Olesen Capital Management LLC www.OlesenValueFund.com 701 W. Broad Street, Suite 209, Bethlehem, PA 18018, U.S.A.

Phone: +1 (610) 866-6200, Fax: +1 (480) 247-5697, Christian.Olesen@OlesenValueFund.com April 11, 2014

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Dear Partners: In the first quarter, we earned 1.4% after fees. The following table shows our historical returns after fees alongside those of global equity markets since the fund’s inception.

Inception through Dec 2009 (13 months) 2010 2011 2012 2013 2014 YTD Cumulative since inception Annualized since inception

Olesen Value Fund L.P. (After Fees) 58.7% 20.2% -7.6% 28.5% 23.1% 1.4% 182% 21.5%

MSCI All-Country World Index * 40.8% 12.3% -7.2% 16.1% 26.5% 1.2% 118% 15.7%

Contents Portfolio Updates:     Approx. 40-65% IRR on Arbitrage of Dutch Squeeze-Out Sold Topps Tiles, Locking in 17.6% IRR Accumulated Add’l Shares in Two Small European Companies Increased Stake in Two Stocks During Brief Emerging Markets Sell-Off p. 1 p. 2 p. 4 p. 4 p. 4 p. 5

K-1’s Issued; Little Taxable Income in 2013, Mostly Due to Deferral of Gains Conclusion

Portfolio Updates  Approx. 40-65% IRR on Arbitrage of Dutch Squeeze-Out During the quarter, I invested in what I think was an excellent arbitrage opportunity. I bought shares in D.E. Master Blenders 1753 BV, the Amsterdam-listed spin-off of Sara Lee’s coffee and tea businesses, which was acquired by an investor group for cash last fall.

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At this point, it looks like we will most likely earn almost 6% over our average holding period of about two months (approx. 40-65% annualized return, depending on the timing of the final cash payout) on this very low-risk arbitrage. Stock Trades 10% Below Buy-Out Price in Obscure Over-the-Counter Market Under Dutch law, depending on the legal structure of an acquisition, it may be necessary for the buyer to acquire at least 95% of the shares (generally via a tender offer to the shareholders) before it can force the remaining shareholders to sell their shares under a ‘squeeze-out’ procedure overseen by the courts. In October, shortly after the investor group obtained 95% of D.E. Master Blenders, the stock was delisted from Euronext Amsterdam and the squeeze-out procedure, which typically takes several months, was initiated in the Dutch courts. A couple of months later, the stock started trading in the so-called ‘grey market’ in the U.S., which is basically the least regulated tier of the pink sheets, at prices that initially were around 10% below the USD-equivalent of the EUR 12.50 buy-out price. Very Low Risk Investment; Imbalance of Supply and Demand for the Stock My research on the Dutch squeeze-out procedure generally as well as the particulars of this case indicated there was only a very low probability that the court’s decision would not result in the remaining shareholders eventually being bought out at EUR 12.50 per share, which I thought would probably occur around May of this year. Many of the shareholders who did not tender their shares (most likely due to inattention) probably also didn’t properly understand the terms of the buy-out and the squeeze-out procedure (and hence the value of their investment). Moreover, some of them were probably U.S.-based individual investors who owned this European-listed stock because the company was spun off from a U.S. company only 17 months before the delisting. Therefore, when the stock became tradable in the U.S. grey market, I think there was likely a meaningful number of natural sellers, but few arbitrageurs were buying because of low liquidity and lack of awareness (perhaps caused by the change in trading venue from Europe to the United States). After I became aware of this opportunity, I accumulated as many shares as I could without pushing the price up significantly, and fully hedged the currency risk. As expected, on April 8 the court issued its decision that the remaining shareholders shall be mandatorily bought out at EUR 12.50 per share within the next few weeks, and the stock is now trading in line with the buy-out price.  Sold Topps Tiles, Locking in 17.6% IRR During January, I sold our remaining shares in Topps Tiles plc, as the price had performed exceptionally well in recent weeks and now reflected approximately fair value. This £250 mil. market cap company is by far the UK’s largest specialty retailer of tiles and related products. This includes bathroom, kitchen, floor, wall and mosaic tiles, grout, adhesives, tools, and wood flooring. Based on the information I have, the company’s market share has increased every year since its IPO in 1997. Most customers are do-it-yourself consumers who are laying tile in a portion of their home as well as small, independent “jobbers” who perform small tile-laying jobs for others. The company does not sell wholesale to builders.

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Superior Competitive Position, Superior Margins Compared to the great majority of its many mom-and-pop competitors and the few smaller chains of tile specialists in the UK, I believe Topps offers at least comparable service (product knowledge of its sales associates), comparable variety, but better in-stock product availability (thanks to its size, own warehouse facilities, and bigger balance sheet which enables it to hold more inventory). The company’s substantially larger, national reach also gives it advertising and branding advantages. Even more importantly, it has a very big cost advantage because it has more buying power and is large enough to justify having its own warehouse and can therefore buy the majority of its inventory directly from manufacturers. This is the reason for its vastly superior gross margins, which are around 60%. The ‘DIY sheds’ (equivalent to the large home improvement chains in the U.S.) also sell tile, but they usually focus on offering a narrower variety of products at lower prices. They also provide less service, as it is not practical or economical to staff the tile aisle (which probably accounts for less than 5% of revenues) with a tile specialist at all times. As far as I know, the DIY sheds’ share of the UK tile market has been roughly constant for many years. So far, the Internet has had little impact on the retailing of tile. Via its web site, Topps sells a fairly small amount of tile, provides product information, and provides a ‘loan a tile’ service providing samples to customers by mail. All in all, I think Topps Tiles has a superior, sustainable competitive position, which is the main reason for the superior margins and continual market share gains. Overestimated Recovery Potential Early in the economic recession, the company’s same-store sales dropped by approx. 20% and the operating margin fell from a little over 20% to around 10%. Contrary to my expectations, sales and margins have largely failed to rebound so far, although it looks like they will most likely show some improvement this year. However, relative to its competitors, it appears that the company is doing well, and it has apparently continued to grow its market share since the recession and remained solidly profitable and cash flow positive all along. I think I may have underestimated how much UK tile consumption was inflated before the recession by the popularity of home improvement projects that were driven by homeowners’ exuberance about their dramatically rising home values, so I incorrectly assumed that most or all of Topps’ lost sales would come back soon after the recession was over. Saved by Low Purchase Price, Realized 17.6% IRR The fund’s average cost of Topps Tiles stock was only 4.5x the company’s pre-recession earnings per share. Our average sales price still only equaled 7.5x pre-recession earnings—however, I would no longer assume that the company will achieve this level of earnings simply as a result of a normalization of the market in which it operates (it will likely exceed these earnings eventually, but probably not for a long time). Depending on how much earnings improve this year, I estimate our selling price to be 16-19x FY

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2014’s earnings. Given my skepticism that earnings will recover all of their lost ground, I think this is close to the fair value of the stock. The fund earned a 17.6% annualized IRR on this investment over its 3½year avg. holding period compared to 9.6% for global equities and 10.0% for UK equities (incl. dividends) over the same time period.  Accumulated Add’l Shares in Two Small European Companies In January, I bought a few additional shares in the company I described in last quarter’s letter which had dropped approx. 20% in December following a mediocre earnings report. This company is fairly small, but reasonably diversified in terms of customers, types of services offered, reliance on key people, etc. The company is debt-free, operates in an attractive industry, and consistently generates lots of free cash flow. These additional shares were bought at prices corresponding to approx. 8.5x adjusted trailing earnings. In addition, I continued to accumulate shares in the illiquid, profitable, asset-rich European company I described in more detail in the Q4 2013 investor letter, but unfortunately I have only been able to acquire a very small stake so far.  Increased Stake in Two Stocks During Brief Emerging Markets Sell-Off I also took the opportunity to increase our positions in two other companies in late January and early February when they temporarily became more deeply undervalued during the brief market sell-off that was caused by concerns about emerging markets (these are both very strong companies that are not highly exposed to emerging markets anyway).

K-1’s Issued; Little Taxable Income in 2013, Mostly Due to Deferral of Gains During the quarter, K-1 forms were sent to all investors in the fund. If you are taxable in the United States, you will need this form in order to report your share of the fund’s various forms of taxable income and deductions on your 2013 tax return. Naturally, I am also happy to provide non-U.S. investors with any information they may need for tax purposes. In 2013, we generated very little in net taxable income for our U.S. investors. For most U.S. investors, the taxable income was less than 1/5th of their total actual profit for the year, and most of this will be taxed at favorable rates for long-term capital gains and qualified dividends. This was primarily due to the deferral of capital gains (that were still unrealized as of year-end), but also other tax planning techniques, such as the strategic use of the specific identification method for tax lot accounting as well as efforts to generate long-term rather than shortterm capital gains whenever this makes economic sense.

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Conclusion I look forward to updating you next quarter, as there are a few positive developments in the works. Please don’t hesitate to call or email me with any questions, comments or concerns. Also feel free to visit the web site www.OlesenValueFund.com, which has additional information about the fund, including previous quarterly letters. Let me know if you need the password to the web site, which is required by SEC regulations.

Sincerely,

Christian Olesen, CFA President Olesen Capital Management LLC, general partner of Olesen Value Fund L.P.

Notes: The above-mentioned returns for the fund are stated for a hypothetical investor who invested at the inception of the partnership and has not made any subsequent contributions or withdrawals, after the 1.75% annual management fee and 20% performance allocation have been subtracted (and after taking into account any high watermark that may apply). The returns reported on your statement from our accountant may differ from these due to the timing of your contributions and withdrawals and any high watermark that may apply. * The version of the MSCI All-Country World Index that is referred to in the table on page 1 includes dividends and is expressed in local currency terms. It is the broadest equity index available, including large, mid, small and micro-cap stocks in developed, emerging and “frontier” markets. U.S. equities make up a little less than half of the value of the index. The fund’s portfolio does not attempt to mirror the index in any way at all; the index returns are only provided in order to show the return on equities generally (before subtraction of the fees and expenses that would have been incurred by replicating the index) during the fund’s existence.

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