EVANSTON ALTERNATIVE OPPORTUNITIES FUND 2Q21 LETTER

The Evanston Alternative Opportunities Fund (“EAOF” or the “Fund”) returned JULY 27, 2021 an estimated +4.0% (Class I) and +3.8% (Class A) net of all fees and expenses in the second quarter and has returned an estimated +6.2% (Class I) and +5.8% (Class A). Net assets in the Fund are approximately $76 million and total strategy assets are approximately $4.0 billion.1

RETURNS AND STATISTICS FOR PERIODS ENDED JUNE 30, 2021

Trailing Trailing Trailing 2nd YTD 1-Year 3-Year 5-Year Sharpe Quarter 2021 ITD2 Volatility2 Beta2 Annualized Annualized Annualized Ratio2 Return Return Return Return Return

Evanston Alternative Opportunities 4.0% 6.2% 23.0% 10.6% 8.8% 5.6% 6.0% 0.8 -- Fund (Net) - Class I Evanston Alternative Opportunities 3.8% 5.8% 22.1% 9.8% 8.0% 4.8% 6.0% 0.7 -- Fund (Net) - Class A HFRI FOF Index 2.8% 4.9% 18.2% 6.3% 6.1% 4.1% 5.3% 0.6 -- 90-Day T-Bill 0.0% 0.0% 0.1% 1.3% 1.1% 0.8% 0.3% -- -- Barclays Aggregate Bond Index 1.8% -1.6% -0.3% 5.3% 3.0% 3.3% 3.1% 0.8 0.06 S&P 500 Index 8.5% 15.3% 40.8% 18.7% 17.7% 14.1% 14.2% 0.9 0.34 MSCI World Index 7.7% 13.0% 39.0% 15.0% 14.8% 10.2% 14.1% 0.7 0.35 Sources: Bloomberg; HFR Database

INTRODUCTION

Evanston Capital Management, LLC (“ECM”) is pleased to provide you with the EAOF quarterly letter. The following pages include:

• Portfolio Holdings & Statistics • 2nd Quarter Strategy Discussion • Portfolio Discussion and Risk Management • Op/Ed

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS Evanston Alternative Opportunities Fund’s (the “Fund”) performance data quoted represents past performance (as described below) and is presented net of the Fund’s fees and expenses. All performance data that includes the current month shown above is estimated. An investment’s return and principal value will fluctuate so that a Fund shareholder’s shares, if and when repurchased in a tender offer, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Where applicable, all returns shown reflect the reinvestment of all distributions of income and capital gains. Class I: Performance for the period from July 1, 2014 through June 30, 2015 is based on a reduced management fee of 0.90% per annum per the management fee waiver. Class I’s performance would be lower without the management fee waiver during such period. From July 1, 2015 through December 31, 2018, Class I’s management fee was 1.20% per annum; effective January 1, 2019, the management fee is 1.0% per annum. Class I is not subject to a sales load. Class A: Performance shown prior to Class A’s inception date (06/01/2015) is based on the performance of Class I Shares, adjusted to reflect Class A’s fees and expenses. Performance shown through December 31, 2018 for Class A reflects a management fee of 1.20% per annum. Effective January 1, 2019, Class A’s management fee is 1.00% per annum with a distribution and service fee of 0.75% per annum. The Fund’s Class I and Class A net performance reflects expense reimbursements that are in effect until July 31, 2022. Performance would have been lower without the expense reimbursements that are currently in effect. Neither Class I nor Class A’s performance was reduced by the early withdrawal fee of 3% that is payable to the Fund for shares the Fund repurchased within 12 months of issuance. If the early withdrawal fee were reflected, performance would be reduced. 1. As of July 1, 2021 2. From inception, July 1, 2014 Foreside Fund Services, LLC, Distributor

Copyright 2021. Evanston Capital Management, LLC. All rights reserved. UNDERLYING MANAGERS3 STRATEGY CONTRIBUTION4

2Q21 YTD Annualized ITD Hedge Fund Approximate Contribution Contribution to Contribution Manager Name Discipline Strategy Allocation % to Performance Performance to Performance Long/Short 2.6% 2.1% 3.4% Rokos Capital Management Global Asset Allocation 9.6% Equity

Event Driven 1.2% 2.6% 0.8% Silver Point Capital Event Driven 7.7%

Relative Value 0.3% 0.7% 0.0% Diameter Capital Partners Event Driven, Relative Value 7.3% Global Asset Long/Short Equity, Global Asset -0.1% 0.9% 1.4% Zebedee Capital Partners 7.1% Allocation Allocation Total (Class I) 4.0% Net 6.2% Net 5.6% Net Matrix Capital Management Company Long/Short Equity 6.1%

3,5 Steelhead Partners Relative Value 5.0% STRATEGY ASSET ALLOCATION

Sachem Head Capital Management Long/Short Equity, Event Driven 4.9% Long/Short Equity: 45% Adelphi Capital Long/Short Equity 4.6% Relative Value: 21% Event Driven: 19% Boundary Creek Advisors Relative Value 4.6% GAA/Macro: 15%

Oxbow Capital Management Long/Short Equity 4.6%

3,5 Whale Rock Capital Management Long/Short Equity 4.5% STYLE ALLOCATION

Long/Short Equity, Global Asset U.S. Long/Short Equity: 20% Crake Asset Management 4.4% Allocation GAA/Macro: 15% Europe Long/Short Equity: 13% Pleiad Investment Advisors Long/Short Equity 4.3% Credit and Capital Structure Arbitrage: 12% Dark Forest Capital Management Relative Value 4.2% Distressed Debt - Long: 11% Emerging Markets Long/Short Pelham Global Financials Long/Short Equity 4.0% Equity: 7% Japan, Developed Asia Long/Short Long/Short Equity, Global Asset Equity: 5% Castle Hook Partners 3.8% Allocation Convertible Arbitrage: 5% Statistical Arbitrage: 4% Eversept Partners Long/Short Equity 3.6% Distressed Debt - Relative Value: 3% Other Special Situations: 3% Redwood Capital Management Event Driven 3.1% Distressed Debt - Special Situations: 2%

3,5 Wellington Management Company Relative Value 2.6% GEOGRAPHIC ALLOCATION

Anchorage Capital Group Event Driven, Relative Value 2.1% U.S.: 51% Cash 1.8% Europe: 30% Emerging Markets: 11% Japan/Developed Asia: 8%

PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS 3. As of July 1, 2021. Holdings and allocation percentages are subject to change, and may be significantly different than those set forth above at the time of your investment. This list excludes the managers of any underlying funds (“Portfolio Funds”) where (i) the Portfolio Fund is in the process of winding up its operations, (ii) the Fund has submitted a full redemption request but retains an investment in such Portfolio Fund with respect to side pockets at the Portfolio Fund level, and/or (iii) the Fund has requested a full or partial redemption and such Portfolio Fund has paid part or all of the redemption proceeds to the Fund in-kind in the form of shares or interests in a special purpose vehicle (collectively, “Excluded Funds”). The Fund’s estimated net return includes investments in Excluded Funds. Excluded Funds are estimated to represent approximately 0.1% of the Fund’s net asset value as of July 1, 2021. “Cash” includes cash, cash equivalents and redemption proceeds payable to the Fund from Portfolio Funds but not yet received (excluding side pocket and other illiquid investments at the Portfolio Fund level). Total amounts may not sum to 100% due to rounding. 4. As of June 30, 2021. Contribution to performance for Class A for 2Q21 was as follows: Long/Short Equity, 2.5%, Event Driven, 1.2%, Relative Value, 0.2%, and Global Asset Allocation/ Macro, -0.1%. Class A’s 2Q21 net return was 3.8%. Contribution to performance for Class A for YTD was as follows: Long/Short Equity, 1.9%, Event Driven, 2.5%, Relative Value, 0.6%, and Global Asset Allocation/Macro, 0.8%. Class A’s YTD net return was 5.8%. Contribution to performance for Class A for ITD annualized was as follows: Long/Short Equity, 3.0%, Event Driven, 0.7%, Relative Value, -0.1%, and Global Asset Allocation/Macro, 1.2%. Class A’s ITD annualized net return was 4.8%. Please see the performance disclosures on Page 1. Total may not sum due to rounding. 5. All exposures shown herein represent ECM’s subjective assessment of the exposures of Portfolio Funds contained in the Fund. All exposures exclude investments in Excluded Funds (defined on page 2, footnote 3) as well as cash and cash equivalents held at the Fund level. However, please note that in calculating the Fund’s gross and net exposures as a percentage of net asset value, the Fund’s allocations to Excluded Funds and cash and cash equivalents are included in the net asset value. Strategy, style, and geographic allocations are subject 2 to change. Japan/Developed Asia exposure includes exposures to Japan, Hong Kong, Singapore, Australia, and New Zealand. Total amounts may not sum to 100% due to rounding.

1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com 1. 2ND QUARTER RETURN DISCUSSION

Market participants grew increasingly optimistic about a return to normalcy in the second quarter, as global inoculations continued to rise and health restrictions eased in many parts of the world. This viewpoint was supported by strong macroeconomic data and robust corporate earnings, driving risk assets higher. Equity markets climbed for a fifth-straight quarter (S&P 500 +8% 2Q, +15% YTD; MSCI World +8% 2Q, +13% YTD), and credit spreads compressed (BofAML U.S. High Yield +3% 2Q, +4% YTD). Not evident in these headline results was the ongoing tug-of- war between an improved outlook for growth on one hand and fears of inflation on the other, as commodity prices soared. The battle resulted in heightened factor volatility at times, especially reflected in the behavior of high-multiple and/or high-growth stocks. All along, investors remained highly attuned to the Federal Reserve, looking for any signs of a potential change to easy monetary policy and hanging on its messaging that rising prices are expected to be transitory. In the end, inflation fears began to abate, longer-term U.S. interest rates declined, the yield curve flattened, and growth stocks were well bid.

EAOF (Class I) returned an estimated +4.0% net in the second quarter, bringing its year-to-date return to +6.2% net (Class I). The Fund benefited from both a high hit rate and attractive skew (i.e. the magnitude of gains considerably exceeded losses). The top five winners contributed approximately 2.7% to the Fund’s gross return, while all four detractors cost the Fund approximately 0.5%. By strategy, the Fund’s long/short equity allocation resumed its performance-leading position, driven by good stock selection, upside beta capture, and a strong rebound among the growth-oriented cohort of managers that had included some of the first quarter’s laggards. Event-driven strategies were the next largest contributor, generating consistently positive returns throughout the quarter and across managers. Again, the group added value through security selection and the successful realization of catalysts among certain legacy holdings and more process-driven investments. The relative-value bucket was a modest contributor as solid returns from long/short credit trading were partly offset by losses in an equity market-neutral strategy. Global asset allocation (“GAA” aka macro) was a small drag on returns with wide dispersion in the results of individual managers. Although the group enjoyed large gains from bullish positioning in equities and commodities, losses in rates pulled overall attribution into the red.

LONG/SHORT EQUITY

After the frenzy that started the year, equity markets mellowed a bit in the second quarter with most global indices rising. Changes in interest rates, primarily the decline in 10-year government bond yields, and tempered views on inflation were the primary drivers of a mini-rotation, as larger capitalization stocks rallied more than small-caps (S&P 500 +8% vs. Russell 2000 +4% in 2Q) and flows into growth stocks resumed (Nasdaq +10% and Nasdaq Biotech +9% in 2Q). However, all major sectors in the S&P 500 traded higher. International markets lagged U.S. large caps (EuroSTOXX 50 +5%, MSCI EM +5%, MSCI Asia Pacific +3% in 2Q). As mentioned above, the Fund’s long/short equity allocation was the biggest driver of EAOF’s return for the quarter.

The best-performing sector-focused managers in EAOF were those with exposures to growth, especially technology. One of the Fund’s technology, media, and telecom (“TMT”) specialists had more success shorting in the second quarter compared to the first quarter, but the manager’s long positions drove returns. Big winners included companies across the cloud and software sub-sectors as well as holdings in a couple of mega- cap internet companies, particularly one that received a favorable court ruling in an antitrust case. Heightened concern around corporate tech security was a major story during the quarter as a series of high-profile hacks and ransomware attacks temporarily crippled sectors as diverse as energy delivery and food processing, raising the profile of cybersecurity companies. Both of the Fund’s TMT specialists own one of the leaders in the space, a business with a diverse portfolio of solutions for cloud protection and antivirus services as well as device security important to an increasingly mobile workforce. The Fund’s second TMT specialist also benefited from holdings in an aerospace company and a software company providing tools to developers.

The Fund’s financials specialist generated positive performance, long and short, across a diverse set of geographies and financial sub-sectors in the second quarter. Returns in emerging markets led the way with strong attribution from banks and financial technology. One emerging market bank holding has had a particularly strong run this year and was the largest contributor during the quarter. Long-held positions in payment- processing and digital payment specialists in South America and Europe were also big winners.

In Asia, equity markets finished the quarter mostly positive with the notable exception of Japan. One of the Fund’s Asia specialists made a couple of prescient bets early in the year that paid off handsomely in the second quarter. The most profitable investment was in container ship companies based on the thesis that a revival in overall consumer demand would lead to an increase in shipbuilding, which had slowed during the pandemic. This manager’s core position rallied massively in the quarter. They also invested in a materials company that soared on company- specific catalysts as well as a positive macro outlook surrounding its core product, steel. This manager has chosen to reduce exposure to the China A-share market for the time being, but the Fund’s other Asia specialist has remained committed to investments there, favoring non-tech growth ideas and, within TMT, preferring “up-and-comers” to the big internet stocks. Specific ideas in consumer and industrial stocks outweighed some struggles in the TMT sector during the quarter. One of the top contributors was a major global supplier of hyaluronic acid, which has a highly profitable use case in skin care.

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1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com Within Europe, the Fund’s specialist was buffeted by underexposure to perceived reopening/reflation trades, but positive company-specific news among core long holdings allowed for strong returns. This manager anticipates growing its short portfolio through adding to both new and existing ideas.

The Fund’s top-down long/short equity managers both produced relatively muted results. Most of one manager’s returns came early in the quarter via long exposure to the materials sector, but a rebalancing of the portfolio earlier in the year left them underexposed to the growthier names that outperformed later. The other macro-focused equity manager in the Fund has wanted to press shorts believing that the risk/reward of being too long of the cyclical sectors in which they focus (autos, banks and miners) was becoming unattractive. That bias led to a flat quarter with short side losses negating gains from longs.

EVENT DRIVEN

Credit Managers

Credit markets continued their remarkably steady ascent during the quarter, aided by declining interest rates and further compression in credit spreads to near all-time tights. While some of the eye-popping inflation readings caused temporary indigestion in equity markets, credit land took these data points in stride. The subsequent perceived hawkish rhetoric coming out of the June Federal Open Market Meeting added downward pressure on rates, with U.S. 10-year yields finishing the quarter at 1.45%, down from year-to-date highs near 1.80%. Both the Barclays U.S. Aggregate Bond Index (+2% 2Q; -2% YTD) and the BofAML U.S. High Yield Index (+3% 2Q; +4% YTD) posted gains during the quarter. EAOF’s credit mangers, meanwhile, continued their strong run, capitalizing on the benign market backdrop to drive further value realization across their portfolios.

Legacy holdings in a global furniture and household goods retailer were again the largest contributor for one of EAOF’s distressed managers. In May, the company successfully completed the IPO of its largest asset, a European discount clothing retailer, which caused the entire security complex to trade up. This manager participated in the capital raise as they believe the business is both recession resistant and high growth given its expanding footprint in eastern Europe. This view was rewarded as the company’s first public earnings report handily exceeded market expectations. While already an outsized winner, this manager sees additional upside in these holdings from further asset monetization and a potential parent-level debt refinancing. Newer positions in a handful of post-restructured energy exploration & production companies also generated nice gains, benefiting from both operational improvements and increased market awareness of the quality of their underlying assets. Another distressed manager in EAOF earned a strong result thanks to a large and long-held position in a media company. In May, the company agreed to be acquired at a substantial premium. The arrival of several well-heeled new entrants to the streaming space in recent quarters only intensified competition, shining a bright light on this company’s position as one of the last stand-alone U.S. media companies, and the aquiring party was willing to pay-up for its expansive content library.

A third credit manager in EAOF benefitted from distressed and post-reorganization holdings, notably plays in the car rental space across both the U.S. and Europe as well as a telecom company. The latter emerged from bankruptcy in April with a slimmer debt structure and new management team that should enable it to better pursue a transformation into a high-speed internet provider. This manager’s performing credit book was more of a mixed bag during the quarter as gains on the long side were largely offset by losses from shorts.

Equity-Oriented Event Managers

The Fund’s activist manager delivered another strong quarter led by gains in core activist positions. A stake in an industrial chemical company continued to appreciate on the back of record earnings, highlighting the operational improvements made by a new management team. This manager remains constructive as the company delivered these results with one core product just starting to recover from cyclical lows. In addition, they are confident in management’s ability to deliver further value through strategic M&A and capital-structure optimization. Other winners included an activist position in an animal health company and a passive holding in a software company that agreed to be acquired at a nice premium. Meanwhile, the pipeline of new activist opportunities remains robust, and the manager is engaged in a few situations that could develop into meaningful positions over the coming months.

GLOBAL ASSET ALLOCATION (“GAA”) AKA MACRO

EAOF’s GAA managers posted mixed results for the quarter, with the overall impact being a small loss at the Fund-level. One manager continued its string of standout returns with gains concentrated in equities and commodities. Within equities, contributors were broad-based across both commodity-linked reflation plays and secular growth names within a variety of sectors. On the commodity side, bets in the agricultural complex paid off handsomely. While this manager thinks there is more money to be made in the global reflation theme this year, they are also wary of some of the growing risks to this theme, chiefly around tightening economic policy in China. The Fund’s other GAA manager, meanwhile, got caught flat-footed by the reversal in interest rates during the quarter, and the meaningful flattening in the U.S. yield curve proved particularly painful. Gains from a long bias in equities, notably in Europe, as well as a bullish bet on energy commodities helped offset a portion of these losses. 4

1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com RELATIVE VALUE

It was a quiet quarter for EAOF’s relative value managers. A continued supply glut in convertible bonds caused some volatility early in the quarter before the market eventually settled down. While the Fund’s convertible arbitrage specialist largely treaded water over this period, we believe they are well-positioned to take advantage of the more attractive set-up in converts today. This includes a more rationalized new issue space where bonds are coming to market at substantially better terms for arbitrage specialists than earlier in the year. EAOF’s emerging market debt manager was able to grind out positive returns across all three of its sub-strategies—directional credit, relative value credit, and local markets— despite maintaining a short duration bias. The team managed the portfolio’s beta profile dynamically and added value through credit selection and active trading. Meanwhile, the Fund’s equity market neutral manager had a slow start out of the gates as they fine-tuned the trade execution of some models, particularly those focused on the highest-frequency signals. The current market backdrop is creating a rich opportunity set for their quantitative approach focused on exploiting short-term pricing inefficiencies in equity markets, and this manager is optimistic about slowly expanding exposure in geographies outside the U.S., which should further enhance the risk/reward profile of the strategy.

2. PORTFOLIO DISCUSSION AND RISK MANAGEMENT

Last quarter, we initiated a new investment with Boundary Creek Advisors (“Boundary Creek”), as more fully described below, and added to some of the Fund’s other investments. The net result of the activity served to marginally increase the Fund’s relative value allocation (21% as of July 1) at the expense of GAA (15%), long/short equity (45%) and event-driven strategies (19%). A further breakdown of the Fund by investment style is depicted on page 2. The Fund’s aggregate gross and net exposures currently stand at 338% and 47%, respectively.

Initial investment with Boundary Creek

On July 1, EAOF initiated an investment with Boundary Creek, a credit-focused hedge fund manager that was founded in 2018 by Peter Greatrex. Peter previously spent a decade at each of JP Morgan Chase and BlueMountain Capital in credit analysis, research, and portfolio management roles. Most recently, he was a Managing Partner and Global Head of Private Capital at BlueMountain. Boundary Creek has offices in New York and London, and its team totals 16, including nine partners, three of whom formerly worked with Peter. The firm launched its flagship fund in mid-2019 and manages approximately $1.3 billion in assets.

Boundary Creek pursues a long/short credit strategy with an ability to invest across fundamental and technical trades in both North America and Europe. We first met Boundary Creek in mid-2020, and we were attracted to the firm’s experienced team, partnership culture, and flexible mandate, the benefits of which were on full display throughout the credit market tumult and subsequent recovery last year. In addition, Boundary Creek acknowledges that some elements of its strategy are capacity-constrained, and the team has been appropriately disciplined with respect to asset growth. We believe that their large universe of opportunities and relatively small capital base should yield more consistent and diversifying returns over a credit cycle than many peers.

3. OP/ED

This section of the letter typically addresses a key component of our investment process, a general hedge fund topic, and/or events in the markets that may impact performance.

This quarter’s Op/Ed focuses on prime brokerage, an important topic but one that is not always well understood. Because prime brokers provide an array of essential services to help hedge funds manage their portfolios and develop their businesses, hedge funds must be thoughtful in managing prime brokerage relationships and assessing related counterparty risk.

THE ROLE OF A PRIME BROKER (“PB”)

Prime brokerage generally refers to a bundle of services that investment banks and other major financial institutions offer to hedge funds and large institutional investors, such as family offices and pension plans. The core components of this bundled offering are:

• Clearing and Custody: Hedge funds commonly execute buy and sell transactions through multiple brokerage firms. A prime brokerage relationship allows a hedge fund to instruct these “executing brokers” to clear and settle all trades into its appointed PB(s). This process enables hedge funds to centralize their holdings, which simplifies reporting and operations, enhances their ability to borrow capital, and improves their ability to manage securities and exposures.

• Margin Finance: PBs enable their clients to borrow money or securities to buy (long) and sell (short). This borrowed capital allows hedge funds to increase exposure to securities and leverage their investable capital. When using leverage, a hedge fund posts cash collateral in the amount of only a portion of a purchase, with the PB loaning the balance. The PB holds the security (or more typically, a portfolio of securities) as collateral and charges interest, usually a benchmark rate plus a spread. In order to determine the amount 5

1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com of leverage it is comfortable extending to a hedge fund, a PB assesses the risk characteristics (e.g. the diversification and types of securities held, industry concentration, etc.) of the portfolio of securities. This business, while not without risk, can be an attractive source of revenues for PBs.

• Stock Lending: In its stock lending business, PBs usually play the role of intermediary. They pay the long-term shareholder a fee to borrow stock and lend it to a hedge fund (to sell short) at a larger fee, thereby collecting a spread for their service. Alternatively, PBs can increase their profit by sourcing the security from their own inventory of stocks, in which case they lend the security directly instead of acting as intermediary. In this instance, some PBs will source the security they are lending from the inventory of stocks they are holding as collateral from a margin financing arrangement with another client. This use of collateral is called rehypothecation, a practice made infamous during the global financial crisis.

• Derivatives Trading: PBs also may facilitate trading in derivatives, such as swaps, currency trading (F/X), futures, options, and warrants. These trades may provide a unique payout structure desired by the hedge fund, potentially enhanced levels of leverage, or some other characteristic that would be difficult to achieve in the cash securities market. In these transactions, hedge funds often post an initial amount of collateral (“initial margin”). As in margin finance, a PB’s risk team needs to assess the characteristics of any derivatives position in order to determine the appropriate amount of initial margin needed as well as the frequency of additional margin that needs to be posted as the derivatives position achieves various P&L thresholds.

Prime brokers also offer several other products and services, including research, corporate access, capital introduction, and business consulting:

• Research and Corporate Access: PBs can provide clients with published research and direct access to the banks’ research teams. In addition, they can facilitate meetings between their clients and corporate management at industry conferences or in one-on-one or group settings.

• Capital Introduction (“Cap Intro”): PBs have resources dedicated to building long-term relationships with high-quality allocators and helping their hedge fund clients find and meet potential investors. Cap Intro teams may also host events and conferences to facilitate these introductions.

• Business Consulting: PBs can help educate hedge funds on operational processes and controls that are considered industry best practices. They also can provide insights on and connections to service providers (e.g. fund administrators, legal firms, auditors, IT consultants and compliance consultants) as well as information on trends in office space and IT infrastructure.

PRIME BROKER RISKS AND MITIGATION STRATEGIES

While the prime brokerage business can contribute significantly to the earnings of a parent bank, it can also incur significant risk if an individual client is extended too much leverage or if the PB becomes overly exposed to similar risks across multiple clients. Sophisticated risk management teams within PB units seek to accurately understand and appropriately manage risk and mitigate the potential for outsized losses. In addition to managing risks up-front (i.e., determining the appropriate amount of leverage at the time trades are initiated), prime brokers also establish several mechanisms that may require clients to post additional collateral over time (aka a “margin call”). Various “triggers” that may force clients to post additional cash collateral could include changes in a hedge fund’s net asset value (NAV), drawdown thresholds, increased volatility of the client’s portfolio, increased portfolio concentration, and others.

Hedge funds also need to assess the counterparty risk of their PBs, and they especially need to do so if they have executed derivatives trades that are “in the money” (i.e., the PB owes the hedge fund profits). We believe that most managers, and especially those that utilize more leverage, should spread their exposure across more than one PB rather than put all their eggs in one basket. We have seen a trend in this direction over the past ten years as more hedge funds now utilize two or more PBs. However, managers still need to think about these risks holistically, in a portfolio context. For example, if a manager has one leg of a trade with a single counterparty that has accrued gains, but another leg of the trade is implemented with a different counterparty and accrues large losses, the manager may face a margin call that forces them to liquidate from both counterparties at potentially bad prices. Alternatively, if the manager just unwinds one side of the trade or there is a timing difference in their liquidation of both sides of the trade, the manager may take on significantly more directional risk than originally intended.

In addition to simply having multiple PBs, hedge funds should also have processes in place to properly monitor and understand exposure levels to their various PBs, and they should move capital and/or securities to maintain proper diversification. They should review the creditworthiness of their counterparties regularly to understand if any PB is facing existential issues that could impair its ability to provide services, particularly portfolio financing. Most often, quantitative data, such as changes in stock price, credit rating, and credit spreads, are used as guideposts for hedge funds’ analysis of counterparty creditworthiness.

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1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com As part of our Operational Due Diligence process, we not only look to understand which PBs a manager partners with but also how they select and monitor these relationships. In doing so, we address topics such as:

• Responsibility for the PB selection process: This discussion provides insight into who among the personnel at the hedge fund was and is involved in the evaluation of PBs and helps inform the level of importance they place on PB relationships.

• Terms of agreements: We seek to understand the key terms of managers’ counterparty agreements, including the strength of financing and the triggers that might lead to a margin call or change in terms. This is especially important for strategies that utilize higher degrees of leverage, trade less liquid securities, and/or utilize derivatives more frequently.

• The longevity of the relationship: Often, hedge fund founders develop relationships with PBs over several years. The experience of working with each other through various market cycles provides both the PB and the hedge fund with a higher level of trust. Such long relationships foster confidence and can put managers at an advantage when compared to peers.

• The level of attention allocated to fostering a strong ongoing relationship with PBs: We tend to find that the best relationships are those which include frequent dialogue at multiple levels between the manager and PB. Managers should understand where they fit into the PB’s business (sometimes referred to as “wallet share”) and be mindful of the pricing and service levels they are receiving relative to other clients.

Additionally, as part of ECM’s Risk Management Committee, which convenes monthly, we review a set of indicators to help evaluate and monitor the PBs used across our underlying managers, individually and in aggregate. If meaningful concerns arise with respect to a given PB, we will look to more precisely quantify our exposure and proactively speak to relevant managers to assess how they are managing these risks.

4. OPERATIONS AND ADMINISTRATION

Throughout the second quarter most of our team continued to work from home, although in June we asked everyone to find time, at their discretion, to come in and refamiliarize themselves with working in the office. After Labor Day, we plan to have functional teams return to the office several days each week, while also providing some continued flexibility to work from home.

As always, we welcome your comments and questions about any of these items. We appreciate your support and trust, and we look forward to continuing to work for the mutual benefit of our aligned interests.

Regards,

The Evanston Capital Team Evanston Capital Management, LLC (847) 328-4961 [email protected]

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1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com IMPORTANT FUND INFORMATION AND DISCLOSURES

The Fund is a continuously-offered, non-diversified, registered closed-end fund with limited liquidity. The Fund’s shares are subject to legal restrictions on transfer and resale and you should not assume you will be able to resell your shares. No assurance can be given that the Fund will achieve its objectives. This quarterly letter does not constitute an offer to sell or a solicitation of an offer to purchase the Fund’s securities. Any such offer will be made only by means of the Fund’s Prospectus. The hedge fund strategy classification of each of the Fund’s underlying portfolio funds used to calculate contribution to performance as shown on page 2 is determined by ECM in its discretion. Totals may not sum due to rounding. The contents of this Fund quarterly letter are solely for informational purposes, are current as of the date set forth on this quarterly letter, and are subject to change from time to time. Neither the Fund nor ECM is obligated to notify you of changes to this information. Certain statements made herein constitute forward-looking statements. These statements reflect ECM’s current views about, among other things, future events and financial performance, and results may differ, possibly materially, from these statements. Neither ECM nor the Fund is obligated to update or revise the statements made or information presented herein. Fund Liquidity/Tenders: The Fund intends to conduct quarterly tender offers. Each repurchase offer is expected to be limited to the repurchase of approximately 5-25% of the outstanding shares, in the Board of Trustees’ discretion. No Fund investor can require the Fund to redeem shares, regardless of how the Fund performs. Early Withdrawal Fee: Shareholders who seek to sell their shares back to the Fund less than one year after purchasing the shares will be subject to a 3% early withdrawal fee payable to the Fund. Fund Fees and Expenses: Portfolio Fund Fees and Expenses: The Fund is a “fund of funds” that invests in Portfolio Funds managed by Portfolio Managers unaffiliated with ECM. Portfolio Funds’ management fees range from approximately 1% to 3% per annum, and incentive fees that a Portfolio Fund may charge range from approximately 15% to 35% of profits per annum.6 Portfolio Fund fees and expenses may be substantially higher or lower as a result of the Fund’s investments in new or different Portfolio Funds. The Fund anticipates that its total annual expenses, taking into account the Expense Limitation Agreement and the Portfolio Fund fees and expenses, but excluding any sales load that may be assessed, will be approximately 8.97% with respect to Class I and 9.72% with respect to Class A, as described in detail in the Fund’s Prospectus. Actual expenses may be higher or lower than estimates provided due to the Portfolio Funds’ fees and expenses. Distribution and Service Fee. The Fund pays Foreside Fund Services, LLC (the “Distributor”) a distribution and/or service fee equal to 0.75% per annum of the aggregate value of the Class A shares outstanding, determined as of the last calendar day of each month (prior to any repurchases of shares and prior to the Fund’s management fee (“Management Fee”) being calculated) (“Distribution and Service Fee”) in accordance with a plan adopted by the Fund in compliance with the provisions of Rule 12b-1 under the Investment Company Act of 1940, as amended (the “1940 Act”). The Distribution and Service Fee is payable quarterly, and the Distributor pays all or a portion of the Distribution and Service Fee to certain financial intermediaries. ECM also pays a fee out of its own resources to financial intermediaries. Please see the Fund’s Prospectus for more detailed information. Management Fee and Management Fee Waiver. ECM contractually agreed to waive a portion of the Management Fee from July 1, 2014 through June 30, 2015, such that it equaled 0.90% per annum (the “Management Fee Waiver”) for such period. Class I’s performance data through June 30, 2015 is shown net of the reduced 0.90% Management Fee. From July 1, 2015 through December 31, 2018, the Management Fee Waiver was terminated, and performance for Class I is shown net of a 1.2% Management Fee during such period. Effective January 1, 2019, Class I’s Management Fee is 1.0% per annum. Performance shown prior to Class A’s inception date (06/01/2015) is based on the performance of Class I Shares, adjusted to reflect Class A’s fees and expenses. Performance shown through December 31, 2018 for Class A reflects a Management Fee of 1.20% per annum. Effective January 1, 2019, Class A’s Management Fee is 1.0% per annum with a distribution and service fee of 0.75% per annum. Expense Reimbursement. Effective August 1, 2021 through July 31, 2022, ECM has contractually agreed to limit the Fund’s total annualized expenses (excluding any borrowing and investment-related costs and fees, taxes, extraordinary expenses, and the Portfolio Fund Fees and Expenses) to 1.5% with respect to Class I and 2.25% with respect to Class A (the “Expense Limitation Agreement”). Prior to January 1, 2019, ECM had contractually agreed to limit the Fund’s total annualized expenses to 1.7% with respect to Class I and 2.45% with respect to Class A. ECM and the Fund may continue to renew the Expense Limitation Agreement for one-year terms thereafter, and may terminate it with 30 days’ prior written notice to the other party. ECM will be permitted to recover from the Fund expenses it has borne in later periods, if Class I and Class A’s expenses fall below the annual rate of 1.5% and 2.25%, respectively. The Fund is not obligated to pay any such amount more than 3 years after the fiscal year-end in which ECM deferred a fee or reimbursed an expense. Please review the Fund’s Prospectus for information about other fees, including the Fund’s operating expenses. Additional Fund Exposures Information: The Fund and Portfolio Fund exposures generally reflect the value of cash positions as well as the economic value of underlying positions, including derivatives positions such as futures and options. ECM has not received the most recent exposures from the majority of the Portfolio Funds as of the date hereof. Consequently, the most recent exposure information previously received by ECM for such Portfolio Funds is used herein.

6 The Portfolio Fund Fees and Expenses are estimated to be approximately 7.47%. 8

1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com STRATEGY DEFINITIONS Long-Short Equity: Seek to profit by taking positions in equities and generally involve fundamental analysis in the investment decision process. Long-short equity strategies may aim to have a net long directional bias, a net short directional bias, or be neutral to general movements in the stock market. Long-short equity Portfolio Managers tend to be “stock pickers” and typically shift allocations between long and short investments based on market conditions and outlook. Event Driven: Seek to invest in opportunities that are created by significant transaction events, such as spin-offs, mergers and acquisitions, and reorganizations. Relative Value: Seek to profit by exploiting pricing inefficiencies between related instruments, while remaining long-term neutral to directional price movements in any one market. Short selling is an integral part of this strategy. Global Asset Allocation: Seek to exploit opportunities in various global markets. Portfolio Funds employing these strategies have a broad mandate to invest in markets and instruments they believe provide the best opportunity. INDEX AND OTHER DEFINITIONS An investor cannot invest in an index. Please note that the indices or performance benchmarks below are composed of securities which for the most part are dissimilar to the positions held directly or indirectly by the Fund, and these indices or benchmarks do not have similar risk/return profiles to that of the Fund. However, these indices or benchmarks have been included herein because they represent various asset classes to which an investor may choose to compare the Fund’s performance. 90-Day T-Bill: rate of return is derived from cash-equivalent securities. Barclays Aggregate Bond Index: comprises government securities, mortgage-backed securities, asset-backed securities and corporate securities, and is a broad measure of the taxable U.S. bond market. CBOE Volatility Index (VIX Index): is considered by many to be the world’s premier barometer of equity market volatility. The VIX Index is based on real-time prices of options on the S&P 500 Index (SPX) and is designed to reflect investors’ consensus view of future (30-day) expected stock market volatility. HFRI FOF Composite Index: is an index composed of funds of funds that voluntarily report their performance to HFR. HFRI Asset Weighted Composite Index: is a global, asset-weighted index comprised of over 1,500 single-manager funds that report to HFR Database. ICE BofA 10+ Year US Treasury: Measures the total return performance of US treasury bonds with outstanding par greater than or equal to $25 million. The maturity range of these securities is greater than 10 years. BofAML US High Yield Master II Index: tracks the performance of US dollar denominated below investment grade rated corporate debt publicly issued in the U.S. domestic market. EURO STOXX: is Europe’s leading blue-chip index for the Eurozone, providing a blue-chip representation of super-sector leaders in the region. The index covers 50 stocks from 11 Eurozone countries. MSCI AC Asia Pacific: is a free-float weighted equity index. It was developed with a base value of 100 as of Dec. 31, 1987. MSCI EAFE Index: is a free float-weighted equity index that captures large and mid-cap representation across developed markets, excluding U.S. and Canada. MSCI EM: is a free-float weighted equity index that captures large and mid-cap representation across Emerging Markets (EM) countries. The index covers approximately 85% of the free float-adjusted market capitalization in each country. MSCI World Index: is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets. NASDAQ Biotech: is a modified market cap-weighted index designed to measure the performance of all NASDAQ stocks in the biotechnology sector with a base value of 200 as of Nov. 1, 1993. NASDAQ Composite Index (NASDAQ): is a broad-based capitalization-weighted index of stocks in all three NASDAQ tiers: Global Select, Global Market, and Capital Market. The index was developed with a base level of 100 as of February 5, 1971. Nikkei 225: is a price-weighted average of 225 top-rated Japanese companies listed in the First Section of the Tokyo Stock exchange. Russell 1000 Growth: measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The index was developed with a base value of 200 as of August 31, 1992. Russell 2000: is composed of the smallest 2000 companies in the Russell 3000 Index, representing approximately 8% of the Russell 3000 total market capitalization. The index was developed with a base value of 135.00 as of December 31, 1986. Russell 2000 Biotechnology Index: is composed of the smallest Biotechnology companies in the Russell 3000 index. S&P Energy: is a capitalization-weighted index and GICS Level 1 sector group. S&P Financials: is a capitalization-weighted index. Intraday values are calculated by Bloomberg and not supported by S&P DJI. S&P 500 Index: is composed of 500 publicly traded stocks representing all major U.S. industries. S&P 500 Industrials: is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period. The parent index is SPXL1. 9

1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com S&P Healthcare: is a market cap-weighted index. The index comprises stocks included in the S&P 500 that are classified as members of the GICS Healthcare sector. S&P 500 Information Technology Index: comprises those companies included in the S&P 500 that are classified as members of the GICS® information technology sector. S&P/LSTA Leveraged Loan: A market value-weighted index designed to measure the performance of the US leveraged loan market based upon market weightings, spreads and interest payments. S&P 500 Materials: is a capitalization-weighted index. The index was developed with a base level of 10 for the 1941-43 base period. The parent index is SPXL1. Shanghai Stock Exchange Composite Index: is a capitalization-weighted index. The index tracks the daily price performance of all A-shares and B-shares listed on the Shanghai Stock Exchange. Alpha: Measures a manager’s value added relative to a passive strategy, independent of the market movement. Beta: is measured versus the relevant index. Sharpe Ratio: is a measure of risk-adjusted returns and is defined as the excess return over cash per unit of volatility.

IMPORTANT RISK FACTORS CONCERNING THE FUND As described in the Fund’s Prospectus and Statement of Additional Information, an investment in the Fund is speculative, involves a substantial degree of risk, and an investor could lose all or substantially all of his or her investment. There can be no assurance the Fund will achieve its investment objectives or avoid significant losses. The Fund is only available to “eligible investors” who can bear significant risk and do not require a liquid investment. Please see the Fund’s Prospectus for important information about the Fund’s terms, risks, and other disclosures. The Fund’s Portfolio Managers may, in some cases, be recently organized or may manage Portfolio Funds that are recently organized and have no or a very limited operating and performance history. The Fund is managed by ECM, and its success will depend, in large part, on ECM’s skill and expertise. Although ECM has over 15 years managing privately offered fund of hedge fund products, ECM’s experience managing registered investment companies is limited to the Fund, which launched in 2014. The Fund’s shares are subject to restrictions on transfer and have limited liquidity. The Fund does not list its shares for trading on any national securities exchange; there is no secondary market for the shares, and none is expected to develop. An investment in the Fund’s shares is not suitable for investors that require liquidity, other than liquidity provided through the Fund’s repurchase policy. There can be no guarantee that an investor will be able to sell any of its shares when it desires to do so. The Fund’s repurchase offer policy may decrease its size over time absent significant new investments in the Fund. It could force the Fund to maintain more liquid investments, sell assets prematurely, substantially increase the Fund’s ratio of illiquid to liquid securities for non-redeeming investors, and/or reduce the investment opportunities available to the Fund and cause its expense ratio to increase. The Portfolio Funds are not registered under the 1940 Act, and therefore are not subject to the 1940 Act’s restrictions and protections, such as fee limitations, asset coverage requirements, and reporting requirements. The Portfolio Managers may use investment strategies and techniques that are not generally permissible for registered investment companies, and Portfolio Funds may be less transparent in providing portfolio holding and valuation information. ECM relies on the valuation of the Portfolio Funds to value the Fund’s shares. Fair value estimates may prove to be inaccurate and may be subject to later adjustments from time to time. Similarly, inaccurate or delayed information that a Portfolio Manager may provide could adversely affect ECM’s ability to accurately value the Fund’s shares. The net asset values received by ECM or the Fund’s administrator from Portfolio Funds may be estimates only, and, unless materially different from the actual valuations, generally will not be subject to revision. ECM relies on these estimates in calculating the Fund’s net asset value for, among other things, reporting the performance data reflected herein. Portfolio Funds are typically audited on an annual basis. The Fund may borrow money for portfolio management and other purposes, and may have to pledge assets when borrowing, which could affect the Fund’s operations in the event of an uncured default. The Portfolio Funds may use leverage to purchase instruments, sell securities short, and/or other means, which would increase any loss incurred. Consequently, the Portfolio Funds may be subject to major losses if market disruptions destroy any hedged positions, which would negatively impact the Fund’s performance. The Fund intends to meet the requirements necessary to qualify for favorable tax treatment as a “regulated investment company,” or “RIC” under Subchapter M of the Internal Revenue Code. If the Fund fails to satisfy the applicable requirements, it may lose its status as a regulated investment company, and in such case, all of its taxable income would be subject to U.S. federal income tax at regular corporate rates without any deduction for distributions to shareholders. Disqualification as a RIC would have a material adverse effect on the value of the Fund’s shares and the Fund’s distribution amounts. You should consult with your own legal, tax, financial, and other professional or advisers before investing in the Fund. Before investing, you should consider carefully the Fund’s investment objectives, limited liquidity, risks, charges, and expenses. The prospectus contains this and other information about this investment company. You can obtain a copy of the prospectus by contacting ECM at [email protected] or calling 847-328-4961 or by requesting a copy from your financial professional. Please read the prospectus carefully before you invest.

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1560 Sherman Avenue | Suite 960 | Evanston, IL | 60201 | P. 847-328-4961 | F. 847-328-4676 | www.evanstoncap.com