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KV Annual Report 2014

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RISK MANAGEMENT PROCESS ACTIVE MANAGEMENT KV Capital completes ongoing monitoring of mortgages in which the Fund invests by performing servicing functions in-house, visiting sites regularly, engaging third party inspectors and quantity surveyors as required and proactively communicating with borrowers. Information presented is as of February 28, 2014. PROCESS & APPROVALS Dual signatories are required to approve cash transfers, and the duties of mortgage origination, underwriting, deal approval and accounting are segregated to mitigate conflicts of interest and to protect the Fund's assets and integrity of reporting to investors. SYNDICATION Syndicated mortgage investments allows the Fund to achieve diversification in excess of what is available to whole mortgage investors because investable assets are spread across a broader range of opportunities. $ 65 Million of Mortgage Investments

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