KGR Kgr Absolute

    KGR ABSOLUTE RETURN PCC LIMITED                        

                   ( Registered in Guernsey - Number 43789 )                   

                              Registered Office:                               

                         MARTELLO COURT, ADMIRAL PARK                          

                       ST PETER PORT, GUERNSEY, GY1 3HB                        

                          __________________________                           

                          TELEPHONE: +44 1481 751000                           

                          FACSIMILE: +44 1481 751001                           

                        e-mail: fundadmin@gg.fortis.com                        

For immediate release 12th November 2008

KGR ABSOLUTE RETURN PCC LIMITED - KGR ASIA DYNAMIC 1 (GBP)

(a closed-ended protected cell company incorporated in Guernsey with
registration number 43789)

Interim Management Statement - 3 months to 30 September 2008 (unaudited)

This statement has been prepared to provide additional information to
shareholders as a body to meet the relevant requirements of the UK Listing
Authority's Disclosure and Transparency Rules. It should not be relied upon by
any party for any purpose other than as stated above.

KGR Absolute Return PCC Limited (`KGRAR' or `The Company') was registered on 13
October 2005 in Guernsey, Channel Islands as a closed ended protected cell
company in accordance with the provisions of The Protected Cell Companies
Ordinance, 1997 and The Companies (Guernsey) Law, 1994. It is established with
one Cell known as the KGR Asia Dynamic 1 (GBP) which has an unlimited life.

Investment Objective & Investment Adviser

The Company's objective is to seek long term capital appreciation through
investment in a diversified multi-manager, multi strategy portfolio of hedge
funds investing in Asia.

At the launch of the Company KGR Capital (Hong Kong) Limited were appointed to
act as investment adviser with responsibility for providing advice on the
Company's investment portfolio, including cash, in accordance with the
Company's investment objective and policy, subject to the overall supervision
of the directors. On 5 September 2008 LGT Capital Partners acquired the entire
business of KGR Capital and KGR Capital (Hong Kong) Limited has been renamed as
LGT Capital Partners (Asia-Pacific) Limited.

Performance Summary

Over the three month period, the company's net asset value produced a negative
return of 6.69%, net of all fees. The closing net asset value as at 30
September 2008 was �63.97 million or 107.24 pence per share. At the close of
business on 30 September 2008 (the last business day of the month), the mid
market price of KGR AR's shares on the London Stock Exchange was 102.25 pence,
representing a discount of 4.65%. Subsequent to 30 September 2008 the share
price discount to net asset value per share has widened significantly
reflecting difficult market conditions across the listed fund of hedge fund
sector generally.

The performance of KGR AR's NAV per share for the three months to 30 September
2008 was as follows:

Jul 2008 -1.77%

Aug 2008 -1.35%

Sep 2008 -3.72%

Market Update

Asian equity markets saw one of the worst quarters in recent memory over the
third quarter of 2008 as panic swept through global markets due to the
significant deleveraging of balance sheets and realization of assets by global
financial institutions. In what turned out to be one of the most eventful
quarters in financial history, Lehman Brothers filed for bankruptcy, Merrill
Lynch was sold, the US government took over Freddie Mac, Fannie Mae, and AIG,
and a USD700 billion financial package was announced to support liquidity in
the credit markets. All Asian equity indices (barring Philippines and Vietnam)
were more or less flat for the month of July, before selling off heavily
towards the end of August and especially in September. Overall, most major
Asian equity indices ended the quarter down. Hong Kong H-shares, Taiwan, and
Thailand were the three worst performing markets over this three-month period.

Credit markets also experienced a very difficult environment in the face of
escalating concerns over corporate credit risks worldwide. Spreads on both
Asian high grade debt and high yields widened significantly in August and
September, and ended the quarter much wider than their respective levels at the
end of 2Q2008.

With almost every asset class selling off in the face of massive deleveraging
in the financial markets, commodity prices also fell sharply. Over the quarter
the S&P GSCI was down 28.6%. Oil led the way, falling over 30.6% during the
period.

Strategy Contribution

      Strategy            3Q2008     
                                     
Absolute Return           -0.30%     
                                     
Arbitrage                 -0.93%     
                                     
Distressed Debt           -0.11%     
                                     
Equity Market             -0.68%     
Neutral                              
                                     
Event Driven              -0.46%     
                                     
Fixed Income               0.00%      
                                     
L/S Asia ex-Japan         -0.38%     
                                     
L/S China                 -0.19%     
                                     
L/S India                 -0.07%     
                                     
L/S Japan                 -0.24%     
                                     
L/S Korea                 -0.06%     
                                     
L/S Pan Asia              -2.65%     
                                     
Macro                     -0.16%     
                                     
Multi-Strategy            -0.47%     

Performance Review

The change in the NAV over the third quarter was, to a large extent, consistent
with the performance of the underlying strategies over the period. Fixed income
managers collectively were the only positive contributors to performance with
long/short pan Asian managers being the biggest detractors to performance.

The table below shows the composition of KGR's investment portfolio by strategy
as at 30 September 2008 (excluding cash):

      Strategy       As at 30 Sep 08 
                                     
Absolute Return           2.44%      
                                     
Arbitrage                18.26%     
                                     
Distressed Debt           2.84%      
                                     
Equity Market             6.41%      
Neutral                              
                                     
Event Driven              8.04%      
                                     
Fixed Income              7.24%      
                                     
L/S Asia ex-Japan         3.40%      
                                     
L/S China                 2.62%      
                                     
L/S Japan                 7.63%      
                                     
L/S Korea                 1.60%      
                                     
L/S Pan Asia             26.34%     
                                     
Macro                     2.74%      
                                     
Multi-Strategy           10.44%     

(Source: LGT Capital Partners (Asia-Pacific) Limited)

Material Events

The sharp fall in sterling relative to the US dollar that has occurred since 30
September, produced a significant requirement for cash at the end of October as
our one month forward foreign exchange contract was rolled forward. This
requirement was met in the short term using our revolving credit facility. This
borrowing is now being reduced as redemption payments are being received.
Redemption orders have already been placed which will enable us to repay the
borrowing in full and restore our normal cash levels once redemption payments
are received. However further falls in the value of sterling against the dollar
(in which currency all our holdings are currently denominated) cannot be ruled
out. This may necessitate further short term borrowing and redemption of funds
in due course.

Preliminary estimates of the Net Asset Value in October indicate an
intensification of the trends described above. The estimated NAV for the month
showed a decline of just over 6% which is the largest drawdown the fund has
experienced to date. This should be viewed in the context of record falls in
the various regional indices. The strategies which have been particularly hard
hit this month are convertible arbitrage and certain types of multi-strategy
funds which have faced significant redemption pressure or are being required by
their prime brokers to reduce their leverage, or in many cases both. This has
resulted in distressed selling particularly of convertible bonds and high yield
bonds and other instruments where hedge funds have come to be the dominant type
of investor. This forced selling, through the application of mark to market
principles, has in turn spread the stress to other hedge funds that hold the
same type of instruments even though the funds themselves may not have had
excessive leverage or may not themselves be facing heavy redemptions.

Coincident with this liquidity pressure at the fund level, the listed fund of
funds sector has itself been encountering heavy selling pressure. This has
caused discounts on all listed vehicles to widen substantially. At its extreme,
the KGR AR PCC Ltd share has traded at a nominal discount to the estimated NAV
in excess of 20%. We are pleased to say that a number of our institutional
shareholders have been prepared to add to their holdings at these extreme
levels with the result that currently the discount has narrowed substantially
to around the 10% level. We are continuing to monitor the situation closely and
remain committed to minimising both the absolute level of discounts and, as far
as market conditions permit, the discount/premium range.

We are pleased to announce that Numis Securities has commenced market making in
our shares.

This interim management statement is available on the KGR Capital/LGT Capital
Partners website: www.kgrcapital.com.

For further information contact:

Edward Cartwright or Pia Skogstrom,
LGT Capital Partners (U.K.) Limited,
Tel: 0207 823 2900


Fortis Fund Services (Guernsey) Limited
Company Secretary
Tel: 01481 751000

12th November 2008



END

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