International Investment Process

We make no attempt to model our international portfolios after any outside index or other benchmark. For purposes of client measurement we generally use the corresponding Morgan Stanley Capital International benchmark.

Our international portfolio managers establish positions in companies in both developed and emerging markets. As international investing has special considerations, we place additional research emphasis on country-by-country market trends, market liquidity, currency strength, accounting and reporting variations, and political climates - among other variables.

We do not sector rotate. Our concentration is on stocks we believe show the best growth fundamentals confirmed by strong price and volume movement. In practice, however, this often means that our portfolios are more concentrated in those sectors with companies displaying the best fundamental characteristics.

Our investment process is primarily "bottom-up" focusing on individual security selection. Secondary consideration is given to country and economic sector conditions. Local currency conditions also are considered but is the least important factor.

Driehaus Capital Management LLC's primary interest is in active securities. These are often just beginning to attract institutional interest. We assess the overall quality of a stock, gauge the near-term appreciation potential, as well as the long-term outlook, and monitor price fluctuations daily. The securities we buy are often of companies that are undergoing significant change. These securities can be volatile in their behavior. While we are aggressive in our portfolio structure, we also strive to be consistent.