Presented by Ziel Feldman

1
From Distress to Success Strategies for Growth
During anEconomic Crisis

• Presented by Ziel Feldman
• Chairman of the BoardPolar Investments Ltd

Conference Sponsored by
December 3, 2007
2
Background on the Sub-prime Crisis

• Over the past decade there has been a revival in
  the American housing market achieved by shifting
  American wealth from the stock market to home
  ownership.
• As the population of home-owners expanded,
  lending institutions began to exploit this
  emerging trend in many different ways including
  sub-prime lending.
• Prior to 2003 this segment comprised
  approximately 5 of the overall mortgage market.
  Starting in 2004, this segment of the market went
  from 5 to approximately 20.
• The main driver of this phenomenon was the
  proliferation of securitized products that
  allowed lenders to package large pools of loans
  and then sell them to investors.
• Investments funds had strong demand for such
  products which drove lenders to expand their
  sub-prime lending programs and lower their
  lending standards.
• Once homes values began to decline and interest
  rates started to climbmore sub-prime loans began
  to go into default which led to an
  overallerosion of the ratings and values of the
  CDOs and SIVs that werebacked by sub-prime loans.

3
Todays Crisis Compared and Contrasted to the
Previous Real Estate Market Crash in the Early
1990s

• Throughout the 1970s and early 1980s the growth
  in the US real estate market was fueled by a
  variety of tax considerations and depreciation
  techniques associated with owning real property.
  
• 1986 Tax Reform Act abolished many of these
  advantageous tax benefits.
• Once those tax benefits were removed, the market
  began a process of readjustment which eventually
  led to a severe downturn in real estate values.
• In both 1986 as well as in 2004, an external
  economic force was at work that was separate and
  apart from the underlying value of the asset.
  Whereas last time it was the tax code, this time
  it was the debt market.

4
Categories of Opportunities in Todays Market

• Write downs and distressed sales of mortgages, on
  mortgage notes and pools of such notes currently
  being held by financial institutions.
• Distressed real estate being sold out of
  bankruptcy or by banks whose borrowers are at
  risk of default.
• Joint venture opportunities with distressed
  developers and/or property owners.

5
Economic Forecast and Real Estate Market
Stabilization

• Expectation for the timing of the current
  predicament to mirror the previous real estate
  crisis. The economy should start re-strengthening
  in late 2009 and property values should begin
  climbing back to historic highs by 2011.
• US demographics are strong and remain strong in
  spite of the current crisis.
• Markets have a tendency to overreact to
  compensate for its mistakes.
• Weak dollar stimulates purchases of US assets and
  products by foreigners.

6
Polars Position in Todays Global Market

• Relationships, Reputation and Track Record
• Diversification and Globalization
• Asset class diversification
• Cash Flow Diversification
• Exit Strategy and Timing Diversification
• Geographic Diversification
• Access to capital

7
Thank You