Whitney R. Tilson and Glenn H. Tongue

8/14/2019 Whitney R. Tilson and Glenn H. Tongue

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145 E. 57th Street, 10th Floor, New York, NY 10022

Whitney R. Tilson and Glenn H. Tongue phone: 212 386 7160

Managing Partners fax: 240 36

www.T2PartnersLLC.com

February 28, 2010

Dear Partner,

Our fund rose 7.0% net in February vs. 3.1% for the S&P 500, 2.9% for the Dow and 4.3% forthe Nasdaq. Year to date, its up 5.3% net vs. -0.6% for the S&P 500, -0.5% for the Dow and-1.2% for the Nasdaq.

The biggest driver of our funds performance this month was the 41.0% jump in General GrowthProperties, discussed below. Other winners included Borders Group (up 65.1%), Huntsman(12.6%), Resource America (11.0%), Sears Canada (10.0%) and Winn-Dixie (8.0%). The

biggest mover in our short book was Palm, which reported terrible sales numbers and tumbled41.4%.

General Growth Properties

A bidding war has broken out for General Growth, as we expected. On December 16th

, in ourfirst (of three) rebuttals to Hovde Capitals bearish reports on GGP, we wrote:

Hovde completely ignores GGPs value as a strategic asset to an acquirer, which is not atheoretical idea but a concrete reality as both Simon and Brookfield are circling right now. ForSimon, there would be big cost savings and, more importantly, revenue benefits: according to theWSJ article below, Buying General Growth would make it by far the dominant player in the

U.S. mall industry with more than 500 properties, giving it enormous clout over retailers in leasenegotiations. As for Brookfield, it raised a $5 billion fund in the past year to make acquisitionsand GGP represents its last opportunity to break into the U.S. market in a big way. These are twovery motivated potential acquirers. [page 9; all three rebuttals are posted atwww.tilsonfunds.com/GGP.pdf]

We continue to hold a large position in GGP because we think the downside is limited in light ofthe offers on the table and the upside could exceed $20 (the stock closed February at $13.11).Attached in Appendix A are three Wall Street Journal articles about the bidding war (alsoattached is our updated Privacy Policy).

K-1s

We are working hard, along with our auditors, Rothstein Kass, to finish the 2009 audit and K-1s.As soon as yours is ready (likely in late March), we will send it to you at this email address. Ifyou would like someone (such as your bookkeeper) ccd on the email, or would like us to fax itinstead, please email or call Kelli [email protected] (212) 386-7160.

Conclusion

In their latest Kiplingers column,Cribbing From the Best, John Heins and Whitney highlighthow we track the 13-F filings of top investors to find good new investment ideas to research.
http://www.tilsonfunds.com/GGP.pdfhttp://www.tilsonfunds.com/GGP.pdfmailto:[email protected]:[email protected]:[email protected]://www.kiplinger.com/columns/discovering/archives/cribbing-from-the-best.htmlhttp://www.kiplinger.com/columns/discovering/archives/cribbing-from-the-best.htmlhttp://www.kiplinger.com/columns/discovering/archives/cribbing-from-the-best.htmlhttp://www.kiplinger.com/columns/discovering/archives/cribbing-from-the-best.htmlmailto:[email protected]://www.tilsonfunds.com/GGP.pdf


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Thank you for your continued confidence in us and the fund. As always, we welcome yourcomments or questions, so please dont hesitate to call us at (212) 386-7160.

Sincerely yours,

Whitney Tilson and Glenn Tongue

The unaudited return for the T2 Accredited Fund versus major benchmarks (including reinvesteddividends) is:

February Year-to-Date Since Inception

T2 Accredited Fund gross 8.4% 6.7% 240.9%

T2 Accredited Fund net 7.0% 5.3% 175.4%

S&P 500 3.1% -0.6% 9.3%

Dow 2.9% -0.5% 44.6%

NASDAQ 4.3% -1.2% 4.6%Past performance is not indicative of future results. Please refer to the disclosure section at the end of this letter. The T2Accredited Fund was launched on 1/1/99. Gains and losses among private placements are only reflected in the returns sinceinception.

T2 Accredited Fund Performance (Net) Since Inception

-40

-20

0

20

40

60

80

100

120

140

160

180

Jan-99 Sep-99 May-00 Jan-01 Sep-01 May-02 Jan-03 Sep-03 May-04 Jan-05 Sep-05 May-06 Jan-07 Sep-07 May-08 Jan-09 Sep-09

(%)

T2 Accredited Fund S&P 500


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Appendix A: Three Articles About General Growth

Properties

FEBRUARY 16, 2010, WSJ

Simon Bids for General Growth

ByKRIS HUDSON

Mall giantSimon Properties GroupInc. on Tuesday announced it has offered $10 billion toacquire struggling rival General Growth Properties Inc., possibly creating the largest U.S. ownerof high-end malls.

General Growth also has been negotiating with Canadian real-estate concernBrookfield AssetManagementInc. about Brookfield providing General Growth billions of dollars in capital to

emerge from bankruptcy-court protection. The decision of whether to go with Simon orBrookfield is for General Growth's board to make, with the company's creditors and thebankruptcy judge getting a say on the final decision.

Indianapolis-based Simon, which owns more than 300 U.S. malls, has offered to pay off GeneralGrowth's $7 billion in unsecured debt in cash or stock. Simon also would pay $6 a share toGeneral Growth's shareholders and the equivalent of $3 a share to pay its remaining obligationsto the heirs of billionaire tycoon Howard Hughes for a massive residential development in LasVegas. General Growth's stock closed at $9.40 on Friday in trading on the so-called Pink Sheets.

"Simon's offer provides the best possible outcome for all General Growth stakeholders," Simon

Chairman and Chief Executive Officer David Simon said in a statement released Tuesday."Simon is in the unique position of being able to offer General Growth creditors andshareholders full, fair and immediate value."

General Growth representatives didn't immediately comment on the Simon offer. The Chicago-based company owns more than 200 U.S. malls. It sought Chapter 11 bankruptcy protection inApril 2009 after failing to refinance portions of its $27 billion debt as they came due.

In a letter to General Growth's board sent Tuesday, Mr. Simon noted that he chose to make theoffer public after General Growth didn't respond to a formal offer that Simon made to itsexecutives and directors "more than a week" ago. Simon said it can finance its entire bid withcash and borrowing capacity it has on hand as well as with financial partners it didn't name.

The deal, if accepted by General Growth's board and approved by its creditors and U.S.Bankruptcy Judge Allan Gropper, would combine two of the largest and oldest mall owners inthe U.S. into a colossus with 550 mallsat least a third of the entire U.S. market. Such heftwould give Simon unrivaled clout in lease negotiations with retailers and in financing talks withits lenders.
http://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineAND


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The deal would put half of the highest quality malls in the U.S. under Simon's ownership,according to Green Street Advisors Inc. Of the 307 U.S. malls rated "A quality"generallymeaning they generate sales per square foot of $400 or more each yearSimon owns 71 andGeneral Growth owns 77. Some analysts say it is those high-quality malls that Simon mostcovets, and that Mr. Simon might opt to shed General Growth's lower-quality properties if hisbid succeeds.

"Simon is a leader in the mall business," Green Street analystJim Sullivansaid. "Buying GeneralGrowth in one bite would take them from leader to dominant player. That's the legacy that Ithink is attracting [David Simon's] interest."

But Simon Properties likely will have to compete with a rival plan that General Growth isdiscussing with Brookfield. Brookfield, which owns and manages $98 billion of assets, boughtnearly $1 billion of General Growth's unsecured debt in the past year, giving it a say in anyrestructuring of General Growth's $7 billion of unsecured debt. Brookfield has informally spokenwith General Growth and other creditors about providing the capital General Growth needs topay some of its debts in return for an equity stake. Such an arrangement would allow General

Growth to exit bankruptcy next year as an independent company with Brookfield as a majorshareholder.

The decision of which route to take out of bankruptcy will be taken up by General Growth'sboard, which has directors with divergent backgrounds that might influence their choices. Onone side is ChairmanJohn Bucksbaum, the founding family scion whose father and uncle builtGeneral Growth into one of the country's largest mall owners after opening their first shoppingcenter in Cedar Rapids, Iowa, in 1954. Mr. Bucksbaum and his family trust own roughly 23% ofGeneral Growth's shares.

On the other side is activist investor William Ackman, whose hedge fund bought roughly 25% of

General Growth's stock late last year through direct purchases and swap contracts withinvestment banks. His Pershing Square Capital Management LP made most those purchaseswhile General Growth's stock was trading for less than $2. He was added to General Growth'sboard last June. "You have a mercenary, a profit-motivated owner of 25% of the company in BillAckman," Green Street's Mr. Sullivan said. "And you have a 25% owner in the Bucksbaumfamily that has deep emotional ties to this company and its assets. That's the setting for a veryinteresting board discussion."

Also on the board areAdam MetzandThomas Nolan, two board members who stepped intoexecutive roles in late 2008 as General Growth was careening toward bankruptcy. Mr. Metz,now General Growth's CEO, and Mr. Nolan, its president and chief operating officer, have

adroitly steered General Growth's bankruptcy process. They and General Growth's advisers havereached agreements with creditors holding most of General Growth's $15 billion in mortgages torestructure those loans and get the malls pledged as collateral out of bankruptcy in recent weeks.

Should General Growth choose to accept Simon's bid, the combination will have ramificationsfor mall retailers such asGapInc.,FootlockerInc. andLimited BrandsInc. A mall owner withhundreds of locations can pressure retailers to open stores in struggling malls as a condition ofgetting space in its best-quality malls. In addition, a retailer is less likely to fight a giant landlord
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over the terms of a given store's lease if the standoff might influence negotiations on its leases atother of that landlord's properties.

Still, some say Simon wouldn't be able to apply such wide-ranging influence immediately."Clearly, the only potential downside is, if you're a mall-based retailer, you have a little lessleverage in negotiating," said Scott Krugman, a spokesman for the National Retail Federation, a

trade group for retailers. "But a lot of the leases are already locked in long term. So therewouldn't be an immediate impact on retailers' leases."


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Brookfield to Battle Simon for Mall Giant

ByJEFFREY MCCRACKENAndKRIS HUDSON

Associated Press

Faneuil Hall, right, shown in 2007. General Growth Properties owns Faneuil Hall Marketplace inBoston.

Canadian property giantBrookfield Asset ManagementInc. is readying a bid to take a largestake in U.S. mall owner General Growth Properties Inc., according to several people familiarwith the matter, aiming to top an unsolicited bid made last week by mall rivalSimon PropertyGroupInc.

Brookfield's planned bid, which could be unveiled as soon as this week, would allow GeneralGrowth to exit Chapter 11 bankruptcy proceedings as a standalone company, with Brookfield asits largest shareholder, these people said.

The Simon bid values General Growth equity at about $3 billion, or about $9 a share. Simonwould also pay off in cash the company's unsecured creditors, who hold $7 billion in debt,valuing General Growth at around $10 billion.

Brookfield's plan, while still being worked out, would value General Growth equity at a littlemore than $3 billion, the people familiar with the matter said. Unsecured creditors, however,would have to accept equity in General Growth, along with some cash.

The plan would make Brookfield the largest buyer in a massive stock sale General Growthintends to make to raise capital for emerging from bankruptcy court. Brookfield would invest atleast $2 billion, these people said, though some of that would likely include forgiving GeneralGrowth debt currently held by Brookfield.

The size of Brookfield's proposed ownership stake and the value it will attach to General Growthcouldn't be learned.
http://online.wsj.com/search/search_center.html?KEYWORDS=JEFFREY+MCCRACKEN&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=JEFFREY+MCCRACKEN&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=JEFFREY+MCCRACKEN&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=SPGhttp://online.wsj.com/public/quotes/main.html?type=djn&symbol=BAMhttp://online.wsj.com/search/search_center.html?KEYWORDS=KRIS+HUDSON&ARTICLESEARCHQUERY_PARSER=bylineANDhttp://online.wsj.com/search/search_center.html?KEYWORDS=JEFFREY+MCCRACKEN&ARTICLESEARCHQUERY_PARSER=bylineAND


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Brookfield, which has been readying a bid for some time, has lined up a consortium of otherinvestors, many of whom are already General Growth debt holders, said people familiar with thematter. They didn't identify those investors. "It is a friendlier, more consensual deal from theGeneral Growth point of view," one of the people said.

The ultimate amount of stock that General Growth would sell hasn't been determined. Brookfield

wants to be a "substantial investor in the company," said a person familiar with the situation,with an eye toward operating General Growth and expanding it.

In rejecting Simon's bid last week, General Growth executives said they intended to look into alloptions for exiting bankruptcy, including soliciting other buyout bids and selling stock to raisemoney for paying debts.

A spokesman for Simon said its bid was the better option for General Growth. "Simon's firm,fully financed $10 billion offer provides immediate 100% cash recovery of par value plusaccrued interest and dividends to all unsecured creditors, plus more than $9 per share in value toshareholders. It is the only offer which provides a full cash recovery for unsecured creditors

while reducing risk and providing potential upside," the spokesman said.

Chicago-based General Growth sought Chapter 11 bankruptcy last April after failing to refinanceportions of its $27 billion debt as they came due. The competing efforts of Brookfield and Simoncome ahead of a key March 3 hearing in its bankruptcy case.

At the hearing, U.S. Bankruptcy Judge Allan Gropper is to decide whether and by how much toextend General Growth's exclusivity period. During that period, only the company's board canpropose plans for exiting bankruptcy. Once the period expires, creditors and outside parties cando so.

Brookfield's plan is likely to get mixed reactions from General Growth's creditors. It is unlikelythat General Growth's stock sale will raise as much as $7 billion and that all of that money wouldbe used to pay unsecured debt. Thus, General Growth's strategy is likely to call for paying part ofits creditors' claims in cash and the balance in stock, people familiar with the matter said. Thatwould appeal to creditors who wanted the potential to reap more than what they are owed if thestock rises.

Simon, based in Indianapolis, has offered to pay the unsecured claims entirely in cash. Thatappeals to some creditors who want to immediately settle their claims and prefer not to gambleon the stock rising.

Further complicating matters: Brookfield last year bought roughly $1 billion of General Growth'sunsecured debt, giving it a voice among General Growth's creditors. Simon, too, has boughtsome of the debt, but how much isn't known. Brookfield is being advised on its bid byGoldmanSachs Group and law firm Willke, Farr & Gallagher, people familiar with the matter said.

The unsecured creditors will be one of many constituencies the judge weighs when hedetermines which plan best suits all of General Growth's creditors and shareholders. It remainedunclear whether the judge would allow a Brookfield plan to compete with Simon's offer, since it
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wouldn't pay unsecured creditors in cash. But if enough creditors preferred getting a chunk ofstock instead of cash, Brookfield could attempt to seek enough votes to confirm the plan,assuming the judge allows creditors to vote on it.

Toronto-based Brookfield manages more than $98 billion in assets, specializing in infrastructure,power plants and commercial property. It has long coveted retail property in the U.S., having

made a failed bid for discount-mall owner Mills Corp. in 2007. And It bid unsuccessfully toprovide General Growth with emergency financing when the mall owner sought bankruptcy lastyear.

In the past year, Brookfield has raised roughly $5 billion, mostly from institutional real estateinvestors contributing to its newly created fund for making acquisitions.


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Westfield Weighs Bid for General Growth

ByKRIS HUDSONAndJEFFREY MCCRACKEN

The takeover battle for mall owner General Growth Properties Inc. reached a boiling pointWednesday as General Growth unveiled a deal with Canadian property investor Brookfield AssetManagement Inc. even as Australian mall ownerWestfield Groupconsidered entering the fray.

GGP proposes to allocate properties between two spin-off companies based on performance. LasVegas's Fashion Show mall would go to the larger spin-off company for the best performingmalls. New York's South Street Seaport mall will go to the smaller spin-off.

Westfield, which owns 119 malls in the U.S., Australia and Britain, signed a nondisclosureagreement this week to begin discussions with General Growth about a possible offer, people

familiar with the matter said.

Westfield has $8 billion of borrowing capacity on hand, and is thus far acting alone, these peoplesaid.

As Westfield deliberated, General Growth laid out a plan to exit bankruptcy proceedings thisyear by splitting the company in two, with Brookfield pledging $2.63 billion to that effort.

General Growth and Brookfield envision creating one company that owns roughly 180 ofGeneral Growth's higher-quality malls and a smaller one that owns riskier real-estate holdings,geared to investors willing to gamble on higher returns.

The complex plan, drafted partly by activist investor and General Growth board member WilliamAckman, is meant to top a $10 billion buyout bid that rival mall owner Simon Property GroupInc. made last week. The General Growth-Brookfield plan values General Growth at $15 a shareand the Simon offer at $9 a share.

"We know it is not automatic," Brookfield spokesman Denis Couture said. "But, we lookforward to working with them and through the court process."

The widening of the takeover contest reflects the recognition among the world's biggest malllandlords that the General Growth bankruptcy represents a once-in-a-life opportunity. Although

U.S. retailers are suffering from one of the worst downturns in decades, General Growth stillowns a much-coveted collection of malls, such as the Ala Moana Center in Honolulu andFashion Show mall in Las Vegas.

Under General Growth's plan to split itself in two to exit bankruptcy, the challenge will be forthe company to assemble $7 billion in cash to pay its unsecured creditors. Simon and its partnershave already amassed such a sum.
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General Growth on Wednesday outlined several paths for raising the money: getting the $2.6billion from Brookfield; selling another $2.8 billion of new stock in the larger company after thesplit; issuing $1.5 billion in new debt; and selling $1 billion of stakes in some of its malls. Thelatter two efforts are in preliminary stages.

Despite its deal with Brookfield, General Growth intends to continue soliciting buyout or

financing offers. "There's still an opportunity for Simon, if they continue to be interested, toultimately provide something that's higher and better than the deal that's on the table today," saidGeneral Growth Chief Executive Adam Metz.

In a statement released late Wednesday, Simon said its all-cash bid was superior to theBrookfield plan because it provided $10 billion "of real valueas compared to a complex pieceof financial engineering that is so highly conditional as to be illusory."

If General Growth gains approval from its creditors and the bankruptcy judge for the breakup,the larger of the resulting companies, which would retain the General Growth Properties name,would hold roughly 180 of the company's more than 200 malls. Brookfield has pledged to buy

30% of that company's shares at a price of $10 a share, for a total of roughly $2.5 billion. Thelarger company would carry more than $19 billion of mortgages on its malls.

The smaller company, to be called General Growth Opportunities, would include many ofGeneral Growth's less-valuable mallsincluding the South Street Seaport mall in New York and13 malls the company previously intended to forfeit to its lendersas well as assets like itsresidential-development division and development rights.

Brookfield would support the smaller company by providing half of the $250 million thatcompany would raise by selling stock at $5 a share, people familiar with the matter said.Brookfield, in turn, would get a 7% stake in that company, which would carry $1.2 billion of

mortgages on its properties.

After an early surge on news of the breakup plan, General Growth's stock ended the day downeight cents at $12.89 in 4 p.m. trading on the over-the-counter Pink Sheets. Analysts saidinvestors were unsure of the true value of the smaller company with riskier assets.

The Brookfield plan values General Growth at about $4.5 billion in equity value, compared with$3 billion under the Simon offer. But Simon has been cutting deals with Blackstone Group LPand other deep-pocketed partners in case it decides to raise its bid.

General Growth clinched the Brookfield pact just one week prior to a pivotal hearing in its

bankruptcy case. On March 3, U.S. Bankruptcy Judge Allan Gropper will decide whetherGeneral Growth's exclusive right to propose a reorganization plan should be extended by as longas six months.

Simon, which has offered to buy the whole of General Growth for $10 billion, would pay off incash holders of General Growth's $7 billion of unsecured debt.


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In addition, Simon would pay roughly $3 billion to General Growth's shareholders, including $6a share in cash and an estimated $3 a share in value from a proposed spinoff off GeneralGrowth's residential-development division.

In addition to Blackstone, Simon has lined up sovereign wealth funds to help finance its bid. Onits own, Simon has $4 billion of cash and $3.5 billion of borrowing capacity. Yet Simon

ultimately might structure its bid as a joint venture in which it owns half and its partners ownhalf, especially if it eventually must sweeten the bid, people familiar with the matter said.

Attention now will turn to whether Simon will increase its offer or perhaps risk missing theopportunity to purchase its next-largest rival at a fraction of the price it would have fetched inpast years. That doesn't mean Simon must match or exceed the Brookfield offer or GeneralGrowth's current share price.

Kevin Starke, an analyst with CRT Capital LLC, estimates that Simon can justify paying asmuch as $16 a share for General Growth, based on General Growth's estimated asset value andcash flow.

One advantage Simon has over Brookfield is that, as the largest U.S. mall owner, Simon canwring cost savings out of General Growth that Brookfield couldn't. In other words, Simon canrecoup some of its outlay by cutting duplicated corporate jobs and perhaps combining otherstaffs.

"If there's another bid, [Simon is] going to be forced to raise their bid," said Jim Sullivan, ananalyst with Green Street Advisors Inc., prior to the Brookfield bid's unveiling. "But they havethe strategic advantage in being in the mall business, which allows them to bid more. They havea very strong balance sheet. But someone has to prompt them to bid more."

General Growth sought bankruptcy last April after failing to refinance portions of its $27 billiondebt load as they came due. If Simon's bid were to prevail, Simon would pay off GeneralGrowth's $7 billion in unsecured debts and assume the $20 billion in mortgages on its malls,likely selling some of those assets to recoup some of its outlay for the purchase. Ultimately, thejudge might allow General Growth's creditors to vote on either the Simon or Brookfield plans.


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T2 Partners Management, L.P. PRIVACY POLICY

This privacy policy explains the manner in which the Partnership, the General Partner and the Investment Manager(collectively, the Partnership

) collect, utilize and maintain nonpublic personal information about the Partnershipsinvestors, as required under Federal legislation. This privacy policy only applies to nonpublic information of investorswho are individuals (not entities).

Collection of Investor Information

The Partnership collects nonpublic personal information about its investors mainly through the following sources:Subscription forms, investor questionnaires and other information provided by the investor in writing, in person, bytelephone, electronically or by any other means. This information includes name, address, nationality, tax identificationnumber and financial and investment qualifications; and transactions within the Partnership, including account balances,investments and withdrawals.

Disclosure of Nonpublic Personal Information

The Partnership does not sell or rent investor information. The Partnership does not disclose nonpublic personalinformation about its investors to nonaffiliated third parties or to affiliated entities, except as permitted by law. Forexample, the Partnership may share nonpublic personal information in the following situations:

To service providers in connection with the administration and servicing of the Partnership, which may includeattorneys, accountants, auditors and other professionals. The Partnership may also share information inconnection with the servicing or processing of Partnership transactions;

To 3rd party marketing firms who have been engaged by T2 to raise assets for the Funds. Any informationprovided to a 3

rdparty marketing firm would be limited to name and basic contact information.

To affiliated companies in order to provide you with ongoing personal advice and assistance with respect to theproducts and services you have purchased through the Partnership and to introduce you to other products andservices that may be of value to you;

To respond to a subpoena or court order, judicial process or regulatory authorities; To protect against fraud, unauthorized transactions (such as money laundering), claims or other liabilities; and Upon consent of an investor to release such information, including authorization to disclose such information to

persons acting in a fiduciary or representative capacity on behalf of the investor.

If you elect to opt-out and do not want us to share your non-public personal information other than when requiredto perform normal services or when required by law, please contact us at: 145 East 57th Street, 10th Floor, New York,NY 10022, Ph: (212) 386-7160 or by email:[email protected].

Protection of Investor Information

The Partnerships policy is to require that all employees, financial professionals and companies providing services on itsbehalf keep client information confidential.

The Partnership maintains safeguards that comply with federal standards to protect investor information. The Partnershiprestricts access to the personal and account information of investors to those employees who need to know that

information in the course of their job responsibilities. Third parties with whom the Partnership shares investor informationmust agree to follow appropriate standards of security and confidentiality.

The Partnerships privacy policy applies to both current and former investors. The Partnership may disclose nonpublicpersonal information about a former investor to the same extent as for a current investor.

Changes to Privacy Policy

The Partnership may make changes to its privacy policy in the future. The Partnership will not make any change affectingyou without first sending you a revised privacy policy describing the change.
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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T2 Accredited Fund, LP (the Fund) commenced operations on January 1, 1999. The Fundsinvestment objective is to achieve long-term after-tax capital appreciation commensurate withmoderate risk, primarily by investing with a long-term perspective in a concentrated portfolio ofU.S. stocks. In carrying out the Partnerships investment objective, the Investment Manager, T2Partners Management, LLC, seeks to buy stocks at a steep discount to intrinsic value such thatthere is low risk of capital loss and significant upside potential. The primary focus of the

Investment Manager is on the long-term fortunes of the companies in the Partnerships portfolioor which are otherwise followed by the Investment Manager, relative to the prices of their stocks.

There is no assurance that any securities discussed herein will remain in Funds portfolio at thetime you receive this report or that securities sold have not been repurchased. The securitiesdiscussed may not represent the Funds entire portfolio and in the aggregate may represent only asmall percentage of an accounts portfolio holdings. It should not be assumed that any of thesecurities transactions, holdings or sectors discussed were or will prove to be profitable, or thatthe investment recommendations or decisions we make in the future will be profitable or willequal the investment performance of the securities discussed herein. All recommendations withinthe preceding 12 months or applicable period are available upon request.

Performance results shown are for the T2 Accredited Fund, LP and are presented gross and netof incentive fees. Gross returns reflect the deduction of management fees, brokeragecommissions, administrative expenses, and other operating expenses of the Fund. Gross returnswill be reduced by accrued performance allocation or incentive fees, if any. Gross and netperformance includes the reinvestment of all dividends, interest, and capital gains. Performancefor the most recent month is an estimate.

The fee schedule for the Investment Manager includes a 1.5% annual management fee and a 20%incentive fee allocation. For periods prior to June 1, 2004, the Investment Managers feeschedule included a 1% annual management fee and a 20% incentive fee allocation, subject to a

10% hurdle rate. In practice, the incentive fee is earned on an annual, not monthly, basis orupon a withdrawal from the Fund. Because some investors may have different fee arrangementsand depending on the timing of a specific investment, net performance for an individual investormay vary from the net performance as stated herein.

The return of the S&P 500 and other indices are included in the presentation. The volatility ofthese indices may be materially different from the volatility in the Fund. In addition, the Fundsholdings differ significantly from the securities that comprise the indices. The indices have notbeen selected to represent appropriate benchmarks to compare an investors performance, butrather are disclosed to allow for comparison of the investors performance to that of certain well-known and widely recognized indices. You cannot invest directly in these indices.

Past results are no guarantee of future results and no representation is made that an investor willor is likely to achieve results similar to those shown. All investments involve risk including theloss of principal. This document is confidential and may not be distributed without the consentof the Investment Manager and does not constitute an offer to sell or the solicitation of an offerto purchase any security or investment product. Any such offer or solicitation may only be madeby means of delivery of an approved confidential offering memorandum.

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Whitney R. Tilson and Glenn H. Tongue

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