Response to the NBR article...

National Business Review today published an article with the headline "John Key annoys local hedge fund managers".

The New Zealand Absolute Return Association (NZARA) would like to clarify that the New Zealand investment managers represented by the association are not "annoyed" with the Prime Minister but have noted his comment regarding hedge funds, and take that as a continuity from recent statements implying improved disclosure may be one of the areas to get a regulatory boost. If this were to be so, NZARA would welcome this initiative. We believe transparency is healthy for all involved in the investment management industry, be they investment managers, investors or regulators.

Anthony Limbrick
Chairman
New Zealand Absolute Return Association

Link to the National Business Review article is below:

http://www.nbr.co.nz/article/private-bin-john-key-annoys-local-hedge-fund-managers-38262

A new member of the New Zealand index...

Pie Funds, an Auckland-based absolute return equity manager is to join the Ernst & Young New Zealand Absolute Return Index.

Pie Funds was founded by Mike Taylor and Richard Avery-Wright in 2007. Their flagship fund is the Pie Australasian Growth Fund which focuses on small to mid cap stocks and short term opportunistic trading.

The fund is unleveraged but has the ability to short futures and trade options for downside protection. Since inception, the fund has outperformed the ASX small cap index by around 20% p.a.

Link here: http://www.piefunds.co.nz/

New Zealand Prime Minister John Key on hedge funds...

From Reuters

"We can no longer afford to ignore the effect that the amount of risk that hedge funds are able to take through leverage that is arguably completely disproportionate to the real economy," said Key.

Link here:

http://www.reuters.com/article/bondsNews/idUSN2148103820081121

Some good media coverage of our performance...

Hi

There has been some good media coverage of the Ernst & Young New Zealand Absolute Return Index over the last few months.

See below for links:

http://www.opalesque.com/AMB2008/47677Australasia_Ernst_and_Young_New_Zealand.html

http://www.hedgemedia.com/articles/detail.jsp?content_id=277018

http://www.hedgeco.net/news/11/2008/new-zealands-absolute-return-managers-index-surge-in-october.html

http://www.scoop.co.nz/stories/BU0811/S00397.htm

http://www.nzherald.co.nz/best-of-business-analysis/news/article.cfm?c_id=1501241&objectid=10539214

Another good month for New Zealand managers...

Hi there

October 2008 was a good month for most of the New Zealand investment managers represented in the Ernst & Young New Zealand Absolute Return index. The index was +15% YTD, and +2.8% for the month.

Before I tell you who the managers are, firstly understand that they are wholesale-only - and are not available for retail investment. They may also expose one's investment to substantial risk - so make sure any offering documentation is read thoroughly so that all risks are fully understood. Past performance is not necessarily an indication of future performance. And when I talk about performance I am talking about that firms "NZARA Average".

There is a strong representation by trend followers and volatility/tail risk in the group. Trend-follower, MS Capital Management was +25% for October, targeted non-correlation manager Pure Capital (my team) was +6% and volatility and tail risk manager, 36 South was +4% for the month. One of the more interesting performances was Commodity Strategies, a commodity trader that was +4%. A great performance considering how weak commodity markets have been. This was the result of a long-short commodity product they run.

These are difficult times. It is satisfying to see New Zealand managers proving they can hold their own in challenging markets - and performing well against global peers.

For more information on the index, please go to http://www.nzara.org/

Regards

Ant Limbrick
Chairman - NZARA