ALTERNATIVE MARKETS UPDATE - END MAY 2023

​Inflation remains a major concern and continues to exert pressure on markets. At least inflation is declining in most economies. In the US, inflation is declining since July 2022 due to the most aggressive measures taken by the Fed in comparison to other economies. Inflation fell from over 9% to now below 5%. The EU’s inflation kept rising until September 2022 when it surpassed the 11% mark. The more hesitant central bank interventions and higher exposure to the war led to a substantially slower decrease. As of April 2023, inflation still remains slightly above 8%. Toward the end of 2022, the UK behaved similarly to the EU, but could not maintain this trend. As of March, inflation in the UK remained above 10%. The continued struggle of the UK – in comparison to the EU – is largely attributable to a combination of its higher food price inflation, high reliability on gas, and worker shortages as well as wage rises. The latest data revealed that the UK could substantially reduce its inflation in April to below 9%. China and Switzerland were able to keep their inflation below 4% throughout this period and have achieved decreasing inflation similar to the previously discussed economies, albeit for different reasons. Japan followed this development but saw a spike in inflation in April 2023, which stems from a surge in food prices. Figure 1 summarizes the inflation rate development from the beginning of 2022. Figure 2 shows the corresponding interest rate measures the various central banks undertook. The Fed took the most aggressive measures with the current range being between 5% and 5.25%. Market participants widely expected rate hikes to stop earlier in 2023, and it seems now that during the June meeting, there will be a break. However, officials stated that the fight against inflation is not over, and further hikes are still reasonably likely. This dampened the optimism of market participants, especially considering views at the beginning of the year with fewer increases and possible cuts as early as autumn. Such a development seems highly unlikely at this stage. The BoE followed the Fed’s development most closely. Unfortunately, it did not achieve the same results, as the substantial discrepancy in inflation data shows. The ECB took almost half a year longer to implement such measures. As of May 2023, central bank rates in the EU are still 1.25% lower than compared to the US. It is also reasonable to assume that the ECB will continue hiking to offset its currently substantially higher inflation. This can be attributed to the later reaction of the ECB in comparison to the Fed. Switzerland, which had fewer problems with inflation, required less severe interventions. In total, the SNB increased its core interest rate by 2.25% since May 2022. In contrast to other Western economies, its core interest rate sits at a moderate 1.5%. Asian countries, such as China and Japan have struggled little with inflation and needed no or only minor central bank interventions. Nonetheless, the countries still did not go through the aftermath of Covid unscathed. 

*|MC_PREVIEW_TEXT|*

RESEARCH PERSPECTIVE VOL. 204 May 2023 Alternative Markets May 2023 Inflation remains a major concern and continues to exert pressure on markets. At least inflation is declining in most economies. In the US, inflation is declining since July 2022 due to the most aggressive measures taken by the Fed in comparison to other economies. Inflation fell from over 9% to now below 5%. The EU’s inflation kept rising until September 2022 when it surpassed the 11% mark. The more hesitant central bank interventions and higher exposure to the war led to a substantially slower decrease. As of April 2023, inflation still remains slightly above 8%. Toward the end of 2022, the UK behaved similarly to the EU, but could not maintain this trend. As of March, inflation in the UK remained above 10%. The continued struggle of the UK – in comparison to the EU – is largely attributable to a combination of its higher food price inflation, high reliability on gas, and worker shortages as well as wage rises. The latest data revealed that the UK could substantially reduce its inflation in April to below 9%. China and Switzerland were able to keep their inflation below 4% throughout this period and have achieved decreasing inflation similar to the previously discussed economies, albeit for different reasons. Japan followed this development but saw a spike in inflation in April 2023, which stems from a surge in food prices. Figure 1 summarizes the inflation rate development from the beginning of 2022. Figure 2 shows the corresponding interest rate measures the various central banks undertook. The Fed took the most aggressive measures with the current range being between 5% and 5.25%. Market participants widely expected rate hikes to stop earlier in 2023, and it seems now that during the June meeting, there will be a break. However, officials stated that the fight against inflation is not over, and further hikes are still reasonably likely. This dampened the optimism of market participants, especially considering views at the beginning of the year with fewer increases and possible cuts as early as autumn. Such a development seems highly unlikely at this stage. The BoE followed the Fed’s development most closely. Unfortunately, it did not achieve the same results, as the substantial discrepancy in inflation data shows. The ECB took almost half a year longer to implement such measures. As of May 2023, central bank rates in the EU are still 1.25% lower than compared to the US. It is also reasonable to assume that the ECB will continue hiking to offset its currently substantially higher inflation. This can be attributed to the later reaction of the ECB in comparison to the Fed. Switzerland, which had fewer problems with inflation, required less severe interventions. In total, the SNB increased its core interest rate by 2.25% since May 2022. In contrast to other Western economies, its core interest rate sits at a moderate 1.5%. Asian countries, such as China and Japan have struggled little with inflation and needed no or only minor central bank interventions. Nonetheless, the countries still did not go through the aftermath of Covid unscathed. Figure 1: Inflation Rate in Percentages in the US, UK, EU, Switzerland, Japan, and China from January 2022 to April 2023, Sources: Stone Mountain Capital Research, Board of Governors of the Federal Reserve System, Eurostat, Office for National Statistics (UK), Swiss Federal Statistics Office, Ministry of Internal Affairs & Communication (JP), National Bureau of Statistics of China, May 2023 Figure 2: Interest Rates by the Central Banks of the US, EU, UK, Switzerland, Japan, and China from January 2022 to May 2023, Source: Stone Mountain Capital Research, Federal Reserve, ECB, BoE, SNB, BoJ, PBoC, May 2023 This highly volatile ecosystem also led to substantial movements in currency markets, which is shown in Figure 3. In 2022, the value of the US-Dollar increased against most other currencies. Major contributors to this development include an increased worry about a potential crisis ahead, in which the US-Dollar acts as a safe haven asset, as well as the comparatively attracted returns obtainable by US bonds. The latter is a consequence of the stronger and earlier interest rate hikes than by other central banks at the time. This effect was especially strong against the Japanese Yen, as the BoJ is maintaining its core interest rate at -0.1%. In the last months of 2022 and early 2023, this development reversed, as interest rates in the US rose at a slower pace than most other countries and investors expected fewer hikes at the time that actually occurred. It seemed that the US-Dollar reached a somewhat stable state, after its initial slide. When the banking crisis began with SVB, the US-Dollar continued to fall further. In recent weeks, the US-Dollar recovered some of its losses following the banking crisis, possibly due to no further bank failures (as of now) or a more favorable perception of relative interest rates to other countries. While the banking crisis is certainly substantial, it does not really feel like 2008 all over again. While it does not match the total extent of the financial crisis from 2007/08, in 2023 more bank assets were subject to bankruptcy than in the entire year of 2008. Figure 4 shows a summary of bank defaults since 2001. This shows the severity of the current economic situation with high rates and high inflation, especially as it is not unlikely that other banks fall too. Figure 3: Development of EUR, JPY, CHF in Comparison to the USD in the Past Year, Sources: Stone Mountain Capital Research, Yahoo Finance, May 2023 Figure 4: Number of Bank Failures and Corresponding Assets from 2001 to 2023, Sources: Crescat Capital LLC, FDIC, Nathaniel Gilbert, May 2023 The considerable uncertainty in markets did not let equities untouched. Volatility in equity markets remains at an elevated level (compared to pre-Covid) between the 20 and 30 levels. However, it shows frequent spikes which is certainly characteristic of the current economic situation. The impact of this volatility has hugely different effects on different industries. Overall, equities enjoyed a strong bull run after the initial Covid crisis until the end of 2021, in which the S&P500 grew by 18% and 24% respectively. In 2022, the development reversed amid a much more critical view of the current state of the economies, which persists until now and probably at least in the short-term future. The S&P500 lost as much as 20% in 2022. In 2023, equities have done much better, despite a still grim outlook. Much of the rather extreme results in recent years can be attributed to tech companies. This includes the bull run following Covid, in which technology became much more important due to the imposed restrictions as well as the abrupt reversal in 2022, which was caused by crashing growth expectations of the highly elevated tech companies. The overall positive development in 2023 can be attributed to the soaring valuations of tech companies, which contribute to the lion’s share of equity indices’ gains, both in terms of performance and size. In stark contrast is the banking sector, which has declined in importance over the past decades. With the current banking crisis, they substantially contribute to equities in a negative way. Figure 5 shows the contrast between the S&P500 and a banking sector index. The strong surge in tech valuations also poses a substantial bubble risk as back in 2000/01. Compared to then, the top 10 tech companies now account for more than 50% of the US GDP as opposed to below 30% then. Figure 6 highlights the similarities of the dominant tech companies. Figure 5: Returns of the S&P500 Index and the S&P US Banks Index in Comparison to the VIX Level from January 2022 to May 2023, Sources: Stone Mountain Capital Research, Standard & Poor’s, CBOE, May 2023 Figure 6: Megacap Tech Enterprise Values as Percentage of GDP from 1990 to 2023, Sources: Crescat Capital LLC, Bloomberg, Kevin Smith, May 2023 Hedge Funds As most alternative asset classes, hedge funds do not enjoy the currently volatile ecosystem. Equity hedge funds are one of the few sub-strategies that benefitted from 2023 thus far. With rebounding equity markets, equity hedge funds achieved a strong Q1 2023. Their performance also carried the industry to achieve a positive Q1 2023. Credit hedge funds were also able to adjust to the current ecosystem and achieved mostly positive returns in the first quarter. Similarly to equity hedge funds, credit funds were able to profit from rebounding markets in 2023. The big winners in 2023 were crypto hedge funds. Despite their strong performances this year, they do not affect aggregate performance a great deal, as crypto strategies are still niche strategies. The largest losers this quarter were macro and quant strategies which faced a difficult and volatile quarter. Figure 7 summarizes the quarterly return of various sub-strategies in the space. Any predictions on the year’s performance are difficult this year, as current markets are highly volatile, especially with a recession looming. Not only is the development of the economy crucial, but it is also vital how well hedge funds are able to limit downsides. For the most part, the industry did very well during the initial Covid drawdown. On the contrary, most funds misevaluated the continued downward streak in 2022, which led to substantial losses. Figure 7: Quarterly Net Returns of Various Hedge Fund Strategies, Source: Aurum Hedge Fund Data Engine, May 2023 Fintech Undoubtedly, the recent rise of AI is the topic in this space. ChatGPT and OpenAI are widely discussed in a variety of situations. The rise of AI started with the official launch of ChatGPT and the subsequent investment of Microsoft in OpenAI in the magnitude of $10bn. While this seemed to be a rumor, in the latest round, OpenAI raised $300m at a valuation of $27-$29bn. Following the success of ChatGPT, many other large corporations and startups advertised their own AI solutions. The current AI frenzy also led companies producing hardware for AI to skyrocket. The most notable example is Nvidia (NVDA). The stock soared 26% after the company handily beat estimates and is set to be in a prime position to profit further from the AI growth of the coming months. Thus far, the stock is up 172% this year only. Figure 8 shows the incredible growth of Nvidia compared to Intel, the “chip-maker” of the 2000s. Nvidia is now well-positioned to become the first trillion-dollar company in the chipmaker industry. Despite the extraordinary growth of AI, the fintech industry is still suffering from its correction from 2021. While the industry has lost a substantial amount of value, fundamentally the industry is set to succeed. At least, once the recent (necessary) correction has subsided. Valuations have plummeted by almost 80% since Q4 2021. In comparison to Q4 2021, the average revenue multiple has decreased from 20x to only 4x by Q4 2022, as shown in Figure 9. Similar issues can be found in the funding levels, which also have been across all, or at least most, industries. Seed financing has remained most robust and only declined by 24% compared to the previous year. In particular later stages were more susceptible to the declining funding. Those dropped by 48% for Series C and D and by a whopping 72% for Series E+ funding rounds. Most CEOs of fintech companies have a rather pessimistic outlook for the 12 months ahead. This is largely due to the difficult economic ecosystem and the potential crisis ahead. For a longer time horizon, most survey participants are positively oriented. As mentioned previously, the fundamentals of the industry remain as strong as ever. The financial services industry stays prone to disruption and is one of the most profitable industries. Established financial companies also tend to have low customer satisfaction. For the most part, fintechs tend to score great in such surveys, suggesting that established players cannot shield themselves from the disruption offered by new fintechs. Additional growth comes from around 2.8bn people that are still underserved in financial services at this time. The industry is currently in a scaling phase, as many applications have proven to be successful and are continuously growing. The industry can make use of blockchain technology, its mobile nature, and the recent surge of AI to better reach underserved people and extend its growth potential beyond the scope of competing against established financial institutions. Figure 8: Market Capitalization of Nvidia and Intel from 1999 to May 2023, Source: Bloomberg, May 2023 Figure 9: Valuations of Public Fintech Companies in Terms of Average Revenue Multiple, Sources: BCG Analysis, Fintech Control Tower & Capital IQ, May 2023 Blockchain Cryptocurrencies started well in the year 2023. As of the time of writing, Bitcoin (BTC) is up 60% and Ethereum (ETH) is up 50% in 2023. While this is impressive growth, cryptocurrencies are still far away from their recent highs in 2021. Crypto markets corrected strongly in 2022, when the most established assets, such as BTC and ETH lost between 60% and 70%. Figure 10 shows a comparison of the yearly returns in 2022 and 2023. Cryptocurrencies had a relatively quiet 2023 with a few spikes. The industry was boosted by the banking crisis, as assets were no longer “safe” in banks, which led to an inflow in crypto. Predictions for BTC vary widely, but most expect BTC to be around the $50k mark by the end of the year. While the potential crisis could certainly alter these predictions, another major contributor to these values stems from the upcoming Bitcoin Halving on April 26th 2024, when the rewarded BTC amount in mining is halved. Another development to watch is the scaling solutions for ETH. ETH functions as the main transaction coin (with the exception of stablecoins), due to its established position in the crypto market and higher scalability than BTC. In contrast to ETH, BTC is mainly held as a store of value, as its scalability issues make it “unusable” as a transaction currency. ETH in itself is still unfeasible as such, but many Layer-2 solutions exist. Layer-2 solutions take transactions off the main chain and process them in side chains that are then sent back to the main chain. This enables the main chain to process more transactions at a substantially lower price. These L2 solutions have recently surpassed ETH in the total number of daily transactions. This major achievement also helped these protocols further. Figure 11 shows the growth in total value locked in these applications over the past year. Optimism and Arbitrum are the most important protocols in this field, which account for more than 85% of the market share. Arbitrum recently overtook Optimism and is establishing itself as the dominant protocol. The protocol accounts now for more than 65% of the total value locked in this field. Arbitrum also launched its highly awaited token in the past months, which certainly helped its publicity. Not all developments in the crypto industry are beneficial. For example, the banking crisis and the bad 2022 led major credit card companies, such as Visa and Mastercard, to halt their push for crypto adoption. From a regulatory perspective, the industry is appreciating the development of the EU, which launched the first comprehensive regulation. In the US, frustration grows as the country seems unable or unwilling to lay out a comprehensive regulation, as the SEC decided to exclude digital assets from their upcoming hedge fund regulation. Coinbase, among others, is already considering moving out of the US, due to the unclarities in crypto regulations. Figure 10: Performance of Bitcoin and Ethereum in 2022 and 2023, Sources: Stone Mountain Capital Research & CoinMarketCap, May 2023 Figure 11: Ethereum Layer-2 Solutions and Their Total Value Locked Over the Past Year, Source: L2Beat, May 2023 Private Equity / Venture Capital The private equity and venture capital industries are probably under the most pressure of the asset classes described. Not only are the two asset classes highly affected by public equity markets, which are under substantial pressure with the exception of a few companies and sectors. The high interest rates also add uncertainty. Not only do they reduce valuations, but they also induced more volatility for long-term projections, as it is unclear when the hikes will stop. Although it seems to be the case, that it will be relatively soon, there is no guarantee and it is also crucial to know at what pace the interest rates will drop again. This ecosystem is even more threatening to venture capital, given the inherently higher risk of the strategy. This uncertainty and correcting valuations are evident in most key numbers of the industry. For example, global private equity M&A has dropped by 32% in Q1 2023 compared to its peak in Q4 2021. This sharp drop is even more relevant when considering that deal activity was helped by valuation discounts. In the below $100m deal size, the average discount reached 31%. The situation is most dramatic in fundraising. In particular venture capital was hit hard. The industry’s fundraising peaked in Q1 2022 at slightly above $80bn. Since then, it has continuously decreased until Q4 2022 when the industry just raised slightly above $20bn. Q1 2023 has only been marginally better in the total amount. However, the number of funds that reached their closing target halved compared to Q4 2022, which was already the worst quarter since 2018. Figure 12 shows the quarterly development of venture capital fundraising activities. Figure 12: Global Quarterly Venture Capital Fundraising from Q1 2018 to Q1 2023, Source: Preqin Pro, May 2023 Private Debt The private debt is in a rather neutral state, compared to most asset classes. On the one hand, the industry is in a stable state with a promising outlook. Performance-wise, the industry posted solid returns in Q1 2023. According to Gapstow Capital Partners, only two out of 16 sub-strategies did not return positive numbers. In addition, the average fund return was 1.3% in the first quarter with many individual funds substantially outperforming the industry average. Despite the difficult economic outlook, it has not affected the industry much as of now. However, the industry is still facing headwinds as do the other industries. With substantially higher interest rates in the market, the necessity for investors to go to private credit to find any yield is no longer required. With this, interest in the industry has declined. Compared to its fundraising peak in Q2 2022, private credit funds could only raise half as much capital in Q1 2023. Despite this negative development, it is still on par with its average fundraising capabilities over the past five years, as shown in Figure 13. Funds also noticed this reduced demand, as almost 50% of fresh capital stems from hedge funds and endowments. Direct lending, the most prominent strategy in the space, is feeling the shift in demand. In this quarter, the sub-strategy hit a decade-low in terms of fundraising. While the interest in the space has declined on an aggregate level, it is even more severe in direct lending. It also lost substantial market share to distressed debt and special situations that are in a better position to exploit potential opportunities of the likely crisis ahead. One saving grace for direct lending funds might be the recent banking crisis, as banks’ risk appetite is likely decreased, which allows direct lending funds to take over prior banking activities in leveraged buyouts. While funds will have to carefully balance their portfolio in distressed debt and special situations, funds of these strategies are optimistic. They are convinced that the current year could become one of the best vintage years, as soon as market participants adjust to the new ecosystem. For riskier debt strategies, this means more favorable covenants for them, overall lower leverage, and higher coupons. However, they need to be cautious of the enhanced riskiness of the potential crisis. In the US, the US leveraged loan default rate has already significantly increased since autumn 2021. While it was close to 0%, it has now surged to 1.35%, as shown in Figure 14. Figure 13: Global Quarterly Private Debt Fundraising from Q1 2017 to Q1 2023, Source: Preqin Pro, May 2023 Figure 14: US Leveraged Loan Default Rate from March 2017 to March 2023 (Data as of 31st March 2023), Sources: Pitchbook, LCD, Morningstar LSTA US Leveraged Loan Index, April 2023 Real Estate The real estate market is still facing substantial problems, and it is unlikely that it will stop in the short term. With a few exceptions, most sub-sectors struggle with high mortgage rates and previously high prices. High interest rates also offer an alternative to relatively stable income in real estate markets. In light of this difficult ecosystem, fundraising in the real estate market has plummeted. In Q1 2023, only $20bn was raised, which makes it the worst quarter over the past five years. Notably, this quarter was even worst than during the downturn during Covid-19, as Figure 15 shows. With declining inflation and declining interest rates in the future, the industry is hopefully in a decent spot to offset the drawdown in the current state. This scenario seems somewhat likely, as housing prices are falling rapidly. Currently, real estate is strongly under pressure in developed markets, but it is still in a healthy state in emerging markets. Despite this good news, the sector is especially threatened in the US, the most important market. The soaring house prices following Covid-19 and the now high mortgage rates have caused a collapse in the affordability of housing. To buy a median-priced house in the US, the mortgage payments have reached a new record high. What’s more alarming is that this mortgage payment has almost doubled in the past three years. Although prices have been falling, it does not offset the increase in mortgage payments. In addition, at current mortgage rates, most home buyers of the past few years could not afford the house they are currently living in. This leads to an enormous problem. Home buyers can no longer afford homes, while home sellers cannot sell their houses, due to too low demand. This led to price decreases of homes of up to 37% at its peak. Figure 16 shows the historical YoY change in US existing home sales over the past two decades. Figure 15: Global Quarterly Real Estate Fundraising from Q1 2018 to Q1 2023, Source: Preqin Pro, May 2023 Figure 16: US Existing Homes Sales (YoY % Change) from January 1999 to January 2023, Source: Charlie Bilello & Creative Planning, May 2023 STONE MOUNTAIN CAPITAL Stone Mountain Capital is an advisory boutique established in 2012 and headquartered in London with offices Pfaeffikon in Switzerland, Dubai and Umm Al Quwain in United Arab Emirates. We are advising 30+ best in class single hedge fund and multi-strategy managers across equity, credit, and tactical trading (global macro, CTAs and volatility). In private assets, we advise 10+ sponsors and general partners across private equity, venture capital, private credit, real estate, capital relief trades (CRT) by structuring funding vehicles, rating advisory and private placements. As of 19th May 2023, Stone Mountain Capital has total alternative Assets under Advisory (AuA) of US$ 61.2 billion. US$ 44.7 billion is mandated in hedge funds and US$ 16.5 billion in private assets and corporate finance (private equity, venture capital, private debt, real estate, fintech). Stone Mountain Capital has arranged new capital commitments of US$ 1.91 billion across more than 25 hedge fund, private asset and corporate finance mandates and has been awarded over 75 industry awards for research, structuring and placement of alternative investments. As a socially responsible group, Stone Mountain Capital is a signatory to the UN Principles for Responsible Investing (PRI). Stone Mountain Capital applies Socially Responsible Investment (SRI) filters to all off its alternative investment strategies and general partners on behalf of investors.    Our Team   Our Mandates   Our Research   Our News     Contact We are able to source any specific alternative investment search and maintain relationships with dozens of best-in-class hedge fund managers, private equity and private debt general partners (GPs) and real estate and infrastructure developers. We don’t pass any costs on to our investors, since our compensation comes from our mandated managers, GPs and developers. Please contact us, should you require further information about our solutions.   Schedule a call with the team Main UK Tel.: +44 207 268 4905 Main Switzerland Tel.: +41 44 586 45 55 Main UAE Tel.: +971 4383 5386 We have updated our privacy policy to take into account the new requirements of the GDPR. Please take some time to read the policy, which explains what personal data we collect, why we collect it, how we use it and other relevant information. You can review our privacy policy here, our anti-bribery policy here and our commitment to the UK stewardship code here. Stone Mountain Capital LTD is registered (Reference: ZA589246) in the data protection public register of the Information Commissioner's Office ('ICO') in the United Kingdom. No action is required if you wish to remain in contact, however please reply if you want your details removed by contacting us at [email protected] or by using the unsubscribe button below. In case this newsletter has been forwarded to you and you want to subscribe, please click here. Stone Mountain Capital is a limited company (LTD) registered in England & Wales with registered number 8763463. The registered address is: One Mayfair Place, Devonshire House, Mayfair, London W1J 8AJ, England, United Kingdom. Stone Mountain Capital LTD is authorised and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom. Stone Mountain Capital LTD is the Distributor of foreign collective investment schemes distributed to qualified investors in Switzerland. Certain of those foreign collective investment schemes are represented by First Independent Fund Services LTD, which is authorised and regulated by the Swiss Financial Market Supervisory Authority (‘FINMA') as Swiss Representative of foreign collective investment schemes pursuant to Art 13 para 2 let. h in the Federal Act on Collective Investment Schemes (CISA). Stone Mountain Capital LTD conducts securities related activities in the U.S. pursuant to a Securities and Exchange Commission ('SEC') Rule 15a-6 Agreement with Crito Capital LLC, a U.S. SEC registered broker-dealer, and member of Financial Industry Regulatory Authority (‘FINRA’), Securities Investor Protection Corporation (‘SIPC’) and Municipal Securities Rulemaking Board (‘MSRB').  Stone Mountain Capital Partners LLP is incorporated as limited liability partnership in England & Wales with company registration number: OC430515. Its registered office is: One Mayfair Place, Devonshire House, Mayfair, London W1J 8AJ, United Kingdom. Stone Mountain Capital Partners LLP is registered as Appointed Representative with FRN: 934964 of Stone Mountain Capital LTD which is authorised and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom.  Stone Mountain Capital Ventures LLP is incorporated as limited liability partnership in England & Wales with company registration number: OC439509. Its registered office is: Devonshire House, ​One Mayfair Place, Mayfair, London W1J 8AJ, United Kingdom. Stone Mountain Capital Ventures LLP is incorporated as Appointed Representative with FRN: 967914 of Stone Mountain Capital LTD which is authorized and regulated with FRN: 929802 by the Financial Conduct Authority (‘FCA’) in the United Kingdom. Stone Mountain Capital FZC is registered as Free Zone Company (FZC), a limited liability company in United Arab Emirates (UAE) at: Atrium Tower, Office AT-101, 1st Floor, One UAQ, P.O. Box: 7073, UAQ Free Trade Zone, Umm Al Quwain, United Arab Emirates with company registration number: 6813. All information in this perspective including research is classified as minor acceptable non-monetary benefits ('MNMB') in accordance with article 11(5)(a) of the MiFID Delegated Directive (EU) 2017/593 and FCA COBS 2.3A.19. For United Arab Emirates (excluding Dubai International Financial Centre (’DIFC’) and Abu Dhabi Global Market (’ADGM‘)) residents only. This website, any document, and the information contained herein, does not constitute, and is not intended to constitute, a public offer of securities in the United Arab Emirates (’UAE‘) and accordingly should not be construed as such. Securities are only being offered to a limited number of exempt investors in the UAE who fall under one of the following categories of Exempt Qualified Investors: (1) an investor which is able to manage its investments on its own (unless such person wishes to be classified as a retail investor), namely: (a) the federal government, local governments, and governmental entities, institutions and authorities, or companies wholly-owned by any such entities; (b) foreign governments, their respective entities, institutions and authorities or companies wholly owned by any such entities; (c) international entities and organisations; (d) entities licensed by the Securities and Commodities Authority (the ’SCA‘) or a regulatory authority that is an ordinary or associate member of the International Organisation of Securities Commissions (a “Counterpart Authority”); or (e) any legal person that meets, as at the date of its most recent financial statements, at least two of the following conditions: (i) it has a total assets or balance sheet of AED 75 million; (ii) it has a net annual turnover of AED 150 million; (iii) it has total equity or paid-up capital of AED 7 million; or (2) a natural person licensed by the SCA or a Counterpart Authority to carry out any of the functions related to financial activities or services, (each an “Exempt Qualified Investor”). The Securities have not been approved by or licensed or registered with the UAE Central Bank, the SCA, the Dubai Financial Services Authority (’DFSA‘), the Financial Services Regulatory Authority (’FSRA’) or any other relevant licensing authorities or governmental agencies in the UAE (the ‘Authorities‘). The Authorities assume no liability for any investment made as an Exempt Qualified Investor. This website, any documents and securities are for the use of Exempt Qualified Investors only and should not be given or shown to any other person (other than employees, agents or consultants in connection with a named addressee's consideration thereof). Stone Mountain Capital FZC is registered as Free Zone Company (FZC), a limited liability company in United Arab Emirates (UAE) at: Atrium Tower, Office AT-101, 1st Floor, One UAQ, P.O. Box: 7073, UAQ Free Trade Zone, Umm Al Quwain, United Arab Emirates with company registration number: 6813. Our Dubai office is at: Almas Tower, Level 54, P.O. Box: 112911, Jumeirah Lake Towers (JLT), Dubai Multi Commodities Centre (DMCC) Free Zone, Dubai, United Arab Emirates. Copyright © 2023 Stone Mountain Capital LTD. All rights reserved. Any business communication, sent by or on behalf of Stone Mountain Capital LTD or one of its affiliated firms or other entities (together "Stone Mountain"), is confidential and may be privileged or otherwise protected. This e-mail message is for information purposes only, it is not a recommendation, advice, offer or solicitation to buy or sell a product or service nor an official confirmation of any transaction. It is directed at persons who are professionals and is not intended for retail customer use. This e-mail message and any attachments are for the sole use of the intended recipient(s). Our LTD accepts no liability for the content of this email, or for the consequences of any actions taken on the basis of the information provided, unless that information is subsequently confirmed in writing. Any views or opinions presented in this email are solely those of the author and do not necessarily represent those of the limited company. Any unauthorised review, use, disclosure or distribution is prohibited. If you are not the intended recipient, please notify the sender by reply e-mail and destroy all copies of the original message and any attachments. By replying to this e-mail, you consent to Stone Mountain monitoring the content of any e-mails you send to or receive from Stone Mountain. Stone Mountain is not liable for any opinions expressed by the sender where this is a non-business e-mail. Emails are not secure and cannot be guaranteed to be error free. Anyone who communicates with us by email is taken to accept these risks. This message is subject to our terms at our Disclaimer.