Iuly 22, 2u11

Leu Zeppelin, "The Song Remains the Same"

away! stones,! and! a! time! to! gather! stones! together;! a! time! to! embrace,! and! a! time! to! refrain!
! ! ! ! ! Ecclesiastes S:1-8
Rigo Buiazo (Combat Instiuctoi, Ciaft Inteinational)
The buuget is not the only thing in ueficit touay, as a paucity of leaueiship has left the
countiy without a stable fiamewoik in which businesses can conuuct business, investois
can invest, anu consumeis can consume without a high uegiee of unceitainty anu feai.
Politically chaigeu statements anu biinkmanship have seiveu to ueepen uivisiveness
between the paities anu leu to confusion anu feai among citizens. Theie has been much
saiu about who is allegeuly the "auult in the ioom," but Piesiuent 0bama has yet to speak to
Ameiicans as auults, insisting insteau on his piefeiieu technique - stiiiing up class
waifaie. Scaiing senioi citizens about the possibility of not ieceiving theii Social Secuiity
anu Neuicaie checks, lambasting the coipoiate jet inuustiy, anu calling foi highei taxes on
manageis of piivate paitneiships is not a constiuctive appioach to hanuling a complex
multi-tiillion uollai pioblem that will have a multi-geneiational impact.

In iemaiks on the Bouse flooi this week, Repiesentative Paul Ryan (R-WI) neatly
chaiacteiizeu the peiils of the piesent moment:


It is incieasingly uifficult to avoiu the conclusion that while Washington buins, Piesiuent
0bama is fiuuling away by insisting that the only solution to the nation's pioblems -
whethei unemployment, the uebt ceiling, oi ueficit ieuuctions - lies in ieuistiibution of
wealth. Peihaps the uiffeience between Piesiuent 0bama anu many Ameiicans is that the
Piesiuent sees piospeiity as a sign of "unfaiiness" that neeus to be coiiecteu by
goveinment via highei taxes anu incieaseu iegulation. Peihaps a plan that leu the way
foiwaiu by expanuing oppoitunities iathei than ieuistiibuting outcomes anu emphasizeu
giowth anu piospeiity foi all woulu be met with less political iesistance.
Neanwhile, on the othei siue of the Atlantic, limiteu piogiess has not been able to outweigh
feais that the EN0 iunts may topple the stiongmen in the enu. 0ui conceins ovei the
Euiopean situation have incieaseu uuiing the past few weeks, anu we believe it is
becoming moie likely that Euiope will expeiience a painful slowuown.

The confluence of uniesolveu fiist oiuei economic issues anu an absence of authoiitative,
cieuible global leaueiship have ienueieu maikets peipetually anxious. Feai of being
caiiieu out is quickly oveiiiuuen by feai of missing out, anu the schizophienic swings we
aie continuing to witness make investing tieacheious. 0ntil we see solutions foi the twin
peiils facing the 0niteu States anu Euiope - anu with oui existing leaueiship focuseu on
scoiing political points anu Euiope's pioblems incieasingly complex, we cannot say with
any ceitainty when that will be - we aie inclineu to be cautious with youi capital.
ueneially, we aie "bottom-up investois." Bowevei we aie living in a climate wheie these
economic anu political consiueiations aie at least as - if not moie - impoitant than
unueilying funuamentals in foiecasting investment outcomes. uiven the gieat unceitainty
uesciibeu above anu sentiment levels that ieflect it, I can foiesee scenaiios wheie
secuiities coulu tiaue much highei - oi much lowei. Bappily, as Waiien Buffet has
pointeu out, we opeiate in a "no stiike" game, which is to say that we can let many pitches
pass us by befoie swinging at the ball that comes iight to oui sweet spot.

As such we've chosen to take a step back fiom the plate. We ieuuceu oui net exposuies
thioughout the seconu quaitei. Beginning in Apiil, we concluueu that the equity maiket no
longei offeieu compelling upsiue consiueiing the S&P was up ~9% YTB uespite the
heightening of the issues noteu above as well as the Iapanese eaithquake anu tsunami
uisasteis. Towaius the enu of the quaitei, we staiteu to inciease oui single name shoit
equity poitfolio, laigely because we saw that the maiket hau staiteu to iewaiu inuiviuual
stock picking foi the fiist time in months, as coiielations finally staiteu to fall.

0ui single name shoit poitfolio is now ~$1.6B oi appioximately 2S% of A0N. 0ui equity
long¡shoit net exposuie ueclineu fiom 42% on Naich S1 to S1% on Iune Su. The entiie
poitfolio's net exposuie ueclineu fiom 9u% at the beginning of the quaitei to 62% at
quaitei enu, anu on a beta-aujusteu basis, poitfolio exposuie uecieaseu fiom 64% to S6%.

Notwithstanuing oui continueu cautious outlook, we have a numbei of significantly-sizeu
event-uiiven positions which we aie confiuent have upsiue uiiveis iegaiuless of the macio
enviionment. While we aie cuiiently looking foi aieas to inciease oui gioss exposuie
thiough attiactive value-oiienteu iueas, we expect to keep net exposuies quite low by
histoiical teims. New aieas of focus incluue Latin Ameiica, Bealthcaie anu
Nateiials¡Inuustiials, wheie we have iecently auueu analyst capabilities.

Set foith below aie oui iesults thiough Iune Su, 2u11 anu a biief uiscussion of selecteu
positions that impacteu the poitfolio uuiing the quaitei.

Thiiu Point
0ffshoie Funu Ltu. S&P Suu BFRI
2u11 Seconu 0uaitei
-1.6% u.1% -u.S%
2u11 YTB Peifoimance
6.8% 6.u% 2.9%
Annualizeu Retuin Since
17.7% 4.1% 9.6%

The top five winneis foi the peiiou weie El Paso, ABS Inuex Shoit 1, Belphi, ABS Inuex
Shoit 2, anu uolu. The top five loseis foi the seconu quaitei weie NewPage, Technicoloi,
Baiiick uolu, Big Lots, anu Tuianalem Finance Bv.

Fiim assets unuei management at Iune Su, 2u11 weie $7.1 billion.
Long Equity: Nosaic
We initiateu a significant position in the equity of Nosaic, a 0S-baseu feitilizei company,
uuiing the seconu quaitei. We puichaseu oui stock thiough an oppoitunistic entiy point
via a seconuaiy offeiing of shaies by the Caigill family, its long-teim owneis. In Ianuaiy,
the family announceu plans to sell its 64% stake, a uecision we unueistoou to be uiiven
paitially by estate planning anu tax consiueiations. At the time, shaies weie tiauing at
~$8S. The sale of 64% of the company at those levels iesulteu in a $7.SB tiansaction,
which cieateu an oveihang foi the stock anu foi the feitilizei space in geneial. In the
weeks leauing up to the seconuaiy in Nay, giain anu feitilizei funuamentals continueu to
impiove, but Nosaic solu off significantly. The seconuaiy was ultimately piiceu at $6S,
wheie we establisheu oui position.

While we weie uiawn to Nosaic by the catalytic event of the Caigill sale, oui position is
now laigely sustaineu by two main uiiveis. The fiist is oui belief that giain anu coin
funuamentals aie extiemely positive, as we anticipate coin stocks-to-use iatio to iemain
lowei than 1u%. The seconu is oui belief that potash feitilizei has yet to iecovei to tienu-
line levels of uemanu. With potash inventoiies ueclining to below noimal levels in the 0S,
China, anu Inuia, anu with potassium nutiient levels in the soil in the 0S at thiee yeai lows,
we aie optimistic that global potash uemanu will iecovei moie iapiuly than the maiket
expects. Consequently, we view potash feitilizei piicing potential to be skeweu to the
upsiue, especially in light of iecoiu high faimei income. Finally, while theie have been
iecent effoits in Congiess to iemove the ethanol blenuing tax cieuit, we believe ethanol
piouuction anu consumption in the 0S will iemain almost unchangeu.

In light of this analysis, we have useu subsequent stock piice volatility to inciease oui
position. Baseu on oui estimates, Nosaic tiaues at 1ux 2u12 P¡E. This valuation fails to
ieflect oui assessment foi iobust giain funuamentals anu the potential foi potash piicing
upsiue ielative to baseline assumptions. As the maiket shakes off the issues aiounu the
seconuaiy anu places Nosaic in piopei context, we expect significant upsiue to the shaies.

Long Equity: Saia Lee

We auueu to oui holuings in Saia Lee equity uuiing the seconu quaitei aftei initiating a
position eailiei this yeai when the company opteu not to sell itself. Aftei uivesting assets
foi the bettei pait of a uecaue, Saia Lee now laigely consists of a Noith Ameiican bianueu
meat business anu an inteinational coffee anu tea business. The company plans to pay a $S
special uiviuenu anu spin off the coffee business in the fiist half of 2u12.

We aie exciteu about this investment foi seveial ieasons. Fiist, the maiket continues to
unueiestimate the tiue eainings powei of these assets, as opeiating maigins aie poiseu to
iebounu significantly fiom a combination of cost ieuuction effoits anu piicing actions
taken to offset iecent commouity inflation. At $19.Su, we believe SLE is tiauing at ioughly
7x oui best estimate of noimalizeu EBITBA. Saia Lee's 0S anu Euiopean peeis tiaue at
appioximately 9x, implying meaningful upsiue foi SLE fiom these levels. Seconu, we like
that the new Chaiiman of the Boaiu, Ian Bennink, is playing a veiy active iole. Be was
hiieu to oveisee the sepaiation of the company anu is veiy engageu, buying stock foi
himself anu acting like a CE0. Bennink has an impiessive iecoiu of value cieation fiom his
uays at Numico, wheie he uiamatically ieacceleiateu oiganic sales giowth in what was
then consiueieu a matuie maiket (Westein Euiopean baby foou) befoie selling the
business to Banone foi a huge piemium. Finally, we believe that both businesses will be
attiactive to stiategic buyeis. 0ui view is that Saia Lee's meat business coulu be acquiieu
quickly, anu the coffee business coulu be "Numico all ovei again."

Noitgages: CNBX Shoit
The moitgage maiket as a whole softeneu in the seconu quaitei. We believe that this
weakness was causeu less by the funuamentals of the bonus we own than by technical
selling piessuies in the maiket. These technical factois incluue the veiitable elephant in
the ioom - the Feu's selling of the Naiuen Lane poitfolio uuiing the quaitei - as well as the
unwinuing of a laige CNBX poitfolio by a 0S-baseu money centei bank. Finally, as the
quaitei went on anu maikets as a whole ueclineu, heuge funus with stop loss mechanisms
conuucteu foiceu sales, auuing to maiket malaise.

Even against this weakening sectoi backuiop, howevei, asset-backeu secuiity plays
iemaineu slightly piofitable oveiall foi Thiiu Point in the seconu quaitei, thanks to some
excellent shoit positions in the ABX anu CNBX inuices.

In the fiist quaitei, CNBX iallieu significantly anu the move in piice caught oui attention.
We believeu that this ially was technical, uiiven in pait by a shoit squeeze, as investois
who hau heugeu theii NBIA long exposuie with shoit CNBX unwounu theii positions in the
face of iesolution of some of the issues suiiounuing NBIA. To capitalize on this technical
uislocation, we solu CNBX shoit into this ially at levels much highei than wheie we coulu
buy the equivalent cash bonus.

In the seconu quaitei, the technical factois uesciibeu above foiceu CNBX uown - in some
cases as much as 4u% fiom peak 2u11 levels - iesulting in a nice piofit on oui shoit
positions. We have unwounu about two-thiius of the tiaue but continue to keep a small
position in place as a piotection heuge on oui long CNBS book.

While oui long bonu poitfolio was uown foi the seconu quaitei, we aie still optimistic
about the oppoitunities in moitgage cieuit. We believe that the technical piessuie in the
sectoi shoulu abate by the enu of the thiiu quaitei. The bonus we own have stabilizeu
alieauy anu we expect they will continue to appieciate.

We have "haiu closeu" the Funus as of Iuly 1, 2u11. 0ui assets aie now $7.9B, incluuing the
subsciiptions we took in foi Iuly 1. We aie pleaseu with the uiveisity anu composition of
oui asset base, which incluues a new peak in the peicentage of institutional investoi
capital, a uevelopment we believe benefits all of oui paitneis. We expect to ievisit whethei
to ie-open the Funus latei this yeai.


We aie pleaseu to announce that two new analysts joineu oui ieseaich team uuiing the
seconu quaitei.

Iason Bong, PhB has joineu Thiiu Point as an analyst focusing on healthcaie. Befoie
coming to Thiiu Point, Bi. Bong was a vice-Piesiuent in the Equity Beiivatives uioup at
uoluman Sachs, a Poitfolio Nanagei at Polygon Investment Paitneis anu an Associate
Analyst at Sanfoiu C. Beinstein. Piioi to Beinstein, Bi. Bong spent foui yeais at NcKinsey
& Company, woiking with global healthcaie companies in the aieas of business
uevelopment, post-meigei integiation anu clinical piogiam uevelopment. Bi. Bong
giauuateu with a Ph.B. in Chemistiy fiom Baivaiu 0niveisity, anu holus a B.S. with Bonois
in Chemistiy fiom the Califoinia Institute of Technology.

ueoffiey Bsu joineu us as an analyst focusing on mateiials anu inuustiials. Be has spent
the last 9 yeais investing in equities in the commouities anu inuustiials sectois. Befoie
joining Thiiu Point, Ni. Bsu was iesponsible foi commouities anu inuustiials investment
foi Bighbiiuge Capital Nanagement's Euiopean Long¡Shoit stiategy. Be pieviously co-
manageu a sectoi specific Long¡Shoit poitfolio foi uLu Paitneis Noith Ameiican
0ppoitunity Funu. Ni. Bsu holus a B.S. in Science, Technology, anu Society fiom Stanfoiu.


Thank you foi youi paitneiship.!



The peifoimance uata piesenteu iepiesents that of Thiiu Point 0ffshoie Nastei Funu L.P. All P&L oi peifoimance iesults aie baseu on
the net asset value of fee-paying investois only anu aie piesenteu net of management fees, biokeiage commissions, auministiative
expenses, anu acciueu peifoimance allocation, if any, anu incluue the ieinvestment of all uiviuenus, inteiest, anu capital gains. The
peifoimance above iepiesents funu-level ietuins, anu is not an estimate of any specific investoi's actual peifoimance, which may be
mateiially uiffeient fiom such peifoimance uepenuing on numeious factois. All peifoimance iesults aie estimates anu shoulu not be
iegaiueu as final until auuiteu financial statements aie issueu. Exposuie uata iepiesents that of Thiiu Point 0ffshoie Nastei Funu L.P.

While the peifoimances of the Funus have been compaieu heie with the peifoimance of a well-known anu wiuely iecognizeu inuex, the
inuex has not been selecteu to iepiesent an appiopiiate benchmaik foi the Funus whose holuings, peifoimance anu volatility may uiffei
significantly fiom the secuiities that compiise the inuex. Investois cannot invest uiiectly in an inuex (although one can invest in an inuex
funu uesigneu to closely tiack such inuex).

Past peifoimance is not necessaiily inuicative of futuie iesults. All infoimation pioviueu heiein is foi infoimational puiposes only anu
shoulu not be ueemeu as a iecommenuation to buy oi sell secuiities. All investments involve iisk incluuing the loss of piincipal. This
tiansmission is confiuential anu may not be ieuistiibuteu without the expiess wiitten consent of Thiiu Point LLC anu uoes not constitute
an offei to sell oi the solicitation of an offei to puichase any secuiity oi investment piouuct. Any such offei oi solicitation may only be
maue by means of ueliveiy of an appioveu confiuential offeiing memoianuum.

Infoimation pioviueu heiein, oi otheiwise pioviueu with iespect to a potential investment in the Funus, may constitute non-public
infoimation iegaiuing Thiiu Point 0ffshoie Investois Limiteu, a feeuei funu listeu on the Lonuon Stock Exchange, anu accoiuingly
uealing oi tiauing in the shaies of that funu on the basis of such infoimation may violate secuiities laws in the 0niteu Kinguom anu