NOVEMBER PROVES BEST MONTH THIS YEAR FOR HEDGE FUNDS - 12/16/02

Hedge funds produced their strongest returns so far this year in November, according to Van Hedge Fund Advisors International, Inc. (VAN), a global hedge fund advisory firm. The Average U.S. Hedge Fund gained 2.8% net of fees while the Average Offshore Hedge Fund posted a 1.5% net gain. Those returns erased losses incurred earlier in 2002 as both the Average U.S. Hedge Fund and the Average Offshore Hedge Fund broke even for the year to date through November.

Although the major stock market averages outpaced hedge funds last month, stocks continue to trail significantly year-to-date. The S&P 500, up 5.9% last month, has lost ?17.2% through November. Likewise, the NASDAQ rose 11.2% in November but maintains a year-to-date deficit of ?23.9%. Many mutual funds are faring worse than hedge funds this year as well. Despite a 5.7% gain last month, the Average Equity Mutual Fund has fallen ?16.4% year-to-date.

Hedge funds benefited again in November from the broad market rebound but the real story is how they have performed for the year overall. A flat year-to-date return for hedge funds in the face of double-digit losses for stocks is a testament to these funds? ability to preserve capital. However, 2002 isn?t an isolated case. According to VAN?s research, the Average U.S. Hedge Fund has actually earned 7.8% net of fees from March 2000, when the bear market started, through November 2002. Over that same period, the S&P 500 and the Average Equity Mutual Fund have produced losses of ?35.2% and ?32.2%, respectively.

Approximately 75% of the hedge funds included in the November Index reported a positive net return. The best performing strategies for the month were U.S. Several Strategies, U.S. Aggressive Growth and Offshore Aggressive Growth, which posted net gains of 8.6%, 5.4% and 5.0%, respectively. For the year to date through November, the top performing strategies were U.S. Short Selling, 24.0% net; Offshore Short Selling, 17.2% net; and U.S. Emerging Markets, 12.4% net. U.S. and Offshore Short Selling were the only losing strategies in November as the continuing market rally diminished those funds? earlier gains.