Declaration Management and Research Announces Final Distributions from Two Mortgage Funds

MCLEAN, Va., Feb. 9 /PRNewswire-FirstCall/ -- Declaration Management & Research LLC (DMR) today announced that it had issued the final distributions from its highly successful DMR Mortgage Opportunity Fund LP and DMR Mortgage Opportunity Companion Fund LP.

The two funds were launched in May and November of 2008 and closed with aggregate capital commitments from institutional investors of $417 million. The funds were designed to take advantage of the dislocation in the structured credit markets that began in late 2007, primarily in residential mortgage backed securities (RMBS). At inception, each vehicle was expected to have a three to five year holding period.

Net realized IRR's from capital calls until the final cash distribution near the end of last month were approximately 27 percent and 42 percent, the company said.

"As 2009 progressed it became evident to us that the strong price recovery in distressed mortgage securities was generally detached from the underlying credit fundamentals," said Jim Shallcross, Declaration's Director of Portfolio Management and the funds' lead manager. "In our view, by the fourth quarter, the intrinsic cheapness of these securities was gone and it was time to exit the trade. Our clients were both surprised and pleased to receive their capital and earnings in such a short time frame."

The funds, which did not use leverage, found the best value opportunities before market technicals turned positive for the sector. By year-end 2009, the new clearing level in RMBS valuations allowed DMR an orderly and profitable exit from the funds' positions. In the next stage of the credit cycle, DMR expects to find select opportunities through its extensive security selection skills.

"These funds were designed for what we would call the deep value phase of this market cycle," said Declaration President Bill Callan. "The next phase, which we believe can be as remunerative, will require a more flexible approach including long-short capabilities."

About Declaration Management & Research LLC

Declaration Management & Research LLC is an SEC registered investment advisor, specializing in a broad range of structured finance and core fixed income strategies. It was established in 1989 and is based in McLean, Virginia. Declaration's clients include public and private pension plans, state agencies, mutual funds and other institutions. As of December 31, 2009, Declaration has assets under management of $11.3 billion. Declaration is an operating company of MFC Global Investment Management, the asset management arm of Manulife Financial Corporation.

About MFC Global Investment Management®

MFC Global Investment Management® is the asset management division of Manulife Financial. MFC Global Investment Management's diversified group of companies provides comprehensive asset management solutions for Institutional investors, investment funds and individuals in key markets around the world. This investment expertise extends across a full range of asset classes including equity, fixed income and alternative investments such as oil and gas, real estate, timber, farmland, as well as asset allocation strategies.

MFC Global Investment Management has investment offices in the United States, Canada, the United Kingdom, Japan, Hong Kong, and throughout Asia. As at December 31, 2009, assets under management for institutional clients were approximately Cdn$110 billion.

MFC Global Investment Management®, Manulife and the block design are trademarks of The Manufacturers Life Insurance Company and are used by it and its affiliates including Manulife Financial Corporation.

About Manulife Financial

Manulife Financial is a leading Canadian-based financial services group serving millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife Financial and its subsidiaries were Cdn$436.5 billion (US$407.1 billion) as at September 30, 2009.

Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial can be found on the Internet at www.manulife.com.

SOURCE Declaration Management & Research LLC