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Castle AI announces share buyback initiative

Thursday, June 17, 2010
Opalesque Industry Updates - Castle Alternative Invest AG (“Castle AI”), the second largest London listed fund of hedge funds, intends to buy back a maximum of 10 per cent of its issued share capital at up to 95 per cent of Net Asset Value (“NAV”) as part of a discount management programme.

The company, which has assets of approximately USD 600 million (as at 30 April 2010), has been listed on the SIX Swiss Exchange since January 1997 and dual listed on the London Stock Exchange on 5 June 2009.

The share buyback will be executed via a second trading line which will be opened on the SIX Swiss Exchange on 21 June 2010, and remain open until 10 December 2010 at the latest. The company will be the exclusive buyer on the second line and will repurchase shares for the purpose of subsequently reducing its share capital. Zurich Cantonal Bank has been appointed as the SIX Swiss Exchange member responsible for setting bid prices on the second line.

In US Dollar terms, Castle AI’s NAV has achieved a net annualised return of 7.23% since inception, compared to an annualised return of 3.07% for the MSCI World Index, with correlation to the index of 0.46*. Thomas Weber, head of hedge fund investment management at LGT Capital Partners, has been lead portfolio manager since inception.

Mark White, General Manager of Castle AI, said:
“It is vital that the boards of listed alternative investment vehicles have effective discount control mechanisms in place. At the time of the London listing, the company announced that it would implement share repurchases, subject to the board’s discretion, in order to support share price performance in the secondary market. These measures, coupled with the enhanced profile and liquidity provided by the dual listing, have attracted new investors in the company and there has been a significant reduction in the level of discount at which the shares trade.

“The second trading line should be an effective way of tightening the discount further, and result in a share price which more accurately reflects the merits of the company, which has delivered positive returns with low correlation to traditional asset classes since its inception.”

Castle AI, based in Pfaeffikon, Switzerland, seeks to achieve long term capital growth through investment in a well diversified and actively managed portfolio of hedge funds, managed accounts and other investment vehicles. Corporate website: www.castleai.com

- FG

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