Q: How do you view the role of alternatives in a prolonged and deep recession?

A: Many hedge funds did not provide absolute returns in 2008, but were effective portfolio-diversifiers and cushioned the accounts of many investors. That diversification is as relevant today as [at] any time in the past. An investor can do nothing in isolation, but needs to think in terms of a portion of a portfolio, taking into account liquidity needs and time frames. When building an all-weather portfolio, there are a lot of compelling choices.

Q: How has your company's marketing changed in recent months?

A: Overall, we haven't changed our marketing approach, but we have seen a significant increase in interest regarding our due diligence process. This became especially evident in the latter half of 2007 and in 2008 as clients and potential clients wanted to know about our scrutiny of risk-management strategies: "Who does your administrating? Who does your accounting? Are they reputable?"

Potential clients and current clients want more information about our hedge fund selection methods. This increase in interest plays to our strengths, which include operational due diligence of hedge funds...we're thinking of investing [in].

Q: Which of Old Mutual's alternative investment strategies worked the best in 2008?

A: Here's a partial list: 300 North Capital, a long/short fund; [Old Mutual Asset Managers] UK, a global-arbitrage currency fund; Rogge, a high-alpha [fund]; and 2100 Xenon, a managed-futures-products strategy. These all delivered positive returns last year. Of the funds that didn't use traditional assets, the boutiques that did the best were the alternative firms. One standout was 2100 Xenon. Other winners were managed futures, specifically trend followers and commodity-trading advisors. Since it was a challenging year for investing in capital markets, Larch Lane [Advisors, an Old Mutual affiliate,] did preserve capital really nicely, and I'm glad we were able to do it. These performance results are especially meaningful in markets where almost all asset classes, including hedge funds, generally produced negative returns.

Q: How do the alternative strategies differ among Old Mutual's investment affiliates?

A: Larch Lane runs a number of hedge funds that include seed, emerging and established managers. At 2100 Xenon, [commodity-trading] and macro strategies are the focus. Thompson, Siegel & Walmsley runs a single-manager, market-neutral fund; while 300 North Capital has a long/short fund. [The] Campbell [Group] and Heitman manage timber and real estate investment trusts, respectively. This broad array of alternative strategies enables us to offer multiple solutions to meet clients' risk needs. One truly diversified investment is timber. The risk and return are good, according to our commodity-trading advisors, and this offers another way for the investor to diversify some of the risks he or she is already taking.

Q: How has your degree in English helped you in your career? Do you return to any classics to help you formulate marketing strategies?

A: I detect many of the same themes in the marketplace that are found in Shakespeare's work—human nature, politics, greed and fear. Should others in the business have a background like mine? I can't say it would help, necessarily, or hurt, but at times it gives me a unique perspective. It gives me a different way of thinking.