June15, 2003


TAIB CONCLUDES $100 MM FUND DEAL


TAIB Bank E.C., Bahrain, has completed a second US$100 million investment in the capital guaranteed Chambord Fund in conjunction with BNP Paribas. Announcing this in Bahrain, Mr Iqbal G. Mamdani, Vice Chairman and CEO said, "At a time when investors are seeking protection of their capital as well as solid proof of past performance, we are delighted to be able, once again, to offer sub-participation in the Chambord Fund to our investors, this time for 5 years, based on its solid performance in the 3 years from 2000 to 2003, when it recorded a growth of 29 %". "The new Chambord will also have the feature of principal protection and the Note has been structured such as to afford a lot of flexibility and choice to investors, particularly in regard to the use of leverage, and in respect of early redemption," he added.

This is the second time that TAIB Bank has invested in Chambord. In the first  3-year investment in 2000, the Fund had a volatility of just 1.8% upto March 2003, and produced returns of 29%. "We based our decision to repeat our investment in this fund for a second " and longer " time as our investors were very pleased with the performance of the Chambord Fund, especially given the extreme volatility of the capital markets during extremely difficult times. Our Fund Advisers, FRM have done a tremendously successful job in selecting and monitoring fund managers, as well as in dynamically managing the allocation of funds between the different hedge fund strategies", said Mr Mamdani.

"The underlying investment by TAIB Bank comprises 5-year Euro Medium Term Notes issued by BNP Paribas. The Net Asset Value of these Notes is linked to the performance of the Chambord Fund, a highly successful fund of multiple hedge funds, based on Alternative Strategies, in which TAIB is the sole investor. The strategy of the Fund is to target steady and absolute returns, with minimal correlation to the performance of the markets, which means that Chambord Fund is expected to generate positive returns whether the markets go up or go down. In the current economic climate, our investors are extremely happy with such an offering by TAIB", said Mr Ramesh Mahalingam, Senior Vice President of the Asset Management Division of the Bank. 

For TAIB’s investors, participation in this Fund affords a leveraged exposure to the performance of $100 MM of the underlying investments and consists of Notes carrying a face value of $25 million. Investors can participate through sub-participation in the Notes and can enjoy a 95% participation in the returns.

The Chambord Fund is advised out of London by Financial Risk Management Ltd., a London-based firm with a 12-year track record in the hedge fund advisory business and with $4.5 billion of funds currently under management. They are ranked among the 15 largest managers in the fund of funds business in the world.

TAIB Bank E.C., an international investment bank based in Bahrain and listed on the Bahrain Stock Exchange, pursues business activities in the regional markets of the Gulf, the Indian sub continent, Turkey, Central Asia, Europe and the USA.


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