To:	Thomas L. Rhodes

From:	Robert Berkopec

Subject:	Alternative Investment Opportunities/ Future Direction

Three alternative investment opportunities have been presented to the Bradley Foundation for review and consideration. In addition GSC Capital Partners is organizing a new debt fund. As you will note I'm not in an investing mood at the present time.

As of January 31, 2001 the Bradley Foundation has a negative investment capacity of ($8,168,384) in the alternative investment portfolio. Most likely the negative capacity will continue in the first half of 2001 since the capital contributions exceed the return of capital and the overall total portfolio will most likely not increase significantly. Another factor to consider is that the alternative investment portfolio has an underweighting in venture capital funds.

Given the current status of the alternative investment portfolio my observations/ recommendations regarding the opportunities are as follows:

1. GSC Recovery II

GSC Partners is in the process of organizing GSC Recovery II ("Recovery II") as a vehicle established to purchase distressed high yield securities and leveraged loans in order to (i) pursue control restructurings; and (ii) achieve high current income. GSC Partners believes that the investment opportunity in distressed securities is currently extremely attractive providing the opportunity to achieve risk adjusted returns not seen since the early 1990's. Attached is an Executive Summary with more information about this fund.

Marketing materials for this fund have not yet been issued yet GSC hopes to have the first closing of this fund in spring 2001. It is expected the minimum investment will be $5,000,000.

The Foundation's investments with GSC Partners are relatively new so it is difficult to make any judgement on the performance to date. On the other hand, the professionals of GSC Partners come from backgrounds that indicate they are highly experienced in analyzing and executing distressed debt investments and restructurings.

Beginning in March 2000 we have made the following commitments to GSC sponsored

funds:

GSC Partners CDO Investors I	2/22/00	$5,000,000

GSC Mezzanine Offshore Fund	7/13/00	$5,000,000

GSC Partners CDO Investors II	12/00	$1,000,000

These funds primary target various forms of debt or debt like securities.

In addition we made a $9,000,000 commitment to Greenwich St. Capital Partners II in Jan. 1999. About 1/3 of the activity of this fund includes investments associated with GSCP Recovery, Inc. The IRR of Capital Partners II through 1/31/01 is 2.28%. The fund is relatively new so the IRR is not meaningful at this stage.

The current environment of the distressed market prompts me to suggest an investment in GSC Recovery II. However, the recent commitments to GSC funds in 2000 and the negative investment capacity status at the present time suggest we pass on this opportunity. It appears we need to "digest" the recent GSC investments and avoid exacerbating the over commitment position at the present time.

2. TCW/Crescent Mezzanine Partners III

The Bradley Foundations $5,000,000 investment in TCW/Crescent Mezzanine Partners I is performing below expectation with a IRR of 6.64% through January 31, 2001. Recommend no investment in Mezzanine Fund II.

3. Mason Wells Leveraged Buyout Fund II, L.P.

The Bradley Foundations $5,000,000 investment in Mason Wells Leveraged Buyout Fund I, L.P. is performing quite well with an IRR of 32.48% through January 31, 2001. However, because of the negative investment capacity and the target Midwestern LBO strategy, no investment is recommended at this time. Fund II will be raising money for most of 2001, so an investment can be reconsidered later in 2001 if deemed appropriate.

4. Mason Wells Biomedical Fund I

This investment was discussed in November 2000 but a decision was deferred to permit monitoring of the Biomedical Fund's activity and evaluate the status of the Bradley Foundation's investment capacity. The Biomedical Fund has $40 million in commitments with a third closing scheduled in March 2001. The Biomedical Fund will most likely not reach the original $75 million target amount in March 2001. Investment considerations include:

a.	The biomedical industry exceeds $1 trillion in the USA and has the potential to be a "hot" industry over the next ten years.

b.	The key individuals have excellent background in this industry. Dan Broderick was previously director of technology at Mayo Clinic in Rochester, Minnesota. Trevor D' Souza worked at Booz Allen & Hamilton where he led the biomedical information systems see additional details in attached letter.

c.	The fund has established collaboration arrangements with key institutions such as the Medical College of Wisconsin, Mayo Clinic, University of Wisconsin and others to provide the fund with the opportunity to preview technological innovations for the purposes of commercializing them.

d.	The fund has invested commitments from Wisconsin Investment Board ($20 M), Northwestern Mutual Life Insurance ($2.5 M) and M&I Bank.

e.	The negative for such investment is the current lack of alternative investment commitment capacity and the higher risk of venture capital funds in a targeted region and industry sector.

I believe the Biomedical Fund I has potential and would provide needed diversification in the venture capital sector. However, given the Foundations negative investment capacity I do not recommend an investment at this time.

In August, 2000 we discussed the merits of having a consulting firm complete a "reality check"

or report card on the Bradley Foundations existing portfolio. At that time the Investment committee decided not to proceed with such a study but rather focus on the implementation of Private i and VentureXpert systems. These systems are now substantially operational and are providing reasonably good performance and benchmark data. Overall, the data provided suggests the Bradley Foundations alternative investment portfolio has performed below our expectations that and below the overall alternative market performance due in part to an underweighting in venture capital funds.

Before we actively begin round two of the alternative investment portfolio, I still believe there is merit in having an "independent reality check" of the alternative investment portfolio with emphasis on establishing a more formal investment strategy for round two. This strategy would include diversification guidelines, identification of other potential fund managers and a scheduled reinvestment plan as capital is returned from the existing portfolio.

Thus far we have been primarily "opportunistic investors" selecting those investments that have come to our attention and were backed by a knowledgeable investment team with a proven track record. Portfolio diversification was not a primary objective nor did we actively evaluate the alternative investment universe for other potential investment opportunities.

I believe we now have a good understanding of the Foundations existing portfolio. However, as we enter round two of the investment program I believe we need assistance to better understand the total alternative investment universe and how the Foundation should interface with that universe. I still believe a $30,000-$40,000 investment with a consulting firm such as Callan Associates to develop a round two investment strategy plan would be beneficial. Should be noted the Foundation could use a portion of the $50,000 of available purchasing credit accumulated from the Merrill Lynch Commission Recapture program to pay for this special project.

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