LONDON, September 3, 2007 — Statistics published by BNY Mellon Asset Servicing show that pooled fund of hedge funds have achieved positive results for the third consecutive quarter. During quarter two of 2007, pooled fund of hedge fund managers achieved a median return of 4.6%, net of fees. This represents a real rate of return against both the average earnings index and the retail prices index of 1.3% and 3.2% respectively.

Over the quarter, pooled fund of hedge fund managers outperformed UK Equity, Property and UK Bond pooled fund managers who provided returns of 3.8%, 1.8% and -2.4% respectively. However, the results show that over longer periods, pooled fund of hedge fund managers fared less well. Over three years to 30 June 2007, the median return for pooled fund of hedge funds was 9.8% p.a. compared with 18.2% p.a. for UK Equity pooled fund managers. Over the same period the median standard deviation for UK Equity funds was 6.2% p.a., compared to 4.8% p.a. for pooled fund of hedge funds.

Commenting on these results, Daniel Hall, Publications and Statistics Manager at BNY Mellon Asset Servicing, said "The median standard deviation, which measures the volatility of returns, indicates that UK Equity managers achieved this outperformance by incurring a slightly higher level of risk than fund of hedge fund managers."

Over three years to 30 June 2007, pooled fund of hedge funds were also outperformed by property pooled funds, which returned 16.3% p.a. This outperformance was achieved with significantly lower risk than both fund of hedge funds and UK Equity funds, as demonstrated by the lower median standard deviation of 2.5% p.a.

Pooled fund of hedge fund managers did outperform against UK Bond managers, who returned 4.0% p.a. over three years to 30 June 2007. This was achieved with relatively similar levels of risk, the median standard deviation for UK Bond pooled funds being 4.2% p.a., compared with 4.8% p.a. for pooled fund of hedge fund managers.

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 June 2007, the average fund of hedge funds held 43.2% of its assets in directional strategies, 14.9% in event driven strategies, 20.9% 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 20 separate funds with over £4.1 billion in assets.

The performance analysis and other information in this press release are based on historical data and are intended for informational purposes only. Past performance is not a guarantee of future performance. This press release does not constitute investment advice, nor is it an offer or recommendation of any security, investment product, service or firm.

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 move their financial assets, operating in 37 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 and treasury services through a worldwide client-focused team. It has more than $20 trillion in assets under custody and administration and more than $1 trillion in assets under management. Additional information is available at www.bnymellon.com.