Gross Net Q4 Volatility Gross NetGLENVIEW FUNDSGlenview Capital Partners (Cayman), Ltd.
6.93% 5.54% 7.17% 16.72% 14.22%
Glenview Institutional Partners, L.P.
6.92% 5.75% 7.49% 16.61% 15.34%
Glenview Capital Partners, L.P.
6.90% 6.25% 8.24% 16.42% 15.72%
GLENVIEW OPPORTUNITY FUNDSGlenview Offshore Opportunity Fund, Ltd.
11.85% 9.54% 12.51% 28.28% 22.51%
Glenview Capital Opportunity Fund, L.P.
11.89% 9.76% 12.73% 28.77% 23.15%
GCM Opportunity Fund, L.P.
12.39% 10.12% 12.47% 28.73% 23.60%
GCM LITTLE ARBOR FUNDSGCM Little Arbor Partners (Cayman), Ltd.
5.76% 4.63% 4.09% 16.47% 13.17%
GCM Little Arbor Institutional Partners, Ltd.
5.14% 4.17% 4.07% 15.95% 13.26%
GCM Little Arbor Partners, L.P.
5.30% 4.32% 4.04% 15.81% 12.64%
Q4 Performance 2010 Calendar Year Performance
We remain constructive on the investment environment over the medium term supported by attractivevaluations, excessive corporate liquidity, a growing economy and ample global liquidity.iii)
Forward risks are no longer tilted towards deflation / double digit recession but instead include inflationarypressures and the corresponding impact on sovereign creditworthiness.iv)
With the recovery in both economy and markets, our ability to find attractive single name shortopportunities is increasing, and our short exposure is shifting away from indices towards individualequities.v)
In the Glenview and GO Funds, we continue to withdraw capital from long fixed income strategies andredeploy capital in long equity strategies with superior risk / reward characteristics.vi)
With the evolution of risk scenarios that now include inflationary pressures, we have adjusted ouralternative hedge positioning towards protection from rising interest rates as well as mortgage putback liabilities, while harvesting a portion of our sovereign CDS hedges.
* * *Fourth Quarter Discussion
Our funds performed well and inline with our long-term expectations, driven by the following:i)
Broadbased success in our investment portfolio, led by strength in healthcare (Life Technologies,McKesson, Medco and Thermo Fisher Scientific), technology (Flextronics, Xerox and BMC) and specialtyfinancials (Aon and AIG).ii)
Continued steady performance from our corporate fixed income portfolio, driven by a diverse set of namesincluding Cengage, Mueller Water Products, MBIA, Terrestar and Ceridian.
Modest positive returns from our US Treasury hedge as the first signs of inflationary pressures emerged,raising yields and reducing bond prices.iv)
Offsetting these gains, our short equity portfolio performed approximately inline with the broader equitymarkets in the quarter on a cash on cash basis, producing negative returns.While our portfolio holdings are diversified by industry, end market and growth drivers, we felt that the commonelements of modest valuations, above consensus earnings growth and accelerating productive capital deploymentwould all serve to promote value for our largest equity holdings. It is therefore not a coincidence that of our eightlargest individual equity winners in the quarter, all of them beat consensus earnings for the September quarter, andsix of them were aggressive repurchasers of their own shares. We believe these trends of secular growth, excesscapital deployment and a modest expansion of valuation multiples will continue to drive positive absolute returnsfrom our investment portfolio in 2011 and beyond, and we discuss many of our positions in depth in the “A TenYear View – Looking Back and Looking Forward” section of this letter.