PRESS RELEASES
HEDGE FUNDS GENERATE POSITIVE RETURN OF +3.51% IN JANUARY

Hedge Funds Start 2006 With Their Best Month In A Year

February 8, 2006 New York, NY Hennessee Group LLC, an adviser to hedge fund investors, today announced that hedge funds advanced ahead of the broad equity markets in January. The Hennessee Hedge Fund Index rose +3.51% (+3.51% YTD). The broad equity market indices were also positive as the S&P 500 increased +2.65% (+2.65% YTD), the Dow Jones Industrial Average was up +1.38% (+1.38% YTD), and the NASDAQ Composite Index rose +4.56% (+4.56% YTD). The bond markets were down in January, as represented by the Lehman Brothers Intermediate Government Corporate Bond Index, which decreased -0.02% (-0.02% YTD).

Hedge fund investors did well in January, especially those that had allocations to international, growth, and emerging markets strategies, said E. Lee Hennessee, Managing Principal of Hennessee Group LLC.

The Hennessee Long/Short Equity Index increased +3.80% (+3.80% YTD) in January. Managers entered January with an average long bias, but larger gross exposures, and took advantage of the additional volatility in the market. International managers also continued to profit, but some managers express concern over rising valuations of companies targeted by LBOs, which would otherwise be strong short candidates.

The rise in volatility in both equity and fixed income markets was a welcomed surprise to most managers in arbitrage strategies and long/short equity, said Charles Gradante, Managing Principal of Hennessee Group LLC. Low volatility throughout 2005 was a major factor in tempering returns.

The Hennessee Arbitrage/Event Driven Index was up in January, returning +2.66% (+2.66% YTD). Convertible arbitrage saw the return of volatility, strong credits, and moderate new issuance. Merger arbitrage also saw a strong month as several new deals of all sorts (hostile, LBO, mergers, competitive bids, etc.) were announced. Most notable were Boston Scientific, Arcelor/Mittal, and Albertsons.

Macro managers continue to be surprised by the shape of the yield curve. Current portfolio consensus among macro managers we monitor is that the Fed will move to 5% and an economic slowdown may be sharper than expected due to higher interest rates, higher energy prices, and softening in U.S. housing, said Charles Gradante, Managing Principal of Hennessee Group LLC. Several managers noted that, despite the current low level of core inflation, headline inflation rates tend to lead core rates by 6 to 12 months. Stagflation is a very real possibility down the road.

The Hennessee Global/Macro Index increased +3.76% (+3.76% YTD) in January. Performance was driven by Latin America, where two democratically elected Presidents came into office and gave the markets confidence. European Indices continued their strong run on the back of a +20% year in 2005, rallying through concerns over both the Palestinian elections and a stand off with Iran, while the Nikkei 225 shook off Livedoor issues to bounce back and finish the month up. Gold also showed another strong month, finishing up almost +7%.

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.