Monday 15 December 2008

Some investment strategies for 2009

Closed end funds:
Fund structure mitigates investor risk
Suitable for arbitrage strategies
Suitable for relative value strategies
Suitable for distressed and private equity strategies
Lends itself to efficient and risk controlled deployment of leverage
Technically complex strategies which rely on multiple trade legs

Distressed investing:
Current cycle is attractive for distressed investing
Distressed assets and distressed pricing in developed markets
Distressed pricing and performing assets in emerging markets

Recovery strategies:
Distressed strategies are a subset
Deep value equity
Deep value credit

Direct lending:
Dearth of credit, easy or otherwise
Banks are retrenching from the market
Spreads and margins are priced for distress despite strong and performing obligors
Bespoke deal structures to mitigate specific risks
Trade finance

Stale strategies:
Short or market neutral credit
Short or market neutral equity
Long volatility - vega
Systematic global macro

Fresh strategies:
Long equity
Long credit (including CBs and private CBs)
Capital structure arbitrage
Distressed investing: control over asset
Factoring, receivables finance, trade finance
Fixed income arbitrage
Risk arbitrage – cross border strategic

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