Johnson School MBA Student-Run Hedge Fund Down Slightly in First Quarter 2009

Short positions prove more profitable than long

ITHACA, N.Y., April 20 /PRNewswire-USNewswire/ -- The Johnson School at
Cornell University's student-run Cayuga MBA Fund experienced a challenging
quarter, posting a return of -1.03%, compared to -2.49% for the HFR Equity
Market Neutral Index and 0.76% for the HFR Equity Hedge Index, which benefited
from a strong March performance. The S&P 500 was down 11.01% over the same
period. While the Fund has identified a number of strong performers on the
long side, its short positions have provided the bulk of the horsepower for
2009 thus far.

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One strong long position was Genentech (DNA). Although the market doubted
Roche's ability to close the $89/share tender offer for Genentech amid the
current credit crisis, Cayuga Fund students saw an opportunity when Genentech
shares were trading below $73 in the beginning of December. Given Roche's
strong financials, Genentech's robust pipeline and business synergy between
the two companies, students believed the deal would eventually close above
$90/share. The revised $95 tender offer from Roche was accepted in March.

MGM Mirage (MGM) was one of the strongest short positions for the fund. With
consumer confidence continuing to erode and discretionary spending pulled
back, Cayuga Fund students believed that customer traffic would continue to
decrease and gambling revenues would continue to fall. Casino stocks also
tend to operate with high amounts of leverage because the lodging and gaming
business is very capital intensive. With the tightening of the credit markets,
MGM was at risk of breaking existing debt covenants and announced in March
2009 that it was at risk of defaulting under debt agreements for the rest of
the year.

"The first quarter proved to be a roller coaster ride for the S&P 500. While
the latest rally could indicate the worst is behind us, the economic data
still leads us to believe that true recovery is still some time away. We
expect to see volatile equity markets with investors possibly retesting March
lows," said Andy Herr (MBA '09), investment relations representative for the
Cayuga Fund. "However, we can already see increased strength in certain
sectors and expect a decrease in the correlation between individual stocks and
the markets as a whole, giving the fund opportunities to generate absolute
returns through vigilant stock selection and risk management."

The Cayuga MBA Fund is an investment vehicle that aims to provide a
competitive rate of risk-adjusted return to its investors while enhancing the
educational and professional opportunities of Cornell's Johnson School MBA
students. It is supported by the analytical platform of the Parker Center,
cutting-edge research by faculty members, and extensive participation by
student portfolio managers. The Parker Center is a classroom providing
real-time stock quotes, international data feeds, and financial analysis
software and data valued at more than $1.8 million per year in licensing fees
and comparable, if not better, than the resources found at many Wall Street
firms.

The Cayuga MBA Fund is managed by 32 portfolio managers, including two
quantitative analysts, a trader, and an investor relations manager who, under
the guidance of faculty and outside investment advisors, work to fulfill the
investment objective of the fund to achieve consistent positive returns that
are uncorrelated with equity market benchmarks, and to maintain significantly
lower volatility than the broader market.

More information on the Cayuga Fund and the Parker Center can be found online
at: http://www.johnson.cornell.edu/parkercenter/.

About the Johnson School
Founded in 1946, the Johnson School is Cornell University's graduate school of
management. Consistently ranked as one of the top graduate schools of
business, the Johnson School builds upon Cornell's depth and breadth of
distinguished research and teaching, and its vast, worldwide network of
alumni, faculty, and colleagues. The school's "performance learning" approach
offers students defined frameworks and analytical tools, combined with expert
feedback to solve real problems in real organizations. Deliberately small and
extremely selective, the Johnson School maintains an intense, collaborative
community, where students develop teamwork and networking skills that foster
innovation and deliver results. Programs include one- and two-year MBA
degrees, an Executive MBA and the Cornell-Queen's Executive MBA, which offers
interactive videoconferencing sessions across the U.S. and Canada. For more
about the Johnson School please visit: www.johnson.cornell.edu.

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SOURCE The Johnson School at Cornell University

Deirdre G. Snyder, +1-607-255-3494, Dgs37@cornell.edu; or Lakshmi Bhojraj,
+1-607-255-1135, Lr10@cornell.edu, both of The Johnson School at Cornell
University