Pooled Fund of Hedge Funds Struggle in First Quarter of 2008 With Lowest Quarterly Return in Five Years

London (ots/PRNewswire) -

- Fund of hedge fund managers outperformed UK and Overseas Equity
pooled funds

Statistics released today by BNY Mellon Asset Servicing show that
pooled fund of hedge funds failed to achieve positive returns during
the first quarter of 2008. Over this period the median return for
these funds was -4.0, the lowest return that we have seen for these
funds since BNY Mellon Asset Servicing started to measure pooled fund
of hedge fund performance in 2003. This is the third consecutive
quarter that pooled fund of hedge funds failed to achieve a quarterly
positive return.

Despite seeing a relatively weak performance during Q1 2008,
pooled fund of hedge fund managers still outperformed other key
investment sectors including UK and Overseas Equity pooled funds,
which returned -9.7% and -9.5% respectively. Pooled fund of hedge
funds were however, outperformed by Property (-3.5%), UK Bonds
(-1.1%) and Cash (1.3%).

Commenting on the results, Alan Wilcock, Performance and Risk
Analytics Manager at BNY Mellon Asset Servicing, said: "Along with
one of the worst starts ever to a year for the equity markets, pooled
funds of hedge funds also suffered from negative returns in January
and March, producing the lowest quarterly return we have seen."

Despite a shaky start to the year, some stronger results in
earlier periods meant that fund of hedge funds did make some small
gains over a one year period with a median return of 1.7%. Pooled
fund of hedge fund managers also outperformed key sectors over this
period, in particular UK and Overseas Equity funds which returned
-8.8% and -1.9% respectively. Over longer term periods, pooled fund
of hedge fund results were even stronger, and over three and five
years the median fund returned 7.5% p.a. and 8.2% p.a. respectively.

Over three years to 31 March 2008, pooled fund of hedge funds
were outperformed by both UK (8.8% p.a.) and Overseas Equity (10.6%
p.a.) pooled funds. BNY Mellon Asset Servicing's analysis does
however show that the volatility of returns over this period (as
measured by the median standard deviation) was significantly lower
for fund of hedge fund managers. The standard deviation for pooled
fund of hedge funds was 5.3% p.a., compared with 10.1% p.a. and 10.9%
p.a. for UK and Overseas Equity funds. Over this period, pooled fund
of hedge fund managers achieved an outperformance of 4.1% against UK
Bond pooled fund managers, with broadly similar levels of risk; the
median standard deviation of these funds was 4.6% 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 31 March 2008, the average fund of hedge funds held 48.4%
of its assets in directional strategies, 13.1% in event driven
strategies, 17.2% in non directional strategies and 21.4% in other
(unspecified) strategies and cash.

BNY Mellon Asset Servicing's fund of hedge funds universe
currently covers 19 separate funds with over pounds Sterling 4.9
billion in assets.

Notes to editors

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 US$23 trillion in
assets under custody and administration, more than US$1.1 trillion in
assets under management and services US$12 trillion in outstanding
debt. Additional information is available at bnymellon.com.

Web site: http://www.bnymellon.com

ots Originaltext: BNY Mellon Asset Servicing
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Louisa Bartoszek, +44-20-7163-2826, louisa.bartoszek@bnymellon.com,
for BNY Mellon Asset Servicing