Welcome to the American Federation of Musicians and Employers' Pension Fund
(AFM-EPF)

Information about Bear Stearns - March 21, 2008

As you may know, one of the Fund's investment managers, Bear Stearns, is currently encountering significant financial difficulties. Bear Stearns manages a large-cap equity portfolio and a small-cap equity portfolio for the Fund (although the Trustees had already decided in February to terminate Bear Stearns' large cap portfolio due to recent underperformance, and the transition to the new manager is in progress).

You should keep in mind that safeguards are in place to protect the Fund's assets that are managed by Bear Stearns. For example, while Bear Stearns gives directions as to how the assets will be invested, the assets themselves are held in the name of the Fund by the Fund's custodial bank, the Bank of New York, which is independent of Bear Stearns. In addition, although Bear Stearns is the named investment manager for the small-cap equity portfolio, most of the day-to-day investment management work is being done by a different investment advisor under a "subadvisory" agreement.

Most significantly, the Trustees have been assured by the Fund's independent investment consultant, Segal Advisors, that neither the assets currently being transitioned out of the large-cap portfolio nor the assets in the small-cap portfolio are at risk because of Bear Stearns' current difficulties.