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					Old Mutual Guernsey: Ahead of the curve
  OMG/GAM Diversity Fund: A fund for bull and bear markets
       Available only through OMG’s FSB authorised life products




                          Eddie Keating
             Investment & Fund Development Manager
                       Old Mutual Guernsey
                          November 2002
Agenda

   • Market analysis
     – Recent investor behaviour
     – Market conditions since April 2000
     – OMG fund developments over the last 12 months
   • GAM Diversity
     – Its place within the OMG fund range
         • Multi-manager, diverse range of strategies
     – The company, the team and the fund
     – Outstanding performance
         • Absolute and relative
   • Conclusions
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The herd mentality - don‟t get trampled.....
   Movement of NASDAQ Composite vs technology mutual fund net flows
          300
           250
                 USD billions
           200
           150
           100
            50
             0
                 28/07/98

                            28/11/98

                                       28/03/99

                                                   28/07/99

                                                              28/11/99

                                                                         28/03/00

                                                                                        28/07/00

                                                                                                   28/11/00

                                                                                                              28/03/01

                                                                                                                         28/07/01

                                                                                                                                    28/11/01

                                                                                                                                               28/03/02

                                                                                                                                                             28/07/02
                                                                                                                                                          Source: SSB, Morningstar

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And avoid the boom and bust
      Movement of MSCI World Index vs mutual fund net flows




                                                      Source: SSB, Morningstar

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The problems stem back to the late 90s
240

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                                                                                                                                                                                                                                                           April 2000
                                                                                                                                                                                                                       •Equities considered the
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120                                                                                                                                                                                                                    •Bonds out of favour because
100                                                                                                                                                                                                                    of low returns
      May-95
                Aug-95
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                                           JP Morgan Global 26.04                                                  MSCI World 114.98

                                                                                                                                                                                  110
                                                    October 2002
                                                                                                                                                                                   90
               •Equities shunned
                                                                                                                                                                                   70

               •Bonds now the asset class of
                                                                                                                                                                                   50
               choice but increasingly
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               expensive
                                                                                                                                                                                                                       JP Morgan Global 17.91                                     MSCI World             -44.63

                                                                                                                                                                                            5
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Falling nominal returns: we needed a new solution

                         ANNUALISED RETURNS
    15%

    10%

     5%

     0%
             Three




                            years




                                                years




                                                              Since
             years




                                                              1986
                             Five




                                                 10
    -5%

    -10%

    -15%

       MSCI World    JP Morgan Global          3-mth Interbank Eurodllr

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Property & alternative strategy meet those needs

                        ANNUALISED RETURNS
    12%
    10%
    8%
    6%
    4%
    2%
    0%
            Three




                                       years




                                                              years
            years




                                        Five




                                                               10
                    Property sector            AS Fund of funds

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OMG fund developments now over 12 months old

                Inflows of more than $64m. since launch

   • Diversified Plus & Growth Plus ($26m.)
      – Five asset class solution
      – Top quartile since launch
   • Property ($31m.)
      – “Real” commercial property fund
      – Non-volatile, positive returns since launch (+6.45% ytd)
   • Market Neutral ($7m.)
      – Outstanding returns since launch (+6.45% ytd)
      – Global equities down 24.5% over the same period
      – Significantly ahead of hedge fund of fund sector


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Pushing investors another route

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                  Sep 95

                           Jan 96



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         May 95




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                                                                                                                                                 May 00




                                                                                                                                                                             May 01




                                                                                                                                                                                                        May 02
            JP Morgan Global 48.62                                               Diversified hedge fund of funds 93.18                                                      MSCI World 19.03



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Now these investors are starting to suffer too

    103




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    100
          Jan-02

                   Jan-02

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                                     S&P Hedge fund of funds sector 1.03                                                           3-mth Interbank cash 1.03



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GAM Diversity - a bull & bear market solution
from OMG

    500

    450

    400
    350

    300

    250

    200
    150

    100
    50
          Jan 90


                   Jan 91


                            Jan 92


                                     Jan 93


                                              Jan 94


                                                       Jan 95


                                                                Jan 96


                                                                         Jan 97


                                                                                  Jan 98


                                                                                             Jan 99


                                                                                                      Jan 00


                                                                                                               Jan 01


                                                                                                                        Jan 02
                      GAM Diversity 393.03             MSCI World        42.43             JP Morgan Global 157.54



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Why add another alternative strategy fund?




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Because of the investment house

   • Global Asset Management founded in 1983
   • Multi-manager alternative strategies since 1989
   • Now part of UBS - one of world‟s largest groups
     with $1.50 trillion invested assets
   • GAM has $7.6 billion multi-manager assets under
     management
   • Award winning performance
      – Best alternative strategy Fund of Funds house 2000 - 2002
      – 20 international investment awards since 2000
      – No 1 UK ISA investment performance over last three years
                                                          Source: Morningstar

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Because of the investment team

   • 37 investment professionals in London & New
     York backed by 600 staff world wide
   • Experienced fund managers with proven track
     records & robust investment process
   • Access to some of the world‟s leading fund
     managers & funds (many closed)
   • Skilled at portfolio construction strategies
   • 50% GAM manager time spent researching new
     talent

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Because of the fund - GAM Diversity

   • Capital appreciation with risk diversification
   • A 12 year track record of superior returns and low
     volatility
   • Employs complementary investment techniques
   • Highly skilled portfolio managers - „Access Great
     Investment Talent‟.
   • „Security of tenure‟ - underlying GAM Diversity
     Fund $1.5 billion
   • S&P AA rated

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Because of GAM Diversity‟s consistency: since 1995


              Year                             Performance
              1995                               21.43%
              1996                               15.29%
              1997                               26.92%
              1998                                1.65%
              1999                               39.58%
              2000                                7.06%
              2001                                7.89%
            2002 YTD                              2.56%


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This is true over the longer term as well (1)

                                     ANNUALISED RETURNS
    20.00%

    15.00%

    10.00%

     5.00%

     0.00%
              One year   Two years     Three years     Five years   10 years   Since launch
     -5.00%

    -10.00%

    -15.00%

    -20.00%

    -25.00%

    -30.00%

                                       GAM Diversity   MSCI World



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This is true over the longer term as well (2)

    500                                         GAM Diversity         MSCI World            JP Morgan
                       Total return               393.72%              27.17%                154.13%
    450            Compound growth rate           13.16%                1.88%                  7.49%
                        Volatility                 9.57%               14.87%                  7.42%
    400
                    % Positive months             70.97%               56.77%                 59.09%
    350
    300
    250
    200
    150
    100
     50
          Jan 90


                    Jan 91


                             Jan 92


                                       Jan 93


                                                    Jan 94


                                                             Jan 95


                                                                          Jan 96


                                                                                   Jan 97


                                                                                                 Jan 98


                                                                                                          Jan 99


                                                                                                                   Jan 00


                                                                                                                            Jan 01


                                                                                                                                     Jan 02
                                      GAM Diversity                   MSCI World                 JP Morgan Global



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All this - with lower volatility too!

    16.00%

    14.00%

    12.00%

    10.00%

     8.00%

     6.00%

     4.00%

     2.00%

     0.00%

                          GAM Diversity   MSCI World



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                   www.oldmutualinternational.com
The difference comes in the range of strategies


                                          Other
        Diversified Relative
                                          17%
               value
                 5%



                                                                   Equity hedge
                                                                       49%
  Trading systematic
      non-trend
         10%


                          Disc. macro trading
                                 19%



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                                  www.oldmutualinternational.com
OMG GAM Diversity sits well in our new fund range

                                     Highly diversified core funds
                                     Discretionary Management across
                                     five asset classes

                                     Asset class funds for tilt/ bias
                                     GAM Diversity included in “tier 2”


                                      Specialist funds
                                      Select funds for “hands on investor”



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GAM Diversity -
a new thoroughbred in the OMG stable


  • One of the world‟s top asset management houses

  • A fund with a distinguished pedigree

  • Currently 31 underlying funds

  • Blend of Equity Hedge and Trading Funds

  • Access to the best funds (mostly closed)

  • Research/active management

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Available only through OMG‟s FSB authorised life
wrappers


   • Standard OMG Alpha and Maxima life policies
   • Monthly liquidity with low minimum investment
     levels
   • Offer period 4 November to 20 November 2002
     with price held at $1
   • Brochure available at
     www.oldmutualinternational.com


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                     www.oldmutualinternational.com
In conclusion - why choose OMG GAM Diversity?


  • Low correlation with equity & bond markets

  • Security of large underlying fund - $1.5 billion

  • Access to global investment talent

  • Expertise of a well resourced multi-manager team

  • Consistent performance in bull & bear markets

  • Even more Diversity within the OMG Five Asset
    Class solution
                                  24
                     www.oldmutualinternational.com
Risk warnings & important notes
 •There are risks associated with investing in the OMG GAM Diversity Fund and it should be noted that OMG has risk rated the
 fund as High Risk.
 •In particular some of the underlying investment strategies used may be regarded as speculative and may involve substantial
 risk of loss.
 •Trading investment interests is speculative and volatile. To achieve a manager‟s performance objectives, the applicable
 fund(s) may make investments that may be considered speculative and may involve substantial risk of loss. The prices of
 investment strategies can be highly volatile. Price movements are influenced by, among other things: changing supply and
 demand relationships; trade, fiscal, monetary and exchange control programs and policies of governments; domestic and
 foreign political and economic events and policies; changes in national and/or international interest rates and rates of inflation;
 currency devaluations and revaluations and emotions of the marketplace. The managers can control none of these factors and
 no assurance can be given that the advice of the managers will result in profitable trades or that substantial loss will not be
 incurred.
 •Alternative investing - general parameters.
 •The market place may be neither open nor transparent; the market may not be regulated; liquidity may be restricted.
 •An alternative strategy fund is a privately organised pooled investment vehicle that invests in publicly traded securities. It uses
 short and long exposure to reduce reliance on movements in the broader market and to focus on profiting from security
 selection. Short exposure is achieved by borrowing securities and selling them in the market with a view to buying them back at
 a lower price and then returning them to the lender. Traditional long-only funds, by contrast, are generally precluded from using
 material short exposure and are therefore more reliant on rising markets for positive returns.
 •The Fund should be viewed as a high-risk investment. Any investment in the Fund should regarded as speculative and may be
 subject to sudden and large falls in value. Losses on realisation could equal the amount invested.
 •An investment in the fund is only suitable for the sophisticated investor who can afford the risk that his investment may fall
 rather than rise in value. An investment in the fund should be regarded as speculative and should not be used as a complete
 investment programme. If a prospective investor has any doubts about the nature or suitability of the investment, advice should
 be sought from their own investment advisor.
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Risk warnings & important notes
 •Transparency is improving in the alternative strategy industry. Nevertheless there may be a limit beyond which transparency
 could damage investors‟ interests - other market participants could use information against the manager. Managers are
 reluctant to release information on their current positions, however they will release varying degrees of past periodic data.
 •Risk of alternative strategies
 •The Fund intends to engage in the trading of equity securities. Although the manager is expected to use a strategy which is
 intended to protect the funds assets from losses due to general declines in the international stock markets, there can be no
 assurances that the strategy to be used by the manager will be successful. The market values of related securities or other
 instruments may not move in correlation with each other or in ways anticipated by a manager, and intervening events may
 cause long and/or short positions not to perform as anticipated. A hedged position also may perform less favourably in
 generally rising markets than an unhedged position.
 •Short Sales. The Fund may sell securities short, a practice which can be volatile and speculative. Short selling is limited to
 securities which can be borrowed, and it may not be possible at times to borrow the securities the fund wishes to short sell. It
 may also be necessary to cover, or repurchase, securities sold short at an undesirable time and at high prices because
 securities which were sold short can no longer be borrowed. Speculators purchasing securities and then refusing to lend such
 securities to short sellers can precipitate this „short squeeze‟ situation. A short sale involves the risk of potentially unlimited loss
 if the securities sold short appreciate in value.
 •Counterparty risk. Currency forward contracts, swaps and other forms of derivative instruments, including futures contracts
 traded on exchanges located outside the USA and UK are not guaranteed by an exchange or its clearing house. Consequently,
 there are no requirements with respect to record keeping, financial responsibility or segregation of customer funds and
 positions. The business failure of a counter-part with which the fund has entered into forward contracts or other derivatives will
 most likely result in a default. The default of a party with which the fund has entered into a forward contract or derivative will
 force the fund to cover its resale commitments, if any, at the then current market price.
 •Illiquid assets. Certain securities purchased or sold short by the fund may be thinly traded or relatively illiquid. Consequently, it
 may be relatively difficult for the fund to dispose of investments rapidly at favourable prices in connection with redemption
 requests, adverse market developments or other factors.
                                                                 26
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Regulatory Information
  Old Mutual Guernsey is registered and has its principle office at Fairbairn House, PO Box 121, The Rohais, St Peter Port,
  Guernsey, GY1 3HE, Channel Islands. The company is registered under section 11 of Insurance Business (Guernsey) Law,
  1986 and the statutory functions of regulation under the legislation are carried out by the Guernsey Financial Services
  Commission. To protect policyholders, this commission requires offshore life offices registered in Guernsey to hold at least
  90% of their policyholder‟ assets in custodian trusteeship with an approved third-party custodian. In common with industry
  practice and in order to protect the interests of all investors, the Company may, in exceptional circumstances, defer the
  realisation of any investment, other than to pay death claims, for a period of up to 12 months.
  Old Mutual Guernsey is the name under which the Old Mutual Life Assurance Company (South Africa) Ltd. (also known as Old
  Mutual) is trading in Guernsey. The registered office of the Old Mutual Life Assurance Company (South Africa) Ltd. is located at
  Mutualpark, Jan Smuts Drive, Pinelands 7405, Cape Town, Republic of South Africa.
  Old Mutual Guernsey, although domiciled in Guernsey, is permitted to market its policies in South Africa, as a branch of the Old
  Mutual Life Assurance Company (South Africa) Ltd. It is consequently regarded by the South African Revenue Service (SARS)
  as being resident in South Africa for tax purposes. The policy in which you invest is therefore subject to South African income
  and capital gains tax. Deductions in respect of tax will be taken from the fund. Tax deductions maybe reduced by the amount
  of any foreign withholding tax already incurred on non-South African income that would be subject to South African tax.
  Published fund prices, as always, will reflect the price after any deduction in respect of tax and management fees. Currently,
  for South African residents, no further tax arises when the policy is surrendered or reaches maturity.
  The tax status described is based on our current understanding of South African tax rules and Old Mutual Guernsey can not be
  held responsible for any future tax or legislative changes that may affect this position. It is recommended that investors contact
  their financial adviser to discuss any tax implications before making any investment.




                                                              27
     www.oldmutualinternational.com www.oldmutualinternational.com
Regulatory Information
  Client confidentiality is protected at all times - Old Mutual Guernsey complies with the Criminal Justice (proceeds of crime)
  (Bailiwick of Guernsey) Law 1999 but otherwise has no duty of disclosure of clients‟ records to any statutory or government
  body within Guernsey.
  Investors should remember that past performance is no guarantee of future returns and that fund prices will reflect the value of
  their underlying securities. As a result of the nature of investments and possible exchange or interest rate fluctuations, the
  value of investments may go down as well as up.
  Old Mutual Guernsey investments are not available to residents of the Bailiwick of Guernsey or the United States of America
  (or any of its territories) or of any jurisdiction where such investments would be unlawful. This presentation does not constitute
  an offer or a solicitation to anyone in any jurisdiction in which an offer is not authorised or to any persons to whom it is unlawful
  to make such an offer or solicitation.
  Source of data: S&P/Micropal www.micropal.com, offer to offer, unadjusted terms, US Dollars for the periods shown. Other
  data sources: as stated




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