TLI Alt. AO. Prfnpv

    Valuation Basis and Net Asset Value

To date the valuation basis adopted by the Directors has assumed that the
appropriate discount rate for valuation purposes is the internal rate of return
on each policy calculated at the time of purchase. This has meant that policy
valuations as at the date of purchase have been equal to their cost and ongoing
policy values have to date tended to increase broadly in line with the cost of
premiums after allowing for the running expenses of the Company.  Whilst this
method has the merit of being conservative, it has become increasingly apparent
to the Board that the level of activity in the secondary market has resulted in
a significant increase in prices for policies. This has been reflected in the
higher prices which have been paid by the Company for more recently acquired
policies but has not so far been reflected in the valuation of policies
previously acquired.

There is no official source of secondary price information for US Traded Life
Interests. Nevertheless, Surrenda-Link as investment manager, through its
extensive contacts, is in a position to advise the Board on market price
movements from time to time and their impact on the value of the policies held
by the Company on an ongoing basis. Their advice is based on the prices at
which policies are currently being offered for sale and/or acquired, adjusted
for anomalous secondary market trades.

 

Accordingly, the Board proposes in future to take such advice on market price
movements fully into account in arriving at an appropriate valuation for the
Company's portfolio. It should, however, be noted that the valuation of the TLI
portfolio should not be taken as an indication of the price which might be
obtained if all or part of the portfolio were to be sold in the market.

The Board of Alternative Asset Opportunities PCC Limited wish to announce that
the net asset value per share of the US Traded Life Interests Fund as at 31st
August 2005 was 104.3 pence, calculated on this new basis.

Contact:

Ian Hancock (Tel. 01481 709677)

Kleinwort Benson (Channel Islands) Fund Services Limited



END

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