Many observers appear to agree that we are coming to the top of what has been a powerful bull market cycle which has been interjected but not held back by several exogenous events. These events have served to curtail the cycle on a short term basis only but not turn it into the worst of all things equity; a sluggish bear market.

Performance fees have typically been associated with hedge funds/alternative investment funds. The traditional hedge fund 2% management fee (on AUM) and 20% performance fees (above a fixed hurdle rate or previous rate of return) date back to the early days of these funds, when many pursued high volatility strategies, often previously employed on banks’ balance sheets rather than managing external investor capital.

Public markets are arguably over-owned and overpriced. To understand why you have only to look at one of the newest phenomenons in the global financial system, the massive artificial creation of cash or, Quantitative Easing by the world’s central banks.

ESG has become as common an acronym in the world of finance as LOL, DM and IDK are in the world of texting. But with such notoriety and fanfare comes risk – and in this case that risk is “Greenwashing”.

EX SABRE DUO LAUNCH NEW ADVISORY BUSINESS AND PARTNER WITH BLACKHEATH CAPITAL MANAGEMENT ON NEW ESG FUND LAUNCH

The rapid upsurge in the investment community’s interest in Environmental, Social and Governance investment products has led to a virtual doubling of ESG focused AUM in the last four years to over $1trn. This has brought with it a plethora of issues, some negative, not least of which is the concept of ‘greenwashing’.

Anathema to hedge fund managers is having any strictures, active or passive that restrict their ability to operate in the way they see fit. Their mission has always been hard and well defined; alpha not beta.

With the impact of Covid-19 so widespread and affecting so many different facets of our lives, it is next to impossible to not to comment in some form on the ramifications of such a global event.

So, as a private investor, not a full blown opted up professional investor but a private retail client, you can indulge to your hearts content in the trading of Foreign Exchange spreads (with eye watering levels of leverage available), you can trade equities via CFD (again leveraged up if required), and you can, still, lend money via the mini bond market to anyone or thing that appears to have a plausible investment offering.

And, so, the sabre rattling has started in the financial services bucket of Brexit. Michel Barnier recently commented: “I’d like to take this opportunity to make it clear to certain people in the United Kingdom authority that they should not kid themselves about this.

With the UK's exit from the EU and the near simultaneous publication of ESMA's consultation paper on the Provision of Investment Management Services in the EU by third country firms (coincidence?), questions are again being asked around where the UK will stand once a trade agreement is agreed with the EU.

New Year, same issues for alternative investment funds it seems. The latest survey from the European Securities and Markets Authority (ESMA), basically a health check on all of the EU’s Alternative Investment Funds (AIFs), has some interesting stories to tell.

Fund liquidity is becoming a focus again as the winding up of the Woodford Equity Income Fund is due to start on January 17, 2020, and the regulator has sounded a warning on liquidity to help prevent a similar debacle.

Corporate bonds have long been the preserve of institutional investors, primarily because the issues available started at £100,000 upwards and too few retail investors were able to invest at those levels without committing a significant amount of their portfolio to one asset.

Questioning the liquidity of exchange traded funds (ETFs) is something that has grown in recent years, thanks mostly to the greater number of institutional funds that now use them – bond ETFs particularly – as an alternative to holding cash.

Marketing of a product is key in any business to ensure it succeeds – the ‘build it and they will come’ adage in the internet age especially is never going to work, and it is no different for alternative investment managers.

Sterling has struggled against major world currencies and it could be storing up incremental risks for managers and investors who have been ignoring the currency markets.

We all know that the Holy Grail for investors is a high return product that has zero risk to their funds. But we also know that doesn’t exist, despite trying the best we can as fund managers to get as humanly close to this as possible.