Composite Notes

Driehaus Capital Management LLC (DCM) is a registered investment adviser with the United States Securities and Exchange Commission (SEC). DCM provides investment advisory services using growth equity strategies to individuals, organizations, and institutions. The firm consists of all accounts managed by DCM (the Company). Prior to October 1, 2006, the firm included all accounts for which Driehaus Capital Management (USVI) LLC (DCM USVI) acted as investment adviser. On September 29, 2006, DCM USVI ceased conducting its investment advisory business and withdrew its registration as a registered investment adviser with the SEC. Effective September 30, 2006, DCM USVI retained DCM as investment adviser to these portfolios.

DCM claims compliance with the Global Investment Performance Standards (GIPS^®).

This performance information is estimated for the period as not all underlying accounts have yet been reconciled. All rates of return include reinvested dividends and other earnings and are net of fees and brokerage commissions. 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. 

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 the Company exercises 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 larger capitalization from time to time.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE SMALL CAP GROWTH COMPOSITE

The Small Cap Growth Composite (the Composite) presented includes all unleveraged “small cap growth accounts” over which the Company exercises discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Company changed the name of the Composite from Small Cap Composite to Small Cap Growth Composite in 2008 to more appropriately reflect the investment strategy of the Composite. 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.

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

The Small Cap Recovery Growth Composite (the Composite) presented includes all unleveraged “small cap recovery accounts” over which the Company exercises discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Company changed the name of the Composite from Small Cap Recovery Composite to Small Cap Recovery Growth Composite in 2008 to more appropriately reflect the investment strategy of the Composite. The Composite was created in January 1997.

An account is considered to be a small cap recovery growth account if it primarily invests in U.S. equity securities of growth companies 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. Accounts in the Composite invest in companies that are trading below their historical high prices and have recently demonstrated improving business prospects.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE MID CAP GROWTH COMPOSITE

The Mid Cap Growth Composite (the Composite) presented includes all unleveraged “mid cap growth accounts” over which the Company exercises discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Company changed the name of the Composite from Mid Cap Composite to Mid Cap Growth Composite in 2008 to more appropriately reflect the investment strategy of the Composite. 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 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.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE MID CAP RECOVERY GROWTH COMPOSITE

The Mid Cap Recovery Growth Composite (the Composite) presented includes all unleveraged “mid cap recovery accounts” over which the Company exercises discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Company changed the name of the Composite from Mid Cap Recovery Composite to Mid Cap Recovery Growth Composite in 2008 to more appropriately reflect the investment strategy of the Composite. The Composite was created in January 2001.

An account is considered to be a mid cap recovery growth account if it primarily invests in U.S. equity securities of growth companies 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. Accounts in the Composite invest in companies that are trading below their historical high prices and that have recently demonstrated improving business prospects.

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 the Company exercises 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 high growth companies within the 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.

COMPOSITE OBJECTIVES AND ACCOUNTS ELIGIBLE FOR THE GLOBAL GROWTH COMPOSITE

The Global Growth Composite (the Composite) presented includes all unleveraged “global growth accounts” over which the Company exercises discretionary investment authority of both cash and equities using the same investment objective and philosophy. The Composite was created in May 2008.

An account is considered to be a global growth account if it seeks to maximize capital appreciation through active investment primarily in equity securities of both U.S. and non-U.S companies exhibiting strong growth characteristics. Under normal market conditions, the style invests in common stocks and equity securities, including preferred stocks, both within and outside the U.S with a market capitalization  greater than $1 billion at the time of purchase.

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 the Company exercises 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 to maximize capital appreciation through active investment primarily in equity securities of smaller capitalization, non-U.S. companies exhibiting strong growth characteristics. Under normal market conditions, the style invests at least 80% of total net assets in the equity securities of non-U.S. small capitalization companies.

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 the Company exercises 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.

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 the Company exercises 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 for each Composite and is fully invested, it is included in the Composite in the next full monthly reporting period. 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, but are not examined by independent accountants. For periods prior to November 1, 2004, time-weighted account 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, account rates of return are calculated on a monthly basis by geometrically linking daily returns. Monthly composite returns are geometrically linked to determine annual composite returns.

Returns are presented on a net of fee basis. Gross of fee returns are available upon request, but are not examined by independent accountants. Net of fee returns reflect the account’s applicable advisory fee and, in some instances, other fees and expenses, 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 March 1, 1990, securities transactions, which include brokerage commissions, are recorded on a trade date basis, and where information is available, income and expense items are recorded on an accrual 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 Company’s 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 where information is available, income and expense items are recorded on an accrual 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 Company’s investment strategy for these Composites. 

For international small cap growth, international discovery, emerging markets growth and global 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 Company is 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 where information is available, 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 Company’s 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. 

Past performance is not indicative of future results. All investments have risks and you could lose money. Other methods may produce different results and the results for individual accounts 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.

Additional information regarding policies for calculating and reporting performance is available upon request. A complete listing and description of all composites is also available upon request. Please contact our sales, marketing and relationship management department at 312-932-8621.

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.

INDICES

The performance results for the Composite are shown in comparison to indices. While the securities comprising the indices are not identical to those in any account in the Composite, the Company believes this may be useful in evaluating performance. Unlike the Composite, the indices are not actively managed and do not reflect the deduction of any advisory or other fees and expenses.