Interim

Letter to Investors
Year 4 - 2016

Dear Partners,

It gives me great joy and pleasure to reach out to you in this festive month of
December, a month where we will almost end our journey for the year. And it
makes me proud to announce that we have gained by 41,68% YTD (year to
date), it means that since the beginning of the year until as of the writing of this
letter on December 1st 2016, our investment portfolio has gained by that much.

This year has not been a year without challenges, as it has been with years
before. To put in perspective where our journey has brought us, I would like to
share a cumulative return of our portfolio since the inception of our partnership.

Fund NAV Performance vs JCI

3,703.98

4,000.00
3,500.00
2,614.33

3,000.00
2,500.00
1,718.60

2,000.00
1,500.00

1,000.00

1,000.00
500.00

1,301.85

1,000.00

952.74

1,069.54

Year 0

Year 1

Year 2

954.94

1,080.88

0.00
Fund NAV

Year 3

Year 4 (YTD)

JCI (Indexed to 1000)

So far, our portfolio has performed with a compound annual growth rate (CAGR)
of 38.73% (not including fees), against the JCI's CAGR of 1.96% over the same
period amount of time. This outperformance is related to our relative small size,
and our ability to pick out stocks that are poised to perform at a rate higher than

other stocks. Even though we have great successes in the past, I must repeat that
past performance does not in any way reflect future returns.

Our outperformance this year is attributed to our fortunate picks in the banking,
mining and consumer goods sector. While it is fortunate for us that the mining
sector is booming again, it is less fortunate for us to allocate less of our funds into
the respective stocks. The rationale behind our investment in the banking sector
is the corporate action that is going on in the listed company, as well as a
sentiment behind the success of tax amnesty regarding other banks that we are
invested in. Profitability of private banks will probably be better due to a higher
quality of credit portfolio as well as more prudent lending practices.

In regards to our investment in the energy sector, recent news about an OPEC
deal to cut output is a very good sentiment to energy commodity prices, such as
coal and oil. Our investment in the energy sector also acts as a hedge towards
rising US dollar, for their income is stated in US dollars while their expenses are
mostly denominated in Indonesian Rupiah. A rising earning in Rupiah terms may
provide a nice boost to the stock price, this is due to the stock being priced in
Rupiah.

Our investment in the property sector, reflects a believe that housing is still in
demand due to its prime categorization of needs. In the short term, we will see
effects of the rising US dollar if the company were to have dollar denominated
bonds, therefore we focus our investments on a diversified property developer
with a well hedged dollar denominated debt. We try to focus our investment on
property developers with a splendid recurring income property portfolio, as well
as a developer with a well diversified property portfolio, in order to maximize
our exposure to an upcoming boom in the property sector. Even though this year
and the next will be tough for developers, we believe that a property developer
with a prime recurring income property portfolio will be able to withstand the
test of these times. This investment will be in our medium term portfolio, where
we try to pick these up for a bargain relative to the boom years of the stock a few
years back.


As for an investment in the healthcare sector, there isn't much to pick in our local
stock market. An interesting player in this field is owned by one of the biggest
conglomerates in our country. They have been able to grow through organic and
inorganic means, with an ambitious goal of having the most privately operated
hospitals in the next few years. Although earnings have been rising, the stock still
trades at a high valuation, we believe that growth in the coming years may be
able to supplement the demanding valuation. A recent commitment by a leading
foreign private equity firm in the company reaffirms our belief in the company.
The company has taken steps to ambitiously grow their revenue and earnings,
even in the tough times.

An interesting take on the healthcare sector may be due to its uncyclical nature,
earnings are rarely affected by crises, and even during tough times, it is still a
prime need. People tend to not skimp on healthcare. Therefore we believe that
this company will still be able to grow, whether times are tough or not. And
because healthcare spending relative to GDP (Gross Domestic Product) is still
low in Indonesia, added by a pent up demand in quality healthcare, the sky is still
the limit for healthcare in Indonesia for the medium to long term.

We have allocated resources to an investment in the company, but we may not
hold the company for long if the stock price were to go up significantly in a short
period amount of time.

As for investments in our portfolio this year, I have taken steps to try and
diversify in several different sectors, each with star companies with good
fundamentals and momentum. Several of our holdings may be held for a few
days, weeks, months, and maybe a few years if the prospects are still good for the
sector and the company itself. As for cutting our losses, we are not limited to
doing that. Some of our holdings may be reduced or removed from our portfolio
if there were to be a fundamental change regarding the company or the sector.
Taking losses is not something we should totally avoid, we take a small loss in
order to avoid a bigger loss in a certain investment. To some people it may seem

like the end of the world to take losses, but we believe if the story for the
company has changed, it is time to get rid of the investment.

For some of you, this letter has been like me telling you a story about the
companies that we are invested in, but in reality, valuation as well as investing is
about a story behind the company. The story, which we try to picture as accurate
as we can, is the fundamental basis of our valuation of a company. In valuation,
we make assumptions, growth rate, risk premium, etc. of a certain company, and
without a story of the company, we would be totally lost in our valuation.
Although at times the story as well as our valuation may be too rosy and too
generous in terms of assumptions, and we try our best to avoid that by making a
realistic approach on our valuation, by doing a thorough research on every
investment, and attaching the most realistic valuation to a certain stock before
making an investment. Mistakes can be avoided by having as much information
you need before making a certain assumption, even though too much
information is sometimes not good, striking that balance between too much and
enough is the art behind it. This takes years and years of experience by learning
through mistakes and those investments that worked out before.

Investing is not only about buying a certain stock and hoping that it would
skyrocket without conducting any research, or by reading up on another
person's research, but it is through the meticulous work of reading up on various
information regarding the company and then making a well informed investment
in a certain company. Another person's research may help us in providing
information that we don't have, but it should never be something you act upon.
When you act upon someone else's research, then you would be following that
person's assumptions, and when it goes south, it would be very hard to learn
from the mistake. Even though at times this might work well, you should make
your own well informed decision when investing, not someone else's

So the secret to a good investment portfolio lies in research, reading up
everything you can find on the company, separating the necessary information
from the unnecessary, and acting upon it with confidence. Even though this is not

the golden key to a successful investment, it will lower your risk of your
investment going south.

In this letter I would also like to personally thank you my partners for trusting
and believing in me for the previous 4 years, and I look forward on us working
together in the journey in the future. If I were a chef, I hope that you have
enjoyed my cooking for the previous years as well as I have. And as the great
Warren Buffett have said, we also eat our own cooking.

In the near future, I will set up a new fund to invest in private companies and try
to grow them with a goal of listing them publicly. The fund will center around the
current growth trends in our growing economy. An investment that I have
spotted lies in a company involved in construction. The company is involved in
producing materials for construction, and I believe in the near medium to long
term what they are producing will be very much needed by various customers,
be it big or small, so the growth prospects are limitless. This investment will be
different from our previous investments where our investments focus on
publicly listed stocks where we can buy and sell almost everyday. This
invesment will take a longer time horizon and be less liquid than our previous
investments. The projected return is better and due to our involvement in the
day to day operation of the firm, we may have better say in what they do and
may project our future profit.

This new fund will be a private equity fund, where our investment is in a non
publicly listed private company. The investment horizon is projected to be at
least 5 years or more, with greater upside than our public equity investments.
We expect a net internal rate of return to be in the vicinity of 25-30% or above if
we can acheive it, with a minimum goal of doubling the fund in 5 years. We
expect to raise IDR 5 (5,000,000,000) to 10 (10,000,000,000) billion to open
the fund. This type of fund will five us a bigger exposure to a growing economy
than our public equity portfolio.

For the new fund, I have set myself a benchmark to outperform, and a set of goals
to be achieved. I hope that you will be able to join me in this new chapter of our
journey, where we will embark on a new venture as partners to achieve greater
wealth in the future.

Regarding our performance for the full year, I will address each and every one of
you in a separate letter. iI fear of not being able to reach out to you before the
end of this financial year, I decided to write this letter before it ends in hopes
that I may inform you well on our progress this year. Take this letter as an early
christmas present from your partner. I hope that you may inform me beforehand
whether you are interested to keep on participating in this fund or the new one,
as well as your decision whether to withdraw or rollover your previous
participation.

I would like to once again thank each and everyone of you for being partners in
our journey together, and I hope to work together with each and everyone of you
in the future. If you do have any questions regarding the partnership, please feel
free to contact me any time at your discretion. I would like to wish you all a
prosperous, joyful new year ahead, as well as a happy holiday.

Sincerely Yours,




Victor Febriant