Fidelis Investors LP

Fidelis Investors LP This presentation is for your review only. Goldman Saelts April 2015 This Fund has not been launched yet and may be subject to changes. This material is delivered solely as reference material with respect to the Limited Partnership Interests in Fidelis Investors LP or Fidelis Investors Offshore LP (each, a "Fund") an investment product that Goldman Sachs may offer in the future. The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities relating to the Fund, notwithstanding that any such securities may be currently being offered to others. Any such offering will be made only in accordance with the terms and conditions set forth in the offering memorandum pertaining to such Fund (such Funds "Offering Memoranduml Prior to investing, investors are strongly urged to review carefully the Offering Memorandum for the relevant Fund (including the risk considerations described therein), the subscription agreement and all related Fund documents, to ask such additional questions of the investment manager as they deem appropriate, and to discuss any prospective investment in the Fund with their legal and tax advisers. Prospective investors should not rely upon any information regarding Fidelis or an investment in the Fund other than the information contained in the Private Placement Memorandum, the Partnership Agreement and the subscription agreements collectively (the "Subscription Agreements"). The Fund is intended for long-term investors who can accept the risks associated with investing in illiquid securities. Prospective investors should be aware that the possibility of partial or total loss of Fund capital exists. Prospective investors should not subscribe unless they can readily bear the consequences of such a loss. The performance of the Fund is completely dependent on the performance of the Funds investment in Fidelis Insurance Holdings Limited (the 'Investment"). If the Investment is unsuccessful, investors may experience a partial or total loss of their invested capital in the Fund. Investors are not expected to be permitted to withdraw capital from the Fund. Please carefully read the Subscription Agreements for additional information regarding the risks and potential conflicts of interests before investing. This presentation does not constitute an offer or solicitation to any person in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it would be unlawful to make such offer or solicitation. No person has been authorized to give any information or to make any representation, warranty, statement, or assurance not contained in the offering memorandum and. if given or made. such other information or representation, warranty, statement, or assurance may not be relied upon. This strategy is suitable for sophisticated investors who believe and understand the business model of Fidelis Insurance Holdings Limited. This is not suitable for an investor who does not understand the insurance market and the risks associated with starting a new company which include but are not limited to the lack of liquidity and transparency. Your attention is also drawn to the fact that this company will seek to underwrite specialty line insurance and invest in hedge funds. Your capital will be put at risk and you may lose some or all of your investment. Additionally, your investment will be locked-up for a certain period of time. Your ability to redeem or transfer your investment or delay receipt of redemption or transfer proceeds will be limited. For regulatory or other reasons. certain information (including information regarding investment performance) that is included in the version of the following presentation given to other investors has been omitted from the version of the presentation materials being provided to Goldman Sachs Private Wealth Management Clients. Private & Confidential EFTA01105026 Executive Summary of Fidelis Fidelis is a start-up Bermuda-based insurance company with a differentiated business model looking to capitalize on opportunities that neither the traditional insurance model nor the hedge fund reinsurance model effectively capture Differentiated Total Return Strategy Proven Management Team and Sponsors Attractive Corporate Structure Potential IPO Exit ■ Fidelis Insurance Holdings Limited ("Fidelis" or the "Company) intends to tactically shift risk between underwriting and investments depending on prevailing market dynamics On the underwriting side, the Company will seek to focus on a portfolio of specialty class insurance and reinsurance lines where the management team has significant experience The investment strategy centers around a portfolio of leading asset managers developed in partnership with Alternative Investments & Manager Selection ("AIMS") ■ Unlike existing insurance companies, Fidelis will seek to execute a total return strategy that intends to maximize return on equity across insurance cycles ■ Opportunity to back Richard Brindle and Neil McConachie, insurance executives with a 20+ year track record of outperformance, including founding and scaling a start up insurance company ■ Ability to co-invest with leading private equity sponsors, Crestview, Oaktree and Pine Brook, who have together previously successfully backed this management team' ■ Potential return of capital via special dividends ■ Bermuda domicile with expectation of low corporate income tax2 ■ Potential to exit at an attractive multiple of book value through an IPO in three to five years if market conditions permit ■ Historically P&C businesses have tended to trade at premiums to book with the industry currently trading at 1.4x tangible book Crestview. Oaktree and Pine Brook are expected to purchase 25% of the common equity. up to 5500 million in the aggregate. Assumes preferred equity is 20% of total capital. There could be material adverse tax consequences should the IRS determine that Fdelis is a passive foreign investment company (or if you are determined to be a US shareholder in a controlled foreign corporation or it Fidelis generates related person insurance income). including subjecting investors to tax on Fidelis' income on an annual basis. whether or not dstributed. You should review the offering material closely and speak to your tax advisor about the impact on your personal tax situation before investing. inducing the impact it the IRS issues further guidance reediting the treatment of non-U.S. insurance companies. Past performance does not guarantee future results which may vary There is no guarantee that these objectives will be met. Private & Confidential EFTA01105027 Proposed Summary Terms of the Funds Proposed Summary of Terms Fund Minimum Investment Fund Structure Clients are being offered the opportunity to invest indirectly in Fidelis common equity through two access funds, Fidelis Investors LP and Fidelis Investors Offshore LP $1 million Fidelis Investors LP will be treated as a Cayman limited partnership and Fidelis Investors Offshore LP will be treated as a Cayman corporation Offer Price Sponsor Economics Expected Closing Transferability of Fund Interests Initial offer price of $10.001 per share for common stock Sponsors receive founder warrants of 9%, vesting when book value is $15.00 No management fee or carried interest May 2015 Transfers of Fund interests will be subject to significant restrictions Investment terms are preliminary and are subject to change in accordance with the offering documents. The descriptions set forth above are a summary of certain proposed terms arid are not intended to be complete. Goldman Sachs has no obligation to offer Fidelis or the Funds. If such a product is offered. please carefully review the offering documents and any supplements thereto (copies of which will be available upon request) for a complete description of all information regarding Fidel"; or the Funds prior to making an ',vestment decision. Private & Confidential EFTA01105028 Disclosures Past performance does not guarantee future results. which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss of principal may occur. The material provided herein is for informational purposes only. It does not constitute an offer to sell or a solicitation of an offer to buy any securities relating to any of the products referenced hereon. notwithstanding that any such securities may be currently being offered to others. Any such offering will be made only in accordance with the terms and conditions set forth in the offering documents pertaining to such Fund. Prior to investing. investors are strongly urged to review carefully all of the offering documents. Goldman Sachs earn a placement fee associated with this offer. Supplemental Risk Disclosure for All Potential Direct and Indirect Investors in Heckle Funds and other private investment funds (collectively. "Alternative Investments-1 No person has been authorized to One any information or to make any representation, warranty, statement or assurance not contained in the offering documents. Any reference to a specific company or security does not constitute a recommendation to buy. sell. hold or &stay invest in the company or its securities. It shodd not be assumed that investment decisions made in the future will be profitable or will equal the performance of the securities dscussed in this document. In connection with your consideration of an investment in any Alternative Investment. you should be aware of the foaming risks: • Alternative Investments are subject to less regulation than other types of pooled investment vehicles such as mutual funds. • Alternative Investments may impose significant fees. including incentive fees that are based upon a percentage of the realized and unrealized gains, and such fees may offset all or a significant portion of such Alternative Investment's trading profits. An individual's net returns may differ significantly from actual returns. • Alternative Investments are not required to provide periodic pricing or valuation information. • Investors may have limited rights with respect to their investments, including limited voting rights and participation in the management of the Alternative Investment. • Alternative Investments often engage in leverage and other investment practices that are extremely speculative and involve a high degree of risk. Such practices may increase the volatility of performance and the risk of investment loss, Including the loss of the entire amount that is Invested. • Alternative Investments may purchase instruments that are traded on exchanges located outside the United States that are 'principal markets" and are subject to the risk that the counterparty will not perform with respect to contracts. • Past performance does not guarantee future results. which may vary. The value of investments and the income derived from investments will fluctuate and can go down as well as up. A loss ol principal may occur. Alternative Investments are offered in reliance upon an exemption from registration under the Securities Act of 1933. as amended. for offers and sales of securities that do not involve a public offering. No public or other mike' is available or will develop. Similarly. interests in an Alternative Investment are highly illiquid and generally are not transferable without the consent of the sponsor. and applicable securities and tax laws wit limil transfers. Alternative Investments may themselves invest in instruments that may be highly liquid and extremely difficult to value. This also may limit your ability to redeem or transfer your lwestment or delay receipt of redemption or transfer proceeds. Alternative Investments may involve complex tax and legal structures and accordingly are only suitable for sophisticated investors. You are urged to consult with you own tax. accounting and legal advisers regarding any investment in any Alternative Investment. Prospective Nwestors should inform themselves as to any applicable legal requirements and taxation and exchange control regulations in the countries of their citizenship, residence or domicile which might be relevant. c20lllaiL2U1S There may be conflicts of interest relating to the Alternative Investment and its service providers, including Goldman Sachs and ifs affiliates. These activities and interests include potential multiple advisory. transactional and other interests in securities and instruments that may be purchased or sold by the Alternative Investment. These are considerations ol which investors should be aware and additional information relating to these conflicts is set forth in the offering materials for the Alternative Investment. Citollsienliellil No part of this material may. without Goldman Sachs' prior written consent. be (I) copied. photocopied or duplicated in any form. by any means, or (ii) distributed to any person that is not an employee. officer, director. or authorized agent of the recipient. 2016 Goldman Sachs. AI rights reserved Compliance Code: ISS438.OSF.OT1J Private & Confidential EFTA01105029 Disclosures The information on the following pages has been provided by third party sources. Goldman Sachs is not responsible for the content, accuracy, completeness or fairness of such information. Goldman Sachs makes no representations, guarantees or warranties of any kind whatsoever regarding such information. Any such information is intended for information purposes only, and any views or opinions expressed therein are the views or opinions of that third party. Goldman Sachs has relied upon and assumed (without independent verification) the accuracy and completeness of such information and neither agrees nor disagrees with the content herein. Private & Confidential EFTA01105030 I Fidelis April 2015 PRIVATE & CONFIDENTIAL t'71t-41 EFTA01105031 Disclosures . .,,entation has been prepared by Addis Insurance Holdings Limited ('Fidelis Holdings') and its direct. wholly-owned subsidiaries (collectively. 'Fidelis' or the "Company") scely tor informational purposes with respect to Fidelis. This presentation was prepared exclusively for the benefit and internal use of the person or entity to whom it is directly addressed and delivered (such recipient. "you") in order to assist you in evaluating. on a preliminary basis. the feasibility of a possible transaction or transactions and does not carry any right of publication or disclosure. in whole or in part. to any other party. The information contained herein must be kept strictly confidential and may not be reproduced or redistributed in whole or in part. in any format. without the express prior written approval of the Company. In particular. this information may not be used to discuss similar structures with any person, Fidelis. Crestview. Oaktree or Pine Brook. as the case may be. could reasonably consider a competitor in this field. You should make your own investigations and evaluations of the information contained herein. The information contained herein is being provided to you at your request for informational purposes only and is not. and may not be relied on in any manner as. legal. tax or investment advice or as an offer to sell or a solicitation of an offer to buy any security or financial instrument, for which an offer can be made only by the Company's final offering documentation. No representation. warranty or undertaking. express or implied. is made as to. and no reliance should be placed on. the fairness. accuracy. completeness or correctness of the information or the opinions contained herein. None of Fidelis. its sponsors, any initial purchasers or placement agents. or any of their respective affiliates. advisors or representatives. shall have any liability whatsoever for any loss arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. The returns or performance results may be lower than estimated. Note that past performance is not indicative of future results. The information contained herein does not purport to contain all of the information that may be required to evaluate such solutions and you are encouraged to conduct independent analysis of the data referred to herein. The information set forth herein is qualified in its entirety by the information in the Confidential Private Placement Memorandum of Fidelis Holdings (the "Confidential Memorandum') and other documents that have been provided or are being provided simultaneously to you. The terms described herein are subject to your review of the Confidential Memorandum and to execution of definitive documents. In the event of any conflict between the information contained herein and the terms of definitive documents. the definitive documents will control. Since the information herein constitutes a summary and is not complete, prospective investors must review the Confidential Memorandum and carefully consider all of the terms and provisions of the definitive documents. Capitalized terms used herein without definition have the meanings ascribed to them in the Confidential Memorandum. The ownership of Offered Shares is a speculative investment that involves a high degree of risk. There can be no assurances that you will not incur substantial or total losses on your investment in Fidelis Holdings. Prospective investors should carefully review the Confidential Memorandum. including. without limitation. the disclaimers and "Risk Factors" in the Confidential Memorandum. Such risks include. without limitation: — Fidelis is a start-up operation and there is no historical information evadable for Investors to evaluate Fidelis' performance or a potential investment in the Offered Shares. — Some executive officers and key personnel, including Richard Brindle. are critical to Fidelis' business. Fidelis' failure to retain such key personnel could seriously affect its ability to conduct its business and execute its business plan. — Fidelis Insurance has not been granted an insurance license. Any failure by Fidelis Insurance to obtain its insurance license. or any suspension or revocation thereof, would have a significant negative effect on it and Fidelis Holding's ability to do business and implement its business strategy. — The performance of Fidelis' Investment Portfolio will depend upon, among other things. the ability of the Investment Adviser to advise Fidelis in accordance with the Investment Guidelines regarding the purchase. redemption and sale of interests in Portfolio Funds. and the ability of the Asset Managers to develop and implement strategies that achieve their investment objectives. — U.S. Holders may recognize income for U.S. federal income tax purposes on Fidelis Holdings' or Fidelis Insurance's undistributed eamings and be subject to certain other adverse tax consequences. based on the application of rules regarding passive foreign investment companies and controlled foreign corporations and the generation of related person insurance income under the U.S. federal income tax laws. — The Offered Shares are restricted securities and investors may need to bear the economic risk of their investment for an indefinite period of time. Certain information contained herein (including financial information) has been obtained from published and non-published sources. Such information has not been independently verified by Fidelis or any initial purchasers and/or placement agents and their respective affiliates. Except where otherwise indicated herein. the information provided herein is based on matters as they exist as of the date of preparation and not as of any future date. and will not be updated or otherwise revised to reflect information that subsequently becomes available, or circumstances existing or changes occurring after the date hereof. Fidelis and any initial purchasers and/or placement agents. and their respective affiliates. advisors and representatives, expressly disclaim any obligation or undertaking to update or revise the information and will not publicly release any revisions Fidelis may make to this presentation that may result from events or circumstances arising after the date of this presentation. Any market data used in this presentation not attributed to a specific source are estimates of Fidelis and have not been independently verified. Private & Confidential 7 EFTA01105032 Disclosures Continued Certain statements reflect estimates, opinions or predictions based on Fidelis' internal financial model, and there is no guarantee that these opinions or predictions will be ultimately realized. Industry breakdowns presented herein are as classified by Fidelis. Certain information contained herein constitutes forward-looking statements. which can be identified by the use of terms such as 'may'. 'Will". "should'. "expect". `anticipate". 'project". `estimate". "intend". 'continue' or 'believe' (or the negatives thereof) or other variations thereof. Due to various risks and uncertainties, including those discussed above. actual events or results or actual performance of Fidelis may differ materially from those reflected or contemplated in such forward-looking statements. As a result. investors should not rely on such forward-looking statements in making any future investment decisions. This presentation does not purport to describe all of the risks associated with Fidelis. Please see the "Risk Factors" section in the Confidential Memorandum and the risk factors starting on page 38 of this presentation. The information contained in this presentation does not constitute or form part of any offer for sale or subscription of or solicitation or invitation of any offer to buy or subscribe for any securities nor shall it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. This presentation is for discussion purposes only. Any decision to purchase securities of Fidelis should be made solely on the basis of information contained in any final offering documentation made available by Fidelis in due course. if applicable. To the extent there is any inconsistency between this presentation and any final offering documentation. the latter governs in all respects. None of the information contained herein has been filed with the U.S. Securities and Exchange Commission. any securities administrator under any state securities laws or any other governmental or self- regulatory authority. No governmental authority has passed on the merits of any future offering of securities of Fidelis or the adequacy of the information contained herein. Any representation to the contrary is unlawful. This presentation is not an offer for sale of securities in the United States or any other jurisdiction. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act of 1933. as amended. or in any other jurisdiction absent compliance with the securities laws of such jurisdiction. This document does not solicit money, securities or any other type of consideration, and. if any money. securities or other type of consideration is sent in response hereto, it will not be accepted. Except as otherwise expressly required by applicable law. no representation. warranty or undertaking (express or implied) is made and no responsibilities or liabilities of any kind or nature whatsoever are accepted by any person or dealer as to the accuracy or completeness of the information contained in these materials or any other information provided by Fidelis. Securities will not be registered under the Securities Act of 1933. as amended, or any state securities laws. Prospective investors are limited to 'accredited investors' as such term is defined under Rule 501(a) of Regulation D under the Securities Act. This document is not. and is not intended to be investment, legal or tax advice. Prospective investors should obtain independent investment. legal and tax advisors regarding the matters addressed herein and based on their particular situation. Goldman Sachs will earn a placement fee associated with this offer. In the United Kingdom. this presentation constitutes a financial promotion pursuant to Section 21 of the Financial Services and Markets Act 2000. This presentation is directed only to persons in relation to whom exemptions under the Financial Services and Markets Act 2000 (Financial Promotions) Order 2005 (the "Order") apply. including 10 persons who have professional experience in matters relating to investments and fall within the definition of "investment professionals" in Article 19(5) of the Order: (ii) persons who are a high net worth company. unincorporated association or partnership or trustee of high value trusts as described in Article 49(2) of the Order (or investment personnel of any of the foregoing): (iii) persons who fall within the categories of "certified high net worth individual" described in Article 48 of the Order, a "sophisticated investor' under Article 50 of the Order or "self - certified sophisticated investor' described in Article 50A of the Order: and (iv) any other person to whom it may otherwise lawfully be made. By accepting a copy of this presentation, you agree to be bound by the foregoing limitations and you acknowledge and agree that all of the Information contained in this document shall be kept strictly confidential by you. Private & Confidential 8 EFTA01105033 Table of Contents 1. Executive Summary 2. Management & Sponsors 3. Insurance Market Overview 4. Business Overview 5. Terms 6. Additional Information 7. Risk Factors Private & Confidential 9 EFTA01105034 1. Executive Summary Private & Confidential EFTA01105035 • Fidelis Overview ■ Fidelis is a Bermuda-based insurance company founded by Richard Brindle and Neil McConachie, who founded Lancashire Insurance ■ Following decades of experience in the space, Brindle and McConachie recognized constraints in the insurance business model and developed an innovative structure to tactically shift capital between insurance and investments based on prevailing market dynamics — Unlike existing insurance companies, Fidelis will seek to execute a total return strategy that intends to maximize return on equity across insurance cycles — Insurance strategy is expected to focus on a portfolio of specialty class insurance and reinsurance risks where the underwriting team has significant experience — Investment strategy developed in partnership with Goldman Sachs' AIMS group ■ Fidelis is targeting a raise of $2.0 billion to execute its strategy ■ Crestview, Oaktree and Pine Brook, whose principals originally backed the Fidelis team at Lancashire, are expected to purchase 25% of the common equity' Up to $500 motion in the aggregate. Assumes preferred equity is 20% of total capital. Private & Confidential 11 EFTA01105036 • Investment Thesis Differentiated Business Model Strong Management Team Experienced Sponsors Efficient and Attractive Structure Valuation and Exit ■ Fidelis represents an evolution of the current re/insurance models with the goal of generating consistent return on equity across insurance cycles ■ Fidelis will seek to maximize total shareholder return by optimizing its balance sheet across both its re/insurance and investment portfolios ■ Partnership with Goldman's AIMS team to build a relatively liquid investment portfolio of leading asset managers to allow for diversification and give access to sought after managers with negotiated terms and fees ■ Fidelis is run by a leading management team that has materially outperformed the insurance industry over the last two decades ■ Track record of founding and effectively scaling a start-up venture ■ Founding private equity investors have deep backgrounds investing in the insurance and related financial sectors and have all previously backed this management team in prior ventures ■ Active capital management with potential for return of shareholder capital via special dividends — Management paid an average annual dividend of 18%1 at Lancashire ■ Bermuda domiciled company that expects to pay low corporate income tax2 ■ Expected embedded leverage of float from re/insurance operations ■ Access to multiple asset managers with discounted fees ■ Potential to exit at an attractive multiple of book value through an IPO in 3-5 years if market conditions are right ■ In Richard Brindle's last 3 years at Lancashire, Lancashire's average price to tangible book ratio was 1.5x ■ Historically, P&C businesses have tended to trade at premiums to book, with current P&C industry trading at 1.4x3 Price / Tangible Book Past performance does not guarantee future results. which may vary. Other employees of Lancashire. in addition to Richard Brindle and Neil McConachie. oantnbuted to Lancashire's track record. There can be no assurance that Fidehs wil outpedorm other companies in the future. Source: Capital 1O. Company filings. Represents average of annual dividends paid 2010 - 2013. 2 There could be material adverse tax consequences should the IRS determine that Fidelis is a passive foreign investment company (or if you are determined to be a US shareholder in a controlled foreign corporation or if Fidelis generates related person Entrance income). including subjecting investors to tax en Fidelis' income on an annual basis, whether or not cistitibuted. You should review the offering material closely and speak to your tax advisor about the impact on your personal tax situation before investing. including the impact it the IRS issues further guidance repelling the treatment of non-U.S. insurance companies. 3As of February 24, 2015. P&C industry refers to the following peer companies: Ace. XL Arch. Everest. PartnerRe. Axis. Abed World. Endurance. Platinum. RenaissanceRe Validus, Montpelier. GreeNightRe. Third Point Re. Hiscox. Amin, Catlin. Beazley, and Novae. Note: Prospective investors should note that. in the absence of an IPO. a sale of their shares may take a considerable length of time. An investment in Fidel's shares should be considered illiquid. There can be no assurance that investment oblectives can be achieved. 12 Private & Confidential EFTA01105037 Fidelis' Business Model Optimizing shareholder return across both sides of the balance sheet ■ Current market players tend to be traditional re/insurers or hedge fund reinsurers — We believe legacy insurance models do not optimize shareholder return given focus on either assets or liabilities — We believe traditional insurers face challenges in the current low-rate environment given the emphasis on fixed income in their investment portfolios ■ By focusing on both liability and asset returns, Fidelis will aim to achieve strong results across insurance cycles Business Model Comparison Traditional Insurers Fidelis Hedge Fund Reinsurers Re/Insurance Strategy ■ Insurance and Reinsurance ■ Insurance and Reinsurance ■ Underwrite multiple insurance lines I ■ Underwrite specialty line portfolio I ■ Generally underwrite low return reinsurance strategy to maximize capital to support investment risk Asset Strategy ■ Primarily low return fixed income portfolio I I I I ■ Access to multiple high quality managers ■ Ability to dynamically adjust hedge fund allocations and add/remove managers I ■ Single manager access Optimized Through the Cycle ■ No Returns ■ Yes I I I ■ No Private & Confidential 13 EFTA01105038 2. Management & Sponsors Private & Confidential EFTA01105039 • Strong Leadership Team ■ Fidelis will be led by Richard Brindle, CEO and Neil McConachie, CFO ■ Management previously founded Lancashire building it from a startup to an LSE-listed $2.4 billion market cap company' ■ While Richard Brindle was CEO at Lancashire, a $100 investment in Lancashire in December 2005 would have appreciated to $492 by March 2014, versus $253 if invested amongst insurance peers2 ■ Lancashire generated compound returns on equity ("ROE") of 20% vs. insurance peers' ROEs of 13% from December 2005 through March 20143 Richard Brindle ■ Over thirty years' experience in the re/insurance industry ■ Founder and Chief Executive Officer of Lancashire from inception in 2005 until 2014 ■ Chief Underwriting Officer at Lancashire throughout tenure ■ Prior to joining Lancashire, Mr. Brindle worked at Ascot Underwriting Agencies and also served as Director of Charman Underwriting Agencies, where he acted as main underwriter ■ Over three decades, the companies managed by Richard Brindle have consistently and significantly outperformed both the Lloyd's market and the broader reinsurance / specialty market: Neil McConachie ■ Over 20 years of experience, including as part of the founding management of two successful Property & Casualty (P&C) start-ups listed on the NYSE and LSE° ■ Founder and President at the Lancashire Group until 2012. Also held roles of CFO. COO, and CRO ■ Developed the highly regarded Lancashire risk and capital management philosophy ■ Previously served as Treasurer and Chief Accounting Officer of Montpelier Re Holdings Ltd ■ Experience in debt and equity capital market offerings, including IPOs of Lancashire and Montpelier Past performance does not guarantee future results. which may vary. Note: There can be no assurance that Richard Brindle and Neil McConachie will remain with Fidelis or that their past performance or success serves as an indicator of their future performance or success. Other employees of Lancashire, in addition to Richard Brinele and Ned McConachie. contributed to Lancashire's track record. There can be no assurance that Fide:is wit outperform other companies in the future. As of 341/2014. source: Company filings and Bloomberg. f:preczated figures include adjustment for dividends. s Source: SNL Financial. CapitallO. Company filings. 4 Lancashire Holdings Ltd. and Montpelier Re Holdings Ltd. 15 Private & Confidential EFTA01105040 MN_ * Management Track Record At Lancashire • ■ Lancashire, under Richard Brindle's leadership, has outperformed peers Lancashire Average ROE vs. Peer Groups: Lancashire Total Return vs. Peer Groups: 2005-Q1 2014 2005-Q1 2014 $600 $.500 $400 $300 $200 $100 $492 $0 Dec-05 Dec-06 Deo-07 Dec-06 Deo-09 Dec-10 Dec-11 Dec-12 Dec-13 —Lancashire —Peer Group 20% 13% Lancashire Peer Group Note: Other employees of Lancashire, in addition to Richard Brindle and Neil McConachie, contributed to Lancashire's track record. There can be no assurance that Fidelis will outperform other companies in the future. Source: Company filings and Bloomberg. Note: Richard Brincie served as Lancashire's CEO from its formation rt 2005 until 30 April 2014: Lancashire's IPO was consummated on 16 December 2005 Note: Past performance does not indicate future results. Any investment entails a risk of loss. There can be no assurance that Richard Brindle and Neil McConactre will remain with Fideks or Mai their past performance or success serves as an incbcator of their future performance or success. Peer Group includes mulbine reinsurance peers. Bermuda property peers. hedge fund backed peers. and Lloyd's peers. Multiline reinsurance peers include Ace. XL Arch. Everest. PartnerRe. Axis. Allied World. Endurance and Platinum. Bermuda Properly peers include RenaissanceRe. Valid us and Montpelier. Hedge Fund Backed peers include GreenlightRe and Third Point Re. Lloyd's peers include Hiscox. Amlin, Catlin. Boaz's,. and Novae . Not all companies were public as of December 2005: peer set reflects only those companies publicly traded at any lime. 16 Private & Confidential EFTA01105041 • Management Track Record at Lancashire of Paying a Special Dividend S ■ Management paid an average annual dividend of 18%' at Lancashire ■ Fidelis anticipates paying out a high percentage of its profits Dividend Yield 22% 20% 2% 25% 23% 2% FY2010 FY2011 Source: Lancashire public filings: CapitaIIO Note: Dividend yield is calculated as the total calendar year cash dividends divided by the year end market captiakzation. Dividends include recurring dividends and special dividends. Peers include Ace. XL Arch. Everest. ParMerRe. Axis. Allied World. Endurance. Platinum. RenaissanceRe. Validus, Montpelier. GreenlighiRe. Third Point Re. Hismix„ Amlin. Catlin. Beazley. and Novae. Not all companies were public as of 2010: peer set reflects only those companies publicly traded at any time. Note: Richard Brindle served as Lancashire's CEO from its formation in 2005 until 30 April 2014: Lancashire's IPO was consummated on 16 December 2005 Note: Past performance does not indicate future results. Any investment entails a risk of loss. There can be no assurance that Richard Brindle and Neil McConachie will remain with Fidelis or that their past performance or success serves as an indicator of their future performance ce success. Represents period from 2010 — 2013. ■ LRE Regular ■ LRE Special ■ Peers Regular -I Peers Special 10% 8% 3% 2% 13% 1 2% 2% FY2013 FY2012 17 Private & Confidential EFTA01105042 • Management Track Record At Lloyd's • ■ Richard Brindle was underwriter from 1986, appointed deputy underwriter in 1988 and acted as main underwriter from 1991 to 1999 at various Lloyd's Syndicates' ■ Richard Brindle's Lloyd's syndicates had a combined return on capacity (profit before personnel expenses as a percentage of capacity) of 16%, which translates to a 22% pre-tax return on capital (assuming a 75% capacity to capital ratio) versus an average of (0.3)% at Lloyd's Return on Capacity (Profit Before Personnel Expenses as Percentage of Capacity) 40.0% - 30.0% - 20.0% - 10.0% di 0.0% (10.0)% (20.0)% 1986 1987 1988 1989 1990 1991 ■ Brindle's Lloyd's Syndicates ■ All Lloyds Syndicates 1 1 1 1992 1993 1994 1995 1996 1997 1998 1999 Brindle's Lloyd's Syndicates' • Average: 16.4% Lloyd's Average: (0.3)% Source: Lloyds filings. Brindle's Lloyds Syndicates compnse Syndicates 2488 and 488. Note: Other empoyees. in addition to Richard Sande. contnbuted to Brindles Lloyds Syndicates' track record. Past performance does not indicate future results. Any investment entails a risk of loss. Note: Syndicate 2488 and 488's combined return on capacity (profit before personal expenses as a percentage of capacity) of 16% translates to a 22% pre-tax return on common equity (Assuming a 75% capacity to capital ratio). These returns are Ficlobs managements estimates for capital requirement supporting syndicates 488 and 2488 for the relevant years. 18 Private & Confidential EFTA01105043 Sponsor Group Previously Backed Management • Founding investors are expected to purchase 25% of Fidelis' common equity' Crestview ■ AUM: Over $6 billion • Sectors of focus: financial services, media, energy, healthcare and industrials PARIS RE martin currie PartnerRe MUNDER ED CAPITAL BANK FINANCIAL (ORP . lanai/hi OAKTREE ■ AUM: $91 billion • Sectors of focus: less efficient markets and alternative investments First BanCorp ALO TAR' JACKSON E1 A ut,S SQUARE AVIATION I lanai/hire I PINE BROOK' • AUM: Over $5 billion • Sectors of focus: financial services and energy RenauvreRe- b Aul. GLOBAL ATLANTIC FINANCIAL GROUP ,h C A I. I N Arc T I, Llanavhire,ILI MONTPELIER RE .1 Combined, the sponsors have invested -$2.6 billion2 in the insurance sector and have a long track record of financial services investments Note: Dotted line boxes indicate companies where Richard Brindle ancRor Neil McConactse were previously employed. Up to $500 million in the aggregate. Assumes preferred equity is 20% of total capital. 2 Includes investments made by Pine Brook's cant:2°as at other firms onor to foundino of Pine Brook. 19 Private & Confidential EFTA01105044 3. Insurance Market Overview ;!illitill Private ,, Confidential i EFTA01105045 • Insurance Market Overview • ■ The insurance market tends to be cyclical with pricing influenced by the relative supply and demand of capital — A "hard" market refers to an environment where insurance economics/pricing tend to be attractive vs. a "soft" market when economic/pricing are less attractive ■ Given abnormally low losses in the past few years, insurance pricing is soft but we are starting to see catalysts for a market turn: — Earnings have been "buoyed" by abnormally low catastrophe loss activity and reserve releases (the "release" of capital that was previously set aside to cover losses) which we believe may be unsustainable - M&A activity has picked up in the re/insurance sector in reaction to market dynamics and signals a potential shift — Return to normalized insurance loss levels would provide an additional catalyst for a market turn ■ Despite the cyclicality of the insurance market, insurers have tended to trade at a premium to tangible book value, trading at an average of 1.3x over the past 10 years' and 1.4x today' Past performance does not guarantee future results. which may vary. Source: Capital IC. Company filings. ' As of February 24. 2015. Insurers refers to the following P&C peer companies: Ace. XL. Arch. Everest. PannerRe. Am. Allied World. Endurance, Platinum, RenassanceRe. Validus. Montpelier. GreenlightRe. Third Point Re, Hiscox. Amlin. Catch. Bewley. and Novae. 21 Private & Confidential EFTA01105046 Current Market Environment: M&A S • We believe the growth in M&A may rationalize capital in the space and create opportunities for Fidelis • There had been no large re/insurance M&A transactions since 2011 (Transatlantic /Alleghany) until the second half of 2014, when there were four >$1bn transactions within several months • Strong historical evidence to show that comparable specialist underwriting businesses have had stock market or sale valuations at price to tangible book value multiples in excess of 1.5x1 Renaissance Re / Axis / Platinum Partner Re XL I Catlin Fairfax / Brit (Nov-2014) (Jan-2015) (Jan-2015) (Feb-2015) %Nal-aMAL) Panne"Re AW . X L \I \I (UHN FAIRFAX BRIT Price: $1.9 billion $11 billion Merger of Equals $4.1 billion $1.9 billion P / Tangible BV Multiple: 1.1x NA 1.5x 1.7x Clients Brokers Service Teams Impact of M&A on Market Dynamics • Clients purchasing insurance will have risk concentration issues with fewer counterparties and likely will look to diversify their exposures by doing business with new entities • Mergers reduce options for brokers, resulting in brokers seeking additional markets to place insurance business and guarantee fees • Client service provided by companies going through a merger may decline, creating opportunities for new and dynamic market entrants focusing on high quality client service • Quality teams may fall out from recently-merged companies Source: Company IL ngs and press releases ' Based on langble book value as of latest publicly available filing prior to announcement (June 30. 2014 ftnantal statements). 22 Private & Confidential EFTA01105047 • Fidelis' Response to the Market Environment • ■ Fidelis' business strategy is uniquely designed to take advantage of re/insurance market cyclicality and maximize profitability in both hard and soft market cycles Business Plan in the Current Market Environment ■ Commencing operations now will allow Fidelis an opportunity to establish solid relationships with brokers and clients who will be critical to Fidelis' underwriting plans — Opportunity to obtain market share as clients reduce concentration resulting from industry consolidation ■ Fidelis intends to target specific lines of business including primary insurance, specialty lines and whole account quota share where pricing is facing less pressure and management has targeted expertise ■ In addition to selling re/insurance, Fidelis expects to buy re/insurance at less expensive rates than it is selling it for, reducing its overall risk exposure ■ In current soft market conditions, Fidelis will initially invest primarily in hedge fund investments — Fidelis' strategy is to be well positioned as reinsurance markets harden by leveraging negotiated liquidity terms' to reallocate its investments towards fixed income strategies and increase underwriting allocations ' Terms are not yet finalized with fund managers and liquidity and fees are subject to final negotiation. Private & Confidential 23 EFTA01105048 4. Business Overview Private & Confidential EFTA01105049 Dynamic Business Model: Active Capital Management • • A key tenet of Fidelis' total return model is its ability to shift risk between insurance and investments to maximize shareholder return • In the shift from a soft to hard insurance market, Fidelis intends to nimbly: —Increase insurance underwriting exposure —Transfer assets to fixed income investments to reduce investment risk • Fidelis' strategy will seek to maximize return on equity in both hard and soft markets Re/Insurance Risk Tolerance \ Thesis Strategic capital allocation TRADITIONAL 'l expected to generate superior REINSURANCE het414_c risk in-adjust surance cycles ed returns across oket re/ Fidelis Investment Risk Tolerance HEDGE FUND REINSURERS Private & Confidential 25 EFTA01105050 • Insurance Strategy Overview • Balanced mix of insurance and reinsurance • Key tenets of Fidelis' strategy will seek to: —Focus on specialty lines, areas in which Brindle has substantial experience and which historically have experienced less pricing pressure —Utilize size of balance sheet to write sizeable business lines — a competitive advantage relative to smaller players —Capitalize on pricing discrepancy between insurance that the Company will write and reinsurers' terms for the same underlying risk in softer markets Key Areas of Focus Illustrative Target Underwriting Portfolio Description Energy / Marine 28% • Coverage for damage to equipment. losses from supply chain disruption and litigation from fees and settlements involving energy assets while marine protects against loss or damage to a ship. in-transit cargo, or property while engaged in marine operations Property 21% • Coverage against most risks to property. such as fire, theft and some weather damage Aviation 70/0 • Coverage for aircraft while stationary or in motion. Covers damage to the aircraft or passengers in the event of an accident, war, or hijacking Political and Allied Perils 7% • Coverage for losses, damage or business interruption resulting from world affairs Whole Account Ouota Share 36,/a • Reinsurer pays an agreed-upon percentage of all losses the insurer sustains on the insurers whole account or a proportion thereof. Note: Olustrabve allocation figures are rounded and may not equal 100%. Any descriptions regarding reinsurance portfolio characteristics. underwriting process. undenvming strategy. goals or risk management are provided for illustration purposes only, are not complete. SI not apply in all situations. may not be fully indicative of any present or future reinsuance portfolios or investments and may be changed in the discretion of Fidelis. No representation is made that Fidelis' reinsurance portfolio characteristics. underwriting process. underwriting strategy, goals or risk management will or are likely to be achieved or successful. Underwming philosophy information reflects general guidelines that may be amended from time to time %%A bout prior notice to investors. 26 Private & Confidential EFTA01105051 Policy Underwriting and Servicing Key Underwriting Lines Energy/Marine Underwriting Decisions High Service Standard Property Aviation Daily Capital Underwriting Call Political and Allied Perils ■ Each line of business will be headed by top tier specialized underwriting expert Whole Account Quota Share ■ Every underwriting opportunity is expected to be discussed and decided mutually via global daily underwriting call often attended by CEO ■ Process allows for consistency in underwriting decisions, capital allocation and targeted returns across different business lines ■ Long and established relationships with market participants such as brokers and cedents ■ Transparency and responsiveness with both brokers and clients Private & Confidential 27 EFTA01105052 / Market Neutral • Manager(s) 12% • • Low Correlation -•- _ 6% t Crabel - t- ra I Multi-Product .... • .. • • • • Equity Long Short Diversified 27% Seminole 12% • • Investment Strategy Overview • • Fidelis will work with GS AIMS to leverage AIMS' open architecture platform and seek to build a portfolio of leading alternative asset managers • Fidelis' portfolio will be built with an emphasis on risk adjusted returns, liquidity, and flexibility with an ability to rebalance the portfolio depending on market opportunity • The strategy offers potential diversification and correlation benefits with the target portfolio likely allocated to 6-8 managers • Potential asset managers are screened for longer term track records in good and bad markets as well as for portfolio volatility and beta before being added to the portfolio Illustrative Initial Portfolio and Sector Allocations' Long Only 0 Liquid And Flexible Fixed Income _ - - - - Market Neutral 10 Event Driven • 12% Multi-Strategy • 45% ♦ • BlackRock Short York Capital ' 1 Duration I Multi-Strategy Non- Permanent Capital 16% Equity Long : Short Manager(s) 15% • York Capital Multi-Strategy Permanent Assets 20% Orange -'" 9 — Fidelis expects to negotiate liquidity terms designed to allow for flexible allocation from investment to insurance risk to quickly take advantage of a hardening re/insurance market O Risk Monitoring2 — AIMS platform provides ongoing risk monitoring, including but not limited to reviewing monthly position level transparency for the majority of the funds O Preferential Terms And Fees — Fidelis expects to negotiate preferential terms with managers, including fee discounts Note: Diversification does not protect an investor from market risk and does not ensure a profit. Terms are not yet finalized with fund managers and liquidity and fees are subject to final negotiation. The Company may terminate AIMS at any time but will pay a fee if termination occurs prior to second anniversary of the cbsing. The asset allocation may change prior to bunch of the portfolio. At launch. the portfolio may include a 12% allocation to one or more market neutral et similar managers. The proposed proforma portfolio includes an allocation to tno strategies managed by York as shown on page 34 and described on page 35. 2 The portfolio risk montonno process includes an effort to monitor risk, but does not imply low risk. 28 IMPORTANT: PLEASE REFER TO RELEVANT DISCLOSURE ON PAGE 35. Private & Confidential EFTA01105053 Risk and Capital Management Corporate Strategy Capital Management Risk Management Portfolio Optimization ■ Board of Directors will set strategic direction for the Company ■ Annual strategic plan with quarterly Board review ■ Board will review Company capital level and allocation quarterly, unless major events require intra-quarter review ■ Board will decide on capital distributions or capital raises ■ Board will review enterprise risk levels and approve risk tolerances ■ Risk and Return Committee chaired by the Chief Risk Officer and comprising senior leaders across disciplines ■ Capital allocated between underwriting and investments based on optimum contribution to risk-adjusted returns ■ Chief Underwriting Officer, Chief Financial Officer, and Chief Investment Officer aim to optimize allocated capital to produce highest return ■ Daily Underwriting Meeting; AIMS investment monitoring Private & Confidential 29 EFTA01105054 5. Terms Private & Confidential EFTA01105055 • Indicative Term Sheet • Issuer ■ Fidelis Insurance Holdings Limited Target Size ■ Targeting $2 billion in total capitalization Target Capital Structure ■ 20% Preferred Equity ■ 80% Common Equity Target Funding ■ June 2015 Offer Price ■ Initial offer price of $10.00 / per share for common stock Exit Timing ■ Anticipated exit via an IPO in 3-5 years ■ Should an IPO not occur, then the Company shall take commercially reasonable actions to list shares for increased liquidity on a U.S. national securities exchange, the LSE or such other securities exchange as determined by the Board Founder Investment ■ Crestview, Oaktree and Pine Brook are expected to purchase 25% of the common equity' and will receive 9.0% warrants, vesting when book value is $15.00 ■ Warrants tie to performance: Warrants vest at $15.00 per share and can be exercised at $10.00 per share ■ After an IPO, warrants cannot be exercised until 180 days post IPO Note: The indicative terms are subject to change and the execution of definitive documentation. Please reference the Confidential Memorandum for a mote compete desaiptban of terms. ' Up to $500 million in the aggregate. Assumes preferred equity is 20% of total capital. 31 Private & Confidential EFTA01105056 6. Additional Information Private & Confidential EFTA01105057 t Fidelis Organizational Structure ■ Initially, Fidelis intends to operate with up to 50 people, absent a major market change requiring the addition of more labor intensive classes of business Key Fidelis Positions Group CEO Richard Brindle UK CEO Person identified: Senior executive with 20+ year insurance history CFO and COO Neil McConachie Chief Investment Officer Edward Russell Chief Risk Officer Person Identified Bermuda CEO Person identified: 15+ years diverse re insurance experience at publicly traded re insurer Chief Underwriting Officer Richard Brindle Note: There can be no assurance that any or a of these professionals identified above will remain with the Company or that the past performance or success of such professional serves as an indicator of his or her future performance or success. In addrloon, there can be no assurance that Fidelis will be successful in filling al of the positions Identified above. 33 Private & Confidential EFTA01105058 t Fidelis Proposed Asset Managers: Historical Results as of 12/31/2014 Inception Date 1Y Return 3Y Ann. Return 5YAnn. Return ITD Ann. Return ITD Ann. Vol. Max DD ITD Beta to S&P 500 Equity Long/Short Seminole Event Driven Nov-95 11.2% 13.1% 9.7% 17.1% 13.9% -19.0% 0.47 Orange Jul-05 6.7% 12.0% 8.9% 11.2% 11.2% -21.5% 0.37 York Multi-Strategy12 Oct-91 6.8% 12.8% 7.4% 13.6% 8.8% -29.9% 0.35 York Multi-Strategy Proforma." Low Correlation Jan-04 9.3% 13.7% 7.8% 9.2% 8.2% -19.0% 0.41 Crabel Multi-Product Long Only / Fixed Income Mar-98 8.5% 8.6% 6.4% 11.2% 15.8% -16.8% 0.04 BlackRock Short Duration Dec-97 1.1% 1.4% 2.1% 4.3% 1.5% -1.3% -0.01 Note: Per Fidelis' request. Goldman Sachs Hedge Fund Strategies U-C ('HFS") obtained polorma returns from certain managers. Proforma returns were simulated. do not reflect actual trading and have inherent limitations. The results were created with the benefit of hindsight and are informational purposes only. No representation is made that a client will achieve results similar to those shown. Data of managers is as reported by the given manager and may not be calculated on a uniform or consistent basis with the information for other managers. Fidelis may change the allocations over time. Allocations may not be representative of current or future investment. Past performance does not guarantee future results, which may vary. Performance is net of management and performance fees for each manager. This slide has been prepared by Fidelis based on information supplied by the appscatte investment manager. but none of the investment managers have reviewed or approved this slide. Historical data of managers is as reported by the given manager. Note: The asset allocation may change prior to launch of the portfolio. At launch. the portfolio may include a' 2% allocation to one or more market neutral or similar managers (as shown on page 28). The allocations reflected here cilfer from those shown on page 28 wh'ch also do not separately show allocations for York Multi-Strategy Proforma. Note: Beta is defined as a measure of the extent to which an asset's returns respond to swings in the benchmark. A beta of I indicates that the asset's price will move mth the benchmark. A beta of less than I means that the asset price will move less than the benchmark. Max DD stands for maximum drawdown and is defined as the peak-to-trough decline during a specific period of a manager. Maximum drawdown is usually quoted as percentage between the peak and the trough. 12.3IMPORTANT: PLEASE REFER TO RELEVANT DISCLOSURE ON PAGE 35. 34 Private & Confidential EFTA01105059 Fidelis Proposed Portfolio Disclosures ' Per Fidelis' request. HFS obtained proforma returns from certain managers. Proforma returns were simulated, do not reflect actual trading and have inherent limitations. The results were created with the benefit of hindsight and are informational purposes only. No representation is made that a client will achieve results similar to those shown. Data of managers is as reported by the given manager and may not be calculated on a uniform or consistent basis with the information for other managers. 2 York Multi-Strategy: The inception dates for York Investment Limited is March 1994. Performance is not a guarantee or indicator of future results. Performance figures are net of all expenses, management fees and incentive allocations for an investment in York Investment Limited Class A interests/shares since inception. The net performance summary assumes returns for York Investment Limited prior to inception were the same as York Capital Management. L.P. which launched in 1991. York Investment Limited follows the same strategy and is managed in a similar style to York Capital Management, L.P. Performance figures reflect the fund's New Issues restricted share class. The historical performance figures reflect average annual net returns for the periods indicated. Returns shown are estimated and unaudited and final return information may vary once monthly performance is confirmed. The manager is under no obligation to update the performance information provided should final numbers differ. This information is confidential and may not be redistributed or reproduced. 3 York Multi-Strategy Proforma: The simulated, proforma performance shown reflects a combined track record of historical returns of certain strategies managed by York Capital Management. Returns shown reflect the historical gross returns of the York Multi Strategy Fund minus profit and loss contributions generated by bank debt. private equity and certain illiquid credit holdings held by the fund for the period shown. The impact of equity and credit hedges was not adjusted to reflect the reduced exposure to illiquid credit and private equity holdings. Performance generated by the credit assets in the York Event Driven UCITs fund (launched in August 2009) was then blended with the remaining York Multi Strategy Fund returns. Prior to UCITs launch in 2009. the hypothetical historical results shown are made up of Multi Strategy fund returns minus bank debt and private equity contribution only. Lastly, a management fee of 1.0% and a performance fee of 20% was applied to the track record to produce a hypothetical net return for the proposed strategy. Manager Specific Return Notes, Manager- Generated Fund Returns & Annualized Rate of Return ("ROR"): All manager returns were provided by the managers. The annualized ROR was derived by compounding the monthly returns provided by the manager. This annualized ROR may not be representative of the return earned by any client of the manager or HFS. The rates of return supplied by the managers were not independently verified by HFS and it makes no representation as to their accuracy. Factors such as fees, expenses, account size, leverage and the timing of additions and redemptions may have a material effect on returns over time. Also. managers periodically may adjust their investment approaches. HFS has not inquired about the managers assumptions in computing these returns and gives no assurance that the investment approach has not changed over the period for which the returns are reflected. Private & Confidential 35 EFTA01105060 Insurance Terminology • ■ P&C: Property & Casualty insurance protecting both businesses and individuals against property losses (damage. interruption, home and auto) and casualty losses (liability, workers compensation, liability home & auto). The traditional P&C business model emphasizes returns through successful underwriting and maintaining a conservative investment portfolio focused on fixed income ■ Insurance Risk: Uncertainty concerning the occurrence of loss ■ Soft Market is characterized by: — Lower insurance premiums — Broader coverage — Increased capacity, i.e. insurance carriers write more policies with higher limits — Increased competition among insurance carriers ■ Hard Market is characterized by: — Higher insurance premiums — More stringent underwriting criteria — Reduced capacity, i.e. insurance carriers write fewer insurance policies — Less competition among insurance carriers ■ Combined Ratio: A measure of profitability used by an insurance company to indicate how well the company performs in its underwriting operations. — A ratio below 100% indicates that the company is making underwriting profit. A ratio above 100% indicates that it is paying out more money in claims than it is receiving from premiums. — Does not include investment income and only includes profit that is earned through efficient management Incurred Losses Expenses Earned Premium ■ Reinsurance: Insurance coverage for insurance companies, i.e. allowing insurance companies to "cede" risk exposures to reinsurers ■ Specialty Lines: the segment of the insurance industry where the more difficult and unusual risks are written. For example, a higher risk insurance line would be a manufacturer of explosives; an unusual risk insurance line would be professional liability, such as claims arising out of professional activities or services provided to a client ■ Whole Account Quota Share: An agreement between an insurer and a reinsurer whereby the reinsurer pays an agreed-upon percentage of all losses the insurer sustains, regardless of type. The insurer compensates the reinsurer for this agreement Combined Ratio Private & Confidential 36 EFTA01105061 7. Risk Factors Private 8, confident., EFTA01105062 • Summary Risk Factors • Prospective investors should be aware that an investment in Fidelis (the `Company") is speculative and involves a high degree of risk. No guarantee or representation is made that Fidelis will be successful. The following is a summary of only certain considerations and you should carefully consider these risks before making a decision to invest in Fidelis. This confidential material is for informational purposes only and is not an offer to sell, or a solicitation of an offer to buy, any securities. Please see subsequent pages for additional detail on potential risks. Capitalized terms used but not defined herein have the meanings described to them in the Confidential Memorandum. ■ The Company is a start-up operation and there is no historical information available for investors to evaluate the Company's performance or a potential investment in the Offered Shares. The Company must successfully develop business relationships, establish operating and risk management procedures, hire staff, install management information systems and processes and complete other tasks appropriate for the conduct of their intended business activities and there is no guarantee it will be successful in doing so. ■ The Company has no operating history, and the illustrative forecast financial information is intended only to represent examples of potential outcomes based upon certain assumptions and limited information made as of its date. The illustrative forecast financial information will vary from actual results based on, among other things, the amounts and types of re/insurance that the Company actually underwrites, the Company's actual investment returns, the pricing and other terms of actual treaties written, the cost of obtaining letters of credit and/or providing collateral, and the amount of assets available to the Company. ■ While management's historical track record is provided for reference and used as a basis for Company projections, actual underwriting returns may vary substantially. There may be significant volatility in underwriting returns. While the management team has historically achieved profitable returns on the underwriting side, there is the potential for a loss of capital in underwriting operations. ■ While historical hedge fund performance is provided for reference and used as a basis for projections, actual hedge fund returns may vary substantially. There may be significant volatility in hedge fund returns. Hedge funds have the potential to generate negative returns. Hedge fund returns will be impacted by the Company's allocations to external managers as well as the returns of each of the managers. ■ There can be no assurance that the management team will remain with the Company. Private & Confidential 38 EFTA01105063 Risk Factors * Prospective investors should be aware that an investment in Fidelis is speculative and involves a high degree of risk. No guarantee or representation is made that Fidelis will be successful. The following is a summary of only certain considerations and you should carefully consider these risks before making a decision to invest in Fidelis. This confidential material is for informational purposes only and is not an offer to sell. or a solicitation of an offer to buy. any securities. Risks Related to the Company's Business ■ The Company is a start-up operation and there is no historical information available for investors to evaluate the Company's performance or a potential investment in the Offered Shares. ■ Persons investing in the Company could potentially lose their entire investment ■ The Company's actual financial results may vary, potentially substantially, from the illustrative forecast financial information. ■ The Company's ability to transact business may be affected by cyclical trends. ■ The Company is dependent upon the services of the Investment Adviser, the Asset Managers and other third parties. ■ The involvement of insurance and reinsurance brokers subjects the Company to their credit risk. ■ Established and new competitors with greater resources, lower target returns, different approaches to risk management or less pricing discipline may make it difficult to effectively market the Company's products and offer the Company's products at a profit ■ The Company may not be able to write as much premium as expected on business with the desired level of projected profitability. ■ The Company may not be able to obtain an adequate volume of underwriting business and investments to achieve the underwriting and investment returns projected by the Company on the Company's anticipated timeline. ■ The inability to attract, retain and manage key employees could prevent or slow the Company's ability to implement its business strategy. ■ The purchases of Shares by the Founding Investors are on differing terms than other investors and there is no guarantee that any or all of the Founding Investors will purchase Shares. ■ The Company's ability to implement its business strategy could be adversely affected by Bermuda employment restrictions. ■ Past performance of companies that Richard Brindle has worked for or assisted in establishing does not indicate future results. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 39 EFTA01105064 • Risk Factors Risks Related to the Company's Business, continued: ■ Some executive officers and key personnel, including Richard Brindle, are critical to the Company's business; the Company's failure to retain such key personnel could seriously affect the Company's ability to conduct its business and execute its business plan. ■ A downgrade or withdrawal of the Company's financial strength rating by insurance rating agencies could adversely affect the volume and quality of business presented to the Company. ■ If the Company improperly structures its underwriting operations and investments in relation to each other, the Company's ability to conduct its business could be significantly and negatively affected. ■ A single or series of insurable events, such as a natural disaster or terrorist incident, could result in (i) simultaneous, correlated and substantial losses from underwriting operations and (ii) investment losses, which would adversely affect the Company's financial condition and results of operations. ■ In the event of a catastrophic event, actual losses of the Company could be substantially different from the losses estimated by the Company using catastrophe models. ■ Changing climate conditions may adversely affect the Company's financial condition, profitability or cash flows. ■ The Company's losses may exceed its loss reserves or available liquidity at any time, which could significantly and negatively affect the Company's business. ■ The Company is subject to the credit risk of its reinsurers. ■ The failure of loss limitation methods utilized by the Company could have a significant and negative effect on its financial condition and results of operations. Reinsurance arrangements, designed to mitigate loss exposure, may not be available to Fidelis on acceptable terms, which could cause potential adverse effects on the Company's performance and condition. ■ The failure to obtain and retain a letter of credit facility and/or the need to provide assets directly as collateral may significantly and negatively affect the Company's ability to successfully implement its business strategy. ■ The Company will not be subject to the reporting requirements that the Company otherwise would be if this Offering were being registered with the SEC, which may impact the ability of the holders of Offered Shares to evaluate the Company and make decisions with respect to an investment in the Company. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 40 EFTA01105065 • Risk Factors Risks Related to the Company's Business, continued: ■ The Company is not required to comply with the Sarbanes-Oxley Act, stock exchange listing requirements or other corporate governance rules. Accordingly, holders of the Offered Shares will not be entitled to the same corporate governance protections afforded to shareholders of companies that are subject to these rules. ■ The Company may write selected quota share reinsurance policies and assume a share of the liabilities of its underlying reinsureds. ■ The Company, in certain cases, will depend on its customers' evaluations or disclosures of the exposures associated with their insurance underwriting, which may subject the Company to reinsurance losses. ■ The Company s results of operations will fluctuate from period-to-period and may not be indicative of its long-term prospects. ■ The effects of emerging claim and coverage issues on the Company's business are uncertain. ■ The Company s operational structure is currently being developed. ■ Operational exposures, such as human or systems failures (including outsourcing arrangements), are inherent in the Company's business, particularly during the initial stages of its operation. ■ Technology breaches or failures, including those resulting from a malicious cyber-attack on the Company or its business partners and service providers (including the Investment Advisers and the Asset Managers), could disrupt or otherwise negatively impact the business. ■ An economic downturn in the United States or elsewhere, the default of a large institution or an actual or predicted sovereign default, could harm the Company's business and its liquidity and financial condition. ■ Currency fluctuations could result in exchange losses and negatively impact the Company's business. ■ Members of the Board will be permitted to participate in decisions in which they have interests that are different from those of the Company's other Shareholders. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 41 EFTA01105066 • Risk Factors Risks Related to the Company's Business, continued: ■ Shareholders will be limited in their rights relating to the Company's operations. ■ Changes in accounting standards and the interpretation thereof could have a significant and negative effect on the Company. ■ The experience of the Company's management team and the discipline of its strategy may not be sufficient to predict or offset severe loss events. ■ The effect of the U.S. Terrorism Risk Insurance Act is uncertain. Risks Related to the Company's Investments: Risks Related to the Investment Adviser and the Asset Managers ■ The performance of the Company's Investment Portfolio will depend upon, among other things, the ability of the Investment Adviser to advise the Company in accordance with the Investment Guidelines regarding the purchase, redemption and sale of interests in Portfolio Funds, and the ability of the Asset Managers to develop and implement strategies that achieve their investment objectives. ■ The funds and investments in which the Investment Portfolio is invested may include limits on the Company's ability to redeem or sell such investments. ■ The Company will rely on the Investment Adviser for advice and recommendations with respect to the Investment Portfolio; neither the Investment Adviser nor its affiliates or any of their respective principals or other employees will be obligated to devote any specific amount of time or effort to advising the Company. ■ The Asset Managers, their affiliates or any of their respective principals or other employees, may engage in investment and trading activities for their own accounts and for the accounts of others which could cause various conflicts of interest to arise which may not be resolved in the Company's favour. ■ The Asset Managers may not be required to provide the Portfolio Funds with the same fee structures, investment objectives and policies of their other accounts, which could incentivize such Asset Managers to effect trading in another account that may have an adverse effect on the Portfolio Funds. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 42 EFTA01105067 • Risk Factors * Risks Related to the Company's Investments: Risks Related to the Investment Adviser and the Asset Managers, continued ■ Certain securities in which the Company invests may not have readily ascertainable market prices and when those securities are sold, the amount received by the Company may be less than the value of such securities carried on the applicable fund's or Fund of One's books. ■ The Company will depend upon key personnel employed by the Investment Adviser and the Asset Managers to advise the Company with respect to the Investment Portfolio. ■ The performance-based compensation arrangements of the Asset Managers may create incentives to make investment decisions that are risky or speculative or to focus on short-term gains rather than long-term growth. ■ The Company may owe performance fees to an Asset Manager even if the Company itself experiences a net loss for the corresponding period. ■ The Company may be required to pay higher fees to an Asset Manager if it is unable to maintain a minimum amount in the fund or Fund of One managed by such Asset Manager. ■ The Company's investments will be subject to higher aggregate transaction costs than those of a traditional insurer or reinsurer, which could reduce the Company's investment returns. ■ An Asset Manager may, from time to time, come into possession of material non-public information or hold significant investments in particular securities and as a result may, from time to time, be restricted or prohibited from trading in the securities of certain companies or result in additional costs. ■ The ability to use "soft dollars" may provide an Asset Manager or a custodian engaged by the Company, when selecting broker- dealers, with an incentive to take into account the soft-dollar benefits available from the broker-dealers. ■ The success of the Company's anticipated investments is dependent on each Asset Manager's ability to develop and implement appropriate systems and procedures to control operational risks. ■ The Company and the Asset Managers may effect investments through vehicles that could subject the Company to creditor's claims. ■ An event of default under a letter of credit facility, which could require the Company to make withdrawals from the Investment Portfolio, would adversely affect the Company's business and results of operations. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 43 EFTA01105068 • Risk Factors Risks Related to the Company's Investments: General Investment Risks: ■ The Companys investments will differ from those of a traditional insurer and reinsurer because the Company expects to invest, through the Investment Portfolio, predominantly in investments that can be speculative, volatile and leveraged, which could increase the riskiness and volatility of the Company's investments. • ■ The performance of the Company's anticipated investments will be highly dependent upon conditions in the global financial markets and economic conditions throughout these markets that are outside of its control and difficult to predict ■ The Company's investments may not achieve the historical results obtained in the past by the Investment Adviser's or any Asset Manager's investment vehicles or accounts (including, in the case of an Asset Manager, any Portfolio Fund managed by such Asset Manager), and a positive return on the Company's investments will not necessarily ensure a positive return on an investment in the Offered Shares. ■ Back-tested performance results do not represent the results of actual trading using client assets. ■ The Investment Portfolio will be exposed to market risk and market spreads on underlying investments. Risks Related to the Company's Investments: Risks Related to the Investments to be made by the Company or the Asset Managers ■ The Company and the Asset Managers will invest the funds in the Investment Portfolio in securities and other investments, utilize investment strategies and employ trading techniques that involve inherent exposures and could result in substantial losses to the Investment Portfolio and, as a result, to the Company. In addition, the Investment Portfolio may hold non-traditional and complex financial instruments, which exposes the Company to increased risks and could result in substantial losses to the Investment Portfolio and, as a result, to the Company. Risks Related to Regulation of the Company: ■ If the Company is subject to insurance statutes and regulations other than Bermuda's or to a change in Bermuda law or application of Bermuda law, there could be a significant and negative impact on the Company's business. ■ Regulatory changes could have a material impact on the Company's business and results of operations. ■ There could be material adverse tax consequences should the IRS determine that the Company is a passive foreign investment company (or if you are determined to be a US shareholder in a controlled foreign corporation or if the Company generates related person insurance income), including subjecting investors to tax on the Company's income on an annual basis, whether or not distributed. You should review the offering material closely and speak to your tax advisor about the impact on your personal tax situation before investing, including the impact if the IRS issues further guidance regarding the treatment of non-U.S. insurance companies. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. 44 Private & Confidential EFTA01105069 • Risk Factors Risks Related to Regulation of the Company, continued: ■ The Company and the Investment Portfolio may be adversely affected by other complex new and changing laws and regulations, whose magnitude of impact cannot be predicted. ■ The Company is subject to the risk of possibly becoming an investment company under U.S. federal securities law. ■ The requirements of the Alternative Investment Fund Managers Directive could increase the Company's regulatory and compliance costs and restrict the Company's ability to rain capital from the issue of shares in one or more EEA jurisdictions. ■ Fidelis Holdings or Fidelis Insurance may be subject to U.S. federal income taxation, and will be subject to the U.S. federal insurance excise tax. ■ U.S. Holders may recognize income for U.S. federal income tax purposes on Fidelis Holdings' or Fidelis Insurance's undistributed earnings and be subject to certain other adverse tax consequences, based on the application of rules regarding passive foreign investment companies and controlled foreign corporations and the generation of related person insurance income under the U.S. federal income tax laws. ■ Tax-exempt U.S. Holders may recognize unrelated business taxable income in respect of their ownership of the Offered Shares. ■ Dividends from Fidelis Holdings may not satisfy the requirements for "qualified dividend income," and therefore may not be eligible for the reduced rates of U.S. federal income tax applicable to such income. ■ Information may be required to ensure compliance with FATCA and similar regimes. ■ Fidelis Holdings or Fidelis Insurance may become subject to taxation in Bermuda after March 31, 2035, which would have a significant and negative effect on Fidelis Holdings and Fidelis Insurance's business and results of operations. ■ The impact of Bermuda's commitment to the Organization for Economic Cooperation and Development to eliminate harmful tax practices is uncertain and could adversely affect Fidelis Holdings or Fidelis Insurance's tax status in Bermuda. ■ Fidelis Holdings and its subsidiaries may be subject to U.K. taxation. ■ The financial transactions tax ("FTT") proposed by the European Commission for certain EU Member States has very broad scope and could, if introduced, apply to certain dealings in shares (including secondary market transactions) in certain circumstances. Prospective holders of Shares are advised to seek their own professional advice in relation to the FTT. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 45 EFTA01105070 • Risk Factors * ■ Changes in U.S. federal tax laws, which may be retroactive, could be released shortly after the Closing of the Offering and could subject Fidelis Holdings, Fidelis Insurance or U.S. Holders to U.S. federal income taxation on Fidelis Holdings or Fidelis Insurance's undistributed earnings. Risks Related to the Offered Shares and this Offering: ■ Fidelis Holdings is a holding company with no significant operations or assets other than its ownership of Fidelis Insurance, Fidelis Marketing and Fidelis UK, and Fidelis Holdings depends on the ability of Fidelis Insurance, Fidelis Marketing and Fidelis UK to meet its ongoing cash requirements. ■ The Offered Shares are restricted securities and investors may need to bear the economic risk of their investment for an indefinite period of time. ■ If a market for the Offered Shares were to develop, there can be no assurance that the Offered Shares will trade at or above book value. ■ An initial public offering or listing of the Offered Common Shares may be delayed or may never occur and the Company does not intend to consummate an initial public offering or listing of the Offered Preference Shares. ■ The Share voting limitation that will be contained in the Bye-Laws may result in a holder of Offered Shares having fewer voting rights than such holder would otherwise have been entitled based upon its economic interest in the Company. ■ In the event that the Company holds one or more additional closings of the purchase and sale of Offered Shares following the initial Closing, the Offered Shares sold at such closing(s) will dilute the ownership interest in the Company of the holders of the Offered Shares sold at the initial Closing and there is a possibility that the book value of such Shares will increase or decrease during the time between the initial Closing and any such subsequent closing(s). ■ The Company may require additional capital in the future, which may not be available to it on satisfactory terms, if at all. Furthermore, the Company's raising of additional capital could dilute the ownership interest of the holders of the Offered Shares and reduce the value of their investments in the Company. The Company may have to raise capital following significant insured losses, resulting in capital being raised at valuations significantly below the original subscription prices for the Offered Shares. ■ Any future exercise of outstanding warrants in exchange for Common Shares may dilute the ownership interest of the holders of the Common Shares and reduce the value of their investment in the Company. ■ Holders of the Offered Shares may find it difficult to serve process and enforce judgment on the Company or the Company's directors or officers. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 46 EFTA01105071 • Risk Factors * ■ There will be anti-takeover provisions contained in the Bye-Laws and the Shareholders Agreements that could impede an attempt to replace or remove the Board or management or delay or prevent the sale of the Company, which could diminish the value of the Offered Shares. ■ Shareholders of the Company may have more difficulty protecting their interests than shareholders of a U.S. corporation. ■ The Company may enter into agreements with certain Shareholders that provide such Shareholders with certain rights. ■ The Preference Shares rank senior to the Common Shares. Note: Please refer to the Confidential Memorandum for the complete Risk Factors. Private & Confidential 47 EFTA01105072