Russell's Client Base for Overlay Services More Than Doubled in 2005 (Russell.com)

Russell's Client Base for Overlay Services More Than Doubled in 2005

TACOMA, Wash. — Feb. 16, 2006 — The client base for Russell Investment Group's overlay services more than doubled in 2005, surging from $100 billion when the year began to $250 billion. Synthetic exposure across these clients now exceeds $14 billion. Russell's overlay services include policy implementation, portable alpha and other customized solutions, all of which aim to reduce tracking error to policy while improving investment performance.

Russell's service attracted several additional clients last year, including the Oregon Investment Council, all seeking risk control and enhanced performance for their total plan assets through rebalatization, portable alpha, cash equitization, synthetic rebalancing, and/or currency overlays.

"Russell has been an innovator in customized total-fund overlays that combine multiple strategies in one efficient, powerful and highly integrated package," said Michael Thomas, director of overlay services at Russell. "More fund fiduciaries are considering Russell's total overlay solution to enhance performance, reduce risk, ease administration and implement cutting-edge strategies such as portable alpha."

The Oregon Investment Council's decision to hire Russell confirms more large pension funds are using flexible derivative overlays to effectively manage their funds. Among those, Southern California Edison, a longstanding client for Russell's policy implementation services, commented on the value of a flexible overlay and Russell's approach to this service.

"We sought a combination of overlay services that would improve our fund's performance while simultaneously reducing exposure to risk," said Dave Ertel, manager of investments, Southern California Edison. "Russell's suite of derivative overlay services offers compelling benefits with the flexibility and adaptability that best match our particular needs and requirements."

"The results of our policy implementation work have been impressive — on average, our clients have seen — at the plan level — nearly a quarter percentage point contributed to their return while reducing total fund tracking error," said Thomas.

The overlay services team operates within Russell Implementation Services, a division at Russell dedicated to helping clients improve their net investment returns by providing efficient implementation tools to multi-manager portfolios. Transition management, commission management and agency currency execution are a few of the other growing implementation services offered.

For three decades, Russell has been researching the discovery and implementation of techniques designed to minimize the cost of strategic portfolio changes by its clients. Russell's global implementation services team currently includes 105 specialists who handle implementation issues for clients representing more than $4 trillion in assets.

About Russell
Russell Investment Group, a global leader in multi-manager investing, provides investment products and services in more than 39 countries. Russell manages more than $155 billion in assets for advisory clients as of December 31, 2005, and provides other financial services to clients worldwide representing more than $2.3 trillion. In 2006, and for the fifth time since 1999, Russell is ranked among the Fortune Magazine 100 Best Companies to Work For in America.

Founded in 1936, Russell is a subsidiary of Northwestern Mutual and is headquartered in Tacoma, Wash., with additional offices in New York, Toronto, London, Paris, Sydney, Singapore, Auckland and Tokyo.

Contacts:
Jennifer Tice, 253-439-2921
Matt Burkhard, 718-875-2122

Russell Investment Group is a registered trade name of Frank Russell Company, a Washington, USA corporation, which operates through subsidiaries worldwide. Frank Russell Company is a subsidiary of The Northwestern Mutual Life Insurance Company.

RC#4335