SMITH BREEDEN AND KAMAKURA CORPORATION ANNOUNCE MARKETING ALLIANCE IN ASIA

HONOLULU, May 16, 2001-- Honolulu-based Kamakura Corporation and Smith Breeden Associates, Inc. of Chapel Hill, North Carolina announced a marketing alliance designed to make Smith Breeden’s U.S. Dollar fixed income investment funds more accessible to sophisticated investors in Asia. Smith Breeden, which manages more than $19 billion in fixed income funds, is well-known as one of the premier research and trading firms in Agency mortgage-backed securities and investment grade corporate bonds in the United States. Kamakura is one of the leading risk management information and software providers world-wide with a particularly strong presence in Asia.

'Kamakura’s expertise in credit risk and interest rate risk has led some of the largest financial institutions in Asia to seek Kamakura’s consulting advice and to install Kamakura’s risk management software and information services,' said Douglas Breeden, Chairman of Smith Breeden and Dean of Duke University’s Fuqua School of Business. 'Our long relationship with the management team at Kamakura has convinced us that both firms have the same research-driven approach to risk management and investment management. We believe that many Asian institutions which know Kamakura well will feel very comfortable with the investment approach that has proven so successful at Smith Breeden.'

'Kamakura has been following Smith Breeden’s rapid growth in fixed income funds under management for more than a decade, and we believe that Smith Breeden’s performance record proves that research truly does make a difference,' said Donald van Deventer, President of Kamakura Corporation. 'The formalization of our relationship with Smith Breeden brings a number of benefits to our mutual clients. Together, we can provide the full spectrum of services to Asian clients, from consulting to software to investment advisory services for client funds. We look forward to creating shareholder value for our mutual clients in the Asia Pacific region through this alliance with Smith Breeden.'

About Smith Breeden Associates, Inc.

Over the past 19 years, Smith Breeden Associates, Inc. has established a reputation as one of the premier research and trading firms in the United States. The firm specializes in the analysis and management of high quality fixed-income portfolios, and offers a variety of strategies designed to produce returns superior to U.S. fixed-income benchmarks such as the Lehman Aggregate or Lehman Mortgage Index. Smith Breeden offers separate account investment management services and alternative investment funds to sophisticated institutional clients world-wide, and the firm currently advises, or manages on a discretionary basis, assets exceeding $19 billion.

About Kamakura Corporation

Kamakura Corporation is one of the leading firms world-wide in risk management information, processing and software. Kamakura’s clients include all five of the five largest banks in the world. Kamakura’s 28 risk management software and information clients range in size from $3 billion in assets to $1 trillion in assets. Kamakura risk management software is currently used in the United States, Germany, Canada, Mexico, Japan, Australia, Korea, and Hong Kong. Kamakura management has published six books and more than 100 publications on credit risk, market risk, and asset and liability management. Kamakura has a world-wide marketing alliance with Unisys and a number of other systems integrators who make Kamakura products available in almost every major city around the globe.

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