During 2017, GrizzlyRock Institutional Value Partners, LP and GrizzlyRock Value Partners, LP (together “GrizzlyRock” or the “Fund”) returned 4.3% net of fees and expenses. Since inception, the Fund has returned 80.6% net of fees and expenses for a 10.4% average annual return to investors.

2017 performance was a tale of two periods. First half performance struggled, stemming from a handful of shorts and one long. In fact, first half 2017 performance of -7.1% was our largest drawdown over GrizzlyRock’s 6 year history. We found our rhythm during the third quarter and concluded the third quarter up 1.1% net for the year. We profited further in the fourth quarter to finish 2017 up 4.3% net.

During 2017, Fund beta adjusted net exposure was effectively zero (specifically 6%) as we continue to find a plethora of attractive securities to short. While 2017 performance was below Fund historical average, GrizzlyRock generated alpha on both sides of the portfolio: long alpha of 3.2% and short alpha of 6.6% compared to the S&P 500. (2) Fund performance was driven
by positive attribution from long positions offset by negative attribution from short positions.

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