Our industry

Growing investor recognition of the need to spread risk and sources of return in their portfolios has been reflected in strong demand for alternative investments in recent years. These encompass a wide range of trading approaches including managed futures and hedge funds that offer diversification from traditional assets like stocks, bonds and property.

Assets under management in the managed futures industry grew from $41 billion in 2001 to over $190 billion by the end of Q1 2009, according to the Barclay Group. In the same period, Hedge Fund Research records that hedge fund assets grew from $539 billion to $1.3 trillion.

Like most other asset classes, the growth in hedge fund assets reversed sharply in the second half of 2008 as the credit crisis led to a broader failure of confidence in financial markets, triggering a massive flight to the safety of cash and government bonds. That in turn has triggered a general shake out in the investment industry, creating numerous price dislocations for innovative managers to trade and paving the way for future consolidation.

The worst of the crisis now appears to be behind us and independent research, including studies by consultants Casey Quirk and Deutsche Bank, show that investors are once again considering allocating to alternative investments. In future, however, these returning investors will require the transparency, flexibility, levels of service and access to global opportunities that can only be provide by the largest players in the industry.

It is our strong belief that the fundamental case for alternative investments remains strong and that as confidence returns to global demand for these assets will return to its long-term growth trend.