Pescara Partners Launches Hedge Fund of Funds

Date: Wednesday, December 11, 2002

Pescara Partners Inc. is proud to announce the launch of the Pescara Fund of Funds, the first in a future series of hedge fund of funds. The Fund will be distributed through registered dealers in Ontario and is available via the FundSERV network. The investment objective of the Fund is to earn a positive risk-adjusted return on capital in each year that is uncorrelated with major equity and fixed income markets. “We believe that hedge funds are at their infancy stage in Canada, with enormous growth potential. The purpose of launching a hedge fund of funds is to facilitate a diversified investment approach to investors.” Raj Lala, President. Pescara Partners Inc. is a dynamic management company that develops and provides innovative alternative investment products. Pescara’s management team and partners have extensive experience in the Canadian financial services industry, from successfully building one of Canada’s largest mutual fund companies, to product creation, management, marketing, and training. “Part of our team’s mandate will be to provide extensive education and training on hedge funds to registered financial advisors. We believe it is critical to provide financial advisors with the necessary tools to carefully select hedge funds for their clients’ portfolios.” Raj Lala, President. A key attribute of the Fund is its independence. The Fund is not affiliated with any of the underlying funds therefore able to adjust the portfolio as needed and work with some of the premier hedge funds available to Canadians. The management fee for the Fund is 1.65% and the performance fee is 10%. The Fund is available to registered financial advisors through deferred sales charge (DSC) and initial sales charge (ISC) options. Pescara has retained Felcom Management Corp. of Toronto to provide investment advice on the selection of hedge fund managers and for the fund’s asset allocation strategy. In order to diversify risks, Felcom will allocate the Fund’s assets to various hedge fund managers using quantitative and qualitative methodologies. Additionally, Felcom’s Alternative Strategy Committee will continuously monitor the performance of the Fund and when it deems it appropriate, make changes to the mix of managers and/or asset allocation. Sergio Simone, who is a figurehead for the Canadian Hedge Fund industry, is an Investment Strategist with Felcom. Mr. Simone is currently the President of the Canadian Hedge Fund Association and one of Canada's leading authorities on alternative investment strategies. He has written numerous articles and reports on the subject and is often invited to speak about alternative investments at industry functions and seminars. Mr. Simone has also acted as a consultant to several Canadian mutual fund companies, on hedge fund development. Recognizing the importance of quality, credibility, and transparency, Pescara has contracted The Royal Trust Company to provide trusteeship, custody, recordkeeping, and valuations. Additionally, the Fund and the management company’s auditor is PricewaterhouseCoopers LLP. For more information on the Pescara Fund of Funds, please contact your registered financial advisor, or contact Raj Lala at Pescara Partners Inc. at (905) 502-1518, by e-mail at raj@pescara.ca or visit our website at www.pescara.ca.