Jayhawk Capital Management, LLC Closes Its U.S.-Focused Hedge Fund after Achieving 23%+ Net Annual Returns since January 1, 1999

Business Wire, Oct 24, 2008

Cites Poor U.S. Economic Policy;

Since Fund's Close, Dow Down 26.8% and S&P Down 29.7%

MISSION, Kan. -- In its June 2008 Quarterly Newsletter to Investors titled "Cash is King," Jayhawk Capital Management summarizes its bearish view on U.S. equities due to fiscal and individual imbalances and incoherent Fed policy. Despite an outstanding 10-year track record, management has decided to close down Jayhawk Institutional Partners and return capital to investors as of August 31, 2008.

The U.S.-focused fund returned 23.5% annualized net of fees over almost 10 years; this, compared to 1.6% for the S&P 500 and 5.1% for Warren Buffet's Berkshire Hathaway Class A shares. Jayhawk's cumulative performance was 682% versus the S&P 500's 22.3% and Berkshire's 64.92%. Mike Schmitz, Jayhawk Capital's CFO, points out that, "When comparing the performance of Jayhawk to the 71 funds (with 10-year track records) in the Goldman Sachs Profit Sharing Plan and Vanguard Funds, Jayhawk ranks first."

Jayhawk believes it is unusual to voluntarily liquidate a fund with such solid returns. However, management has consistently stated that where they do not see opportunity to achieve solid returns, they will return capital to investors. For example, in September 2007, management liquidated the Jayhawk China A-Share Fund because of their belief that the Chinese A-Share market was significantly overvalued. At liquidation, the fund had achieved 70.1% annualized net returns, and since closing that fund, the CSI 300 A-Share index is down over 65%. As is the case with all of Jayhawk's funds, the management team was the largest investor in the Institutional Fund. Kent C. McCarthy, founder and CEO of Jayhawk Capital Management, said, "In our opinion, fundamentals for U.S. equities have deteriorated further since our June 30 newsletter; accordingly, we would prefer to have our assets invested in Asia, particularly China."

Jayhawk Capital Management, LLC is a Kansas-based investment firm that manages several hedge and private equity funds, focused primarily on investing in companies based and operating in North America and China.