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Optimism suggests better times ahead for alternatives

Date: Thursday, April 24, 2008
Author: HedgeWeek

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Greg Coffey, GLG Partners' star emerging markets fund manager, has walked away from a handsome fortune in share options and other bonus payments to start his own business. Can he earn more money by setting up his own fund - especially in these difficult current global circumstances? Is it a sign that a turn is afoot?

Coffey's decision came alongside this week's announcement by US-based buyout firm Warburg Pincus that it has raised USD 15bn for its new global private equity fund. This proves that investors are continuing to allocate money to the alternative investment industry despite the credit squeeze and economic slowdown.

In Coffey's case, it's far from a reckless punt. Surely the best performing manager at GLG and one of the top performing hedge fund managers in the world - the GLG Emerging Markets Fund was up 51 per cent last year and 60 per cent in 2006 - has a firm grasp on investment opportunities in current market conditions.

More importantly, it suggests that there are interesting opportunities ahead. Take the FTSE 100 index as an example. It has been more or less stable in the past few months, after the heavy fall it sustained last year. Still, prices are at low levels, and this makes sense for investors. Funds raised when financial markets are down can generate significant returns.

Is now a good time to invest? High-flying investors certainly seem to think so.