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Opalesque Exclusive: CMA: Look out for opportunities such as those in 1998 later this year: Japan, selected emerging markets “The alternative investment management industry is going through its worst crisis since 1998,” Sandro Mauceri of EFG’s hedge fund group Capital Management Advisors (CMA), recently told French news site NewsManagers.com.

He believes that the crisis is not over. “Banks have not yet lowered internal leverages and other stock decreases could be announced.” Not to mention the problems a great number of hedge funds are encountering, especially with regards to redemptions.

Opportunities similar to those of 1998 could come up in Q3 2008 or Q1 2009. Japanese stocks are looking up and some emerging markets are becoming interesting. Although not China. where it is difficult to hedge. Opportunities are also coming back in global macro due to dislocations “and due to the general lack of consensus in the world of hedge funds.” With regards to volatility arbitrage strategies, CMA further believes that volatility will remain high for a while. Rates arbitrage has been left out by investors and that has created some anomalies in some rate curves.

Sandro Mauceri added that, with regards to credit distressed strategies, companies will suffer from lacks of liquidity in the financial system and the rate of companies going bankrupt will increase.

In February 2006, Swiss private bank EFG International expanded its existing hedge fund ......................

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