| While the global investment environment is clouded | | | | can be unpredictable, too. For example, fundamentals |
| by economic recessions, credit crises and wars, | | | | may appear to underpin bullish longer-term sentiment |
| wealthy entrepreneurs still find a ready pool of asset | | | | on managed funds, despite the best efforts of stock |
| management specialists to assist with alternative | | | | markets to suggest otherwise. |
| investments. | | | | Despite the global economic downturn, the fund |
| What constitutes a good investment depends on | | | | management sector remains buoyant. While banks, |
| who you ask. A hedge fund manager may point to | | | | building societies, life insurance, brokers and general |
| the favourable short- and long-term outlook for a | | | | insurance Firms have all noted a decline in business |
| unique asset mix far removed from traditional single | | | | volumes and profitability, asset management Firms |
| asset classes. Unsophisticated investors are certainly | | | | continue to grow their teams to cater to wealthy |
| disillusioned with the security and predictability | | | | investors from Asia and the Middle East. Global |
| offered by traditional asset classes, including listed | | | | wealth managers now actively manage US$17.4 |
| equities at US dollar deposits. | | | | trillion, with new flows from Asia compensating for |
| The average investor, however, has more difficulty | | | | market index losses by accounting for 13% of total |
| understanding different investment concepts. A | | | | assets. |
| property investment, for example, is easier to | | | | Hedge Funds |
| understand than equity investments, and returns are | | | | A hedge fund is a popular managed fund, with |
| easier to predict because property value is less likely | | | | managers typically collecting performance and |
| to depreciate because of factors such as corporate | | | | management fees from the Client. Hedge funds are |
| fraud and accounting manipulation. | | | | discretionary because they are required to make little |
| Aidan Healy, managing director of | | | | information public, to protect the integrity of the |
| Singapore-headquartered corporate consultancy Healy | | | | fund manager's trading methods. |
| Consultants, says many of his Firm's Clients are | | | | Private equity funds |
| wealthy entrepreneurs keen on investing in Asia, | | | | Private equity is an exciting investment genre with |
| which according to the United Nations Conference on | | | | high risks and high rewards. The absence of public |
| Trade and Development (UNCTAD)'s World | | | | information and lack of exchange listing bureaucracy |
| Investment Report 2007 receives two-thirds of | | | | makes private equity an attractive experiment for a |
| global foreign direct investment (FDI). Common Asia | | | | savvy investor. Private equity has shown a proven |
| investment routes include: | | | | ability to outperform public companies on key |
| Property | | | | metrics, despite the credit crunch. The best private |
| In 2006 and 2007 booming Asian property proved a | | | | equity investors are able to deliver superior profits, |
| reliable investment for entrepreneurs wanting to | | | | value and investment returns. That said, private |
| chart accurate paths of returns with a wealth of | | | | equity firms are likely to hold investments longer and |
| figures to hand. Direct commercial real estate | | | | to see slower multiple growth before the market |
| investment in Asia Pacific reached a new high of | | | | corrects itself. |
| US$121 billion in 2007, up 27% on 2006. However, the | | | | Nothing ventured, nothing gained |
| global subprime crisis has led international property | | | | Venture capital investments are inherently risky, too, |
| consultant Jones Lang LaSalle to predict a decline in | | | | though they also come with the prospect of |
| overall property transaction volumes in more 'mature' | | | | above-average returns. However, a drought of |
| markets such as Tokyo, Singapore, Sydney and | | | | venture capital-backed initial public offerings (IPOs) on |
| Melbourne. However, emerging markets such as | | | | leading exchanges in 2008 is a combination of |
| China, the Philippines and Vietnam are expected to | | | | nervous investors, the credit crunch and the general |
| see continued growth, with attractive returns on | | | | economic slowdown, making IPOs a less attractive |
| investment. | | | | source of capital for fast-growing companies. |
| Managed funds | | | | A key downside of venture capital investment for |
| Managed funds are a lazy man's investment. If you | | | | the recipient is the role many angel investors demand |
| have excess cash flow and do not have time to | | | | in the day-to-day running of a business. |
| analyse securities, why not purchase managed funds? | | | | Conclusion |
| The price you pay for such a lazy investment is | | | | Most investors would be advised to treat alternative |
| usually large fund manager fees, often offsetting | | | | investments as a gamble which they can afford to |
| fund growth. Just like listed securities, managed funds | | | | lose. |