Industry Experts Predict Greater Market Discipline and More Due Diligence in 2010

Walkers Seminar Offers Perspective from Regulators, Investment Managers, Financial Executives, and Other Market Leaders

GEORGE TOWN, Grand Cayman, January 14 - Joel Press, Managing Director of Morgan Stanley's Prime Brokerage
Division; Todd Groome, non-Executive Chairman of the Alternative Investment
Management Association (AIMA); and Gregory Zuckerman, author and special
writer with The Wall Street Journal were among the experts who offered their
predictions for 2010 at a seminar for more than 300 members of the financial
industry in New York hosted by international offshore law firm Walkers. The
experts' predictions included greater market discipline from investors and an
increased focus on due diligence by providers and custodians. Greater
allocations to hedge funds were anticipated at the expense of equities, while
the latest regulatory waves and the next likely bubbles in the market were
also debated.

"In today's environment, there can no longer simply be a checklist to
confirm a process. Potential investors must look at what motivates and drives
the relevant provider," said Ingrid Pierce, Partner with Walkers and head of
the firm's Cayman Islands Hedge Fund practice. "Custody diligence is very
much at the forefront of people's minds. Key questions include whether
counterparties have the ability to move or re-hypothecate assets and whether
contracts will hold up in an insolvency."

Investigative diligence, which looks in a very detailed way at precisely
what various providers do, not just what they say they do, has also become a
key focus as investors and other players ramp up their policies in this area,
according to Ms. Pierce.

"It is important for both funds and investors to work out well in advance
exactly what their exit strategy will be and how the provisions in the fund's
documents will actually work," Ms. Pierce said. "The heightened levels of
diligence we have seen throughout the investment process are not going to
diminish anytime soon. All participants, including legal counsel have to
increase our awareness of the issues and address key areas of risk with our
clients."

Highlighting some positive trends in hedge funds, AIMA's Todd Groome
pointed to new allocations going to a variety of strategies. For example,
managers in Asia are seeing 75% of net new allocations coming from the United
States, primarily from pension funds. He also noted the launch of new hedge
funds represents a clear increase in confidence.

"Market discipline from investors is back with a vengeance," said Mr.
Groome. "Investors are asking for greater transparency. They want to use the
transparency to create a more idiosyncratic contract for their particular
situation and a particular strategy."

On the regulatory front, in this current challenging policy environment,
Mr. Groome said things will take time and require considerable coordination
among financial leaders, policy makers, and investors.

Joel Press of Morgan Stanley offered his personal insights on what can be
expected in the hedge fund market going forward. He anticipates hundreds of
smaller start ups in 2010 and said that seeding is more important than ever.
With inflows still coming into the market, Mr. Press predicted that the
industry will be worth US$3 trillion four years from now, compared to the
current estimated value of US$1.8 trillion.

"There is no need for hedge fund fees to go down," Mr. Press said. "If
you look at long-term investing, hedge funds are absolutely performing better
than any other investment vehicle. Investors are looking to replace equities
with hedge fund allocations and hedge funds are increasingly being used as an
equity substitute."

The seminar also featured an in-depth examination of the role of
fiduciaries, notably issues of responsibilities and accountability, from Guy
Locke, Partner and Joint Head of the Corporate and Financial Restructuring
Group at Walkers and Scott Lennon, Senior Vice President at Walkers Fund
Services.

"It is a brand new world for hedge fund directors. Questionnaires are
more extensive and elaborate and people want to know that manuals have been
fully tested," Mr. Lennon said. "With changing standards of care and
liability caps for auditors and other service providers, managers are in a
tough negotiating environment. It is important to understand the whole
picture of risk and where it will fall if things go wrong."

Hedge fund financing was addressed by Philip Paschalides, a Walkers
Partner and head of the firm's Finance and Corporate Group in the Cayman
Islands. Mr. Paschalides said that the banking team in Walkers' Cayman office
had its busiest year ever for hedge fund financing, suggesting that leverage
may not be a thing of the past.

"Lenders are generally quite savvy about the hedge fund world," Mr.
Paschalides said. "They keep databases, look at redemptions and gates and
will lower borrowing bases to account for liquidity and concentration
issues."

Gregory Zuckerman from The Wall Street Journal said we are in an age of
bubbles, citing housing, energy, Asian currencies and technology stocks as
examples of bubbles the market has experienced over the past decade.

"The next bubble may be emerging markets, Brazil, China, or pockets of
real estate in Asia or Australia," Mr. Zuckerman said. "Everyone is worried
about the next investor. There is an incentive to increasingly pile on trades
and now it is much easier to express trades using ETFs, synthetic CDS and
other types of derivatives. Managers today are fully invested and talking
about adding leverage, but they don't really believe in the long term nature
of these investments. It might work out in the short term but long term you
wonder if they can all get out."

The New York event was the latest in the 'Walkers Fundamentals' series
designed to bring discussions of key financial issues to the world's
investment capitals. Video highlights of the seminar will be posted to
Walkers' website at www.walkersglobal.com.

"We were delighted to hear attendees use words such as 'enlightening' and
'relevant' to describe the event," said Mark Lewis, Senior Investment Funds
Partner with Walkers, who opened the seminar. "Walkers believes the best way
to ensure best practices in the financial community is through open
discussion and education by all the participants."

About The Walkers Group

From offices in the British Virgin Islands, Cayman Islands, Dubai, Hong
Kong, Jersey, London, and Singapore, the Walkers group provides legal and
management services to leading FORTUNE 100 and FTSE 100 global corporations
and financial institutions, capital markets participants, investment fund
managers, and growth-and middle-market companies. The Walkers group is
comprised of leading offshore law firm, Walkers; fund services provider,
Walkers Fund Services Limited; and SPV and corporate services providers,
Walkers SPV Limited, Walkers Corporate Services Limited and Walkers (BVI)
Limited.

Walkers' expertise has been validated by numerous awards including
"Offshore Law Firm of the Year" by Alpha Magazine, The Lawyer, PLC Which
Lawyer? and Asian Legal Business. Walkers has also been honoured as the PLC
Which Lawyer? Yearbook Leading Cayman Islands Law Firm, Who's Who Legal Law
Firm of the Year: Cayman Islands and has shared honours for "Offshore Legal
Team of the Year" by the Society of Trust and Estate Practitioners (STEP).
Many of Walkers' attorneys have also been recognized by the industry and
their peers.

For more information on the Walkers group, visit us on the web at
www.walkersglobal.com or contact us by e-mail at info@walkersglobal.com. To
contact Walkers by phone, call our Cayman Islands office at +345-949-0100.

Megan Fox of Levick Strategic Communications for Walkers, +1-202-973-5308, or Mobile, +1-202-596-0707, mfox at levick.com