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From the Opalesque team:

According to the latest 'Alternative Outlook' report issued by 3A, a division of Swiss banking group SYZ & CO dedicated to alternative investments, the loan package announced by the BCE last month could be a "major step towards the sustainability of the euro currency and a significant reduction in the liquidity risk" - although fiscal discipline will also have a say in that.

3A believes that a good mix of investment styles between trading-oriented and fundamental stock-pickers will support an attractive performance this year; the manager will increase its exposure to more aggressive l/s equity managers, and reduce exposure to convertible bond managers due to richer valuations and a slower volume of issues.

In parallel, Chicago-based data provider Hedge Fund Research's HFRI Equity Hedge Index is up 4.32% YTD (to end-April) and it returned +24% in 2009.

Event driven managers have seen increased flows for some time now, as the perception of the markets is that there is a significant amount of deals on the way, says 3A's report. The downside is that spreads are very tight as everyone is playing the few opportunities out there. But Asian markets are seeing more interest as the spreads there offer greater yield. The combination of low interest rates and many firms sitting on healthy cash balances says that all the ingredients are present for the strategy. It is "just a question as to when the broader market bel......................

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