Capital Protection Fund

Overview

• Capital Protection Fund (CPF) is Series A on the IDF Capital platform.

• The first fund designed to take advantage of US regulations utilizing life insurance contracts purchased in the secondary and tertiary market.

• Ensures tax compounding of gains and avoidance of withholding tax without the need to use offshore tax havens.

• Advisors and investors are increasingly turning to this asset class to take advantage of predictable double digit returns and the capital security of this real asset.

• CPF offers an exciting and genuinely new alternative to capital preservation.

Performance Chart

Performance Index Review

• CSFB - the Investable Hedge Fund Index.

• S&P 500 – the stock market index based on the market capitalizations of 500 leading companies publicly traded.

• Barclays - the index measures the performance of the U.S. investment grade bond market.

• AAP - the index tracks the performance of funds implementing an investment strategy in the US life insurance sector .

– The AAP index indicates the lack of volatility of this sector.

– Through the financial crisis the performance of the funds has been steady.

– Given that many of these funds invested when prices were high the opportunity with prices at a low is clearly attractive.

Why the Capital Protection Fund?

• Life insurance contracts bought by the Fund are selected to run on average to more than 150% of the predicted life expectancy before eroding the principal amount originally invested.

• Buying large numbers of policies spreads the risk of average predicted life expectancy being exceeded.

• Returns are not eroded by taxes.

• Investors time horizons meet those of the life insurance contracts purchased.

• The Fund uses a simple and conservative valuation model that targets a fair return to all investors.

Valuation Model

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1 2 3 4 5 6 7 8 9 10 11 12 13

Fund inc Reserve Smooth Fund UnSmoothed (12%) Reserve

Indicative Effect of Portfolio Smoothing

* The reserve is invested in policies within the fund

Valuation Model (cont.)

• A portfolio of policies has been modeled on a deterministic basis.

• The model uses a risk adjusted initial valuation which provides a reserve.

• The model assumes policies priced to provide a 12% growth rate in the fund. (BLUE line)

• The purchase price of the policies is assumed to be 18%.

• The reserve is the cash difference between those two prices.

• The reserve is invested in policies. (GREEN line)

Valuation Model (cont.)

• At approximately 7 years it can be seen that there is a value drop – the BLUE line.

• This drop in value is at the point where the average life expectancy is assumed to have been lengthened.

• The PURPLE line assumes the introduction of value from the reserve.

• This gives rise to a smoother curve.

• The model allows the manager to offset some or all losses when policies are sold and through active management of the underlying growth rate, reserves and maturities provide a fair return to ALL shareholders.

Why the Capital Protection Fund?

Leveraging a strong track record of investment in this asset class, the advisors to the CPF have created a fund which expertly combines:

• A 10%+ target return per annum, which is consistent and realistic over the longer term.

• Investment in a large portfolio of small face, secondary and tertiary life insurance policies.

• Credit facilities that enhance the liquidity and flexibility of the fund, while providing the opportunity to improve fund returns.

• Target minimum of 250 different policies within 18 months of launch.

Market History

• The secondary market for life insurance on Seniors emerged as a serious business in 2002/3.

• Before then the market existed by trading Viaticals – life insurance policies that relied on the Aids related phenomenon.

• Since 2002/3 the market has grown considerably. It peaked in 2007/8 when contracts with a face value of circa $12b. were traded.

• Since the financial crisis that number has reduced to circa $1.3 billion in 2011.

• These numbers should be treated with caution as there is no recognized spot market though they do indicate the substantial and established nature of the marketplace.

Market Demand

$2.0 $2.6 $3.3$5.5 $6.1

$12.2 $11.8

$7.6

$3.8$1.3$1.9

$4.2$6.7

$10.0

$13.5

$22.6

$30.7

$35.5 $36.0 $35.1

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Annual Volume

Cumulative Volume

Conning Estimate of Annual and Cumulative U.S. Life Settlement Volume ($ in Billions)

Analysis: Conning Research & Consulting

Press Coverage

• “The increasingly popular practice of buying rights to older people's life insurance is risky, even downright perilous. People are living longer than actuarial tables say they should, and that is a problem, at least for the investor.”

• “Wall Streets new Halloween trick...It’s a scheme based on the mundane (but huge) life insurance market. Wall Street intends to tap into the $26 trillion-worth of life insurance policies that Americans hold, using a financial mechanism called ‘life settlements’”

Press Coverage (cont.)

• Over the years the sector has received some bad press.

• Fraud was an issue but with the development of regulation, best practice and transparent procedures, those entering into transactions today are better protected.

• Almost all states now have regulations in place and understand the market.

• Problems were made worse by a lack of knowledge and it has to be said, the pure greed of some participants.

• As always confidence and security is derived by aligning yourself with the right principals and business partners.

So why invest in life insurance contracts?

• Life insurance contracts offer long-term growth potential that is generally not affected by interest rate movements, volatility in the equity markets, global events, exchange rates or economic downturns.

• They can offer impressive returns which aren’t correlated to other asset classes.

• Leveraging a strong track record of investing in this market, the principals behind the Capital Protection Fund have created a fund which expertly addresses the lack of liquidity, transparency and flexibility of many funds investing in this area.

The Issues

• Premium Payments -Fund investments are being made on a quarterly basis providing useful cash flow. The Fund has bank facilities available for premium payment.

• Manufactured Insurance Contracts -The Capital Protection Fund does not buy newly manufactured policies.

• Late Maturities - The impact of late maturities can be reduced by purchasing small face value policies – in high volume.

• Valuation Model - The valuation model used by CPF provides for risk adjusted, smoothed returns.

• Liquidity - a part of the issue is the mismatch between the investment term of the fund and that of the investor. Life insurance contracts are NOT readily liquidated anymore than commercial or residential property. CPF deals with this by seeking to match the investor’s aims with those of the Fund itself.

Fund Benefits

• Tax efficiency is where the CPF opportunity really delivers.

• Provides tax free growth within the Fund and deferral of income taxes.

• Does not require complicated tax avoidance methods using offshore tax havens.

• Employs the tax advantages provided to US life insurance policies.

• CPF is the first life policy fund to use US laws and regulations that defer taxes without the need to take complicated avoidance measures.

Tax Free Growth

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Pre-Tax

After Tax

Tax Advantaged VS. Regular Investment Growth Assuming 12% return PA and tax rate of 40%

About Us

• The Capital Protection Fund is advised and managed by an experienced team with 50+ year track record of generating consistent returns in the Life Insurance contract space as well as providing specialized expertise in all aspects of these contracts.

• The advisors to the Fund are recognized names in the industry and are identified on the following slide.

Structure & Advisors

• IDF Capital LLC – a Delaware Series LLC (a protected cell company)• The Managing Member of IDF Capital – Manhattan Fund Services (MFS)• Principal of MFS is Richard (Rick) Pfeiffer ex CEO of AIG Consumer

Finance Division• Series A is the Capital Protection Fund (CPF)• Advisor to CPF –Longevity Market Advisors (LMA)• Principals of LMA are Christopher Conway and Mike Graviss• Lawyers – Locke Lord, Atlanta in the person of Brian Casey, partner• Auditors - Grant Thornton • Actuarial – Data Life• Servicing – Torrey Pines LLC• Custodian and Banker – Wilmington Bank & Trust

Ready to invest in our expertise?

• Contact The Capital Protection Fund today at info@capitalprotectionfund.com

• Capital Protection FundSuite 31-0935, Hudson Street,Jersey City,NJ 07302

www.capitalprotectionfund.com

Disclaimer

• Capital Protection Fund purchases US life insurance contracts in the secondary and tertiary markets through licensed providers and directly or through its appointed agents negotiates the terms of and consummates all transactions with contract owners or their authorized representatives, in accordance with applicable law. Capital Protection Fund, are not investment advisors or agents, brokers, fiduciaries or representatives for you or your clients and thus do not provide any legal, financial, insurance or tax advice. If someone sells a life insurance contract, they may lose valuable life insurance benefits for themselves or their beneficiaries, or their eligibility for certain other benefits such as Medicaid or other government benefits or entitlements may be reduced or affected. There may be alternatives to a person selling their life insurance contract, including the ability to receive accelerated death benefits or policy loans. Decisions made by your clients/persons should be made only with the assistance and advice of their own legal, financial, insurance, tax and other advisors as deemed necessary in order to obtain a full understanding of the potential risks and ramifications thereof based upon the client’s/person’s particular circumstances.

• Services offered by Capital Protection Fund are not necessarily offered in all states.

• The materials provided are for informational purposes only. They may not be reproduced, copied, distributed or transmitted to any person without the prior written consent of the company and must be returned to the company at the end of the presentation. The written presentation and the materials contained herein are not and do not constitute any offer to sell or a solicitation to purchase securities or any investment.