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THREADNEEDLE SET TO OUTSOURCE INVESTMENT OPERATIONS TO JPMORGAN

Threadneedle Investments (“Threadneedle”) announced today that it has entered into exclusive negotiations with JPMorgan Chase Bank N.A. (“JPMorgan”) with the intention of appointing JPMorgan as Threadneedle’s chosen provider of outsourced Investment Operations services.

Threadneedle and JPMorgan expect to finalise contractual arrangements during July 2006 and transfer operational control of Threadneedle’s Swindon-based Investment Operations function to JPMorgan in October 2006.

The outsourcing will be achieved by way of a “lift out” of Threadneedle’s operations covering confirmation and settlement, valuations and pricing, and accounting activities for all of Threadneedle’s funds. Subsequently, Threadneedle’s Swindon operations and staff will form an integral part of JPMorgan’s expanded European service offering.

Crispin Henderson, Managing Director of Threadneedle Investments, said:

“We believe this is excellent news for our current and future clients. This deal allows Threadneedle to focus on its key strengths as a fund manager - providing excellent investment performance for its clients.

Our clients will benefit from JPMorgan’s strengths in service administration and commitment to providing state-of-the-art capabilities in derivatives and complex instruments - an integral part of many of Threadneedle’s products.

We aim to achieve these benefits with a high degree of continuity, as the only real difference in the short term will be a change of operational control – the people, processes and systems will remain unchanged.”

Conrad Kozak, JPMorgan Securities Company Executive, said:

“Through this agreement with Threadneedle, a leading European fund manager, we will continue to build our international operations services businesses. We are confident that we will continue to exceed our clients’ service expectations and help them achieve greater success by anticipating their evolving needs.

For JPMorgan Worldwide Securities Services, this transaction is about supporting Threadneedle’s investment operations needs as well as enabling us to continue to lead the industry in servicing our clients’ complex investment strategies.”

Threadneedle was advised throughout the selection and negotiation process by, amongst others, Troika, the specialist financial services management consultancy.