BLUEMAR CAPITAL MANAGEMENT, LLC

Q4 2019 | INVESTOR LETTER

March 9, 2020

BlueMar Master Fund, Ltd.

BlueMar Azul Master Fund, Ltd.
BlueMar Capital Management, LLC
623 Fifth Avenue, 16th Floor
New York, NY 10022

Dear Investor,

For the fourth quarter 2019, BlueMar Master Fund, Ltd. (the “Fund”) was up 5.0% net of fees1. The Fund’s full year
net return was 25.1% and the cumulative net return since inception (October 2011) is 104.4%3. The Fund’s
annualized net return1 and volatility since inception are 9.0%1,3 and 6.6%3, respectively.

BlueMar Returns and Market Comparison Q4 20195

Oct-19 Nov-19 Dec-19 Q4 2019 YTD 2019

BlueMar Master Fund (net)1 0.9% 2.3% 1.7% 5.0% 25.1%

BlueMar Azul Master Fund (net)2 1.4% 3.5% 2.4% 7.4% 38.8%
HFRI Equity Hedge Index 1.4% 1.7% 2.4% 5.6% 13.6%
S&P 500 2.2% 3.6% 3.0% 9.1% 31.5%
MSCI World Index 2.6% 2.8% 3.0% 8.7% 28.4%
MSCI World Financials Index 2.9% 3.4% 3.1% 9.6% 27.2%
Financials Select SPDR (XLF) 2.5% 5.1% 2.6% 10.5% 31.9%
Real Estate Select SPDR (XLRE) 0.0% -1.7% 1.1% -0.6% 28.7%

BlueMar Capital Average Exposure Levels

Q4 2019 Inception-to-date3

Average Cash Levels -16.8% 0.4%

Average Gross Exposure 187.4% 160.5%

Average Net Exposure 46.2% 38.7%

Annualized Net Return 9.0%

Volatility3 6.6%

Sharpe Ratio 1.35

623 5th Avenue, 16th Floor | New York, NY 10022| Tel: 212.446.2400 PAGE 1
 PERFORMANCE ATTRIBUTION FOR Q4 2019

BlueMar Performance Attribution and Exposure Detail

Oct-19 Nov-19 Dec-19 Q4 2019 YTD 2019

Average Gross Exposure 182.3% 186.5% 194.1% 187.4% 181.9%

Average Net Exposure 44.2% 46.8% 47.9% 46.2% 45.5%

Long Attribution (Gross) 1.6% 6.7% 3.8% 12.6% 50.8%

Short Attribution (Gross) -0.3% -3.7% -1.6% -5.6% -14.9%

Core portfolio:

In Q4, the core portfolio had a gross contribution of 3.86% to the Fund. Business Services (291 bps), Asset
Gatherers (113 bps), and Life Insurance (91 bps) were the top subsector contributors, while Property & Casualty
Insurance (-49 bps), Special Situations/Other (-33 bps) and Specialty Finance—Real Estate/Mortgage (-6 bps)
were the top detractors.

Reduced trade concerns, accommodative monetary policy and expectations for acceleration in economic
activity drove robust market performance in Q4. Tightening credit spreads and lower volatility illustrated
improving investor sentiment. “Growth” vs. “value” factor performance was stable within the period, and record-
low positioning within rate-sensitive Financials helped to drive outperformance of the industry relative to the
market. Position crowding and market breadth are increasingly relevant factors. Our process continues to
prioritize underlying fundamentals and a balanced portfolio.

The top single name contributors were Wyndham Hotels & Resorts, Fidelity National Information Services and
Global Payments. The top detractors were Choice Hotels, Axis Capital and Bank of Hawaii.

Event-driven/tactical:

In Q4, the event-driven positions had a gross contribution of 2.79% to the Fund. Within our portfolio, corporate
actions and international opportunities were a significant positive contributor to performance. While we
continue to see attractive domestic situations, we have modestly increased our international exposure within
the strategy, reflecting an improving opportunity set abroad. In addition, the emerging rationalization of
competitive dynamics within many industries should continue to provide more opportunities for value-enhancing
consolidation.

PORTFOLIO AND MARKET COMMENTARY

We would like to take this opportunity to comment on some of the crosscurrents affecting markets recently, and
more specifically how we are thinking through the current environment.

With regards to market indices or risk-on/off behavior, we have been monitoring three different tail risks: (i) a
rapid, global and sustained outbreak of coronavirus disease Covid-19, (ii) a market-unfriendly presidential
candidate winning the White House along with full control of Congress, and (iii) the potential for oil prices to
collapse due to the simultaneous supply and demand shock caused by failed negotiations at the recent OPEC+
summit and Covid-19.

The extreme levels of recent market volatility are due to the combination of the three factors discussed. Of note,
the VIX has surpassed great financial crisis levels, while the 10-year and 30-year yields on U.S. treasuries are at
all-time lows. The latter scenarios are pricing in much more than a temporary virus outbreak or even a routine
recession.

623 5th Avenue, 16th Floor | New York, NY 10022| Tel: 212.446.2400 PAGE 2
 The news flow concerning Covid-19 in the short-term is certainly going to worsen. There is going to be significant
disruption to most people’s daily lives, and this will cause a sharp deterioration in economic activity, particularly
among the most affected verticals. Markets hate uncertainty, and there is no good precedent or comparable
for a situation like this. This lack of history is what makes outcomes difficult to predict, and therefore to price. We
would argue that the deterioration in affected verticals is going to be sharper than most people expect, but
also shorter than your typical recessionary environment. Our analysis suggests that most companies are better
off in a sharp but short shock scenario, rather than in a shallower but more protracted downturn.

Our risk-management process is a central part of our firm, and we remain very diligent in navigating through the
consequences of this virus. However, we are also very focused on analyzing not just the short-term disruption this
will create, but also the mid/long-term opportunities that this episode will produce.

The opportunities are mainly: (i) dislocations in certain stock prices that overshoot or undershoot any reasonable
outcome, and (ii) acceleration in customer adoption of certain technologies or habits that were already in
motion. For example, we believe that this outbreak will serve to further penetrate the adoption of digital
payments, mobile wallets, and ecommerce market share.

Importantly, we believe the current environment will further rationalize competitive behavior in most industries.
We expect a continued retrenchment of “market share at all costs” behavior, particularly from private market
participants as unit economics, gross margins, cash burn, and cyclical concerns come more into focus.

Separately, the upcoming presidential election in the U.S. has been significantly de-risked recently given the rise
of former VP Biden as the frontrunner for the Democratic nomination. This is a meaningful positive for market tail
risk as he is a moderate candidate whose policies and priorities are well known and understood, particularly
around regulation.

Finally, the ongoing collapse in oil prices poses a different set of risks. While most consumers do benefit from
lower gas prices, “too low” oil negatively impacts credit markets, business investment, and cyclical sector
employment trends.

Our current priority is to manage through the existing volatility while preserving the flexibility and tactical agility
to take advantage of dislocations. Given the swift move in rates and emerging concerns around credit, we
believe that the environment for long/short within our investable universe is very attractive. While our gross and
net exposure levels have not meaningfully changed in recent months, the current environment dictates that we
remain nimble in our exposures and further concentrate our long portfolio in high quality stocks and idiosyncratic
ideas with visible catalysts.

BUSINESS UPDATE

There are no major updates at this time.

As always, please feel free to contact us with any questions. Thank you for your continued support.

David Rodriguez-Fraile
Managing Partner & Portfolio Manager
BlueMar Capital Management, LLC

623 5th Avenue, 16th Floor | New York, NY 10022| Tel: 212.446.2400 PAGE 3
 *END NOTES
1Net return (Quarterly class) reflects the returns of an investor who invested in BlueMar Partners, LP (the onshore
feeder to BlueMar Master Fund Ltd.) on the initial launch date (October 3, 2011) in USD, is new issue eligible, and
is subject to the high watermark, a 1.5% management fee, and 20% incentive fee/allocation. These figures have
not been audited.

2Net return (Quarterly class) reflects the returns of an investor who invested in BlueMar Azul Partners, LP (the
onshore feeder to BlueMar Azul Master Fund Ltd.) on the initial launch date (February 1, 2017) in USD, is new issue
eligible, and is subject to the high watermark, a 2.0% management fee, and 20% incentive fee/allocation. These
figures have not been audited.

3Statistics
since inception commence with the BlueMar Master Fund’s inception on October 3, 2011 through
January 31, 2020.

4Historical volatility is measured using monthly net performance.

5The comparison of the Fund to the performance of certain market indicators or indices may not be meaningful
since the constitution and diversification of, and risk associated with, the Fund’s portfolio may be significantly
different than those of any such market indicator or index.

The S&P 500 Index (“S&P 500”) is designed to be a leading indicator of US equities, and it is meant to reflect the
risk/return characteristics of the large‐cap universe. The S&P 500 is an index consisting of 500 stocks chosen from
market size, liquidity and industry group representation, among other factors.

The MSCI World Financials Index and the MSCI World Index are free-float weighted equity indexes developed
with a base value of 100 as of December 31, 1998 and December 31, 1969 respectively. Both the MSCI World
Financials Index and the MSCI World Index include developed world markets, and do not include emerging
markets.

The Financials Select SPDR (“XLF”) is an exchange-traded fund incorporated in the USA. The Fund’s objective is
to provide investment results that, before expenses, correspond to the performance of The Financial Select
Sector. The Index includes financial services firms whose businesses range from investment management to
commercial and business banking.

The HFRI Monthly Indices (“HFRI”), including the HFRI Equity Hedge Index (“HFRI‐EHI”), are equally weighted
performance indexes. The HFRI are updated three times a month: Flash Update (5th business day of the month),
Mid Update (15th of the month), and End Update (1st business day of following month). The current month and
prior three months are left as estimates and are subject to change. If a constituent fund liquidates/closes, that
fund's performance will be included in the HFRI as of that fund's last reported performance update. The HFRI are
fund weighted (equal‐weighted) indices. Unlike asset‐weighting, the equal‐weighting of indices presents a more
general picture of performance of the hedge fund industry. Any bias towards the larger funds potentially
created by alternative weightings is greatly reduced, especially for strategies that encompass a small number
of funds. Both domestic and offshore funds are included in the HFRI.

The S&P 500, the MSCI World Financials Index/MSCI World Index, the Financials Sector SPDR (“XLF”) and HFRI‐EHI
indexes (the “Indexes”) are not being used as a benchmark to show the relative under‐performance or the out‐
performance of the Fund’s results. Rather, the Indices are presented to show the comparative rates of return
relative to the performance of the Fund.

623 5th Avenue, 16th Floor | New York, NY 10022| Tel: 212.446.2400 PAGE 4
 *DISCLAIMER

THIS REPORT IS CONFIDENTIAL AND MAY NOT BE REPRODUCED IN WHOLE OR IN PART, OR DELIVERED TO ANY
OTHER PERSON, WITHOUT THE PRIOR WRITTEN CONSENT OF BLUEMAR CAPITAL MANAGEMENT, LLC.

THIS LETTER SEEKS TO DESCRIBE OUR CURRENT VIEWS OF THE MARKET AND TO HIGHLIGHT SELECTED INVESTMENT
ACTIVITY. ANY DISCUSSION OF SPECIFIC SECURITIES OR STRATEGIES IS INTENDED TO HELP INVESTORS UNDERSTAND
OUR INVESTMENT MANAGEMENT STYLE, AND SHOULD NOT BE REGARDED AS A RECOMMENDATION OF ANY
SECURITY OR STRATEGY. THE INFORMATION IN THIS REPORT MAY INCLUDE ESTIMATES AND PROJECTIONS AND
INVOLVE SIGNIFICANT ELEMENTS OF SUBJECTIVE JUDGMENT AND ANALYSIS. THIS REPORT WAS PREPARED BY
BLUEMAR CAPITAL MANAGEMENT, LLC (“BMC”) BASED UPON INFORMATION FROM SOURCES THAT ARE BELIEVED
TO BE RELIABLE. HOWEVER, BMC DOES NOT MAKE ANY REPRESENTATION OR WARRANTY AS TO THE ACCURACY
OR COMPLETENESS OF THE INFORMATION CONTAINED IN THIS REPORT. NO REPRESENTATION IS MADE AS TO THE
ACCURACY OF SUCH ESTIMATES OR PROJECTIONS OR THAT SUCH PROJECTIONS WILL BE REALIZED, AND BMC HAS
NO OBLIGATION TO UPDATE OR KEEP CURRENT ANY INFORMATION OR PROJECTIONS CONTAINED IN THIS REPORT.
REFERENCES TO SECURITIES PURCHASED OR HELD OR STRATEGIES EMPLOYED ARE ONLY AS OF THE PERIOD
REFERENCED AND ARE SUBJECT TO CHANGE. YOU SHOULD NOT ASSUME THAT INVESTMENTS IN THE SECURITIES
IDENTIFIED WERE OR WILL BE PROFITABLE OR THAT DECISIONS WE MAKE IN THE FUTURE WILL BE PROFITABLE. IT
SHOULD NOT BE ASSUMED THAT RECOMMENDATIONS IN THE FUTURE WILL EQUAL THE PERFORMANCE OF ANY
SECURITY REFERENCED IN THIS LETTER. THIS LETTER IS NEITHER AN OFFER TO SELL NOR A SOLICITATION OF AN OFFER
TO BUY AN INTEREST IN ANY FUND, WHICH WILL BE MADE ONLY BY MEANS OF A CONFIDENTIAL PRIVATE
PLACEMENT MEMORANDUM. AN INVESTMENT IN THE FUND INVOLVES SUBSTANTIAL RISKS. THERE CAN BE NO
ASSURANCE THAT THE FUND’S INVESTMENT OBJECTIVES WILL BE ACHIEVED. INVESTORS COULD LOSE SOME OR ALL
OF THEIR INVESTMENT.

623 5th Avenue, 16th Floor | New York, NY 10022| Tel: 212.446.2400 PAGE 5