Gosling's Grouse: Innovate to accumulate

GOSLING'S GROUSE

Innovation is a fundamental part of fund management, pushing the boundaries to give investors access to new asset classes.

But what is the difference between genuine innovation and someone else spotting an opportunity to make a quick bit of money at investors’ expense? It is always a fine line, and in many cases the ‘innovation’ works on the basis the innovator manages to get out before things go pear shaped. Witness Arch cru or Keydata as good examples of this. In the case of Keydata, wrapping a structure around an illiquid asset like life settlements was asking for trouble, and yet life settlements are a good investment for certain investors. I love structured products when they are put together by grou...