‍June 1, 2010

Dear Partner,

We are pleased to announce the launch of Discerene Fund LP. Almost every one of you has traveled with us through these past months as the firm and Fund have taken shape—as supporters, advisors, mentors, references, and friends—and so it is in large part because of your collective efforts that we are able to write this launch letter at all. We are especially grateful for your vote of confidence, and for signaling your commitment to being a Day 1 investor in the Fund. As a young team, we do not underestimate the importance of your early commitment and of the responsibility that you have entrusted with us.

Given that this is our first formal communication to all our Partners, we thought it important to reiterate some fundamental principles and values of the firm.

The mission of the firm is to generate good long-term returns for our Partners by focusing on capital preservation above all else. We will seek to do this by doing thorough research and making thoughtful investment decisions as if we were “private market” investors. We believe that if we focus on the investment process, returns will take care of themselves. We will not chase performance in bullish markets nor bow to short-term performance pressures. We will not relax our investment discipline, and are happy to hold cash if we cannot find compelling investment opportunities. We will strive not to be overconfident when investments go our way, nor quickly abandon our fundamental research process when they do not. We will make mistakes, but we will maintain an intrinsic humility and intellectual honesty so that we learn from them, and continuously work on improving the investment process.

We will build the firm as a long-term partnership with our investors, and view each relationship as being important to the DNA of the firm. Our favorite length of partnership is “forever.” Apart from our friends and family, we want to have fewer, rather than more, Limited Partners, because a diffuse Limited Partnership base becomes less reflective of a true private partnership. Consequently, we will close our Fund anytime we believe that the Partnership has become too big and difficult to manage, or that the assets within the Fund have become too large for us to manage optimally.

We are committed to being transparent with our Partners, so disclosure to our Partners will be limited only by our need to protect the interests of the Fund, and of all Partners equally. To that end, we will be writing quarterly letters giving you what we believe are the most important updates for the firm and the Fund. We would like to spend as much time as we can on the investment process, but this will not be to the detriment of open, honest, and timely communication with our Partners, in good times and especially in bad. In tough times, our hope is that our Partnership will “fall in,” not “fall out.” We are committed to finding the right Partners and building strong relationships with each in order to achieve this outcome.

Within the firm, we are committed to creating a culture that values personal integrity and character, humility and intellectual honesty, a passion for investing as a craft, honest effort and hard work towards our common goals. We have a team environment that is based on trust and mutual respect, and this will serve as the foundation for open and constructive debate. We are committed to the learning and development of every member of the firm regardless of experience, and to rewarding excellence. We want to be a “home” to a small team of bright, thoughtful, intellectually curious, honest and humble individuals who are self-motivated and unafraid to roll up their sleeves, are willing to think critically and independently—reasoning from first principles instead of relying on conventional wisdom, who hold themselves to high personal and professional standards, and are temperamentally suited to patient, long-term investing. We want each member of the team to tap-dance to work every day, deriving fulfillment from our doing the best job we can being good stewards.

Our Day 1 team includes two junior analysts and an acting chief operating officer, each of whom has already shown incredible commitment to the firm as we have worked towards our launch. I am excited to have each of them on board, and hope that you will get to meet them in person. We have now moved into our offices in Stamford, Connecticut: we have very humble quarters at a very humble address, which suits us very well. If you are willing to make the trek to see us, we would be delighted to roll out the red carpet to host you—if we had one.

We thank you again for your trust in us, and will do our utmost to justify it.

Yours sincerely,