OLD MUTUAL EUROPEAN EQUITY FUND

INVESTMENT OBJECTIVE AND POLICIES

The objective of the Old Mutual European Equity Fund is to seek to achieve asset growth through investment in a well-diversified portfolio of securities of European issuers, of issuers established outside Europe which have a predominant proportion of their assets or business operations in Europe or of securities listed or having a listing on a European exchange. It is not proposed to concentrate investments in any one industry or sector.

The securities in which Old Mutual European Equity Fund may invest shall include ordinary shares or common stock, ADRs, GDRs, preference shares and warrants, provided that any investment in warrants shall not comprise more than 5 per cent. of the Net Asset Value of the Old Mutual European Equity Fund. At the time of investment at least 80 per cent. of the securities in which the Old Mutual European Equity Fund will invest will comprise securities of companies which are constituents of the MSCI Europe Index which is a general index for pan-European equities covering 16 countries. The European countries in which the Old Mutual European Equity Fund may invest may include the countries of the EU, Norway and Switzerland. Subject to the investment restriction 2.1 of Schedule III in the Prospectus, the securities will be listed, traded or dealt in on a Regulated Market.

For the Old Mutual European Equity Fund, stock selection shall be based on a bottom-up approach, with the Investment Adviser believing that the best investment returns are achieved by buying attractively valued companies. In choosing such investments, the Investment Adviser will typically assess a company’s prospects (evidenced by factors such as a strong balance sheet and its earnings and growth potential), with sector and market weightings being of secondary importance.

The Old Mutual European Equity Fund may invest up to 10 per cent. of its Net Asset Value in the securities of issuers established or having a significant proportion of their assets or business in Jersey, Guernsey, the Isle of Man and Eastern European countries, such as Croatia, Albania, Serbia, Macedonia, Bosnia-Herzegovina and Turkey and, subject to the investment restriction 2.1 of Schedule III in the Prospectus, the securities will be listed, traded or dealt in on a Regulated Market in these countries.

The Old Mutual European Equity Fund may invest its liquid assets or may invest up to one third of the Net Asset Value for temporary defensive purposes in short-term securities such as commercial paper, bankers’ acceptances, certificates of deposit and government securities issued by an OECD member country or by any supranational entity provided that the foregoing securities are denominated in euro, subject to the investment restriction 2.1 of Schedule III in the Prospectus, are listed, traded or dealt in on a Regulated Market in an OECD member country and are rated Investment Grade or better.

The Old Mutual European Equity Fund may invest up to 5 per cent. of its Net Asset Value in openended collective investment schemes whose objective is to invest in any of the foregoing. These collective investment schemes will be established as UCITS under the UCITS Directive in any EU member state.

The Old Mutual European Equity Fund may invest up to 5 per cent. of its Net Asset Value in REITs listed, traded or dealt in on Regulated Markets that are not considered Emerging Markets.

The Old Mutual European Equity Fund may employ investment techniques and instruments which may be exchange-traded or over-the-counter derivatives, such as futures (such as currency future contracts), options, options on futures, forward settled transactions, convertible securities, hybrid securities, structured notes, credit default swaps and swap agreements. Such derivative instruments may be used for (i) hedging purposes, (ii) efficient portfolio management, and/or (iii) investment purposes, subject to the conditions and within the limits from time to time laid down by the Central Bank. All exposure arising through the investment in financial derivative instruments will be covered by the underlying assets of the Old Mutual European Equity Fund. The Old Mutual European Equity Fund will use the commitment approach methodology to accurately measure, monitor and manage the “leverage” effect produced by the use of financial derivative instruments and for the calculation of its global exposure. As the Old Mutual European Equity Fund uses the commitment approach it must ensure that its global exposure does not exceed its total Net Asset Value. The use of such financial derivative instruments will result in minimal leverage of up to 10 per cent. of the Net Asset Value of the Old Mutual European Equity Fund under the commitment approach. In using the commitment 3 approach for the calculation of global exposure, the Old Mutual European Equity Fund will convert each derivative position into the market value of an equivalent position in the underlying asset of that derivative.

The Old Mutual European Equity Fund may use derivatives to acquire synthetic long and synthetic short positions over a variety of time periods (depending on current market conditions and the Investment Adviser’s view relative to those conditions) in accordance with the requirements of the Central Bank. The expected range for the long and short positions the Old Mutual European Equity Fund may take is between 0% to 10 % short exposures in combination with 0% to 10% long exposures.

The Old Mutual European Equity Fund is denominated in euro. The Old Mutual European Equity Fund does not propose to hedge routinely the currency exchange rate exposure arising as a result of fluctuations between the Euro and the currency in which investments of the Old Mutual European Equity Fund are made, but may do so from time to time. The Investment Adviser may enter into foreign exchange transactions to hedge against exchange risk, to increase exposure to a currency or to shift exposure to currency fluctuations from one currency to another. Suitable hedging transactions may not be available in all circumstances and there can be no assurance that the Old Mutual European Equity Fund will engage in such transactions at any given time. Such transactions may not be successful and may eliminate any chance for the Old Mutual European Equity Fund to benefit from favourable fluctuations in relevant foreign currencies.