CastleArk Management's Small Company Growth portfolio invests in the most promising firms with market capitalizations between $150 million to $3.5 billion.

Because we strongly believe earnings growth drives long-term stock prices, we invest in companies whose improving business fundamentals suggest they are poised to outperform their peers. CastleArk Management's strategy and process have generated excess returns for our clients over the long term.

Portfolio Management team:

• James Stark, CFA
• Greg Baxter, CFA

Jim Stark and Greg Baxter joined CastleArk Management in 2007. Jim and Greg have a combined 30 years experience managing small company growth equities. With a need for a small cap manager, CastleArk recognized in Jim and Greg an investment team with longevity and a process that fit well into CastleArk Management's family of strategies.

Small Company Growth Overview

We believe that earnings growth is the primary driver of stock prices over the long term, and that excess returns can be achieved by investing in those companies with improving business fundamentals. The CastleArk advantage stems from our emphasis on three key attributes:

• the direction of growth over the absolute level of growth,
• actual fundamental improvements vs. anticipated improvements, and
• disciplined analysis focused on the magnitude and sustainability of the drivers of fundamental improvement.

The Investment Process

The CastleArk process is a disciplined and repeatable process applied consistently throughout all types of markets. Our 3-step process includes:

1. Identification,
2. Fundamental Analysis, and
3. Portfolio Construction.

Identification
Our screening process begins with a universe of all companies with market capitalizations roughly equivalent to the Russell 2000 Growth Index (approximately $150 million to $3.5 billion). Our screening process narrows the list to 150 – 200 potential candidates which show signs of improving fundamentals.

In an effort to minimize our exposure to overpriced, over-hyped situations, we invest in companies only after measurable improvement has been confirmed.

Fundamental Analysis
Through fundamental analysis of each company, CastleArk determines the magnitude and sustainability of change. Once identified, potential candidates are researched and the drivers of business improvement are identified. Our portfolio management team then assesses the magnitude and sustainability of these drivers. Our goal is to identify any change in the direction of growth before it becomes fully reflected in the stock price.

The CastleArk research process reduces the investable universe to approximately 100 – 125 companies.

Portfolio Construction
CastleArk uses a bottom-up approach when building the Small Company Growth portfolio. Our portfolio managers emphasize 1) risk management and 2) sell discipline to build diversified portfolios of 75-95 stocks.

Continuous dialogue, in addition to a weekly review of every holding, allows for fluid adjustments to the portfolios' holdings. Limits on position size and sector weights, along with constant portfolio attribution analysis, contribute to the CastleArk risk management process.

Our sell discipline derives from our belief that losses can be minimized by identifying potential problems before they become fully reflected in the stock price. Our willingness to move on to the next good idea at the first sign of trouble is a key ingredient in our risk management process and, therefore, in our ability to produce alpha.

Insure Process Integrity

Assets in the Small Company Growth portfolio will be capped at approximately $1 billion, insuring the quality of our portfolio, rather than the size of our client base. Capping assets will allow our portfolio managers to consider all of the best investment opportunities, without the impediments of liquidity issues, in order to meet our objective of providing our clients with superior performance.

Small Company Growth profile:

AUM (12/31/10):                  $233 million
Number of holdings:            75-95
Benchmark:                             Russell 2000 Growth Index
Capitalization universe:     $100 million - $2.8 billion
Median market cap:             $992 million
Cash position:                         0% - 5%