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Parus Fund Monthly Activity Report for April 2014

The Parus Fund is a global long/short Equity Fund investing primarily in North American and European equities. The Fund’s objective is to generate absolute returns by targeting on the long side growth stocks with a competitive advantage and on the short side structurally declining companies. The Fund employs a stock-picking methodology supported by fundamental analysis and the use of primary data. The Fund focuses on long-term outcome with the objective to make money on each position independently be it long or short. Stocks included in the portfolio are the result of a bottom-up selection process, hence the variable net exposure of the Fund which has historically been between 0 and 95%.

The Parus Fund is an Irish Qualified Investor Fund (QIF) regulated by the Central Bank of Ireland. The fund offers USD, EURO and CHF classes. The Fund is managed by Parus Finance, an independent asset management company regulated by the FCA and operating out of London.

The performance of the Parus Fund USD Class was -2.7% in April of which -2.9% comes form the long book and +0.1% from the short book. The Fund is at -1.7% YTD, +20.5% for 1 year, +39.5% for 3 years and +104.6% for 5 years.

The high growth portion of the book continued to affect our portfolio despite its size being reduced by half between December and March. Most negative contributors were Bank of America, Bank of Ireland, LinkedIn and Asos and most positive ones were MGIC, DR Horton and Zillow on the long side and Seagate on the short side. During the month, we also added one long European bank in the portfolio.
At the end of April, the net exposure of the Fund is 50.9% of the NAV, with a long exposure of 58.9% and a short exposure of 8.0%. The gross exposure is 66.9% of the NAV.

Finance, including credit card processors, (23.3%) remains the largest sector followed by Media (14.3%) and Real estate (9.5%). The long portfolio holds 29 positions. In the short book, Energy is the largest sector (2.8%), followed by Technology Hardware (2.5%) and Semiconductors (1.2%). The short portfolio holds 9 positions.

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