An alternative reality check

CONTRARIAN

Alternative assets were supposed to be the big new thing. Investors were destined to shed their traditional inhibitions and embrace a new world that consisted of sexy stuff that would be very different from boring gilts and blue-chip equities.

This buzz has created a great deal of innovation and frenzied discussion. Barely a week goes by without some excited talk of a new asset class or new strategy that will genuinely provide the holy grail of alternative investing – uncorrelated returns. Talk is cheap and the reality is very, very different. Compared to most other developed world countries, and especially the US, our investment community is irredeemably cautious and conservative. The big story for me is how alternatives have been a disaster here in the UK, with very few investors bothering to embrace anything with the w...