AIP's Flagship Fund, Alpha Hedged Strategies Fund (ALPHX), Received a 4-Star Overall Morningstar Rating(TM)* among 45 funds in the New Long/Short Category for the period ending 4/30/06 WHITE PLAINS, N.Y., May 16 /PRNewswire/ -- AIP Alternative Strategies Funds (AIP) today announced that the 2nd fund in their growing family of alternative mutual funds, the Beta Hedged Strategies Fund (Ticker: BETAX), has officially opened to all investors. AIP is also the advisor to the Alpha Hedged Strategies Fund (Ticker: ALPHX) the first open-end multi-strategy mutual fund to directly access specialized hedge fund managers, which entered the ever growing alternative space in September 2002. The success of the Alpha Hedged Strategies Fund, and the demand in the marketplace and from ALPHX clients, led AIP to design and launch the Beta Hedged Strategies Fund. The Alpha Hedged Strategies Fund recently passed the $200MM mark and received a 4-star Overall Morningstar Rating(TM) for the 3-year period ended 4/30/06. The Alpha and Beta Hedged Strategies Funds are open-end mutual funds designed to minimize equity market exposure and volatility by employing a variety of absolute return strategies. ALPHX and BETAX represent the next generation of products for hedged alternative strategies investing, and are open to all investors. "The Beta Hedged Strategies Fund is simply a more aggressive mix of the managers and strategies employed by ALPHX," noted Lee Schultheis, Chief Investment Strategist and Co-Founder of AIP. "ALPHX has filled a niche with advisors as an 'alternative' to fixed income; the same advisors wanted a more 'turbo-charged' version of ALPHX to use in lieu of an equity allocation, hence BETAX." Since inception on September 23, 2002 through April 30, 2006 we feel ALPHX has succeeded in providing attractive risk-adjusted returns, 8.01% annualized return (vs. 16.23% for the S&P 500), as evidenced by our maintaining a low beta of +0.06 (vs. 1.00 for the S&P 500), and an annualized standard deviation of just 4.29% (vs. 14.21% for the S&P 500). ALPHX's return for the 12 months ended 4/30/06 was 13.26%. Standardized Performance (as of 3/31/06) YTD 1YR Since Incep* ALPHX 6.60% 9.77% 7.68% S&P 500 4.21% 11.72% 16.20% * Annualized Performance data quoted represents past performance; past performance 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. Current performance of the Fund may be lower or higher than performance quoted. Most recent month-end performance is available by calling 1-877-Low-Beta. The Funds impose a 2.00% redemption fee for shares held than 90 calendar days. "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 so we developed and successfully launched the Beta Hedged Strategies Fund, to meet the demand for an alternative risk/reward profile." Beta utilizes the more aggressive managers and strategies in higher % allocations than Alpha, and will also use 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. "Alpha has been a favorite among 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," noted Schultheis. "Advisors know that they have to be able to offer conservative, all-weather choices to their clients," Schultheis added. "By delivering both a conservative portfolio risk profile and strong risk-adjusted performance, Alpha Hedged Strategies has garnered both increased media exposure, and investor interest." About the Alpha & Beta Hedged Strategies Funds The Funds (ALPHX & BETAX) are open-end mutual funds that invest their portfolio in a manner similar to a conservative and more aggressive, hedge fund-of-funds, respectively. The Funds employ a multi-manager approach to a variety of hedged alternative investment styles, but each with a portfolio of its own securities, using the limited amounts of leverage and short-selling allowable in open-end mutual funds. As multi-strategy funds, ALPHX and BETAX give their 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 Funds utilize the talents of highly specialized hedge fund managers, as sub-advisors to the Funds, in executing their alternative investment strategies. The Funds offer the portfolio diversification benefits that institutions, pension funds, endowments & foundations, and high-net worth individuals have become accustomed to in hedge funds. The Funds combine these portfolio attributes with the daily pricing, liquidity, and other shareholder features commonly associated with open-end mutual funds. As such, the Funds are uniquely positioned to provide their shareholders with portfolio diversification that goes well beyond the traditional asset classes of stocks, bonds and cash. For more information on the Funds please visit http://www.aipfunds.com/ or call 1-866-Low-Beta (569-2382). Fund Disclosure The Funds' 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. Certain hedging techniques and leverage employed in the management of the Funds 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 Funds. 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 Funds. Options held in the Funds may be illiquid and the fund manager may have difficulty closing out a position. The Funds 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 Funds, resulting in a generally higher investment cost than from investing directly in the underlying shares of these funds. The Funds intend 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. * 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 Long-Short funds over the following time periods: 45 funds in the last three years. With respect to these Long-Short funds, Alpha Hedged Strategies Fund received a Morningstar Rating(TM) of 4-Stars for the three-year period ending 4/30/06. ** Morningstar defines Long-Short as: a fund with roughly 20% their total net assets in short positions. Mutual fund investing involves risk; loss of principal is possible. Please consult an investment professional for advice regarding your particular circumstances. An investment in the Funds may not be suitable for all investors. 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. The S&P 500 Index is a broad based unmanaged index of 500 stocks, which is widely recognized as representative of the equity market in general. You cannot invest directly in an index. Quasar Distributors, LLC, Distributor - 5/06 DATASOURCE: AIP Alternative Strategies Funds CONTACT: Jennifer Connelly of JC Public Relations for AIP Alternative Strategies Funds, +1-908-813-2478, Web site: http://www.aipfunds.com/

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