The Fund is generally closed. It has accepted little new money since early 2005, and has been turning away most subscriptions since early 2003, in order to restrain its size and maintain flexibility. We will attempt to notify investors who have already expressed interest if there is a chance of subscription (please tell us if your e-mail changes); investors unknown to us are best advised to look elsewhere. If this changes, we will note it here.

The following description is not complete and is intended only to give a general idea of the proposed Fund's structures and features. Any offer to investors will be made on the basis of the Fund's Confidential Explanatory Memorandum and Subscription Agreement, which is available only when open, to eligible investors permitted to receive such information in their own jurisdiction.

Structure:  Apollo Asia Fund Limited (the "Fund") is a British Virgin Islands (BVI) company, recognised as a Professional Fund in the BVI.

Investment objectives & approach: we seek good long-term financial returns by investing in companies listed or operating in Asia, through both capital gains and net income. This is not formally an absolute return fund, and may certainly be affected by short term market movements (we usually make very limited use of hedging), but I can assure co-investors that my own interest is in absolute monetary returns, not in beating competitors. The Fund will pick stocks without regard to the geographical or sector weightings of indices or competitors, although again I can assure co-investors that I keep an eye on diversification and balance. See investment philosophy.

Investment manager & adviser: the investment manager is AIMS Asset Management Sdn Bhd, a Malaysian company (website www.aimskl.com), and the investment adviser is Apollo Investment Management Ltd, a BVI company. Apollo Investment Management has an option to take over as Investment Manager at any time; the structure was designed for maximum flexibility and safety in the event of policy instability in any country. The fund manager is Claire Barnes, who has no responsibility for other activities of AIMS Asset Management, and is the largest shareholder of the Apollo Asia Fund.

Custody, administration & registration: HSBC Institutional Trust Services Asia Limited (changed on 31 Dec 2005, from HSBC International Trustee Limited, due to an HSBC reorganisation).

Auditor: KPMG, Hong Kong.

Minimum investment: US$100,000 (reduced from US$150,000). Lesser amounts may be accepted on a discretionary basis. (This depends partly on what other investors have committed; under BVI rules we must keep the majority of initial commitments over US$100,000). Subject to this we do, when open, encourage regular monthly/ bimonthly/ quarterly investing.

Eligible investors: must be "Professional Investors" in the context of the BVI Mutual Funds Act, which in essence means either (a) a professional investor, or (b) signs a declaration of net worth in excess of US$1m (alone or with spouse) and consents to be treated as a Professional Investor.

US investors: not accepted. (The fund was originally structured to be suitable for US investors, but KPMG HK stopped its US tax service, we spent months trying to identify an alternative service provider, and stopped trying when the US announced it was pondering new bureaucratic burdens and outrageous disclosure requirements on funds which accept any US investors.) This is unlikely to change in the foreseeable future, even if the fund reopens.

Investment manager's fees & incentive: 1.0% of net asset value per annum, and 15% of the absolute gains over a high water mark, are shared by the investment manager and the investment adviser.

Subscriptions: monthly - but before sending money or filling in forms, please confirm that we will accept your subscription, for the date and size proposed. The fund is not automatically open to subscription, will not accept subscriptions from funds-of-funds and most intermediaries, and usually has an investor queue. If a subscription is accepted, the Administrator needs to receive documentation in HK by the penultimate HK business day of the month (not counting Saturdays), and to receive cleared funds in New York by the last NY business day. (If additional subscription days are designated, make this two HK days and one NY day before, respectively.) Funds may, if accepted, be sent at any stage of the month. The subscription price is the Net Asset Value per Share.

Redemptions: quarterly, with one full calendar quarter's notice from investors. The redemption price will be NAV. Redemptions may be restricted to 10% of the shares then outstanding. Redemptions may be effected if necessary by a distribution of securities. Redemptions of all or part of any investor's holding may be instigated by the investment manager.

Subscription & redemption charges: we will add a 1.8% charge to the subscription price, and deduct the same percentage from the redemption price. This is for the benefit of the Fund, and hence of the long-term investors; it does not go to the investment manager. It mitigates the cost to the long-term investors of new entrants or redeemers, and yes the costs in these markets may indeed be that high - sometimes lower if you are lucky enough to be buying into a panic, or selling into euphoria, but often the inflows and outflows are not so conveniently timed, and the costs can be much, much, higher. We are aware that many investors are used to a single price for subscriptions and redemptions, but the costs are then hidden and transferred to the long-term investors. We don't think that's fair, and we do things differently.

Early redemption charges: a three-year lock-in is fairly standard for a fund of this type. We have no lock-in, but there is an early redemption charge: 8% in the first year after subscription, 5% in the second, and 3% in the third. We hope nobody needs to pay these. If concerned, please don't invest. Think of it this way: it's better than a lock-in, and provides some flexibility in the event of a real crisis. We do have discretion on the subscription & redemption charges, but intend only to exercise it where there is no net flow of funds. Having lived through a few bear markets of different kinds, I am acutely aware of "open-ended fund risk", and believe that investors generally only appreciate how vicious this can be when experienced once or twice at first hand. Fickle investors decimated David Watt's Floreat Fund in the 1990s, and to judge by Julian Robertson's comments were a major factor in the problems of Tiger; the credit crunch has caused many recent examples. Given our approach to investment, I would have relatively little concern about sitting through a protracted downturn with a stable portfolio, but in the event of short-term valuation losses I would like co-investors who sit tight or consider buying more, rather than those who might panic out. I believe that "open-ended fund risk" could well be the biggest risk, if we did not try to explain ourselves sufficiently well that we pre-screen the investors, and protect the Fund in this manner. If this risk is controlled, serious bear markets often provide the best long-term opportunities.

Tax status: if the Fund accepted US investors (which it currently does not; see above), its intention would have been to file for US federal tax treatment as a partnership. For UK tax purposes it is a roll-up fund (non-distributing).

Subscription and redemption forms are at the back of the Explanatory Memorandum, along with procedures, account details etc.