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Alternative Market Briefing

2009 Outlook (8) - Kleinwort Benson sees bargains in equities, corporate credit, hedge funds, commodities, structured product

Thursday, January 15, 2009

By Benedicte Gravrand, Opalesque London: See yesterday’s 2009 outlook (6) here and (7) here.

According to Jeremy Beckwith, CIO at the UK-based private bank Kleinwort Benson, financial security will be the number one priority for investors in 2009.

For those in a position to take risks, bargains can be found in (1) equities and corporate credit; (2) property; (3) the hedge fund industry; (4) commodities later in the year, when EM recover ahead of Western economies; (5) structured products that take advantage of current levels of implied volatility to offer high income whilst limiting downside risk (Source).

With regards to opportunities for the hedge fund industry, Jeremy Beckwith told Opalesque in an e-mail communication that the assets controlled by hedge funds were falling sharply not only because of poor performance and redemptions, but also from the enforced deleveraging as banks had withdrawn lending facilities.

"The widespread sell-down of these investments has sent prices of many securities to very low levels, as market liquidity has dried up,” he continued. “All credit spreads have widened out substantially and the prices of many smaller company equiti......................

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