Management Fee Reduction and Director Resignation

FRM DIVERSIFIED ALPHA LIMITED

(the "Company")

ANNOUNCEMENT

13 OCTOBER 2010

The Company's Board of Directors met on 12 October 2010 and the Company now announces two developments reflecting the Company's reduced portfolio management requirements throughout its continued managed wind-down.

Firstly, FRM Investment Management Limited, the Investment Manager of the Company, has agreed to reduce its management fee from 1.25% to 0.50% per annum of the Company's Net Asset Value attributable to invested assets. For the avoidance of doubt, the Investment Manager shall not be entitled to receive any management fee in respect of any uninvested cash of the Company.

Secondly, Damian Johnson has tendered his resignation as a director of the Company. The Board would like to thank Damian for his contribution to the Company during his time as a director.

Both of these changes will be effective as from 1 November, 2010.

Enquiries:

Financial Risk Management Limited

Chris Brierley 020 7968 6136

J.P. Morgan Cazenove

William Simmonds 020 7588 2828