STT State Street Corporation

State Street Global Advisors (SSgA), the largest institutional money manager in the world, announced today a major expansion of its alternative strategies capabilities. This new initiative encompasses a significant broadening of SSgA's traditional long-short strategies to include a new line-up of cutting edge absolute return strategies, an infusion of new investment professionals, and a joint development relationship with an innovative quantitative investment management boutique. SSgA has managed absolute return strategies since the early 1990s. Today the firm makes available to clients a wide variety of absolute return strategies, including currency, long/short, market neutral, fixed income arbitrage and equity hedge/directional strategies, totaling approximately $4 billion in assets (as of March 31, 2006). With this effort, SSgA is bringing greater focus to the management of its alternative strategies. The current staff of investment professionals is led by Chris Woods, and was recently expanded to include new high profile hires of Jonathan Chanis, Henri Fouda, and Todor Georgiev formerly of Caxton Associates, Mellon Capital Management and KBC Alternative Asset Management, respectively. The three bring with them experience managing emerging market, commodity, global macro and capital structure arbitrage strategies. Woods and his team report to Sean Flannery, CIO North America and to Jane Tisdale, senior managing director of Absolute Return Strategies. The team is also supported by SSgA's Advanced Research Center, a group of more than twenty five analysts with advanced degrees in mathematics and applied finance disciplines. Additionally, a license has been entered into for dynamic allocation software developed by AlphaSimplex Group, LLC, a Cambridge, Mass.-based quantitative investment management company led by Andrew W. Lo, Ph.D., managing member and chief scientific officer. Dr. Lo is the director of the MIT Laboratory of Financial Engineering, and the Harris & Harris Group Professor at the MIT Sloan School of Management. "The combination of our risk management expertise and AlphaSimplex's tools for dynamic asset allocation distinguishes us in this competitive industry," said Woods. "Designed specifically to address the heterogeneous risk exposures implicit in different absolute return strategies, the software transcends traditional asset allocation analytics which don't typically take into account some of the unique risk factors faced by these strategies." "This initiative signals a high level of commitment to alternative investment strategies and allows us greater flexibility to build standard and customized alpha investment solutions for our clients," said Flannery. "It also provides flexibility to offer absolute return strategies to a wide range of clients on a worldwide basis. Lastly, by establishing a focused business, we can more easily adapt to changing market conditions in our single-minded pursuit of alpha." SSgA's increased commitment to absolute return strategies comes at a time of rising institutional demand and we are uniquely positioned to capture a share of this growing marketplace. We intend to provide institutions with access to alpha through investment with a firm that has a long fiduciary heritage. SSgA's well-tested operational environment, and deep knowledge of risk management, differentiates the firm along with its global reach and experience managing across the entire spectrum of asset classes. This breadth allows the operational flexibility to access multiple strategies in the pursuit of alpha, while at the same time aiming to offer clients a high level of transparency, accountability and fiduciary comfort. SSgA will accomplish this flexibility through the establishment of a limited purpose trust company, State Street Global Advisors Capital Management Trust Company, LLC. About State Street Global Advisors State Street Global Advisors, the investment management group of State Street Corporation, delivers investment strategies and integrated solutions to clients worldwide across every asset class, investment approach and style. With $1.5 trillion in investment programs and portfolios at June 30, 2006, State Street Global Advisors has investment centers in Boston, Hong Kong, London, Milan, Montreal, Munich, Paris, Singapore, Sydney, Tokyo, and Zurich, and offices in 25 cities worldwide. For more information, visit State Street Global Advisors at www.ssga.com. About SSgA Capital Management State Street Global Advisors Capital Management Trust Company, LLC, is a New Hampshire-chartered, limited-purpose, nondepository trust company, and a wholly-owned subsidiary of State Street Corporation, a financial holding company supervised by the Federal Reserve Board. About State Street Corporation State Street Corporation (NYSE: STT) is the world's leading specialist in providing institutional investors with investment servicing, investment management and investment research and trading services. With $10.9 trillion in assets under custody and $1.5 trillion in assets under management at June 30, 2006, State Street operates in 26 countries and more than 100 geographic markets worldwide. For more information, visit State Street's web site at www.statestreet.com.