SPHERA FUND

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SPHERA FUND Israeli Business Forum
September 10, 2008
This presentation is provided to the recipient
for information purposes only and no
representation or warranty, express or implied,
is made as to the completeness or accuracy of the
information contained herein.  This presentation
does not constitute an offer to sell, or a
solicitation of an offer to buy, any interests in
Sphera Fund. 
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Israel Economy Snapshot Industrialized economy /
Emerging Capital Market

• The Best of Both Worlds
• Strong Macro indicators
• GDP per capita at developed economy level. ?
  Israel GDP per capita is higher than 9 out of the
  28 OECD countries
• Macro economic policy indicators- inflation,
  budget ? deficit, current account at developed
  economies levels (or better)
• Emerging market-like growth and returns on
  equities

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Sustainable 4-5 growth trend line supported by
1-3 inflation target by BOI
Source Sphera Funds Management
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Resilient economy supported by structural reforms
and stable policy
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Global Financial Crisis Could Not Have Caught
Israels Economy at a Better Position

• Strong Macro indicators
• Major financial market reforms
• Pension fund reform
• Primary dealers
• Government bond issuance consolidation
• Bachar reform
• Solid fiscal policy
• Credible monetary policy

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Israeli Market Universe

• Tel-Aviv Stock Exchange
• - Over 600 companies listed
• - Aggregate market cap gt 200 Billion
• - Average daily volume 1.7B (700M Equity)
• - Average daily volume equity derivatives 1.5B
• - Aggregate equity ownership profile (as of
  31/12/2007)
• - Insiders 40
• - International 30
• - Domestic Institutions 15
• - Retail 15

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Israeli Market Universe (Contd)

• Over 100 Israeli related companies are traded
  internationally, primarily U.S
• - gt 30B Market Cap
• Tel-Aviv Stock Exchange
• - P/E 11X
• - Price/Book 1.95X
• - Dividend Yield gt 3

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Israel Index Performances
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The Fund the Strategy

• Premier hedge fund manager based in Israel (over
  260m of locally and internationally sourced
  assets under management)
• Proven track record (18.0 net annualized since
  2001)
• Strong Management Team that has been with the
  Fund for the past 7 years
• 18 staff with 11 investment professionals
  (average 15 years experience)
• Primary focus on Israeli-related equities listed
  in Israel, US and Europe

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Investment Philosophy

• Capture emerging market-style returns with
  developed market-style volatility
• Consistent capture of market gains (strong stock
  picking) and capital preservation in periods of
  turbulence (careful risk management, shorts and
  index options)
• Fundamentally driven, bottom-up approach to
  stock picking with emphasis on in-depth company
  research
• Intimate access and understanding of company
  managements

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Cumulative Net Performance of Sphera Fund Jan
2001 July 2008
251
94
4.0-
6.5-
Sphera returns are net of all fees 2004-present
returns are all in U.S. dollar terms Historical
returns for 2001-2003 are presented in Shekels
and were audited by KPMG.
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Average Net Annual Returns Jan 2001 July 2008
Sphera returns are net of all fees 2004-Present
returns are all in U.S. dollar terms Historical
returns for 2001-2003 are presented in Shekels
and were reviewed and approved by KPMG.
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Sphera has Outperformed on a Risk-Adjusted Basis
Sharpe Ratio Jan 2001 July 2008
Annualized Std. Deviation Jan 2001 July 2008
Sphera returns are net of all fees 2004-present
returns are all in U.S. dollar terms Historical
returns for 2001-2003 are presented in Shekels
and were reviewed and approved by KPMG.
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Rolling 12-months performance

Sphera VS. TA100 and Nasdaq Best Worst 12
months since 2001
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52 Week Rolling Beta to the MSCI EM
Source MSCI, Morgan Stanley Research
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Disclaimer
This presentation is issued by Sphera Funds
Management (Sphera), 21 Haarbaah Street, Tel
Aviv which is not an authorized or regulated
advisor. In the UK this presentation is exempt
from the general restriction on the communication
of invitations or inducements to engage in
investment activity contained in Section 21 of
the Financial Services and Markets Act 2000 on
the grounds that it is directed only at persons
who are of a kind to whom the Fund may lawfully
be promoted under the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005
(the Order), being Investment professionals
within the meaning of Article 19 of the Order,
being persons having professional experience in
matters relating to investments high net worth
corporations and partnerships and the trustees of
high value trusts within the meaning of Article
49 of the Order Sophisticated investors within
the meaning of Article 50 of the Order, being
persons who have a current certificate signed by
an authorized person to the effect that they are
sufficiently knowledgeable to understand the
risks associated with the investments described
in this presentation and have signed in the 12
months prior to this presentation a statement in
the form set out in Article 50 of the Order
Associations of high net worth corporations or
sophisticated investors within the meaning of
Article 51 of the Order The shares in the Fund
(the Shares) will not be registered under the
US Securities Act of 1933, as amended (the 1933
Act) or under the securities legislation of any
state of the United States or approved by the US
Securities and Exchange Commission or any other
federal or state government or self-regulatory
agency. No governmental or other agency has
passed or will pass opinion on the accuracy or
adequacy of this presentation. Any
representation to the contrary is a criminal
offence. The Shares will be offered for
investment only to accredited investors within
the meaning of Regulation D under the 1933 Act
pursuant to the exemption from registration
provided by section 4(2) of the 1933 Act and
certain relevant state securities laws. Since the
Shares have not been registered under the 1933
Act or any other relevant US state securities
laws, purchasers of the Shares will be required
to bear the economic risk of their investment for
an indefinite period unless such interests are
subsequently registered under the 1933 Act or
such state laws or an exemption therefrom is
available, and purchasers will be required to
agree that the Shares will not be transferred
without such registration or an exemption
therefrom. An investment in the Fund will be
available only to the types of person listed
above. Please identify yourself immediately if
you are not such a person. No other person
should act or rely on the contents of this
presentation. By accepting this presentation, by
your action you warrant, represent, acknowledge
and agree that you are one or more of the types
of person listed above. The content of this
presentation has not been approved by an
authorized person within the meaning of the
Financial Services and Markets Act 2000.
Reliance on this presentation for the purpose of
engaging in any investment activity may expose an
individual to a significant risk of losing all of
the property or other assets invested or of
incurring further liability. The presentation
refers to certain events as having occurred which
have not occurred on the date of this document,
but which are expected to occur prior to the
publication of the Listing Particulars in
relation to the Fund. Any person in doubt about
the investment to which this presentation relates
should consult an authorized person specializing
in advising on investments of this nature. These
materials are strictly confidential and may not
be reproduced or redistributed in whole or in
part nor may their contents be disclosed to any
other person without the prior written consent of
Sphera Funds Management Limited. The proposals
outlined in this presentation are preliminary.
This presentation neither constitutes a
prospectus nor an offer nor an invitation to
apply for interests in the Fund. The information
provided in this presentation is for background
purposes only and may be materially updated,
completed, revised or amended. It is subject to
verification. No reliance should be placed on
the information provided in this presentation and
no representation or warranty, express or implied
is made by the Fund,, Sphera Funds Management and
its affiliates or any of their respective
directors, officers or employees or any other
person, and no liability whatsoever is accepted
by any such person, in relation
thereto. Applications for the Shares in the Fund
may be made only on the basis of the Private
Offering Memorandum relating to the Fund .