Corporate Governance Guidelines

Pursuant to Section 303A.09 of the NYSE Listed Company Manual

The business and affairs of Alesco Financial Inc. ("the Company") shall be managed under the direction of the Board of Directors (the "Board") in accordance with Maryland law. The Board will have the responsibility for the overall stewardship of the Company, including establishing the overall policies and standards for the Company in the operation of its business, and reviewing and approving financial and business plans. In addition, the Board will monitor and assess the overall performance and progress of the Company. To this end, the Board has adopted the following guidelines to assist it in its corporate governance responsibilities.

I. BOARD COMPOSITION

A. Size of the Board. The Company's Bylaws provide that the Board will consist of not less than the minimum number of directors permitted by Maryland law (which is currently one) nor more than 15 directors. The number of directors serving on the Board is currently set at 9 members. The Board, together with the Company's Nominating and Corporate Governance Committee, will periodically review the appropriate size of the Board. A majority of the Board may increase or decrease the size of the Board within the limits specified in the Company's Bylaws.

B. Independent Directors. A majority of the directors serving on the Board shall be "independent" as determined by the Board in accordance with the rules and standards established by the New York Stock Exchange, Inc. (the "NYSE") from time to time. Because it is not possible to anticipate or explicitly provide for all circumstances that might signal potential conflicts of interest, the Board, when making "independence" determinations, will broadly consider all relevant facts and circumstances. No director will qualify as "independent" unless the Board affirmatively determines that each independent director has no other material relationship, either directly or indirectly, with the Company or its affiliates.

C. Selection of Board Members. All members of the Board are elected annually by the Company's shareholders, except for Board action to fill vacancies arising between shareholder elections. The Board will be responsible for the selection of nominees for election or appointment to the Board. The Nominating and Corporate Governance Committee shall recommend candidates for election to the Board. The Nominating and Corporate Governance Committee may consider nominees recommended by management and shareholders using the criteria approved by the Board to evaluate all candidates. The Nominating and Corporate Governance Committee reviews each candidate's qualifications, including whether a candidate possesses any of the specific qualities and skills desirable for members of the Board. Evaluations of candidates generally involve a review of background materials, internal discussions and interviews with selected candidates as appropriate. Upon selection of a qualified candidate, the Nominating and Corporate Governance Committee will recommend the candidate for consideration by the full Board. The Nominating and Corporate Governance Committee may engage consultants or third-party search firms to assist in identifying and evaluating potential nominees. To recommend a prospective nominee for the Nominating and Corporate Governance Committee's consideration, the candidate's name and qualifications must be submitted to the Company's Secretary in writing to the following address: Alesco Financial Inc., Attn: Secretary, Cira Centre, 2929 Arch Street, 17th Floor, Philadelphia, PA 19104. When submitting candidates for nomination to be elected at the Company's annual meeting of shareholders, shareholders must follow the notice procedures and provide the information required by the Company's Bylaws.

D. Management Directors. The Board anticipates that the Company's Chief Executive Officer ("CEO") will be nominated annually to serve on the Board. The Board may also appoint or nominate other members of the Company's management whose experience and role at the Company are expected to help the Board fulfill its responsibilities.

E. Term Limits. Because of the value the Board places on having directors who are knowledgeable about the Company, its business and operations and its industry, the Board does not believe that arbitrary term limits on directors' service are appropriate. The Board believes that, as an alternative to term limits, it can ensure that the Board continues to evolve and adopt new viewpoints through the evaluation and nomination process described in these guidelines.

F. Limitation on Board Service. The Board does not believe that it is advisable to arbitrarily limit the number of boards of other public companies on which a director may serve. A director shall notify the chairman of the Board (the "Chairman") prior to becoming a director or trustee of another public company in order to avoid potential conflicts of interest and to address whether the aggregate number of directorships or trusteeships held by such director would interfere with his or her ability to carry out his or her responsibilities as a director of the Company. In the event that the Board determines that such additional directorship or trusteeship constitutes a conflict of interest or interferes with such director's ability to carry out his or her responsibilities as a director of the Company, such director, upon the request of the Board, shall offer his or her resignation or not accept the other directorship or trusteeship.

G. Chairman; Lead Independent Director. The Board will periodically appoint a Chairman. Both independent and management directors, including the CEO, are eligible for appointment as the Chairman. The Chairman, or if the Chairman is not an independent director, the chairman of the Nominating and Corporate Governance Committee, shall serve as the lead independent director. The lead independent director is responsible for coordinating the activities of the other independent directors, including scheduling and conducting separate meetings of the independent directors and for such other duties as are assigned from time to time by the Board.

H. Board Membership Criteria. Nominees for the Board should be committed to enhancing long-term shareholder value and must possess a high level of personal and professional ethics, sound business judgment and integrity. The Board's policy is to encourage selection of directors who will contribute to the Company's overall corporate goals. The Nominating and Corporate Governance Committee may, from time to time, review the appropriate skills and characteristics required of Board members, including such factors as business experience, diversity and personal skills in finance, marketing, financial reporting and other areas that are expected to contribute to an effective Board. In evaluating potential candidates for the Board, the Nominating and Corporate Governance Committee will consider these factors in light of the specific needs of the Board at that time.

I. Board Responsibilities. Board members should be sufficiently familiar with the business of the Company, including its financial statements and capital structure, and the risks and competition it faces, to facilitate active and effective participation in the deliberations of the Board and of each committee on which he or she serves. Board members are expected to prepare for, attend and participate in meetings of the Board and committees on which they serve, and are strongly encouraged to attend the Company's annual meetings of shareholders. Each member of the Board is expected to ensure that other existing and planned future commitments do not materially interfere with the member's service as a director. These other commitments will be considered by the Nominating and Corporate Governance Committee and the Board when reviewing Board candidates and in connection with the Board's annual evaluation process.

J. Functions of the Board. In addition to the general oversight of the management, the Board, either itself or through its committees, shall perform a number of specific functions, including: (1) reviewing, approving and monitoring the Company's fundamental financial and business strategies and major corporate actions; (2) selecting, evaluating and compensating the CEO; (3) providing counsel and oversight on the selection, evaluation, development, retention and compensation of executive officers of the Company; (4) overseeing succession planning for the CEO and executive officers of the Company; and (5) ensuring that policies and procedures are in place for maintaining the integrity of the Company, including the integrity of the financial statements, the integrity of compliance with laws and ethics and the integrity of business relationships with investors and others.

K. Board Compensation. The Board, through the Company's Compensation Committee, will review, with the assistance of management or outside consultants, if desired, appropriate compensation policies for the directors serving on the Board and its committees. It is the general policy of the Board that Board compensation should be a mix of cash and equity-based compensation. Inside directors will not be paid for Board or committee membership in addition to their regular employee compensation. In performing this review, the Compensation Committee may consider board compensation practices of other companies of similar size and structure, contributions to Board functions and the time commitments related thereto, service as committee chairs, the success of the Company and other appropriate factors. The Board should be aware that questions as to directors' independence may be raised when directors' fees and emoluments exceed what is customary. Similar concerns may be raised when the Company makes substantial charitable contributions to organizations in which a director is affiliated, or enters into consulting contracts with (or provides other indirect forms of compensation to), a director. The Board will critically evaluate each of these matters when determining the form and amount of director compensation.

L. Directors Who Change Job Responsibility; Retirement. The Board does not believe that directors who retire or change their principal occupation or business association should necessarily leave the Board; however, there should be an opportunity for the Board, through the Nominating and Corporate Governance Committee, to review the continued appropriateness of Board membership under these circumstances. The Board does not believe that a fixed retirement age for directors is appropriate.

II. BOARD MEETINGS

A. Board Meetings Frequency. The Board will generally hold at least four regularly scheduled meetings per year and hold additional special meetings as necessary. Each director is expected to attend both scheduled and special meetings, unless unusual circumstances make attendance impractical. The Board may also take action from time to time by unanimous written consent.

B. Board Meetings Agenda and Materials. The Chairman and the Company's Secretary shall prepare the agenda for each meeting and arrange for it to be distributed in advance of the particular meeting to the directors along with appropriate written information and background materials so that Board meeting time may be conserved and discussion time focused on questions that the Board has about the materials.

C. Independent Directors Discussions. To promote open discussions among the independent directors, it is the policy of the Board that the independent members of the Board meet separately without management directors at least twice per year during regularly scheduled Board meetings to discuss such matters as the independent directors consider appropriate. The lead independent director will assume the responsibility of chairing the meetings of independent directors and shall bear such further responsibilities which the independent directors as a whole or the Board might designate from time to time. The Company's independent auditors, finance staff, other employees and other outside advisors may be invited to attend these meetings.

D. Board Presentations and Access to Information. The Board encourages the presentation at meetings by members of the Company's management who can provide additional insight into matters being discussed or who have potential issues that the CEO believes should be given exposure to the Board. The Board encourages management to arrange presentations at Board meetings and to provide other reports that will enhance the flow of meaningful financial and business information to the Board. Each Board member will have complete access to management for relevant information.

E. Reliance on Management and Outside Advice. In performing its functions, the Board is entitled to rely on the advice, reports and opinions of management, counsel, accountants, auditors and other expert advisors. The Board shall have the authority to retain and approve the fees and retention terms of its outside advisors.

III. BOARD COMMITTEES

A. Committees. The current three committees of the Board are the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. From time to time the Board may establish a new committee or disband a current committee depending upon the circumstances.

B. Committee Member Selection. The Board will designate the members and chair of each committee, endeavoring to match the committee's function and needs for expertise with individual skills and experience of the appointees to the committee. The membership of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee shall consist solely of independent directors.

C. Committee Functions. The number and content of committee meetings and other matters of committee governance will be determined by each committee in light of the authority delegated by the full Board to the committee, the committee's charter and applicable regulations. The Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee each have a written charter, approved by the Board, which describes the general authority and responsibilities of each committee. The Company will provide to each committee access to employees and other resources to enable committee members to carry out their responsibilities.

The duties of each committee may be described briefly as follows:

Audit Committee. The Audit Committee will help ensure the integrity of the Company's financial statements, the qualifications and independence of the independent auditor and the performance of the internal audit function and independent auditors. The Audit Committee will select, assist and meet with the independent auditor, oversee each annual audit and quarterly review, and prepare the report that federal securities laws require to be included in the annual proxy statement.

Compensation Committee. The Compensation Committee will review and approve the compensation and benefits of the directors and executive officers, administer and make recommendations to the Board regarding compensation and equity incentive plans, produce an annual report on executive compensation for inclusion in the proxy statement and publish an annual committee report for the shareholders.

Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee will develop and recommend to the Board a set of corporate governance principles, adopt a code of ethics, adopt policies with respect to and to resolve conflicts of interest, monitor the Company's compliance with corporate governance requirements of state and federal law and the rules and regulations of the NYSE, establish criteria for prospective members of the Board, conduct candidate searches and interviews, oversee and evaluate the Board and management, evaluate from time to time the appropriate size and composition of the Board and recommend, as appropriate, increases, decreases and changes in the composition of the Board and formally propose the slate of directors to be elected at each annual meeting of the shareholders.

IV. MANAGEMENT RESPONSIBILITIES

A. Annual CEO Evaluation. The Compensation Committee will review at least annually the performance of the CEO and communicate the results of the review to the CEO and the Board.

B. Succession Planning. On an annual basis, the CEO will review with the Nominating and Corporate Governance Committee and the Board a succession plan for the executive officers, including policies and principles for selecting a successor to the CEO, both in an emergency situation and in an ordinary course of business.

C. Evaluation of the Board. The Nominating and Corporate Governance Committee is responsible for overseeing an annual evaluation of the performance of the Board and its committees to determine whether the Board and its committee are functioning effectively. The Nominating and Corporate Governance Committee shall report its conclusions to the Board and the committees. If determined by the Nominating and Corporate Governance Committee to be desirable or appropriate, the committee may retain independent corporate governance experts to assist the committee with these evaluations. The committee's reports should generally include an assessment of the Board's and each committee's compliance with these guidelines, as well as identify areas in which the Board or any committee could improve its performance.

D. Financial Reporting, Legal Compliance and Ethical Conduct. The Board's governance and oversight functions do not relieve the Company's management of the primary responsibility for preparing financial statements which accurately and fairly present the Company's financial results and condition. Management shall maintain systems, procedures and a corporate culture that promote compliance with legal and regulatory requirements and the ethical conduct of the Company's business.

E. Corporate Communications. The Board believes that management has the primary responsibility to communicate with investors, the press, employees and other constituencies that are involved with the Company, and to set policies for those communications.

V. MISCELLANEOUS

A. Director Orientation and Continuing Education. The Company is responsible for providing an orientation program for each new director and periodic continuing education programs for all directors on subjects that would assist them in discharging their duties. The orientation program for each new director is designed to familiarize new directors with the Company's businesses, strategies and challenges and to assist new directors in developing and maintaining skills necessary or appropriate for the performance of their responsibilities. Continuing education programs for Board members may include a mix of in-house and third-party presentations and programs.

Adopted October 2006