New perspectives on alternative investments
It is a great pleasure to introduce this second pictet report, which draws together insight, analysis and opinion from the world of alternative investments. we have called on a wide range of experts – both asset managers and investors – from around the world who contributed to two days of lively discussion and debate at our alternatives conference in lausanne in mid september 2009.
Our aim is to give our clients and partners a range of perspectives on hedge funds and private equity – the two forms of alternative investment with which pictet is primarily concerned.
While market sentiment, as expressed in risk premiums has more or less returned to pre-lehman collapse levels, there are several powerful, longer term trends that are likely to redefine the investment landscape in the years to come.
First, there is the likelihood of a prolonged deficit in consumer spending arising out of the excessive household debt accumulated in the west during the long liquidity boom; moreover, while household debt will restrain consumption in this region, the huge increase in G10 government debt, as a result of the financial crisis, will have implications for years to come.
Second, there is a clear shift in global demographics as societies age in the developed nations and populations rise in the emerging world; in the western markets there are major consequences for the funding of social security systems, for healthcare and for pension planning.
Third, there is the growing impact of china and the developing world generally on global growth; these countries will account for two-thirds of global GDp growth in 2010. as these countries become ‘developed’, which countries then will deserve the ‘emerging’ epithet?
Investors would do well to take a long term view. in our 204-year history, we have learnt to avoid short term expedients, to measure in years, not in weeks or months. we devote our passion and experience, seasoned in good times and bad, to understanding how we can best serve our clients.
Above all we value integrity, critical to, yet independent of, the ceaseless tide of innovation. integrity is the common thread in the following pages; the partners and management team at pictet are pleased to invite you to consider the thoughts of our contributors.