PRESS RELEASES
Hennessee Group LLC Releases 12th Annual Hedge Fund Manager Survey

Hedge Fund Industry Assets Grew 21%

December 5, 2006, New York, NY -- The Hennessee Hedge Fund Advisory Group ("Hennessee Group LLC"), a global adviser to hedge fund investors, today released the results of the 12th Annual Hennessee Hedge Fund Manager Survey, the industry's oldest hedge fund manager survey. The survey results indicate that the hedge fund industry grew 21% from $1.009 trillion to $1.223 trillion.

"Despite some high profile disappointments, the hedge fund industry continued to see positive inflows, confirming its maturity as an asset class," commented E. Lee Hennessee, Managing Principal of Hennessee Group LLC.
Asset growth was the result of positive manager performance (+11%) and new capital inflows (+10%). In addition, the number of hedge funds grew 10% from 8,050 to 8,900 funds. Since 1987, the Hennessee Hedge Fund Index has generated an annualized return of +13.70% (net of fees and expenses) with approximately 37% less volatility than the S&P 500 Index, which returned +9.01% over the same time period.

"The growth in the hedge fund industry has largely become a ˇ®zero sum game' on the long side since the capital is largely being reallocated from long only equity and bond managers to hedge funds," stated Charles Gradante, Managing Principal of Hennessee Group LLC. "The real growth concern going forward is the potential difficulty maintaining historical short hedge ratios due to a supply shortage of stocks and bonds to borrow. This will likely cause a situation which will change the industry's landscape, creating the need for a greater use of derivatives in lieu of the cash market to hedge portfolios."

Introduced in 1995, the Annual Hennessee Hedge Fund Manager Survey is the oldest and most comprehensive hedge fund industry survey. The 2006 survey respondents include 440 hedge funds from 97 management companies representing over $256 billion in assets. The Survey excluded CTAs who solely trade futures contracts.

Findings from the Survey include:

Individuals and family offices (including funds' general partners and employees) continue to represent the largest source of capital for hedge funds, comprising 40% of total industry assets. Fund-of- funds represent 28% of industry assets, while corporations represent 18%, pensions represent 11%, and endowments and foundations represent 8%.

ˇ¤ Hedge funds surveyed had an average long exposure of 106% and short exposure of -55%, indicating a low use of margin.

ˇ¤ Hedge funds surveyed had an average gross exposure (longs plus shorts) of 161%, while net exposure (longs minus shorts) was +51%. Average gross exposure is at the highest level since the introduction of the survey in 1995, indicating more leverage is being used to generate returns.

ˇ¤ 86% of hedge funds are registered with a regulatory agency (NASD, SEC, CFTC, State), up from 61% the previous year.

The Hennessee Group conducts its Annual Hennessee Hedge Fund Manager Survey to provide insight to the firm's advisory clients and the investment community as a whole. For details or questions regarding the 12th Annual Hennessee Hedge Fund Manager Survey, please contact Hennessee Group at (212) 857-4400.

About the Hennessee Group LLC

Hennessee Group LLC is a Registered Investment Adviser that consults direct investors in hedge funds on asset allocation, manager selection, and ongoing monitoring of hedge fund managers. Hennessee Group LLC is not a tracker of hedge funds. The Hennessee Hedge Fund Indices? are for the sole purpose of benchmarking individual hedge fund manager performance. The Hennessee Group does not sell a hedge fund-of-funds product nor does it market individual hedge fund managers.

For additional Hennessee Group Press Releases, please visit the Hennessee Group's website. The Hennessee Group also publishes the Hennessee Hedge Fund Review monthly, which provides a comprehensive hedge fund performance review, statistics, and market analysis; all of which is value added to hedge fund managers and investors alike.

The information in this release has been obtained from sources believed to be reliable, but no guarantee is made with respect to accuracy. Past performance is not a guarantee of future performance. No statement in this release is to be construed as a recommendation to buy or sell securities or to provide investment advice. Contact your adviser before investing in hedge funds.