IP Fund Makes Changes – New US Equities Mandate, New “Class A Units” and Closing of “Founder’s Units”

December 1, 2010

Dear Unitholders:

We are writing this letter to inform you of some important changes to the Investment Partners Fund.

A. Expanded mandate of the Investment Partners Fund to increase the allowable weighting in securities listed on US exchanges while minimizing the impact of currency fluctuations – Starting January 1, 2011

• Increase allowable percentage invested in securities traded on US exchanges from 50% to 100%.
• Hedge currency exposure to minimize the impact of US currency fluctuations.
• More efficient use of our cash balance.
• Increased portfolio diversification.

Our disciplined approach requires patience to seek out the best investment opportunities. Since inception of our Fund on October 1, 2009, we have maintained an average cash balance (using month end figures) of 44%. In this same time period, our Fund has generated a cumulative return of 22.5%. We would prefer to utilize more of our cash balance but we are always selective in choosing investments for our Fund.

The Canadian stock exchange represents less than 4% of global equity markets. By expanding our mandate, we will be increasing our investable universe from about 85 companies in Canada, to over 700 securities from Canada and US equity markets. This will enable us to put more of our cash balance to work, increase our level of diversification, and allow us to be more selective in choosing investments for our Fund. From this expanded universe, we will still maintain a concentrated portfolio of the best 10 to 20 opportunities.

We will be investing in securities that trade on US exchanges and that are priced in US dollars. Therefore, we intend to enter into hedging contracts to attempt to eliminate the impact of US currency fluctuations. Our hedging strategy will be strictly confined to hedging currency movements. This strategy is used by many Canadian mutual funds investing outside of Canada. Our hedging transactions will take place with Bank of New York Mellon, a triple-A rated counterparty that is among the world’s leading foreign currency providers.

With 100% of our Portfolio Managers investable net worth invested in the Fund alongside our unitholders, we believe these changes are in the best interests of the Fund.

B. Introducing a new class of units (“Class A units”) and the closing of the original class of units (“Founder’s units”).

• As of March 1, 2011, all units issued will be of a new class of units called Class A units.
• Units owned prior to March 1, 2011 are grandfathered and will be reclassified as Founder’s units.

Unitholders do not have to take any action for these changes to take effect. All units issued prior to March 1, 2011 will simply be recast as Founder’s units. Any units issued on March 1, 2011 or later will be Class A units.

C. Introducing an administration fee to the Class A units starting March 1, 2011.

• A 1.25% administration fee will be applied to all Class A units issued March 1, 2011 and thereafter for all unitholders (including the principals of JDM).
• The fee will be payable monthly as 1/12 of 1.25% applied to the end of the month Net Asset Value of the Fund for the Class A units prior to the calculation of the administration fee.
• The existing performance fee schedule will remain unchanged (i.e. 25% of any gains over 5% per calendar year).
• The administration fee of 1.25% will not be payable by the Founder’s units.
• Founder’s units will no longer be issued after February 1, 2011 (except for transfers in progress at February 1, 2011).

Since the inception of our Fund, the operating company has paid 100% of the costs of operating the Fund. By introducing a 1.25% administration fee, we are attempting to recover these operating costs. For example, the costs of running the Fund before salaries, have amounted to approximately 1.25% and include the following expenses: trading, hedging, audit, custodian, insurance, legal and Ontario Securities Commission fees.

For comparison purposes, the median global equity mutual fund MER in Canada is 2.88%. The administration fee payable on the Class A units will be deducted from the Net Asset Value (NAV) of the Class A units each month and will not require separate billing at the unitholder level. In this regard, there will be two distinct Net Asset Values for the Fund: (1) the Class A units NAV which will include the deduction of the monthly administration fee; and (2) the Founder’s units NAV which will have no such deduction.

While our hurdle rate of 5% per calendar year determines whether we earn a performance fee, in effect, this becomes a 6.25% hurdle for the Class A units due to the impact of the 1.25% administration fee.

What Will Not Change

• 100% of our Portfolio Managers investable net worth remains invested in the Fund alongside our unitholders.
• Our investment process and discipline will not change, we will be applying our approach to a broader universe of securities.
• We are still managing only one Fund, the Fund will simply be divided between 2 classes of units –the Founder’s units and the new Class A units.

We will be sending you an updated Statement Of Investment Policy that reflects these changes. We thank you for your continued support and look forward to working together in 2011.

Sincerely,
JDM Investment Partners Ltd. (Trustee of The Investment Partners Fund)

The foregoing is intended to provide information only and shall not be deemed as or considered to constitute advice on, or as an offer, inducement or solicitation to trade in any securities. In the event that the Investment Partners Fund should decide to distribute units, the units shall only be offered to eligible subscribers on an exempt basis pursuant to exemptions from prospectus requirements under applicable securities regulations. Investors are advised to seek independent legal and financial advice.