Gottex Positive Q1 Performance - Good Progress in Fund Restructuring

Commenting, Joachim Gottschalk, Chairman and CEO, stated: “Although the market environment has continued to remain volatile during the first quarter of 2009, we believe we have made good progress in a number of areas to address the requirements of the new financial environment. Our first restructuring, which involved one of our major market neutral products, resulted in 83% of its investors remaining in the restructured product, which is a positive result and a confirmation of investors’ trust in the fund of hedge funds’ model. Our other restructuring plans are progressing well and we expect all our major market neutral and directional products to reopen by the end of June 2009.

“We are pleased with the launch of Gottex Solutions Services, our independent services company that provides institutional hedge fund investors with access to a managed account platform, outsourced middle office services including risk management as well as reporting and specialised work-out services. Initial client feedback has been very positive, as clients want greater transparency, improved governance and better information together with modern risk management.

“It is encouraging to see some liquidity returning to the financial markets and our portfolios. Nevertheless, we continue to be cautious about the short term outlook, which we expect to remain volatile. Looking forward, we believe that there are major alpha opportunities ahead of us with only a limited number of well-capitalised, experienced firms able to capture this potential on behalf of their clients. Our strong debt free balance sheet, our global coverage and our predominantly institutional client base will enable us to benefit from the expected consolidation and convergence in the hedge fund industry.”

Asset under Management The group’s AuM were USD 8.5 billion at 31 March 2009, compared to USD 9.6 billion at 31 December 2008 representing a decrease of 12.2%. The decrease was primarily caused by the negative impact of deleveraging, other technical factors and by client redemptions.

There were no client subscriptions for the quarter, whilst client redemptions accounted for USD 480 million. Foreign exchange contributed USD 30 million whilst deleveraging and rebalancing factors reduced AuM by USD 480 million in Q1 2009.

Despite positive performance of the market neutral products, overall net performance was a negative USD 250 million, predominantly due to mark downs in the asset based strategies.

During Q1 2009, Gottex’s core market neutral and directional products have performed better than equity markets and relevant hedge fund indices, which we believe is a confirmation of our expectation that performance of market neutral strategies will diverge from equity strategies during 2009.

Outlook The market environment remains difficult and we expect continued volatility until the end of the year, even though we have seen some liquidity returning to the hedge fund market. After further pressure on our industry in the first half of this year, we expect institutional asset flows in the hedge fund industry to start turning positive in the second half of 2009, driven by the major opportunity ahead in terms of higher risk- adjusted investment returns. Larger, well-capitalised firms with experienced staff, including ourselves, will be well positioned to make the most of these opportunities.

Gottex’s plans announced earlier this year are showing encouraging results and are generally on track. Building on a strong base of experienced professionals, global coverage and a strong debt-free balance sheet, Gottex is positive about its long term growth outlook. However given the current market situation, we only expect to see the benefits of our plans in terms of AuM growth towards the end of the year.

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