Star Hedge Managers Corp. - Press Release

TORONTO, Oct. 26 /CNW/ - Star Hedge Managers Corp. (the "Fund") announces an upward revision of the Fund's portfolio value as at September 30, 2009 and additional positive developments in the month of October.

The management of Star Hedge Managers Corp. advises as follows:

    
    Upward Revision of Portfolio Value, Net Asset Value per Class A Share and
    One-Year NAV Performance, as at September 30, 2009
    -------------------------------------------------------------------------

    -   The Fund previously posted an aggregate net asset value as at
        September 30, 2009 of $90,664,083. This value was based on a reported
        value of the Fund's holdings of Dynamic Power Hedge Fund (the
        "Dynamic Fund") of $26,775,066.

    -   To reflect a change in the reported value of the Dynamic Fund units
        held by the Fund, the aggregate value of the Fund's holdings of the
        Dynamic Fund as at September 30, 2009 is restated as $28,517,332. The
        change in reported value takes account of a retroactive conversion of
        the Fund's previous holdings of Class F Units into Class FC Units of
        the Dynamic Fund.

    -   As a result of the foregoing:

        -  the undiluted and fully-diluted net asset values of the Fund's
           Class A Shares as at September 30, 2009 are restated as $12.4294
           and $11.2596, respectively;

        -  the Fund's aggregate net asset value as at September 30, 2009 is
           restated as $92,406,349; and

        -  the one-year undiluted Class A Share NAV return for the period
           ending September 30, 2009 is restated below:

    -------------------------------------------------------------------------
                                                One Year NAV Return
                                     September 30, 2008 - September 30, 2009
    -------------------------------------------------------------------------
    Star Hedge Managers Corp.
     (NAV performance, undiluted
     Class A Shares)*                                 32.8%
    -------------------------------------------------------------------------
    S&P/TSX Composite Index
     (Total Return)(xx)                                 0.51%
    -------------------------------------------------------------------------

    * The Fund's $12.4294 undiluted net asset value per Class A Share as at
        September 30, 2009 represents an increase of 32.8% over the Fund's
        net asset value of $9.3614 for Combined Units posted September 30,
        2008. Past performance may not be repeated. Combined Units consisted
        of one Class A Share and one Warrant, with no part of the net asset
        value attributable to Warrants. The fully-diluted NAV per Class A
        Share as at September 30, 2009 was $11.2596. Fully-diluted NAV
        assumes all Warrants will be exercised.

    (xx) Source: Bloomberg.


    Positive Developments
    ---------------------

    -   As at September 30, 2009, the Fund's portfolio consisted of Class I
        Units of Sprott Hedge Fund LP II (the "Sprott Fund") having a value
        of $23,279,939; Class FC Units of Dynamic Power Hedge Fund (the
        "Dynamic Fund") having a value of $28,517,332, an account managed by
        Front Street Investment Management Inc. (the "Front Street Managed
        Account") having a value of $40,483,124 and net cash of $125,954.

    -   Since September 30, 2009:

        -  The Sprott Fund has published an October 2009 month-to-date
           performance estimate for Class A Units of the Sprott Fund for the
           period from September 30, 2009 to October 15, 2009 of +1.5%.

        -  The Dynamic Fund has published a net asset value per Class FC
           Units of the Dynamic Fund as at October 16, 2009 of $65.45*,
           representing an increase of approximately 6.9% over the $61.22 net
           asset value used by Star Hedge Managers Corp. when reporting the
           restated September 30, 2009 net asset values per Class A Share
           reported above.*Source: Globefund.com

        -  As at October 15, 2009, the net asset value of the Front Street
           Managed Account had increased by approximately 3.9% over the net
           asset value used in computing the September 30, 2009 net asset
           value per Class A Share.

        -  As at October 15, 2009 the Fund had net cash holdings of
           approximately $81,291.
    

The foregoing information has not been audited. Further, the values of the Fund's investments change on an ongoing basis and performance may not be repeated. Accordingly, there can be no assurance that the Fund's investments will exceed or be less than their values as at September 30, 2009 and/or reflect the information provided above. Information respecting the Sprott Fund and the Dynamic Fund has not been independently verified by the Fund. The information contained herein is not, and should not be construed as, determinative of the net asset value of the Fund or Class A Shares of the Fund.

The Fund has been created to provide long-term capital growth by investing in a portfolio consisting of private investment funds or portfolios managed by three of Canada's leading portfolio managers: Eric Sprott of Sprott Asset Management, Rohit Sehgal of Dynamic Funds, and Norm Lamarche of Front Street Investment Management Inc.

Class A Shares and Warrants are listed on The Toronto Stock Exchange under the symbols XHM.A and XHM.WT.

For more information please visit the Fund's website at www.bmocm.com/bmosp under "Closed-End Funds".

SOURCE STAR HEDGE MANAGERS CORP.

For further information: For further information: BMO Financial Group, Mark W. Lobsinger, (416) 359-7742

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STAR HEDGE MANAGERS CORP.

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