Complaint Relates to Non-Core, Legacy Business That Is No Longer in Operation

New York, NY — May 11, 2010 — Ivy Asset Management today issued the following statement in response to a civil complaint filed by the New York Attorney General. The complaint relates to non-discretionary advisory services that Ivy provided to a limited number of professional investment advisors who, in turn, chose to invest their own clients' assets with Bernard L. Madoff Investment Securities. Ivy previously notified its clients that it was winding down its remaining fund of hedge funds business.

Douglas Squasoni, Chief Restructuring Officer of Ivy Asset Management, said, "Ivy takes its responsibilities very seriously, and our first priority always is to protect our investors and clients. Unfortunately, a limited number of clients from a legacy non-discretionary advisory business of Ivy were among Bernie Madoff's victims when his plot was exposed in December 2008.

"These non-discretionary advisory clients were primarily professional investment advisors who chose to maintain Madoff exposure for their own clients. Ivy informed its clients that it had questions about Madoff that it could not answer and recommended to its clients that they reduce their exposure to Madoff."

"The non-discretionary advisory business that is the focus of this complaint was never part of Ivy's core proprietary fund of hedge funds business, and is no longer in operation. Further, the Ivy executives involved in this matter left the company in 2008.

"We have been cooperating with the Attorney General's investigation and intend to defend ourselves against these claims."

Ivy Asset Management Background

Since its founding, Ivy Asset Management's primary business was managing its own proprietary funds of hedge funds. However, the Attorney General's complaint relates to a non-core, non-discretionary advisory business that provided advice to professional investment advisors who, in turn, made investment decisions about how and where to invest their own clients' assets. These professional investment advisors conducted their own, independent due diligence on Madoff after 2000.

Following a previously announced strategic review, Ivy began winding down its funds of hedge funds last month. Ivy's clients with separately managed accounts continue to be consulted on an individual basis, in order to determine how best to handle the future management of their accounts. Ivy is no longer offering active investment management. The issue with the Attorney General will not affect the liquidation of the Ivy commingled funds' portfolios in any way, either with respect to the timing of payments or the amount of payments to investors.