The markets have been good to those investors that held tight over the past few months. Unfortunately most will still be sitting on significant losses and I prefer to think we're still looking for a way out of the woods versus in the clearing already. While primarily still in cash in terms of equity related positions, we continue to look at private opportunities in the alternatives space, especially over seas. What this (dare I say 'bear market bounce') has done is stabilize the alternative investments industry for the time being. The rate of outflows has slowed and funds will super star teams continue to secure commitments. While some investors in private equity and other illiquid assets may take this as an opportunity to look for an available exit under more forgiving terms, the value of these assets probably hasn't changed significantly due to the rally. The bids that are out there in the secondary market remain significantly discounted and capital is still hard to come by for many smaller firms. Who has benefit from this 'bounce' have been many of the hedge fund strategies. Looking at the Credit Suisse Tremont Indices Convertibles are up over 12% YTD. Other strategies showing low single digit percentage returns include Emerging Markets, Risk Arbitrage, Fixed Income Arbitrage, and Multi Strat funds. For investors this will be a game for the nimble and risk seeking. There are opportunities and risks as always. Those willing to go against an intermediate trend in the short term will likely benefit from continued secular shifts that develop over the longer term.
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