Composite Notes

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE MICRO CAP GROWTH COMPOSITE

The Micro Cap Growth Composite (the “Composite”) presented includes all unleveraged “micro cap growth accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in January 1996.

An account is considered to be a micro cap growth account if it primarily invests in U.S. equity securities of growth companies with market capitalization ranges of generally followed micro cap indices at the time of purchase. However, there is no requirement to be exclusively invested in micro cap stocks and the accounts have invested, to a lesser extent, in stocks with a smaller or larger capitalization from time to time.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month. Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style. Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE SMALL CAP COMPOSITE

The Small Cap Composite (the “Composite”) presented includes all unleveraged “small cap growth accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in January 1993.

An account is considered to be a small cap growth account if it primarily invests in U.S. equity securities of high growth companies within market capitalization ranges of generally followed small cap indices at the time of purchase. However, there is no requirement to be exclusively invested in small cap stocks and the accounts have invested, to a lesser extent, in stocks with a smaller or larger capitalization from time to time.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month. Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style. Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE SMALL CAP RECOVERY COMPOSITE

The Small Cap Recovery Composite (the “Composite”) presented includes all unleveraged “small cap recovery accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in January 1997.

An account is considered to be a small cap recovery account if it primarily invests in U.S. equity securities within the market capitalization range of generally followed small cap indices at the time of purchase. However, there is no requirement to be exclusively invested in small cap stocks and the accounts have invested, to a lesser extent, in stocks with a smaller or larger capitalization from time to time. The account invests in companies that are trading below their historical high prices and have recently demonstrated improving business prospects.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month. Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style. Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE MID CAP COMPOSITE

The Mid Cap Composite (the “Composite”) presented includes all unleveraged “mid cap growth accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in January 1993.

An account is currently considered to be a mid cap growth account if it primarily invests in U.S. equity securities of growth companies with market capitalizations within the market capitalization ranges of generally followed mid cap indices at the time of purchase. However, there is no requirement to be exclusively invested in mid cap stocks and the accounts have invested, to a lesser extent, in stocks with a smaller and larger capitalization from time to time, as well as in certain derivative instruments known as “SCORES.” Certain accounts invested in “SCORES,” an equity derivative representing the underlying security’s capital appreciation component, between 1988 and 1992.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month. Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style. Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE MID CAP RECOVERY COMPOSITE

The Mid Cap Recovery Composite (the “Composite”) presented includes all unleveraged “mid cap recovery accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in January 2001.

An account is considered to be a mid cap recovery account if it primarily invests in U.S. equity securities within the market capitalization ranges of generally followed mid cap indices at the time of purchase. However, there is no requirement to be exclusively invested in mid cap stocks and the accounts have invested, to a lesser extent, in stocks with a smaller or larger capitalization from time to time. The account invests in companies that are trading below their historical high prices and that have recently demonstrated improving business prospects.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month. Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style. Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE LARGE CAP GROWTH COMPOSITE

The Large Cap Growth Composite (the “Composite”) presented includes all unleveraged “large cap growth accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise full discretionary investment authority of both cash and equities using the same investment objective and philosophy.  The Composite was created in April 2007.

An account is considered to be a large cap growth account if it primarily invests in U.S. equity securities of growth companies within market capitalization ranges of generally followed large cap indices at the time of purchase. However, there is no requirement to be exclusively invested in large cap stocks and the accounts have invested, to a lesser extent, in stocks with a smaller capitalization from time to time.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month.  Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style.  Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE INTERNATIONAL SMALL CAP GROWTH  COMPOSITE

The International Small Cap Growth Composite (the “Composite”) presented includes all unleveraged “international small cap growth accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise full discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in July 2001. 

An account is considered to be an international small cap growth account if it seeks superior capital appreciation through active investment in international equities displaying exceptional earnings per share and sales growth characteristics. Preferred companies also possess dynamic business models and benefit from favorable macro-market conditions. The strategy invests in companies with market capitalizations generally less than $2.5 billion.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month.  Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style.  Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE INTERNATIONAL DISCOVERY COMPOSITE

The International Discovery Composite (the “Composite”) presented includes all unleveraged “international discovery” accounts over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in January 1999.

An account is considered to be an “international discovery account” if it seeks superior capital appreciation through active investment in international equities which are not constrained by market capitalization but will generally be biased towards small and mid cap international equities displaying exceptional earnings per share and sales growth characteristics.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month. Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style. Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE INTERNATIONAL REALTY COMPOSITE

The International Realty Composite (the “Composite”) presented includes all unleveraged “international realty accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise full discretionary investment authority of both cash and equities using the same investment objective and philosophy.  The Composite was created in February 2007.

An account is considered to be a international realty account if it seeks superior capital appreciation through active investment in international realty equities which are not constrained by market capitalization and display exceptional earnings per share and sales growth characteristics.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month.  Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style.  Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE EMERGING MARKETS GROWTH COMPOSITE

The Emerging Markets Growth Composite (the “Composite”) presented includes all unleveraged “emerging markets growth accounts” over which Driehaus Capital Management LLC and Driehaus Securities LLC (collectively, the “Companies”) exercise full discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in January 1997. 

An account is considered to be an emerging markets growth account if it seeks capital appreciation by investing primarily in equity securities of rapidly growing companies in emerging markets countries around the world. This strategy may invest substantially all (no less than 65%) of its assets in emerging markets companies.

Once an account has met the above criteria, it is included in the Composite in the first month in which it was fully invested as of the beginning of the month.  Accounts that change investment strategies are transferred between Composites in the first full monthly reporting period in which the account is managed under the new style.  Terminated accounts are excluded from the Composite in the first month in which they are not fully invested as of the end of the month.

PERFORMANCE RESULTS

Asset-weighted, net of fee Composite returns are presented. Monthly Composite returns are calculated as the sum of the monthly returns of each account weighted by the account’s beginning monthly value as compared to the Composite total. Equal-weighted Composite returns are available upon request.  For periods prior to November 1, 2004, time weighted rates of return were calculated on a monthly basis and allowed for the effect of cash additions and withdrawals using the Modified Dietz method. If a cash contribution or withdrawal exceeded 10% of an account’s value, the account was revalued and the return was calculated for the interim period. Effective November 1, 2004, rates of return are calculated on a monthly basis by geometrically linking daily returns. Monthly or partial month returns are geometrically linked to determine annual returns.

Returns are presented on a net of fee basis. Gross of fee returns are available upon request. Net of fee returns include the account’s applicable advisory fee while the gross of fee returns do not. Both are net of brokerage commissions charged to the accounts.

The cumulative asset-weighted, net of fee return for a multiple-year period is computed by compounding the annual rates of return for the years included in such multiple-year periods. The annualized rate of return is presented as the level annual rate which, if earned for each year in a multiple-year period, would produce the actual cumulative rate of return over that period.           

For small cap growth and mid cap growth accounts, valuations and returns are computed and stated in U.S. dollars. After January 1, 1990, securities transactions, which include brokerage commissions, are recorded on a trade date basis and income and expense items are recorded on an accrual basis. Prior to 1990, settlement date valuation was used and interest and dividends were recorded on a cash basis. Returns are presented on a pretax basis. Leverage is not a part of the Companies’ investment strategy for these Composites.

For micro cap growth, small cap recovery growth, mid cap recovery growth and large cap growth accounts, valuations and returns are computed and stated in U.S. dollars. Securities transactions, which include brokerage commissions, are recorded on a trade date basis and income and expense items are recorded on an accrual basis. Returns are presented on a pretax basis. Leverage is not a part of the Companies’ investment strategy for these Composites. 

For international small cap growth, international discovery, international realty and emerging markets growth accounts, valuations and returns are computed and stated in U.S. dollars. Since returns are stated in U.S. dollars, exchange rates were used in the conversion. The Companies are not aware of any significant inconsistencies between exchange rates used in the Composites and those used in the benchmark indices. Securities transactions, which include brokerage commissions, are recorded on a trade date basis and income and expense items are recorded on an accrual basis. Returns are presented on a pretax basis and are net of any actual foreign taxes withheld on dividends and interest. Leverage is not a part of the Companies’ investment strategy for these Composites. Securities are valued in the foreign currency in which they are denominated and then translated into U.S. dollars at the spot rate. Forward contracts are generally purchased to hedge the risk of the currency fluctuation between the trade date and the settlement date of the underlying securities transactions. 

Additional information regarding policies for calculating and reporting performance and the Global Investment Performance Standards (“GIPS® standards”) compliant presentation are available upon request. Other methods may produce different results and the results for individual accounts within the Composite and for different periods may vary depending on market conditions and the composition of the account. Care should be used when comparing these results to those published by other investment advisers, other investment vehicles and unmanaged indices due to possible differences in calculation methods.

The performance data shown represents past performance and does not guarantee future results. Current performance may be lower or higher than the performance data quoted.

TAX EFFECT

The rates of return presented are determined without regard to U.S. tax consequences. Income tax may be withheld on income depending on the tax laws of each country and its treaty, if any, with the U.S. Such withholding taxes are reflected in the performance of accounts.