups a Litigation (2); Trade finance (3); Libraries (2); Hospital receivabes (1) QO) Point of Sale Lending o Time share receivables (1); Manufacturers (1) Commercial mortgages (1 startup); Residential mortgages (1 startup) Corporate loans (1 startup); Leveraged loans (2 startups); DIP loans (1 startup) ae oe = Private Banking Traditional Swiss private bank (1 startup, 2 acqulsitions) Providing portfolio financing for clients of other private banks * Serving Swiss Independent Asset Managers * Rolling up Swiss Independent Asset Managers * Swiss private bank that only serves Americans * Private bank serving clients of major deferred compensation provider OUOOUOD * Will need to recruit a management team 5 EFTA00506385