Alpha Hedged Strategies Fund's Success Leads to Plans for a New Beta Hedged Strategies Fund WHITE PLAINS, N.Y., Oct. 24 /PRNewswire-FirstCall/ -- Alternative Investment Partners, LLC (AIP) today announced a significant milestone for their Alpha Hedged Strategies Fund (Ticker: ALPHX), as it reached its 3 Year Anniversary. The Alpha Hedged Strategies Fund, http://www.aipfunds.com/, is an innovative open-end mutual fund designed to minimize equity market exposure and volatility by employing a variety of absolute return strategies. The Fund represents the next generation of product for hedged alternative strategies investing, and is open to all investors. Since inception on September 23, 2002 through September 30, 2005, we feel we have succeeded in providing attractive risk-adjusted returns, as evidenced by our 6.81% annualized return, while maintaining a low beta of +.04 (vs. 1.00 for the S&P 500), and an annualized standard deviation of just 4.21% (vs. 15.03% for the S&P 500). The Fund's total return for the 12 months ended 9/30/05 was 10.01%. Performance data quoted represents past performance and does not guarantee future results. The investment return and principal value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original cost. Fund performance current to the most recent month-end may be lower or higher than the performance quoted and may be obtained by calling 1-877-Low-Beta. The fund imposes a 2.00% redemption fee for shares redeemed less than 90 calendar days after they are purchased. "The three year mark is a significant milestone, and we are pleased to announce that Alpha Hedged Strategies Fund received a 3-Star Overall Morningstar Rating(TM)* among 252 Conservative Allocation funds for the period ending 9/30/05," noted Lee Schultheis, Chief Investment Strategist and Co- Founder of AIP and the Alpha Hedged Strategies Fund. The Overall Morningstar Rating for a fund is derived from a weighted average of the risk-adjusted return figures associated with its three-year Morningstar Rating metrics. "At the three year mark, Morningstar covers fund data in a more in-depth manner, and funds also begin to show up in more periodicals in various fund rankings and ratings. As Alpha Hedged Strategies is in Morningstar's Conservative Allocation Category,** many potential investors will be interested in our lower level of risk statistics such as beta and standard deviation, which Morningstar tracks on Morningstar.com for a rolling three year period." "Funds that focus on just one strategy, or on just technical model driven strategies, miss the point in our view," commented Schultheis. "One of the key attributes of the hedge fund world is its adaptability. The strategies and styles that work the best in today's environment, may not work as well, or need a little 'tweaking' under different fundamental market conditions. For instance, if volatility is missing from the markets, relying solely on strategies that need volatility can be fool hardy. Having experienced hedge fund managers, that have seen trends come and go, provides a greater ability to change with the times." "In reflecting back on the last three years, perhaps the biggest surprise is that there have not been more imitators in the mutual fund space, seeking to follow on the heels of our success," added Schultheis. "One of the keys to Alpha Hedged Strategies is combining the active management skills of experienced hedge fund managers in a fully open-end mutual fund. Most of the alternative products developed in the mutual fund space over the past three years have either fallen short of the fully open-end fund format, have used a single strategy approach, or have relied on fixed indices or technical models." The success of the Alpha Hedged Strategies Fund, which recently passed the $135 Million mark, has led AIP to begin developing a Beta Hedged Strategies Fund. "The financial advisor community has really warmed up to the concept of a multi-strategy product like ours," said Schultheis. "Now they want more choices, and we are developing Beta Hedged Strategies Fund, to meet the demand for an alternative risk/reward profile." Beta will consist of some of the more aggressive managers and strategies from Alpha, in higher % allocations, and some new managers/strategies specifically designed for Beta's higher total return target, with an allowance for a little higher risk profile, as measured by beta and standard deviation. Beta Hedged Strategies is targeted for an early 2006 roll out. "Alpha has been a favorite among financial advisors for their more conservative clients, and Beta is designed to be more attractive to the investor seeking a higher rate of return, but still reduced risk profile vis- a-vis the market indices," added Schultheis. "Advisors know that they have to be able to offer conservative, all-weather choices to their clients. By delivering both a conservative portfolio risk profile and strong risk-adjusted performance, we feel Alpha Hedged Strategies has met these objectives. Now with Beta Hedged Strategies, they will have more tools to work with, in meeting the needs of their clients." About the Alpha Hedged Strategies Fund The Alpha Hedged Strategies Fund (ALPHX) is an open-end mutual fund that invests its portfolio in a manner similar to a conservative hedge fund-of- funds. The fund employs a multi-manager approach to a variety of hedged alternative investment styles, but with a liquid portfolio of its own securities, using the limited amounts of leverage and short-selling allowable in open-end mutual funds. As a multi-strategy fund, Alpha Hedged Strategies gives its investors exposure to a broad variety of active management in alternative strategies including: Distressed Securities, Earnings Revision Long/Short Equity, Momentum Long/Short Equity, REIT Long/Short Equity, Deep Discount Value Long/Short Equity, International Long/Short Equity, Merger Arbitrage, Fixed- Income Arbitrage, and Convertible Bond Arbitrage. The Alpha Hedged Strategies Fund utilizes the talents of highly specialized hedge fund managers, as sub-advisers to the Fund, in executing their alternative investment strategies. The Fund offers the portfolio diversification benefits that institutions, pension funds, endowments & foundations, and high-net worth individuals have become accustomed to in hedge funds. The Fund combines these portfolio attributes with the daily pricing, liquidity, and other shareholder features commonly associated with open-end mutual funds. As such, the Fund is uniquely positioned to provide its shareholders with portfolio diversification that goes well beyond the traditional asset classes of stocks, bonds and cash. For more information on the Alpha Hedged Strategies Fund please visit http://www.aipfunds.com/ or call 1-866-LOW-BETA (569-2382). Fund Disclosure The fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company, and it may be obtained by calling 1-877-LOW-BETA (569-2382), or visiting http://www.aipfunds.com/. Read it carefully before investing. The information in this communication is not complete and may be changed. We may not sell the Beta Hedged Strategies Fund until the registration statement filed with the Securities and Exchange Commission is effective. This communication is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. Certain hedging techniques and leverage employed in the management of the Fund may accelerate the velocity of possible losses. Short selling involves the risk of potentially unlimited increase in the market value of the security sold short, which could result in potentially unlimited loss for the Fund. Derivatives involve investment exposure that may exceed the original cost and a small investment in derivatives could have a large potential impact on the performance of the Fund. Options held in the Fund may be illiquid and the fund manager may have difficulty closing out a position. The Fund may also invest in: -- smaller capitalized companies -- subject to more abrupt or erratic market movements than larger, more established companies; -- foreign securities, which involve currency risk, different accounting standards and are subject to political instability; -- securities limited to resale to qualified institutional investors, which can affect their degree of liquidity; -- shares of other investment companies that invest in securities and styles similar to the Fund, resulting in a generally higher investment cost than from investing directly in the underlying shares of these funds. The Fund intends to utilize these individual securities and hedging techniques in matched combinations that are designed to neutralize or offset the individual risks of employing these techniques separately. Some of these matched strategies include: merger arbitrage, long/short equity, convertible bond arbitrage and fixed-income arbitrage. There is no assurance that these strategies will protect against losses. 2005 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. * For each fund with at least a three-year history, Morningstar calculates a Morningstar Rating(TM) metric each month by subtracting the return on a 90-day U.S. Treasury Bill from the fund's load- adjusted return for the same period, and then adjusting this excess return for risk. The top 10% of funds in each category receive 5 stars, the next 22.5% receive 4 stars the next 35% receive 3 stars, the next 22.5% receive 2 stars and the bottom 10% receive 1 star. The Overall Morningstar Rating(TM) for a fund is derived from a weighted average of the performance figures associated with its three-, five-, and ten-year (if applicable) Morningstar Rating(TM) metrics. The Alpha Hedged Strategies Fund was rated against the following numbers of U.S. domiciled Conservative Allocation funds over the following time periods: 252 funds in the last three years. With respect to these Conservative Allocation funds, Alpha Hedged Strategies Fund received a Morningstar Rating(TM) of 3 stars for the three-year period ending 9/30/05. ** Morningstar defines Conservative Allocation as: a fund that invests in both stocks and bonds and maintains a relatively small position in stocks. These funds typically have 20-50% of their assets in stocks and 50-80% of assets in bonds and cash. Mutual fund investing involves risk; loss of principal is possible. Please consult an investment professional for advice regarding your particular circumstances. Beta is a quantitative measure of the volatility of a given stock, mutual fund, or portfolio, relative to the overall market, usually the S&P 500. A beta above 1 is generally more volatile than the overall market, while a beta below 1 is generally less volatile. Standard Deviation is a statistical measure of the historical volatility of a mutual fund or portfolio, using daily net asset value returns. Quasar Distributors, LLC, Distributor - 10/05 DATASOURCE: Alpha Hedged Strategies Fund CONTACT: Jennifer Connelly of JC Public Relations for Alpha Hedged Strategies Fund, +1-908-813-2478, Web site: http://www.aipfunds.com/ http://www.morningstar.com/

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