Connective Capital I - Market Neutral

September 2016 Performance Report

Portfolio At Month End

Manager Overview

Net Return for the Month

Strategy: Market neutral L/S equity, focus on short alpha

Sector Focus: Technology, media, cleantech / energy
Process: We are engineers that evaluate industry disruptions and anticipate market
sentiment towards the winners and losers.
CCI Strategy AUM: ~ $ 29 M

0.32%

Gross Long Return

1.50%

Gross Short Return

-1.07%

Gross Long Exposure

72%

Gross Short Exposure

-63%

Net Exposure (beta adj.)

-1%

Number of Holdings

85

Liquidity: 45 days notice, quarterly in onshore, monthly in offshore

Performance Since Inception

Fees: 1.5% for onshore, 2% for offshore (monthly mgmt fee); 20% (quarterly perf fee)

Comp. Annual Return

8.9%

Prime Brokers: J.P. Morgan, Citibank

Avg. Monthly Return

0.8%

Annualized Std. Dev.

10.7%

Corr. vs NASDAQ

-11%

Target net beta exposure: +5% to -5%

Target # of long/short positions: 25 longs / 50 shorts
Research Team: Rob Romero (PM), Thomas Hor (Co-PM), Tao Long, Calvin Jiang

Corr. vs L/S HF Index

-2%

% Profitable Months

61%

Sharpe Ratio

0.72

Sortino Ratio

1.23

Operations Team: Cindy Matsuyama, Andrew Kellar

Net Returns - Connective Capital I QP (See notes). (CC I Offshore has similar performance)
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
3.20%

2016

-0.74%

-2.12%

-1.00%

2.46%

0.05%

0.76%

-0.72%

0.32%

YTD
2.11%

2015

2.92%

-2.60%

0.92%

-2.37%

0.30%

5.05%

1.67%

1.16%

-0.50%

3.41%

1.50%

-5.11%

2014

-5.18%

-0.29%

1.56%

-0.21%

3.39%

-0.15%

-0.11%

0.62%

-1.03%

4.90%

0.68%

3.97%

6.08%
8.04%

2013

-1.45%

2012
2011

-5.83%
3.26%

1.96%
-3.68%

-0.43%
1.50%

-3.54%
2.90%

-2.96%
3.30%

-3.43%
-0.24%

-0.02%
6.00%

2.35%
0.19%

-2.16%
-3.26%

2.85%
-1.22%

0.92%
-2.67%

-0.66%
-5.09%

-6.64%
-8.48%

2010

0.25%

-3.56%
-0.02%

1.20%
2.02%

2.25%
0.34%

1.12%
1.56%

4.70%
2.18%

1.12%
0.78%

2.79%
1.92%

2.37%
-1.76%

-1.76%
3.62%

2.84%
-0.88%

3.12%
-2.53%

20.94%
7.56%

2009

-7.10%

2008

-2.13%

0.62%
3.85%

0.97%
0.19%

3.26%
2.61%

7.82%
-2.44%

-2.64%
2.21%

0.54%
-4.47%

-6.19%
-1.84%

0.30%
0.83%

5.81%
-3.49%

5.98%
2.91%

0.26%
5.12%

8.82%
2.86%

-3.32%
-0.36%

0.81%
-4.81%

2.66%
0.34%

1.95%
-0.47%

-2.51%
-0.18%

3.41%
-0.33%

1.96%
-1.11%

5.13%
1.75%

5.41%
2.23%

0.31%
3.04%

1.22%
1.18%

22.55%
-4.36%

2007

3.88%

2006
2005

-5.36%
7.06%

2004

-4.09%

3.11%

0.76%

6.80%

-3.32%

-0.17%

2.34%

4.18%

4.19%

-2.78%

-0.80%

2.49%

25.89%

5.84%

-0.08%

-0.03%

0.05%

-2.87%

8.82%

6.83%

1.71%

1.98%

5.32%

-1.52%

23.22%

8.52%

4.47%

13.37%

2003

CCI vs Indexes

3.00

$3.00

2.0%

Avg. return in down NASDAQ months*

Benefits of CCM short alpha

1.0%

CCI
2.16

0.0%

$2.00
2.06

Long / Short

1.63
Equity Market Neutral
$1.00

NASDAQ

CSFB L/S
Index
CC I

-1.0%
-2.0%

S&P 500

-3.0%
Apr-16

Oct-15

Apr-15

Oct-14

Apr-14

Oct-13

Apr-13

Oct-12

Apr-12

Oct-11

Apr-11

Oct-10

Apr-10

Oct-09

Apr-09

Oct-08

Apr-08

Oct-07

Apr-07

Oct-06

Apr-06

Oct-05

Apr-05

Oct-04

Apr-04

Oct-03

$0.00

-4.0%

* Average since CC1 inception Nov. 2003 to Sept 2016

Connective Capital Management LLC

385 Homer Avenue Palo Alto, CA 94301 650-321-4545 investor@connectcap.com www.connectcap.com

Connective Capital I - Market Neutral

Long/Short Global Growth Equities

L/S Alpha Return (cumulative)

120%

Cummulative Long Alpha

Cummulative Short Alpha

100%
80%
60%
40%

Exposure by Market Cap (month end)

Size

Dec-15

Dec-14

Dec-13

Dec-12

Dec-11

Dec-10

Dec-09

Dec-08

Dec-07

Dec-06

Dec-04

0%

Dec-05

20%

Alpha Return by Market Cap (month)

Long

Short

Net

Gross

Long

Short

Total

Micro cap

3.1%

-11.3%

-8.2%

14.4%

Micro cap

-0.54%

0.40%

-0.14%

Small cap

26.4%

-26.9%

-0.5%

53.2%

Small cap

0.23%

0.03%

0.26%

Mid cap

23.8%

-22.9%

0.9%

46.7%

Mid cap

0.27%

-0.40%

-0.13%

Large cap

18.8%

-2.2%

16.6%

20.9%

Large cap

0.25%

0.18%

0.43%

Total

72.0%

-63.3%

8.7%

135.3%

0.21%

0.22%

0.43%

Market Cap

Total

Exposure by Region (month end)

Region
Asia ex-Japan

Alpha Return by Region (month)

Long

Short

Net

Gross

5.6%

-5.6%

0.1%

11.2%

Long

Short

Total

Asia ex-Japan

Region

0.22%

0.35%

0.58%
0.09%

Europe

0.3%

-6.3%

-6.0%

6.6%

Europe

0.01%

0.08%

Japan

0.0%

-0.7%

-0.7%

0.7%

Japan

0.00%

0.03%

0.03%

Non Asia EM

1.8%

-2.9%

-1.2%

4.7%

Non Asia EM

0.11%

0.16%

0.27%

North America

64.3%

-47.8%

16.5%

112.1%

North America

Total

72.0%

-63.3%

8.7%

135.3%

Total

-0.13%
0.21%

-0.41%
0.22%

-0.54%
0.43%

Exposure by Subsector (month end)

Subsector
Alt Energy Other

Alpha Return by Subsector (month)

Long

Short

Net

Gross

Long

Short

Total

0.0%

-2.2%

-2.2%

2.2%

Alt Energy Other

0.00%

-0.04%

-0.04%
0.31%

SubSector

Biofuels

0.5%

-2.5%

-2.0%

3.0%

Biofuels

-0.04%

0.35%

Consumer

0.0%

-0.6%

-0.6%

0.6%

Consumer

0.04%

0.18%

0.22%

Consumer HW

3.0%

-4.3%

-1.3%

7.2%

Consumer HW

0.12%

-0.19%

-0.07%

Energy & Storage

2.9%

-1.8%

1.1%

4.7%

Energy & Storage

-0.14%

-0.15%

-0.29%

Enterprise HW

0.0%

0.0%

0.0%

0.0%

Enterprise HW

0.00%

0.00%

0.00%

Enterprise Services

0.0%

-3.2%

-3.2%

3.2%

Enterprise Services

0.00%

-0.01%

-0.01%

Factor

43.3%

-1.8%

41.5%

45.1%

Factor

0.34%

-0.01%

0.33%

Healthcare

2.6%

-4.9%

-2.3%

7.6%

Healthcare

-0.35%

-0.65%

-1.00%

Infrastructure

0.0%

-2.2%

-2.2%

2.2%

Infrastructure

0.00%

0.07%

0.07%

Internet

9.8%

-15.3%

-5.5%

25.1%

Internet

0.11%

-0.04%

0.07%

Other

0.0%

-1.8%

-1.8%

1.8%

Other

0.00%

0.07%

0.07%

Semis & Components

1.0%

-5.8%

-4.8%

6.9%

Semis & Components

0.08%

0.60%

0.67%

Software

4.3%

-4.0%

0.3%

8.3%

Software

-0.08%

-0.19%

-0.27%

Solar & Wind

2.3%

-6.4%

-4.1%

8.7%

Solar & Wind

0.01%

0.02%

0.03%

Telecom

0.8%

-1.3%

-0.5%

2.2%

Telecom

0.09%

0.08%

0.17%

Transportation

1.5%
72.0%

-5.3%
-63.3%

-3.8%
8.7%

6.8%
135.3%

Transportation

0.02%
0.21%

0.13%
0.22%

0.16%
0.43%

Total

Total

Returns between 11/1/03 and 12/31/04 are from the Managed Account with similar strategy to Connective Capital I, LP (CC I LP), and Connective Capital I QP, LP (CC I QP), which was rolled into CC I LP on 1/3/05. Investment returns between 1/3/05 to 5/31/07 are derived from
CC I LP. At CC I QPs launch on 4/1/06, CC I LP was under its high watermark. To fairly represent typical investor returns, CC I LPs returns are used from 4/1/06 to 5/31/07, the earliest point when both CC I QP and CC I LP are above their respective high watermarks. All returns are
shown net of a 1.25% annual management fee (1.5% from August 1, 2005), and a 20% performance allocation. Investment returns subsequent to 1/3/05, are shown net of legal, audit, administrative, and other direct fund expenses. All attribution and exposure data are based on CC I QP,
its predecessor fund and managed account.

Performance information is historical and is not indicative of, nor does it guarantee, future results. The gross investment returns for CC I, LP prior to 1/1/05 have been reviewed by an independent accountant. Investment returns after 1/1/05
except any estimates have been compiled and reviewed by an independent administrator, and the data for recent periods may be adjusted as a result of a subsequent audit of the year of which these periods are a part. Performance among
limited partners and investors may vary, depending upon the date(s) of capital contributions and withdrawals. Monthly alpha and beta attributions are net of the 90-day T-Bill rate (these three attributions sum to the period net return), and
full-year figures include monthly compounding. Beta is computed with respect to the NASDAQ Composite. Alpha and beta attributions are good faith estimates by Connective Capital, so may contain errors and have not been reviewed by
an independent accountant. Investment returns from 11/1/03 through 12/31/04 reflect investment returns at market close on the last Friday of each month. This report may include a discussion of certain positions of the funds at the time this
report was prepared. The funds may no longer have or be seeking to establish, any of these positions at the time you receive this report. This is not an offering document and should not be construed as an offer to sell or the solicitation of an
offer to buy any security. An offer of interest in any of the funds managed by Connective Capital Management, LLC may be made solely by means of the Confidential Private Placement Memoranda.

Connective Capital Management LLC