KBC adapts equity-linked market activities to c...

Regulated information*

On 10  December,  the  KBC  group  announced  that  it  is  currently
examining its  operations outside  its  home markets  and  evaluating
whether  or  not  they  belong  to  its  core  activities,   generate
sufficient return  or  use up  too  much  capital. As  part  of  this
group-wide exercise and as  stated before by the  Group CEO, some  of
the derivatives-based  market activities  are being  subjected to  an
in-depth evaluation by KBC Financial  Products ('KBCFP'). KBC FP  has
conducted a strategic review of operations and decided to discontinue
some of its  hedge fund  related activities.  However, the  remaining
positions of  existing investors  will be  managed until  they  reach
maturity. This decision has already led to and could lead to  further
internal transfers and, where no suitable alternatives are available,
to redundancies.
As part of this strategic review,  KBC has also decided to close  KBC
Alternative Investment Management  ('KBC AIM').  KBC AIM  is a  hedge
fund manager  specialising  in  a  variety  of  strategies  including
relative value and market neutral  bias across multiple products  and
asset classes. KBC AIM's  offices are based in  London, New York  and
Hong Kong, and  the company  employs 28  investment professionals  in
total. The closure of  KBC AIM will  lead to a  number of job  losses
with some positions  being reallocated to  other KBC business  units.
All investors in the funds have been fully redeemed.

At the  same  time,  Pacific  Alternative  Asset  Management  Company
('PAAMCO'), a 9-billion-USD fund of hedge funds company, announced on
2 December that  the investment  team of KBC  Alpha Asset  Management
('KBC  Alpha'),  a  700-million-USD  hedge  fund  of  funds  will  be
transferred to  PAAMCO. The  team will  be integrated  into  PAAMCO's
global portfolio  management team  and will  initially operate  as  a
separate division within PAAMCO, known as Pan Asia Alpha  Strategies.
KBC Alpha has offices in London, Hong Kong, Tokyo and Singapore.  The
group manages  multi-strategy  funds  of hedge  funds,  which  invest
across Asia  on  behalf  of Japanese,  European  and  North  American
investors.

* This news item contains information that is subject to the
transparency regulations for listed companies.


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