A ground swell is forming in the alternative industry. When Alternative Decisions recently visited London repeated comments and observations highlighted a few themes taking shape. Here we share them with our readers.

Sentiment is improving but business in not back to normal - asset gathering is slow and new methods are needed. Unsurprisingly the main priorities for managers in Q1 were completing restructurings, where they were needed, or handling a wave of redemptions. Perversely the best managers who produced respectable performances in 2008 and did not suspend dealing were sold by investors who needed cash.

Bob Dylan sang “Times are a changing” and we know so following our trip. Here is a summary of the main observations from meeting alternative fund managers in London.

The biggest observations were:

• Considering new structures. Managers are seriously considering UCITS III and managed accounts, where previously many preferred to guide investors into their existing offshore funds. Launches of absolute return funds in UCITS III umbrellas and more managers offering managed accounts are likely. However, investor demand will be the deciding factor for many alternative fund managers as different buyers are moving in different directions.
• Fund managers know investors hold the purse. Power is now with the purchaser, the investors. They want more insights into how their money is managed and like the standards AIMA, HFSB et al are proposing. But where do they go to find these managers? Quant screens do not show transparency.
• Investor protection and care are business issues. Investors are now looking beyond numbers and in more detail into other items. Preparing the right processes and getting them into a standard investor toolkit reduces burdens for investors and managers. Putting materials into a library can aid access and use.
• Demonstrate value for money. Industry change is affecting service providers, fund managers now rightly want services to give value for money and be simple and clearly priced. Feedback and evidence on results will be the model for the future.
• How to reach investors that are even more fragmented. Attrition throughout the industry has made finding the right investors and building relationships more difficult. Fund managers need “soft” services to accompany sales efforts.
• Desire to increase visibility and profile before recovery underway. Investors are repairing process shortcoming and still advancing plans to allocate to alternatives so fund managers need to be moving onto their radar screens now. Popping up after the allocation decision is made is too late. Investing in communication and showcasing transparent reports can assist profile growing.

We are more excited than ever.

Alternative Decisions accomplishes or assists fund managers to achieve all these things.

We’ll share more lessons soon as we continue to mobilise the business.