Dorado Draft 0602

Dorado Multiplier Fund Ltd

Technical PresentationFebruary 2006

CONFIDENTIAL

Dorado Multiplier Fund Ltd (or The Fund)

is an unlisted public investment company

whose key investment objective is

to generate a fully-franked net dividend yield of over 9% per annum for its investors, paid

quarterly

through the execution of a unique, proprietary investment strategy

Overview

Fund performance since inception

$ %

Issue price per share for the founding investors $1.00

Total net fully-franked cash dividends paidper share from August 2003 to January 2006 $0.274 27.4%[represents a 10.5% annualised fully franked net yield]

Gross amount of franking credits attached tofully-franked dividends paid $0.117 11.7%

Unrealised increase in Fund net asset valueper share as at 24 January 2005 $0.347 34.7%

______ _____

Increase in shareholder wealth $0.738 73.8%(including the value of franking credits)

Increase in shareholder wealth $0.621 62.1%(excluding the value of franking credits)

Fund financial position per share (at 31 Dec 2005)Balance Sheet per share Cost Mark to market

cents per share cents per share

AssetsCash 4.0 4.0 Investments 230.0 261.1 Dividends receivable 0.3 0.3 Receivables 0.0 0.0

234.3 265.3 Liabilities

Interest bearing debt 125.0 125.0 Accrued interest - - Current income tax provision 0.2 0.2 Deferred tax on unrealised gains - 9.3

125.2 134.5

NET ASSETS 109.1 130.8

Shareholders' FundsIssued capital 104.8 104.8 Investment revaluation reserve - 21.7 Retained profit brought forward 10.8 10.8 Current year profit 5.8 5.8 Dividends paid (12.3) (12.3)

109.1 130.8

NTA per share under AIFRS 109.1 130.8

NTA per share before deferred tax provision 140.1

136.1

Underlying NTA per share (excluding fully-franked dividends received/receivable, before deferred tax provision)

Elements

Investment strategy - unique, evidence based and successful, generating high fully-franked yields

Performance-based investment management fees

Transparent, familiar and efficient company investment structure

Investor liquidity mechanisms under development

Investment strategy overview

Conservativefinancialgearing

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structuring

Intelligentportfolio

management

Available evidence strongly supports the view that active fund management does not generate excess returns over the long term

Instead, the Fund’s portfolio management strategy is based on a fundamentally passive approach, modified in order to achieve the Fund’s broader investment objectives

Fama, “EfficientCapital Markets”

(1970)

Bernoulli’sTheorem, “TheLaw of Large

Numbers”

Central LimitTheorem (Chebyshev)

Poterba & Summers,“Mean reversionIn stock returns”

(1988)

Fama & French, "The Cross-Section of

Expected StockReturns," (1992)

Markowitz,“Portfolio Selection”

(1952)

PortfolioManagement

Strategy

The strategy is a distillation of empirical portfolio research, applied using established statistical theorems and techniques

Portfolio management – evidence based


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Portfolio characteristics

Applying these principles, the Fund’s portfolio has been constructed so as to exhibit the following characteristics:

The portfolio is highly diversified, and the Fund does not take a view as to expected future price movements of individual stocks in the portfolio

The portfolio has exhibited below-market portfolio risk

The portfolio generates high dividend yields, with high levels of associated franking credits

Minimal portfolio turnover is required to maintain its key characteristics

The portfolio is constituted almost exclusively of S&P/ASX 200 companies


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Current portfolio constituentsConservative

financialgearing

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AEO AUSTEREO GROUP LTD

ALN ALINTA LTD

ALS ALESCO CORP LTD

ANZ ANZ BANKING GRP LTD

API AUSTRALIAN PHARM INDUSTRIES LTD

AVJ AV JENNINGS LTD

AWB AWB LIMITED B CLASS

BLD BORAL LTD

BSL BLUESCOPE STEEL LTD

CBA COMMONWEALTH BANK LTD

CRG CRANE GROUP LIMITED

CSM CONSOLIDATED MINERALS LTD

DJS DAVID JONES LIMITED

FLT FLIGHT CENTRE LTD

FWD FLEETWOOD CORPORATION LTD

FXJ JOHN FAIRFAX LTD

GUD GUD HOLDINGS LTD

GWT GWA INTERNATIONAL LTD

HIL HILLS INDUSTRIES LTD

IAG INSURANCE AUSTRALIA GROUP LTD

JST JUST GROUP LTD

LNN LION NATHAN LIMITED

MGW MCGUIGAN SIMEON WINES LTD

NAB NATIONAL AUST. BANK LTD

OST ONESTEEL LIMITED

PPC PEET & CO LTD

QAN QANTAS AIRWAYS LTD

RCL REPCO LTD

SBC SOUTHERN CROSS BROAD LTD

SFC SCHAFFER CORP. LTD.

SKE SKILLED ENGINEERING LTD

SPT SPOTLESS GROUP LTD

STO SANTOS LTD

SUN SUNCORP-METWAY. LTD

TAH TABCORP HOLDINGS LTD

TEN TEN NETWORK HOLDINGS LTD

TLS TELSTRA CORPORATION. LTD

WAN WEST AUSTRALIAN NEWS LTD

WES WESFARMERS LIMITED

WYL WATTYL LTD

40 stocks, of which 36 are S&P/ASX 200 constituents Portfolio constituents collectively contribute

approximately 30% weighting of the S&P/ASX 200

As an implicit component of the Investment Strategy, the Fund has adopted a conservative level of financial gearing to enhance long-term returns

The gearing is achieved through ordinary on-balance sheet financial debt

The target gearing ratio (based on debt/portfolio market value) is between 40% and 45% (currently 42%)

The Fund has adopted an active near-term interest rate hedging strategy which will be extended as the Fund grows

Investment strategy – financial gearing


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The Dorado Multiplier Fund has adopted a highly efficient tax structure and strategy as an integral component of its investment strategy

The strategy enable an enhanced level of fully franked dividends to be distributed to investors and virtually eliminates the corporation tax incurred by the fund

Notwithstanding its efficiency and uniqueness, the tax strategy is straightforward and is very low risk

Tax structuringConservative

financialgearing

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The Fund’s current target is to generate quarterly dividends that represent, at least:

A fully franked net yield of over 9% per annum

which is equivalent to

A gross yield of 12.8% annum

The actual yield will vary according to the yield on the underlying portfolio and other factors

Note that the after-tax yield to investors will depend on each investor’s tax circumstances and capacity to utilise franking credits

Opportunity to introduce dividend reinvestment plan once a retail AFS licence has been obtained (expected by mid 2006)

Investment Strategy objectives – Dividend Yield

The high dividend yield and high level of franking credits makes an investment in the Fund potentially highly attractive to:

Investors seeking to enhance their portfolio investment income

and / or Investors with a low marginal tax rate

Natural investor clienteles include: Self-funded retirees

Self-managed superannuation funds (particularly allocated pensions – note 15% tax rebate for rebatable super pensions)

Spouses with low taxable income

Family trusts

Investment Strategy objectives – Dividend Yield (cont’d)

The Fund seeks to actively manage and moderate the risks associated with equity investments in general and the Investment Strategy in particular

In particular, gearing is a fundamental and integral component of the Strategy, but it inevitably also magnifies investment risks

These risks are managed and moderated by:- The Fund’s diversified, low-risk portfolio management strategy- Adopting a target gearing ratio of between 40% and 45%, well below

the Fund’s facility limits- Adopting a long-term investment horizon, and strongly

recommending that the Fund’s investors do the same

Through these measure, the Fund has been structured so that its underlying net assets per share should exhibit volatility only moderately above overall equity market volatility

Investment Strategy objectives – Risk Management

The Fund’s investment strategy was devised by and is the property of Dorado Capital Pty Ltd

The Fund has engaged Dorado Capital as Manager to execute the investment strategy on its behalf

Dorado Capital’s fees are based on the level of fully-franked dividends that the Fund pays to its shareholders in excess of a yield threshold

Dorado Capital also provides other administrative and company secretarial services to the Fund on a cost-recovery basis

The Manager

A key objective is to keep fees and expenses low and transparent in order to provide excellent value to investors

The Fund charges no outright entry fees to investors introduced by the Manager

The Manager receives a Performance Fee equal to 33% of the annualised fully-franked net dividends paid that exceed a 6% yield

The total ongoing costs (including the Performance Fee) are targeted to be a total 1.4% to 1.5% per annum of the fund’s net asset value (on the basis of a 9% fully-franked yield for the Fund’s investors)

Management fees and expenses

Legal structure

Necessary for effective execution of the Investment Strategy Affords transparency and investor protection

- Majority independent board of directors- Compliance with Corporations Act

Cost efficient Not materially tax disadvantageous (note LIC provisions) Common in the US and Europe

- US mutual funds structured as open-ended companies- European investment trusts / OEICs

Fund established using a company structure, rather than the more common trust structure employed for collective investment vehicles in Australia:

Liquidity Although the an investment in the Fund is fully

transferable, no ready market for shares in the Fund exists at this time

The Fund is investigating seeking a listing on the Newcastle Stock Exchange in order to provide a liquidity mechanism for its shareholders

Genuine liquidity mechanism (trade through established brokers) although no guarantee of liquidity in and of itself

Low cost

Following listing, the Fund’s intention would be to adopt a periodic on-market buyback strategy to ensure that a minimum level of liquidity is available for investors

Maximum of 10% of share capital per annum under Corporations Act on-market buyback restrictions

Economy & Finance

Dorado Draft 0602