THIS IS A MARKETING COMMUNICATION. PLEASE REFER TO THE CONFIDENTIAL OFFERING MEMORANDUM OF THE FUND AND ITS SUPPLEMENTS BEFORE MAKING ANY FINAL INVESTMENT DECISIONS.

This document has been prepared solely for information purposes and does not constitute an offer or a recommendation to buy or sell any particular security or to adopt any specific investment strategy. The material contained herein has not been based on a consideration of any individual client circumstances and is not investment advice, nor should it be construed in any way as tax, accounting, legal or regulatory advice. To that end, investors should seek independent legal and financial advice, including advice as to tax consequences, before making any investment decision.

Except as otherwise indicated herein, the views and opinions expressed herein are those of Morgan Stanley Investment Management, are based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date hereof. This communication is a marketing communication. It is not a product of Morgan Stanley’s Research Department and should not be regarded as a research recommendation.

The information contained herein has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research. All information contained herein is proprietary and is protected under copyright law.

This presentation is for informational purposes only, is intended solely for the use of the person to whom it has been delivered (including such person’s employees, representatives, agents, or advisors, as applicable), and is not an offer to buy or sell, or a solicitation of an offer to buy or sell, any security or instrument or to participate in any trading strategy. By accepting this information, you agree you have a duty to keep permanently confidential the information contained herein and that such information may not be disclosed, reproduced, or distributed (orally or in writing) to others (except as otherwise set forth herein) at any time without the prior written consent of AIP Private Markets. You further agree that any other persons permitted to receive the information contained herein will be bound by a similar duty of confidentiality. You acknowledge that the disclosure, reproduction or distribution by you of the information contained herein could result in liability to AIP Private Markets and the Portfolios. A prospective investor (and each employee, representative or other agent of a prospective investor), however, may disclose to any and all persons, without limitation of any kind, from the commencement of discussions, the U.S. federal income tax treatment and tax structure of a Portfolio (and any transactions entered into by such Portfolio) and all materials of any kind that are provided to a prospective investor relating to such U.S. federal income tax treatment and tax structure. In any event, except as otherwise required by law, no prospective investor (or employee, representative or other agent of such prospective investor) may disclose the name of, contact information for, or any other similar identifying information (including the names of any employees, affiliates, or investments) regarding, a Portfolio or Morgan Stanley AIP Private Markets or any of its affiliates, except to its tax advisor or to a regulatory authority as required by law. As used in this paragraph, “tax structure” means any fact that may be relevant to understanding the purported or claimed U.S. federal income tax treatment of a transaction.

For European Economic Area investors: Please note that this material may include certain information on MSIM’s sustainability practices and track record, at an organizational and investment team level, which may not necessarily be reflected in the portfolio of any fund(s) or related investment vehicle(s) you invest in. Please refer to the offering documents of any fund(s) prior to investment, for details on how, and the extent to which, the fund(s) takes ESG considerations into account on a binding or non-binding basis.

If any offer of interests is made, it will be made only pursuant to a definitive confidential offering memorandum of the applicable fund (the “Memorandum”), which contains material information not contained herein, as a private placement under the U.S. securities laws, and information that supersedes the information contained herein will be furnished to qualified prospective investors at their request. Any interests offered have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the Securities Act”), the securities laws of any state of the United States, or any non-U.S. securities laws, and will be offered and sold for investment only to qualifying recipients of the Memorandum pursuant to the exemption from the registration requirements of the Securities Act provided by section 4 (a) (2) thereof and/or provided by Regulations promulgated thereunder, and in compliance with any applicable non-U.S. Securities laws.  The Portfolio will rely on an exemption pursuant to Section 3(c) (7) of the Investment Company Act. The interests may not be transferred or resold except as permitted under the Securities Act and any applicable state or non-U.S. securities laws, pursuant to registration or exemption therefrom. The transferability of the interests will be further restricted by the terms of an Agreement of Limited Partnership. Moreover, the terms of an investor’s interest will be governed by the terms of an Agreement of Limited Partnership.

ANY LOSSES IN A PORTFOLIO WILL BE BORNE SOLELY BY INVESTORS IN THE PORTFOLIO AND NOT BY MORGAN STANLEY OR ANY OF ITS AFFILIATES. THEREFORE, MORGAN STANLEY'S LOSSES IN THE PORTFOLIO WILL BE LIMITED TO LOSSES ATTRIBUTABLE TO THE OWNERSHIP INTERESTS IN THE PORTFOLIO HELD BY MORGAN STANLEY AND ITS AFFILIATES IN THEIR CAPACITY AS INVESTORS IN THE PORTFOLIO. INTERESTS IN THE PORTFOLIO ARE NOT INSURED BY THE FDIC AND ARE NOT DEPOSITS, OBLIGATIONS OF, OR ENDORSED OR GUARANTEED IN ANY WAY, BY MORGAN STANLEY OR ANY OF ITS AFFILIATES. MORGAN STANLEY AND ITS AFFILIATES DO NOT, DIRECTLY OR INDIRECTLY, GUARANTEE, ASSUME OR OTHERWISE INSURE THE OBLIGATIONS OR PERFORMANCE OF THE PORTFOLIO DESCRIBED HEREIN OR ANY COVERED FUND IN WHICH SUCH PORTFOLIO INVESTS. INVESTORS SHOULD READ THE MEMORANDUM BEFORE INVESTING IN THE PORTFOLIO. MORGAN STANLEY IS THE SPONSOR OF THE PORTFOLIO FOR PURPOSES OF SECTION 619 OF THE DODD-FRANK ACT (“THE VOLCKER RULE”). A DESCRIPTION OF THE ROLE AND SERVICES OF MORGAN STANLEY WILL BE PROVIDED IN THE OFFERING MEMORANDUM.

Before deciding to invest in any Morgan Stanley AIP Private Markets Portfolio, the recipient should consider all relevant investment considerations and any conflicts of interest of Morgan Stanley AIP Private Markets. The recipient should have the financial ability and willingness to accept the risks associated with an investment in a Portfolio for an indefinite period of time. An investment in a Portfolio is speculative and involves significant risks. These risks include, but are not limited to, the following: Each investment which would be made on behalf of such Portfolio would be illiquid, and an investor may not be able to transfer its interest in any such investment because of restrictions on transferability of interests. Any potential return on an investor’s investment will be reduced by the fees and expenses payable to Morgan Stanley AIP Private Markets, as well as those fees and expenses payable pursuant to the terms of each investment made on behalf of the Portfolio, which may be substantial. In addition, investors unable to meet their funding obligations with respect to any such investment in a timely manner may face severe default penalties, including the forfeiture of any distributions to which an investor may be otherwise entitled. The terms of any investment shall be governed by definitive agreements. Any decision to invest should be made solely in reliance upon such agreements.

Performance information is not indicative of future performance or investment returns, and a prospective investor should not view the performance information in this presentation as an indicator of the future performance of a particular fund. Additional information is available upon request. Risk factors are set forth in the Appendix.

Certain information contained herein constitutes forward-looking statements, which can be identified by the use of terms such as “may,” “will,” “should,” “expect,” “anticipate,” “project,” “estimate,” “intend,” “continue,” or “believe” (or the negatives thereof) or other variations thereon. Due to various risks and uncertainties, including, but not limited to, those set forth herein, actual events or results or actual performance of any Portfolio may differ materially from those reflected or contemplated in such forward-looking statements. Except as otherwise indicated herein, the views and opinions expressed herein are those of Morgan Stanley AIP Private Markets, are based on matters as they exist as of the date of preparation and not as of any future date, and will not be updated or otherwise revised to reflect information that subsequently becomes available or circumstances existing, or changes occurring, after the date hereof. They are subject to change based on market, economic and other conditions and may not actually come to pass.

Morgan Stanley does not provide tax advice. The tax information contained herein is general and is not exhaustive by nature. It was not intended or written to be used, and it cannot be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer under U.S. federal tax laws. Federal and state tax laws are complex and constantly changing. You should always consult your own legal or tax advisor for information concerning your individual situation.

This presentation is provided for discussion purposes only, and does not constitute an offer or an invitation to subscribe to interests in the Fund. Subscriptions of interests in the Fund are currently not being sought, solicited or accepted from prospective investors, and are therefore not possible at this stage. The information presented herein should not be relied upon because it is incomplete and may be subject to change. Subscriptions will only be made and accepted on the basis of the final Memorandum and the accompanying final subscription documents. The final Memorandum as well as the subscription documents may be made available to prospective investors subsequently at the General Partner’s discretion and only after all relevant requirements for marketing of the interests in the Fund have been met.

European Investors

Issued in the European Economic Area by MSIM Fund Management (Ireland) Limited. MSIM Fund Management (Ireland) Limited is regulated by the Central Bank of Ireland. MSIM Fund Management (Ireland) Limited is incorporated in Ireland as a private company limited by shares with company registration number 616661 and has its registered address at The Observatory, 7-11 Sir John Rogerson's Quay, Dublin 2, D02 VC42, Ireland.

Issued in the UK by Morgan Stanley Investment Management Limited. Authorised and regulated by the Financial Conduct Authority. Registered in England No. 1981121. Registered Office: 25 Cabot Square, Canary Wharf, London E14 4QA.

This document has been classified as a pre-marketing communication. There is no guarantee that the investment strategy referred to will be established as a Fund. The information presented herein should not be relied upon because it is incomplete and may be subject to change.

In the event that a Fund is established in future, it will only be offered in countries in which the Fund has been registered for marketing.

This document includes information on potential environmental characteristics and objectives that will be promoted by an investment strategy, that have not been finalised and are still subject to change. The document may also include certain information on MSIM Private’s sustainability practices and track record, at an organizational and investment team level, which may not necessarily be reflected in a portfolio of any fund(s) or related investment vehicle(s) you may invest in.

Risk Factors

This is a summary of various risks associated with investing in a global impact portfolio (a “Portfolio”). This summary is not, and is not intended to be, a complete enumeration or explanation of the risks involved. The recipient should consult with its own advisors before deciding whether to invest in a Portfolio. In addition, to the extent that the investment program of a Portfolio changes and develops over time, additional risk factors not described here may apply. Only a recipient who understands the nature of the investment, does not require liquidity in the investment for the whole of the investment’s extended term, and has sufficient resources to sustain the loss of its entire investment should consider making the kinds of investments described in this presentation.

By investing in a global impact fund of funds, an investor gains exposure to the portfolio of the fund of private equity funds and is subject to the risks attendant to such investment fund. An investment in a fund involves a high degree of risk. The following are among the risks applicable to an investment in a Portfolio:

Developments in Financial Services Industry and Impact on Morgan Stanley.

In the event of market turmoil and the overall weakening of the financial services industry, Morgan Stanley’s financial condition may be adversely affected and it may be subject to legal, regulatory, reputational and other unforeseen risks that could have an adverse affect on Morgan Stanley’s business and operations. To the extent that any such events occur, Morgan Stanley, its affiliates and employees may be unable to fulfill their funding obligations to a Portfolio, one or more of the Portfolio’s key investment professionals may cease to be associated with the Portfolio and the Portfolio may suffer other adverse consequences, each of which could adversely affect the business of the Portfolio, restrict the Portfolio’s investment activities and impede the Portfolio’s ability to effectively achieve its investment objectives. In addition, the cost and availability of funding available to the Portfolio may be adversely affected by illiquidity and wide credit spreads in the credit markets. Continued turbulence in the U.S. and international markets and economy may adversely affect the Portfolio.

Illiquidity of Interests; Limitations on Transfer; No Market for Interests. An investor in a Portfolio will not be permitted to transfer its interest without the consent of the general partner of the Portfolio. Furthermore, the transferability of an interest will be subject to certain restrictions contained in the Agreements of Limited Partnership of the Portfolio and will be affected by restrictions imposed under applicable securities laws. There is currently no market for the interests, and it is not contemplated that one will develop. The interests should only be acquired by investors able to commit their funds for an indefinite period of time, as the term of the Portfolio could continue for up to 14 years. In addition, there are very few situations in which an investor may withdraw from the Portfolio. The possibility of total loss of an investment in the Portfolio exists and prospective investors should not invest unless they can readily bear such a loss.

Risks Related to the Structure and Terms of a Portfolio. Investments in a fund of funds structure may subject investors to additional risks which would not be incurred if such investor were investing directly in private equity funds (the “Underlying Funds”). Such risks may include but are not limited to (i) multiple levels of expense; (ii) reliance on third-party management; and (iii) termination of a Portfolio’s interest by an Underlying Fund.

Risk of Loss. There can be no assurance that the operations a Portfolio will be profitable, that a Portfolio will be able to avoid losses or that cash from operations will be available for distribution to the limited partners. The possibility of partial or total loss of capital of a Portfolio exists, and prospective investors should not subscribe unless they can readily bear the consequences of a complete loss of their investment. A Portfolio will have no source of funds from which to pay distributions to the limited partners other than income and gains received on portfolio investments and the return of capital. Any losses in a Portfolio are borne solely by investors in the Portfolio and not by Morgan Stanley or its affiliates.

Leverage. A Portfolio and its Underlying Funds may use leverage in their investment strategies. Leverage may take the form of loans for borrowed money (e.g., margin loans) or derivative securities and instruments that are inherently leveraged, including options, futures, forward contracts, swaps and repurchase agreements. A Portfolio or its Underlying Funds may use leverage to acquire, directly or indirectly, new investments (including prior to the Portfolio’s Initial Closing or Final Admission Date). A Portfolio or its Underlying Funds may leverage existing investments to permit distributions or additional investments, facilitate hedging activities, meet capital calls, and bridge fundings for investments in advance of capital calls. The use of leverage by a Portfolio or the Underlying Funds can substantially increase the market exposure (and market risk) to which the Portfolio’s and the Underlying Funds’ investment portfolios may be subject.

Reliance on the General Partner and Investment Manager. The success of a Portfolio will be highly dependent on the financial and managerial expertise of the General Partner and the Investment Manager and their expertise in the relevant markets. The quality of results of the General Partner and the Investment Manager will depend on the quality of their personnel. While the General Partner believes that the present personnel of the General Partner and the Investment Manager are outstanding, there are risks that death, illness, disability, change in career or new employment of such personnel could adversely affect results of the Portfolio. The limited partners will not make decisions with respect to the acquisition, management, disposition or other realization of any investment, or other decisions regarding a Portfolio’s businesses and portfolios.

Reliance on Third Party Fund Management. Each Portfolio will be investing in Underlying Funds managed by such Underlying Funds’ managers who are unrelated to the General Partner and its affiliates and, indirectly, in investments selected by such unrelated managers. Although the General Partner and the Investment Manager will attempt to evaluate each Underlying Fund based on criteria such as the performance history of such Underlying Fund and its underlying manager as well as such Underlying Fund’s investment strategies, the past performance of an Underlying Fund and its underlying manager may not be a reliable indicator of future results. Some underlying managers may not be registered as investment advisers with the U.S. Securities and Exchange Commission, making it more difficult for the General Partner to scrutinize such underlying managers’ credentials. Neither the General Partner nor the Investment Manager will have an active role in the day-to-day management of Underlying Funds in which a Portfolio invests. The performance of an Underlying Fund may also rely on the services of a limited number of key individuals, the loss of whom could significantly adversely affect the Underlying Fund’s performance.

Availability of Investment Opportunities. The business of identifying and structuring investments of the types contemplated by a Portfolio and its underlying funds is competitive and involves a high degree of uncertainty. Furthermore, the availability of investment opportunities generally will be subject to market conditions and competition from other funds of funds as well as, in some cases, the prevailing regulatory or political climate. In general, a Portfolio will not be permitted to acquire an interest in an underlying fund without the fund manager’s consent and there is no assurance that fund managers will give the Portfolio such consent. Accordingly, there can be no assurance that the Portfolio and its underlying funds will be able to identify and complete attractive investments in the future or that they will be able to invest fully its commitments. Similarly, there can be no assurance that the underlying funds in which the Portfolio invests will be able to identify and complete investments in the future or fully invest their commitment amounts. Since the underlying funds may only make a limited number of investments, and since the underlying funds’ investments generally will involve a high degree of risk, poor performance by a few of the investments could severely affect the total returns to the Portfolio invested in such underlying funds. Moreover, identification of attractive investment opportunities by the underlying funds in which the Portfolio will be invested is difficult and involves a high degree of uncertainty. Even if attractive investment opportunities are identified by AIP, there is no certainty that the Portfolio will be permitted to invest in such opportunity (or invest in such opportunity to the fullest extent desired). Finally, there are other funds sponsored, managed or advised by Morgan Stanley and its affiliates that are or may be seeking investment opportunities similar to those the Portfolio is or may be seeking, and Morgan Stanley and such other funds have no obligation to offer any opportunities it or they may identify to the Portfolio or such Underlying Fund. In addition, the General Partner may not be able to obtain as favorable terms as it would otherwise in a less competitive investment environment. In addition, the current private equity environment has become even more competitive as hedge funds have been competing for investment opportunities that have traditionally been targeted by private equity funds.

Illiquidity of Investments. A Portfolio’s ability to transfer any of the interests in Underlying Funds in which it invests will be limited under applicable securities laws as well as by contract. Similarly, investments held by such underlying funds will be subject to transfer restrictions under applicable securities laws and contract. Consequently, there is a significant risk that the Portfolio and the underlying funds will be unable to realize their investment objectives by sale or other disposition of such investments at attractive prices, or will otherwise be unable to complete any exit strategy with respect to such investments. These risks can be further increased by changes in the financial condition or business prospects of the companies, changes in national or international economic conditions, and changes in laws, regulations, fiscal policies or political conditions of countries in which the underlying funds’ investments are made.

Investment Related Risks. The success of the Underlying Funds’ activities may be affected by general economic and market conditions, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws and national and international political circumstances. These factors may affect the level and volatility of security prices and liquidity of the portfolio investments. Unexpected volatility or liquidity could impair a Portfolio’s profitability or result in their suffering losses.

Risks Associated with Non-U.S. Investments. Certain non-U.S. investments involve risks and special considerations not typically associated with U.S. investments. Such risks may include but are not limited to (i) changing political environments, regulatory restrictions and changes in government institutions and policies; (ii) changes in policy with regard to taxation, fiscal and monetary policies, repatriation of profits and other economic regulations; (iii) currency exchange rate fluctuation; (iv) differences in auditing and financial reporting standards; (v) differences in tax regimes and changes in tax treaties; (vi) local intermediary risks and (vii) restrictions on the repatriation of capital and profits.

Valuations. Because there is no public market for private equity investments, they are difficult to value. This difficulty is increased when purchasing a portfolio of interests in private equity funds, as the portfolio will lack the benefit of financial statements and periodic company updates originated from a common investment manager. The overall performance of a Portfolio will be affected by the acquisition price paid by the Portfolio for its direct or indirect interests in Portfolio Investments, which will be subject to negotiation with the sellers of the interests. In addition, while the performance of the investment manager will affect the purchase price paid for the interests, the historical performance of investment managers is not a guarantee or prediction of their future performance, which can vary considerably. Therefore, valuations of investments are inherently subjective to a certain extent. Investors should be aware that there may exist a conflict of interest to the extent that a Morgan Stanley entity is performing valuations for a Portfolio.

Tax Risks. Limited partners may recognize a significant amount of ordinary income as a consequence of an investment in a Portfolio. In addition, limited partners may recognize a significant amount of taxable income in connection with an investment in the Portfolio prior to the receipt of any corresponding distribution. The Portfolio and the limited partners could become subject to additional or unforeseen taxation, as well as filing requirements, in U.S. states or non-U.S. jurisdictions in which the Portfolio or Underlying Funds operate and invest. Changes to U.S. federal, state and local tax laws, changes to non-U.S. tax laws and changes to taxation treaties between the United States and the countries in which the Portfolio invests (or changes in the interpretation of any such laws or treaties) may adversely affect its ability to efficiently realize income or capital gains. update regulation as a bank holding company disclosure;

Regulation as a Bank Holding Company. Morgan Stanley is a bank holding company (a “BHC”) under the U.S. Bank Holding Company Act of 1956, as amended (the “BHCA”). Morgan Stanley has also elected to become a “financial holding company” (a “FHC”) under the BHCA, which is a status available to BHCs that meet certain criteria. FHCs may engage in a broader range of activities than BHCs that are not FHCs. However, the activities of FHCs and their affiliates remain subject to certain restrictions imposed by the BHCA and related regulations. If Morgan Stanley “controls” a Portfolio within the meaning of the BHCA these restrictions would be expected to apply to a Portfolio as well. Accordingly, the BHCA and other applicable banking laws, rules, regulations and guidelines, and their interpretation and administration by the appropriate regulatory agencies, have the potential to restrict the transactions and relationships involving Morgan Stanley and its affiliates, a Fund adviser, a Portfolio's general partner and a Portfolio, on the other hand, and have the potential to restrict the investments and transactions by, and the operations of, a Portfolio. For example, if the BHCA regulations applicable to Morgan Stanley were applicable to a Portfolio those regulations may, among other things, restrict a Portfolio’s ability to make certain investments, impose a maximum holding period on some or all of a Portfolio’s investments, restrict the Fund adviser’s ability to participate in the management and operations of the companies in which a Portfolio invests, and restrict the ability of Morgan Stanley to invest in a Portfolio. In addition, certain BHCA regulations may require aggregation of the positions owned, held or controlled by related entities. Thus, in certain circumstances positions held by Morgan Stanley and its affiliates (including the Portfolio's adviser) for client and proprietary accounts would likely need to be aggregated with positions held by a Portfolio if Morgan Stanley were viewed to “control” a Portfolio within the meaning of the BHCA. In this case, where BHCA regulations impose a cap on the amount of a position that may be held, Morgan Stanley may utilize available capacity to make investments for its proprietary accounts or for the accounts of other clients, which may require a Portfolio to limit and/or liquidate certain investments.

These restrictions have the potential to materially adversely affect a Portfolio by, among other things, affecting the Adviser’s ability to pursue certain strategies within a Portfolio’s investment program or trade in certain securities. Moreover, Morgan Stanley may cease in the future to qualify as an FHC, which, were a Portfolio to be “controlled” by Morgan Stanley within the meaning of the BHCA, may subject a Portfolio to additional restrictions or may result in the restructuring or dissolution of a Portfolio. Moreover, there can be no assurance that the bank regulatory requirements applicable to Morgan Stanley and a Portfolio will not change, or that any such change will not have a material adverse effect on a Portfolio. At any time, a Portfolio or the Portfolio's adviser may be restructured in order to reduce or eliminate the impact or applicability of these bank regulatory restrictions on a Portfolio or other funds and accounts managed by the Portfolio's adviser and its affiliates, including, without limitation, through the Portfolio's general partner transfer. Morgan Stanley may seek to accomplish this result by, depending on the facts and circumstances: causing the Portfolio's general partner transfer to occur, causing another entity to be the Portfolio's general partner or requesting that the Portfolio's general partner take certain actions, transferring ownership of the Portfolio's adviser, reducing the amount of Morgan Stanley’s investment in a Portfolio (if any), or any combination of the foregoing, or by such other means as it determines in its sole discretion. Any such transferee may be unaffiliated with Morgan Stanley. In connection with any such change, the Portfolio's general partner may in its sole discretion assign its right to receive carried interest (to the extent it has any such right) or cause another entity to be admitted to a Portfolio for the purpose of receiving carried interest.

At any time (including prior to the initial closing, Morgan Stanley may, in its sole discretion, restructure the Portfolio, the General Partner or the Investment Manager in order to reduce or eliminate the impact or applicability of these bank regulatory restrictions on the Portfolio or other funds and accounts managed by the Investment Manager and its affiliates. Morgan Stanley may seek to accomplish this result by causing another entity to replace AIP as the Portfolio’s General Partner, transferring ownership of the General Partner or Investment Manager, reducing the amount of Morgan Stanley’s investment in the Portfolio (if any), or any combination of the foregoing, or by such other means as it determines in its sole discretion. Any such transferee may be unaffiliated with Morgan Stanley. In connection with any such change, the General Partner may in its sole discretion assign its right to receive carried interest or cause another entity to be admitted to the Portfolio for the purpose of receiving carried interest.

Conflicts of Interest. As a diversified global financial services firm, Morgan Stanley engages in a broad spectrum of activities including financial advisory services, asset management activities, sponsoring and managing private investment funds, engaging in broker-dealer transactions and other activities. In the ordinary course of business, Morgan Stanley engages in activities in which Morgan Stanley’s interests or the interests of its clients may conflict with the interests of the Portfolio or the limited partners. The potential for Morgan Stanley, as placement agent, to receive compensation in connection with a limited partner’s investment in the Portfolio presents such placement agent with a potential conflict of interest in recommending that such limited partner purchase interests in a Portfolio. Such placement agent may in its sole discretion waive the placement fees payable by a limited partner. Prospective investors should take such payment arrangements into account where evaluating any recommendations relating to Interests.

The Volcker Rule. Section 619 of the Dodd-Frank Act, commonly known as the “Volcker Rule,” and regulations to implement the Volcker Rule issued by the U.S. federal financial regulators in December 2013 (“Implementing Regulations”), prohibit “banking entities” from sponsoring and investing in covered funds, except as permitted pursuant to certain available exemptions. In addition, a banking entity may not enter into certain so-called “covered transactions,” as discussed further below, with any “covered fund” that the banking entity sponsors, organizes and offers or for which the banking entity serves as investment manager, investment adviser or commodity trading advisor, or any covered fund controlled by such a covered fund. The term covered fund includes, among others, private-equity funds that are privately offered in the United States and that rely on Sections 3(c)(1) or 3(c)(7) of the Investment Company Act to avoid being treated as “investment companies” under the Investment Company Act. Morgan Stanley and its affiliates are banking entities, and the Portfolio is a covered fund for purposes of the Volcker Rule and the Implementing Regulations.

The Volcker Rule and the Implementing Regulations impose a number of restrictions on Morgan Stanley and its affiliates that affect  a Portfolio, the General Partner, the Adviser and the Limited Partners. For example, to sponsor and invest in a Portfolio, Morgan Stanley will comply with the Implementing Regulations’ “asset management” exemption to the Volcker Rule’s prohibition on sponsoring and investing in covered funds. Under this exemption, investments made by Morgan Stanley (aggregated with certain affiliate investments) in a Portfolio will be limited to 3% of both the total number and aggregate fair market value of the outstanding ownership interests of a Portfolio (the “per-fund limit”). To the extent that Morgan Stanley holds an ownership interest in any feeder funds, the per-fund limit will be calculated at the Portfolio level, including both direct investments in a Portfolio and indirect investments in a Portfolio through any feeder funds, calculated on a pro rata basis. In addition, total investments in all covered funds by Morgan Stanley (aggregated with certain affiliate and employee investments) in reliance on the asset management exemption and certain other exemptions are limited to 3% of Morgan Stanley’s Tier 1 capital (the “aggregate investment limit”).

A change in Morgan Stanley’s Tier 1 capital may mean that retention of some or all of the ownership interest in a Portfolio by Morgan Stanley or certain of its affiliates and employees would violate the aggregate investment limit. In addition, the withdrawal or default of an investor in the Portfolio or an excuse or election not to participate in a call for capital contributions by an investor in a Portfolio may cause a violation of the per-fund limit by Morgan Stanley. To the extent that the retention of an interest in a Portfolio or further investment in the Portfolio by Morgan Stanley or certain of its affiliates and employees would result in a violation of either the per-fund limit or the aggregate investment limit, then Morgan Stanley and certain of its affiliates and employees may be required to dispose of, transfer or otherwise reduce holdings in some or all of their respective ownership interests in a Portfolio or may be prohibited, entirely or partially, from making further investments in a Portfolio.

General Risks Related to Social and Environmental Impact Investments. The Portfolio and the Underlying Funds will target strategies and markets that demonstrate the potential to produce superior returns due to market inefficiencies and/or companies with a strong potential for change, as well as measurable positive social or environmental impact through investing in activities that result in (among other things) the creation of jobs for underserved populations, climate change mitigation or the provision of basic services (such as access to finance, energy, education, healthcare, water, sanitation or transportation) to those who currently do not have access, or cannot afford such access. Social and environmental impact investments may not provide as favorable returns or protection of capital as other investments. An Underlying Fund may structure certain investments using non-standard terms that are less favorable for the Underlying Fund than those traditionally found in the marketplace for investment strategies that do not link social or environmental impact to financial returns. Moreover, an Underlying Fund may determine to forgo an investment that could provide favorable returns because such investment would not have sufficient social or environmental impact. Specific risks exist in the types of investments that an Underlying Fund will seek to make based on its investment objective. Underlying Fund investments may focus on geographic areas that are experiencing weakened financial positions (including high unemployment rates, disease, high poverty rates, high foreclosure rates, and low incomes) that may be more susceptible to negative effects of changes in the economy or the availability of public assistance. Such geographic focus may decrease the likelihood of success of an Underlying Fund investment or the ability of an Underlying Fund investment to achieve financing or refinancing. Social or environmental impact projects selected by an Underlying Fund may require the Underlying Fund to make several different types of investments. For example, the Underlying Fund may provide both equity and debt in the same social or environmental impact project. Moreover, the Underlying Fund may invest in social or environmental impact projects that involve investments in multiple locations, and the financial returns thereon will depend on the success of the social or environmental impact project in each location.

New Type of Investment Strategy. Social and environmental impact investing is a relatively new investment strategy and may utilize innovative investment techniques that have not been thoroughly tested in the market or are untested. For example, if an Underlying Fund lends capital as part of an Underlying Fund investment in connection with an innovative business strategy, repayment of such a loan may be contingent on the achievement of a certain threshold of success over which the Underlying Fund has no control. Such techniques may have operational, theoretical or other shortcomings which could result in unsuccessful investments and, ultimately, losses to an Underlying Fund. New investment technique utilized by an Underlying Fund or Underlying Fund investments may be more speculative than established techniques and may increase the risk of an investment in the Portfolio.

Reputational Risk. Given the stated focus of the Portfolio to deliver attractive financial returns and positive social and environmental impact, the Portfolio, and therefore limited partners invested in the Portfolio, might be exposed to reputational risk if the Portfolio fails to achieve its stated impact goals or invests in an Underlying Fund whose investments are perceived to be in conflict with this goal.

Epidemics and Other Health Risks. Many countries have experienced outbreaks of infectious illnesses in recent decades, including swine flu, avian influenza, SARS and the 2019-nCoV (the “Coronavirus”).  In December 2019, an initial outbreak of the Coronavirus was reported in Hubei, China.  Since then, a large and growing number of cases have been confirmed around the world.  The Coronavirus outbreak has resulted in numerous deaths and the imposition of both local and more widespread “work from home” and other quarantine measures, border closures and other travel restrictions, causing social unrest and commercial disruption on a global scale and significant volatility in financial markets.  In March 2020, the World Health Organization declared the Coronavirus outbreak a pandemic.

The ongoing spread of the Coronavirus has had, and will continue to have, a material adverse impact on local economies in the affected jurisdictions and also on the global economy, as cross border commercial activity and market sentiment are increasingly impacted by the outbreak and government and other measures seeking to contain its spread. The global impact of the outbreak has been rapidly evolving, and many countries have reacted by instituting quarantines and restrictions on travel. These actions are creating disruption in supply chains, and adversely impacting a number of industries, including but not limited to retail, transportation, hospitality, and entertainment.  In addition to these developments having adverse consequences for certain Portfolio companies and other issuers in or through which the Portfolio invests and the value of the Portfolio’s investments therein, our operations (including those relating to the Portfolio) have been, and could continue to be, adversely impacted, including through quarantine measures and travel restrictions imposed on our personnel or service providers based or temporarily located in affected countries, or any related health issues of such personnel or service providers.  Any of the foregoing events could materially and adversely affect the Portfolio’s ability to source, manage and divest its investments and its ability to fulfil its investment objectives.  Similar consequences could arise with respect to other comparable infectious diseases.

Prospective investors should note that, given the significant economic and financial market disruptions currently occurring and anticipated in connection with the COVID-19 outbreak, any information provided regarding valuations, targets and/or prior performance of the AIP’s and/or its affiliates’ assets under management and any investments mentioned herein may not fully reflect the impact relating to the outbreak and it is expected that the valuation and performance of certain of the investments mentioned herein will be materially adversely impacted for future periods (at least in the short term).