The Bank of New York Mellon's Pershing Unit Releases New Study for Hedge Funds...

JERSEY CITY, N.J., Jan. 5 /PRNewswire-FirstCall/ -- A new white paper
published by Pershing LLC, a subsidiary of The Bank of New York Mellon
Corporation, and Aite Group LLC has found that managing counterparty risk is a
much more critical component of a hedge fund's overall business operations
today than it has been in previous years.

The study, entitled Risk and Reward: Hedge Funds Changing Views on
Counterparty Relationships, focuses on the heightened importance of
effectively managing counterparty risk and the integral role it plays in
partnering with a prime broker.  It also highlights best practices that have
been implemented by other hedge funds to help address and mitigate
counterparty risk.  Key findings from the study include:

    --  Hedge Funds Increase Scrutiny On Managing Counterparty Risk
    -- Counterparty risk monitoring has become a significant part of overall
        business operations.  One of the major drivers for heightened attention
        to managing counterparty risk are hedge funds' concerns about the
        negative impact it could ultimately have on their firms' operations
        should one of their key counterparties default on their obligations.
        More than 50% of respondents reported monitoring counterparty risk on a
        daily basis and nearly 85% consider it an extremely important or very
        important business issue.  An overwhelming 96% of respondents also cited
        managing counterparty risk as the number one factor in selecting their
        prime broker relationships.  Concerns about managing counterparty risk
        two years ago were not a primary issue for most hedge funds, as 26% of
        the respondents considered counterparty risk important and 22% viewed it
        as moderately important;
    -- Counterparty Risk Management Must be Tackled Directly and Systematically
    -- Effectively monitoring counterparty risk will continue to be a
        critical component of a hedge fund's business operations.  The
        development of a standardized, well-documented approach to analyzing
        counterparty risk remains one of the top priorities for the hedge fund
        community.  Best practices for proactively managing counterparty risk
        include:
    -- Leveraging innovative services from prime brokers, such as a
        tri-party account approach
    -- Conducting consistent internal portfolio and risk assessments
    -- Formalizing business processes by outsourcing and installing
        in-house technology solutions such as portfolio management
        systems
    -- Implementing third-party independent valuation technology
        solutions and service providers supplemented with in-house
        valuation tools; and
   --  Adoption of Technology -- There is no silver bullet for hedge funds when
        attempting to actively monitor the balance sheets of important
        counterparties despite the growing concerns over counterparty risk
        management.  Most hedge funds currently go through manual-intensive
        processes to keep track of counterparty relationships.  The reality is
        that despite the industry's lack of a comprehensive technology
        platform to fully automate counterparty risk management, hedge funds
        continue to expand their presence globally and invest in more complex
        instruments. Reliable counterparty relationships will become even more
        critical, and continual innovation in terms of technology and services
        from leading service providers will be key to mitigating the hedge fund
        industry's exposure to counterparty risk.


Craig Messinger, managing director of Pershing Prime Services, said, "Managing
counterparty relationships is one of the most important business and
operational issues facing hedge funds and the broader industry today.  In
order to help ensure continued growth and success, hedge funds of all sizes
must continue to invest in and implement the proper internal controls and
systematic processes to effectively monitor, manage and mitigate counterparty
risk."

Sang Lee, managing partner at Aite Group LLC, added, "The current credit
crisis has elevated the importance of counterparty risk management in the eyes
of many hedge fund managers.  Creating a more systematic approach to
counterparty risk management will go a long way in restoring market confidence
and helping the hedge fund industry recapture its profitability."

Risk and Reward: Hedge Funds Changing Views on Counterparty Relationships is a
component of Pershing's Ideas Without LimitsTM thought-leadership program.
The study is based on a survey conducted by Aite Group with 23 global hedge
funds during the summer of 2008.  The top 100 hedge funds --those with assets
under management (AUM) greater than $500 million --represent more than 75% of
total hedge fund AUM.  Aite Group targeted these funds to capture responses
that reflect the changing perception and importance of managing and assessing
counterparty risk.  The respondents of the study were funds with active
trading operations that typically handled multiple asset classes. The report
was commissioned by Pershing LLC and independently executed by Aite Group LLC.
A copy of the study is available by contacting Pershing Prime Services at
primeservices@pershing.com or at www.pershingprimeservices.com.

Pershing Prime Services delivers an unconflicted, integrated suite of prime
brokerage solutions, including expansive access to securities lending,
dedicated client service, powerful technology and reporting tools, robust cash
management products, global execution and order management capabilities and
additional integrated solutions of The Bank of New York Mellon. Pershing Prime
Services is a service of Pershing LLC.

Pershing LLC (member FINRA/NYSE/SIPC) is a leading global provider of
financial business solutions to more than 1,150 institutional and retail
financial organizations and independent registered investment advisors who
collectively represent over five million active investors.  Located in 19
offices worldwide, Pershing is committed to delivering dependable operational
support, robust trading services, flexible technology, an expansive array of
investment solutions, practice management support and service excellence.
Pershing is a member of every major U.S. securities exchange and its
international affiliates are members of the Deutsche Borse, the Irish Stock
Exchange and the London Stock Exchange.  Pershing LLC is a subsidiary of The
Bank of New York Mellon Corporation.  Additional information is available at
www.pershing.com.

The Bank of New York Mellon Corporation is a global financial services company
focused on helping clients manage and service their financial assets,
operating in 34 countries and serving more than 100 markets. The company is a
leading provider of financial services for institutions, corporations and
high-net-worth individuals, providing superior asset management and wealth
management, asset servicing, issuer services, clearing services, and treasury
services through a worldwide client-focused team. It has $22.4 trillion in
assets under custody and administration, approximately $1.1 trillion in assets
under management, and services approximately $12 trillion in outstanding debt.
Additional information is available at www.bnymellon.com.

SOURCE  The Bank of New York Mellon Corporation

Michael Geller, +1-201-413-4179, mgeller@pershing.com