Alternative Investment Opportunities Through a Slowing Economy

Glossary HFRI Fund Weighted Composite Index is aglobal, equal-weighted index ofsingle-manager funds that report monthly net ofall fees performance in USDollar and have a minimum of $50 Million undermanagement or $10Million under management and a 12-month track record of active performance.The index does not include fund of funds. MSCI AC World Index (“MSCI ACWI”) is designed to track broadglobal equity-market performance. It comprises the stocks of nearly 3,000 companies from 23 developed countries and 25 emergingmarkets. MSCI ACWI Sustainable Impact Index is designed to identify listed companies whose core business addresses at least oneof theworld's social and environmental challenges, as defined by the United Nations Sustainable Development Goals. MSCI China Index captures large- and mid-cap representation across China A shares, Hshares, B shares, Red chips, P chips andforeign listings (e.g., ADRs). With 704 constituents, the index covers about 85%of this China equity universe. MSCI World Index covers large- andmid-capequities across 23 DevelopedMarkets countries. With 1,603 constituents, the index covers approximately 85%of the free float-adjusted market capitalization in each country. NASDAQ Composite is a stock market index that includes almost all stocks listed on the Nasdaq stockexchange. Along with the DowJones Industrial Averageand S&P 500, it is one of the threemost-followed stockmarket indices in theUS. Pitchbook Private Capital Index is acapital-weighted, aggregatequarterly returns indexwhich captures private equity, venture capital, real estate, real assets, private debt, funds of funds, and secondaries funds. S&P 500 Index is acapitalization-weighted index that includes a representative sample of 500 leading companies in leading industries of the US economy. Although the S&P 500 focuses onthe large-cap segmentof the market, with over80%coverageof US equities, it is also an ideal proxy forthe total market. S&P 500 150/50 Quality Index takes a leveragedlong position in the quality index and a short position in the lowest quest quintile index. S&P 500 Lowest Quintile Index tracks the lowest 100companies in theS&P 500based onreturn on equity, accrual ratios and financial leverage. S&P 500 Quality Index tracks the top 100companies in theS&P 500based on return on equity, accrual ratios and financial leverage. VIX, or the Chicago Board Options Exchange (CBOE) Volatility Index, is a real-time index representingthemarket’s expectation of30-day forward-looking volatility, derived from the price inputs of theS&P 500 indexoptions. OTHER TERMINOLOGY Aggregate Deal Value USD BN is the total value ofdeals that occurred in thespecified time period, for the specifiedasset class. Business Development Company,also knownas aBDC, is a regulated investment company that raises capital from individual and institutional investors through the sale of shares in the stock market. BDCs provide financingto private companies, typically small- and mid-sized businesses. BDCs are required to distribute a significant portion of their taxable income to shareholders in the formof dividends. Corporate Acquisition is defined as acorporate transaction where onecompany purchases a portion or all of another company's shares or assets. Acquisitions are typically made in order to take control of, andbuild on, the target company's strengths and capture synergies. Correlation is a statistical measure of how two assets or asset classes move in relation to oneanother. Correlation is measured on a scale of 1 to -1. A correlation of 1 implies perfect positive correlation, meaning that two assets or asset classes move in thesame direction all of the time. A correlation of -1 implies perfect negative correlation, such that two assets or asset classes move in theopposite direction to each otherall the time. A correlation of0 implies zerocorrelation, suchthat there is no relationship between the movements in the two over time. EV/Revenue Multiple is a ratio that compares the total valuation ofa firm's operations (enterprise value) to theamount of sales generated in a specifiedperiod (revenue). IPO or Initial Public Offering refers to theprocess of offering sharesof aprivate corporation to thepublic ina newstock issuance for the first time. An IPO allows a company to raise equity capital from public investors. Leveraged Buyout (LBO) is the acquisition of anothercompany using a significantamount of borrowed money (bonds or loans) to meetthe cost of acquisition. The assets of the company being acquired areoften usedas collateral for the loans, alongwith theassets of the acquiring company. Net IRR, or internal rate of return, is aperformancemeasurement equal tothe internal rate of return after fees andcarried interest are factored in. It is used incapital budgeting and portfolio management to calculatean investment's yield or overall financial quality by calculating anexpected rate of return. Public listing refers to a security whichis publicly traded onan established stock exchangeor national market system; and, with respect to an entity, that suchentity is the issuer of a security that is publicly listed. Refinancing refers to the process of revising and replacing the terms of anexisting credit agreement, usually as it relates to a loanor mortgage. Restructuring is a significant action undertakenby acompany inorder to modify its operations with the intention of reducingdebt, increasing efficiency and improving the business going forward. A business restructure is most common in companies facing financial difficulties. Secondary Buyout refers to a transaction involving the saleof aportfolio company by one financial sponsor or private equity firm to another.This kind of buyout indicates the end of the seller's control or involvement with thecompany. Sponsor Acquisition refers to the acquisition directly or indirectly by acompany(and/or its respective affiliates). Strategic Return Estimates or SREs are basedon Citi Private Bank’s forecast of returns for specific asset classes (to whichthe index belongs) overa 10-year time horizon. The forecast for eachspecific asset class is made using aproprietary methodology based on theassumption that equity valuations revert to their long-term trend over time. Trade Sale is the disposal of a company's shares or assets, in whole or inpart to anothercompany, an M&A exit, in other words, in which the target company is acquired for cash or stock. Vintage Year in the private equity and venture capital industries refers to the year in whicha fundbeganmaking investments or, more specifically, the date in which capital was deployed to a particular company orproject. Investors may cite thevintage year in order togaugeapotential return on investment (ROI). WEALTH OUTLOOK 2023 | MID-YEAR EDITION │ ALTERNATIVE INVESTMENTS | 33