LONDON, November 29, 2007 — Statistics released today by BNY Mellon Asset Servicing show that for the first time in 12 months, pooled fund of hedge funds failed to achieve a quarterly positive return. During the third quarter of 2007, the median return for pooled fund of hedge fund managers was -0.8%. Despite this, these funds still outperformed other key investment sectors during the quarter, including UK Equity (-2.6%) and Property (-0.9%) pooled funds.

However, pooled fund of hedge fund performance was less favourable when compared against the cash index, which rose by 1.4% over the quarter and against other asset classes - UK Bond and UK Index Linked pooled funds achieved returns of 2.6% and 5.0% respectively.

Over a one-year period to 30 September 2007 pooled fund of hedge fund managers returned 12.3%, and outperformed against UK Equity, UK Bonds UK Index Linked and Property pooled funds.

Pooled fund of hedge funds were less successful over longer-term periods and over three years to 30 September 2007 achieved a median return of 9.3% p.a., compared with 16.2% p.a. for UK Equity pooled funds.

Commenting on the results, Daniel Hall, BNY Mellon Asset Servicing's Publications and Statistics Manager, said: "Although UK Equity pooled funds outperformed relative to fund of hedge funds, this outperformance was achieved with a higher level of risk. The volatility of returns for pooled UK Equity funds, as measured by the median standard deviation, was 7.1% p.a. compared with only 4.6% p.a. for fund of hedge funds."

Pooled fund of hedge funds were also outperformed by Overseas Equity pooled funds, who returned 17.4% p.a. over a three year period. However, the volatility of returns was significantly higher for Overseas Equity pooled funds as represented by a median standard deviation of 8.8% p.a.

Each quarter, BNY Mellon Asset Servicing publishes results from its pooled fund of hedge funds universe which consists of multi-strategy funds of hedge funds. These offer a route into alternative investments for UK pension schemes and a means of generating returns, whilst reducing overall fund risk through diversification. Hedge fund strategies can be broadly classified as directional, event driven and non-directional. Directional strategies seek to forecast and exploit broad market trends, while event driven strategies seek to anticipate and exploit events such as mergers or corporate restructurings. Non-directional strategies generally seek to take advantage of pricing inefficiencies.

As at 30 September 2007, the average fund of hedge funds held 39.7 % of its assets in directional strategies, 14.4% in event driven strategies, 28.2% in non directional strategies and 21.0% in other (unspecified) strategies and cash.

BNY Mellon Asset Servicing's fund of hedge funds universe currently covers 17 separate funds with over £4.2 billion in assets.

BNY Mellon Asset Servicing offers clients worldwide a broad spectrum of specialised asset servicing capabilities, including custody and fund services, securities lending, performance and analytics, and execution services. BNY Mellon Asset Servicing provides services through The Bank of New York, Mellon Bank, N.A. and other related companies.

The Bank of New York Mellon Corporation is a global financial services company focused on helping clients manage and service their financial assets, operating in 34 countries and serving more than 100 markets. The company is a leading provider of financial services for institutions, corporations and high-net-worth individuals, providing superior asset management and wealth management, asset servicing, issuer services, clearing services and treasury services through a worldwide client-focused team. It has more than $20 trillion in assets under custody and administration, more than $1.1 trillion in assets under management and services $11 trillion in outstanding debt. Additional information is available at bnymellon.com.