SILVER ARROW PARTNERS, L.P Avenue of the Americas Suite 4141 New York, New York Net Exposure 54.7%

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1 PARTNERS, L.P Avenue of the Americas Suite 4141 New York, New York April 13, Q 2015 Net Return % Net Exposure 54.7% Dear Limited Partners: Silver Arrow Partners, L.P. ( the Fund ) generated a 0.29% negative net return during the first quarter of For the quarter, investments on the long side generated 0.26% (26 basis points) in negative performance. Short selling generated 0.43% (43 basis points) in positive performance. We are very pleased to announce that Wilson Madden has joined us to head up our marketing efforts. Wilson has 25 years of experience in hedge fund marketing, and was instrumental in helping Tiger Management grow to institutional size. He is a perfect fit for Silver 1 The performance is for Silver Arrow Partners, L.P., an investment partnership managed by Silver Arrow Investment Management, LLC (the Fund ). Performance data shown represents past performance of the Fund and is no guarantee of future performance of the Fund. Investment return will fluctuate with market conditions. Performance changes over time and currently may be above or below previous results.

2 Arrow and will free up additional time for us to focus on the portfolio. If any of you would like to contact Wilson directly, you can reach him at LONG INVESTMENTS During the quarter, the portfolio of long investments underwent a significant change in construction. Early in the quarter, we sold out of eight long investments. We had profitably owned 5 of those investments going back to The decision to sell was driven by the fact that our share price targets had been reached. Three of the long investments were sold because the operating results and the long-term outlooks for the underlying companies diverged from our expectations. By the end of the quarter, we replaced the sale of those eight positions with the purchase of five new positions. As a result of these actions, we were able to substantially refresh the portfolio, increasing the proportion of new ideas with much higher expected rates of return, as compared to the positions sold. Due to the material recent declines in share prices, we increased exposure to the North American railroad sector and the global Internet sector. 1) Transportation Airlines For 2013 and 2014, investments in the transportation sector were large positive contributors to Fund profits. Over that period, we made four investments in the U.S. commercial airline industry, including positions in United Continental Holdings, Inc. (ticker: UAL), Delta Air Lines Inc. (ticker: DAL), American Airlines Group Inc. (ticker: AAL), and JetBlue (ticker: JBLU). We began 2015 with two airline investments, United Continental Holdings and American Airlines Group. We profitably sold our position in United Continental Holdings in January, and maintained our investment in American Airlines Group. United Continental and American Airlines appreciated 66% and 86%, respectively, from their recent bottoms on October 13, 2014, which occurred during the height of the Ebola panic. Following the sharp appreciation in share price, the two airline investments together represented close to 20% of total Fund assets.

3 The sharp and rapid collapse of oil prices muddies the long-term picture for North American oil production. Given the importance of oil price as cost component for the airlines, we chose to recognize our profit in United Continental and reduce exposure to the sector. To us, American Airlines stands out us the most undervalued company in the group under the widest assumptions for long-term oil prices. In spite of the sharp appreciation in share price, American Airlines currently trades at only 6x forward earnings, a roughly 60% discount to the average multiple for the S&P 500 Index. Railroads In our 2014 year-end investor letter, we summarized what we liked about the North American railroad sector: The railroad industry in the U.S. has experienced a large amount of consolidation since Advocates for consolidation can thank the Staggers Rail Act of 1980, which deregulated the American railroad industry and led to an increase in merger activity. In 1980, there were 33 Class 1 railroads in the United States; today, there are only 7. Class 1 railroads in the U.S. are defined as having annual revenues of $250 million or greater. Through railroad mergers, rail-to-rail competition was reduced and railroad market power increased. For example, today there are two major effective duopolies for grain transportation in the U.S.; Burlington Northern Rail and Union Pacific dominate the Western U.S. and CSX and Norfolk Southern dominate the Eastern U.S. The top four Class I railroads account for 85% of grain and oilseed traffic in the U.S., compared to only 53% in The railroad sector dramatically underperformed the broader market during the first quarter. There were multiple reasons for the underperformance. First, the West Coast port strike had a material negative impact on commercial transport volumes domestically and internationally. Second, bad weather across much of the U.S. hurt domestic transport volumes. Finally, the collapse in oil prices and related decline in oil drilling activity raised concern about health of railroads oil transport business. As a result of the negative industrywide share price performance, we were able to invest in the sector at extremely advantageous price levels, especially given our long-term view of the business. The first two problems, the port strike and bad weather, are by nature, temporary problems. The strike, was resolved and volumes are starting to trend towards more normal

4 levels. Snow always abates in the spring. One consistent Silver Arrow investing tenant is we like to buy stocks that have over-reacted to unimportant or temporary news. The collapse in oil prices will lead to much lower drilling activity, as evidenced by the 50% drop in drilling rig usage that occurred over the past 6 months. However, the railroad industry exposure to oil and oil-related transport volumes is quite low at 5-10% of total consolidated revenue. Furthermore, despite the use of oil surcharges, the dramatic decline in oil prices will have some positive offsetting impact on operating costs. The risk to the overall business from declining oil and oil-related transport volumes is overstated. The market is also ignoring the fact that given the sharp decline in coal transport volumes over the past 3 years, the makeup of today s railroads revenue streams is the best it has been in many years, with a much smaller exposure to coal. As we have discussed in prior letters, coal historically made up over 20% of the biggest railroads volume and as much as a third of their revenue. From its peak in 2006, the domestic coal business declined substantially during the Great Recession of because of falling overall demand for electricity generation. Then, demand for coal shrank further as a result of fuel switching, and regulatory pressures on power generators to reduce their coal usage in favor of cleaner fuels like gas, nuclear, and renewable energy sources. While we have a negative view of future oil rail volumes at current oil prices, we believe the oil-related hit to revenue growth will not be large given its relatively smaller contribution to consolidated revenue. We are currently invested in three railroad companies, Canadian Pacific Railway Limited (ticker: CP), CSX Corp. (ticker: CSX), and Union Pacific Corporation (ticker: UNP). 2) Global Internet As we mentioned in our 2014 year-end investors letter, the Internet did not do much in 2014 despite positive industry growth. Against this historical backdrop, we did find a handful of situations involving high quality companies which experienced substantial share price declines. Our first successful investment was in Facebook (ticker: FB) during the first half of 2014 and during the market rotation out of high growth stocks. We also made investments in Alibaba Group Holdings Ltd. (ticker: BABA) and Vipshop Holding Ltd. (ticker: VIPS), which we subsequently sold profitably following quick and sharp appreciation in share prices. Alibaba s share price fell sharply early this

5 year, allowing us to repurchase the shares at levels below our original purchase price last year. Separately, we purchased shares in Baidu, Inc. (ticker: BIDU) following its sharp decline this year. We have followed Baidu closely for over 3 years, and have previously been invested in the company. SHORT SELLING As we discussed in the 2014 year-end investor letter, our pipeline of short ideas is growing and we expect capital allocated to short selling to increase in We started the year with 19% of capital committed to short sales. By the end of the quarter, short sales grew to 26% of capital. For the quarter, the top 5 profitable short positions were: 1) Abercrombie & Fitch Co. (ticker: ANF) 2) The Coca-Cola Company (ticker: KO) 3) Mattel, Inc. (ticker: MAT) 4) Whole Foods Markets, Inc. (ticker: WFM) 5) GoPro, Inc. (ticker: GPRO) Today, one of the holy grails of investing among institutional clients is the desire for low volatility investment funds, usually involving low net exposure investing strategies. Given how challenging shorting individual stocks has been over the past five years, more and more investment funds moved away from running short portfolios made up of individually sourced ideas, predicated on company specific catalysts, to other methods of short selling to bring down fund net exposure. Shorting instruments like index ETFs and/or industry ETFs, closet indexing on the short side, or buying out-of-the-money put options on stock indices are an increasingly popular tools for managing net exposure and delivering the much sought after low net exposure profile. To the extent these instruments are used for shorting, these managers have given up on the pursuit of Alpha and profits on the short side. We do not manage the portfolio with a target net exposure in mind, nor are we interested in managing short-term performance volatility. We are agnostic about both net exposure and shortterm volatility. The only thing that determines the Fund s net exposure is the comparative quality of ideas on the long and short side. Our only goal on the short side is to generate both positive Alpha, and more importantly, positive returns that are additive to the returns on the long side of the portfolio.

6 The common theme across our short portfolio is companies facing secular negative operating outlooks, often due to worsening competitive dynamics, bad corporate strategies and management, weak structural returns on capital, industry cannibalization or declining consumer appeal for core products and services. Theoretical overvaluation of a company is not a primary filter for us in searching for short ideas. At the end of the quarter, the short portfolio consisted of 12 individually shorted companies, with an average position size of 2.1%. Our shorts have smaller average position sizes than our long investments by design. A higher degree of diversification on the short side helps us manage and contain certain risks unique to short selling, specifically the possibility that the ability to borrow shares to short may rapidly decline, thus increasing the likelihood of a short squeeze or imposition of egregious short borrowing rates. Currently, the industry sectors where we maintain the most concentration on the short side are the retail, food and beverages, and software sectors. PORTFOLIO CONSTRUCTION 3 As of March 31, 2015, the Fund held a net long exposure to U.S. equities of 54.7%. Gross long exposure was 80.7%. Gross short exposure was 26.0%. The top 5 long positions, highlighted below, represented 39.7% of our invested capital. TOP 5 LONG INVESTMENTS American Airlines Group Inc. (ticker: AAL) Baidu Inc. (ticker: BIDU) Facebook, Inc. (ticker: FB) Celgene Corporation (ticker: CELG) Las Vegas Sands Corp. (ticker: LVS) 3 Nothing discussed in the PORTFOLIO CONSTRUCTION section should be interpreted as prediction of economic growth, equity or credit market direction, or a recommendation to trade or invest in any securities mentioned in the section or securities related to ones mentioned in the section. We provide a detailed list of the Fund s top long investments for the purpose of providing transparency to the Fund s limited partners. Furthermore, the opinions of the investment professionals at the Management Company are subject to dramatic and frequent changes.

7 As a matter of policy, we generally do not disclose current individual short positions in our quarterly letters. However, we are willing and happy to discuss individual short positions directly with our clients. OPERATIONS We welcome your questions or comments at any time. Please do not hesitate to contact us via at GB@SilverArrowCap.com. Sincerely, Raji Khabbaz Managing Member Senior Portfolio Manager Gary Brode Managing Member Portfolio Manager