Current market conditions and recent positive hedge fund returns are providing attractive opportunities for allocations in alternative strategies, according to Mercer. However, following good practice when selecting managers remains crucial, as some have emerged from the financial crisis in better shape than others.
Hedge funds delivered their best returns in a decade last year, according to Simon Fox, a senior hedge funds researcher at Mercer, and while 2010’s returns are not expected to be as strong as in 2009, he believes the current market conditions still provide great opportunities for active management.
“The flexible approach offered by hedge funds should pay dividends this year, especially now that they face less competition from within the hedge fund industry and from investment banks,” he says.
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Pre-vacation employees happiest
Workers are happiest while planning their vacations, but happiness levels fall back to normal immediately upon return to the office, a recent survey reveals.
A poll of 1,530 Dutch adults, 974 of whom took a vacation during the study period, found that those in the planning phase of a vacation had higher happiness scores than those not going away, while vacationers and non-vacationers showed no difference in their happiness levels unless the time off was considered very relaxing.
Even vacations described as relaxing produced only a slight happiness boost during the first two weeks back. After eight weeks that slight increase had faded completely, according to the news report.
The researchers are not surprised by the brevity of vacation-related happiness, as most vacationers must jump back into their jobs immediately upon return. Further, the inability of many to fully disengage from the workplace while away—through email, texts, and cell phone—limits their ability to properly relax.
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Investor confidence slips
Global investor confidence fell slightly in February, according to State Street’s Investor Confidence Index.
The index—which measures investor confidence on a quantitative basis by analyzing the actual buying and selling patterns of institutional investors—fell 0.7 points to 103.9 from January’s revised reading of 104.6. North American and European investors were upbeat with an increase of confidence of 3.3 points and 2.1 points, respectively, while investors in Asia were more hesitant, with confidence falling back to 97.0 from 98.1 in January.
“Institutional investors continued to balance a number of competing factors against one another in making their risk allocations this month,” says Ken Froot, a Harvard University professor and co-developer of the index. “Developments in Europe occupied much of their attention, as concerns around the long-term solvency of peripheral economies continued to grow. Although the most recent increase in the discount rate by the US Federal Reserve took place after the data for this month’s ICI was collected, institutional investors appear to have anticipated the change, and what it implies for relative investment prospects across the Atlantic.”
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Russell wins billion dollar steel mandate
Russell Investments has consolidated its relationship with giant steel manufacturer OneSteel through a corporate superannuation outsourcing mandate.
Russell says it will roll the OneSteel fund into the Russell Super Solution Master Trust, adding to the trusteeship, administration and investment management services it currently provides for the manufacturer.
The relationship dates back to 2001 and Russell claims the mandate represents one of the largest master trust mandates in Australia, with A$1.1 billion (C$1 billion) in funds under management.