MATTHEW FEARGRIEVE explains why the S&P 500 and the STOXX 600 right now make this a good time to invest in European equities and corporate bonds.

A Wall Street trader looks at a monitor showing the stock market index going down because of the coronavirus pandemic
A Wall Street trader looks at a monitor showing the stock market index going down because of the coronavirus pandemic

July 2020

European stock markets are seeing inflows as the coronavirus tightens its grip on the US and the country’s economic woes continue to mount. Whilst May and June saw the S&P 500 recover most of the losses of the crash in March, with the Federal Reserve providing emergency economic stimulus, the attention of markets is now focusing on the possibility that the virus remains uncontrolled in the US for some time to come. …


MATTHEW FEARGRIEVE explains why the World Health Organization says Africa must prepare for the worst of COVID19. And why the continent is not prepared for what is coming.

Global map showing COVID19 cases worldwide
Global map showing COVID19 cases worldwide

AS AT 12 MAY 2020 there are around 68,000 known cases of COVID19 in Africa, and 2,340 reported deaths (source: African Arguments). There is currently no model for projecting the extent of COVID19 mortality across the African continent: the continent is too vast, the African nations are too different, and so much is still unknown about the virus. Tragically, when you read this article, these numbers will be much higher.

So it is perhaps unsurprising that the director-general of the World Health Organization (WHO) should have erred on the side of caution, by advising the continent to “prepare for the worst”. Though the pandemic is in its early days on the continent, however, health experts have warned that even facilities in Africa’s richest nations could be overwhelmed by the spread of the virus. And the WHO has just convened an emergency meeting today, as the disease continues to spread across the African continent. …


As a new report by Eurekahedge reveals further contraction in the European hedge fund industry, MATTHEW FEARGRIEVE explains the failure of Alternative UCITS as a vehicle for truly “alternative” strategies, and why managers in Europe are increasingly looking to the Cayman Islands as a hedge fund domicile.

Graph showing stock market collapse during coronavirus crisis
Graph showing stock market collapse during coronavirus crisis

The financial crisis of 2008 left in its wake a chastened world in which transparency and liquidity were held aloft as sacrosanct. Hedge funds came in for much of the blame, despite being exonerated of any systemic role in the global financial meltdown (remember the German government describing hedge funds as “locusts”?) …


MATTHEW FEARGRIEVE explains five ways in which your pension provider- and your financial adviser- should be communicating with you during the coronavirus lockdown.

A pension pot with pennies in it
A pension pot with pennies in it

In these days of lockdown and self-isolation, pension providers and financial advisers, like all businesses, have to work harder at reaching out to their clients. Especially when your pension fund is suffering losses in the market turmoil. Now is the time for all financial services firms to be thinking of their clients and how to help them understand the financial impact of the coronavirus crisis on their investments.

Here we explain five key things that your pension provider and your financial advisers (whichever one you have the main relationship with) should be doing during the lockdown to support you. …


MATTHEW FEARGRIEVE sets out five behavioural protocols that investment fund managers need to adopt to survive the impact of COVID19 on their business.

Coronavirus market meltdown: the Bulls and the Bears wearing clinical facemasks
Coronavirus market meltdown: the Bulls and the Bears wearing clinical facemasks

It is not only turbulent, highly volatile markets that investment managers have to grapple with. In these days of lockdown and self-isolation, managers, like all businesses, have to work harder at reaching out to their clients. Especially when the portfolio is suffering losses. In the unprecedented circumstances in which we all find ourselves, a feeling of disconnection from the manager, or of being kept in the dark, will drive investors to the exit just as surely as portfolio losses. …


MATTHEW FEARGRIEVE suggests ten macro impacts that the coronavirus pandemic will have on the global hedge fund industry

Market trader wearing protective clothing PPE during the coronavirus crisis
Market trader wearing protective clothing PPE during the coronavirus crisis

The hedge fund industry has been in the doldrums since the financial crisis of 2008, when the majority of alternatives managers failed to deliver the alpha returns they promised. Indeed, the ten years since 2008 has been a lost decade for alternative asset management, thanks in part to low interest rates, a long-running US bull market and high stock valuations.

And the market turmoil and economic aftermath of the coronavirus pandemic seem set to deal another body-blow to the industry.

In this article, we posit ten possible impacts of the pandemic on the global alternatives industry. The horizon is not rosy for hedge fund managers. …


With some alternatives managers gaining and others losing in the market turmoil, MATTHEW FEARGRIEVE looks at the changing fee model of hedge funds and the evolutionary context of their performance in down markets.

An empty stock market trading room during the coronavirus pandemic
An empty stock market trading room during the coronavirus pandemic

Few hedge funds in today’s pandemic-stricken markets will get close to emulating Pershing Square’s success, as the US fund banks a US$2.6 billion profit on a US$27 million bet that coronavirus would trigger a crash in world markets. Pershing’s investors may well be feeling quite sanguine right now about the fees they pay to the fund’s manager.

The traditional “2 and 20” hedge fund fee model has been on the slide since the financial crisis of 2008, when the majority of hedge funds failed to deliver the uncorrelated returns they promised. And hedge fund performance has not exactly bounced back, with the ten years since 2008 being something of a lost decade for the alternatives industry, thanks in part to low interest rates, a long-running US bull market and high stock valuations. …


MATTHEW FEARGRIEVE explains why Health Experts say that India should prepare for the worst. And why the country is not prepared for what is coming.

Map of India
Map of India
Click here for interactive COVID19 tracker map

AS AT 4 APRIL 2020 there are around 2,650 known cases of COVID19 in India, and 68 confirmed deaths across 29 states, reported by the country’s Ministry of Health and Family Welfare (MoHFW) which is working in conjunction with teams at the Johns Hopkins Coronavirus Resource Centre in the United Kingdom. These numbers are changing by the hour and will, unfortunately, be significantly higher when you read this article. …


With COVID19 spreading in the Cayman Islands, MATTHEW FEARGRIEVE explains why R$200 billion of Brazilian offshore assets are at risk

Aerial view of the Cayman Islands
Aerial view of the Cayman Islands
Grand Cayman, home to R$200 billion of Brazilian assets

1 APRIL 2020: the world’s largest offshore financial centre, the Cayman Islands, has reported 15 cases of COVID-19 and one death. The chief medical officer has confirmed that the Cayman Islands now have “community transmission” of the virus. The islands are in lockdown, with a nightly curfew and all flights cancelled. There are reports of the islands’ premier, Alden McLaughlin, allowing in one British Airways flight in the coming days, to enable out-of-work expats to leave.

In this article we will consider the potential devastating impact of the virus on the 4,000 financial services workers in the Cayman Islands who administer R$200 billion of Brazilian assets currently under management in Cayman investment vehicles. We start with an overview of Cayman’s investment industry. …


With COVID19 spreading in the Cayman Islands, MATTHEW FEARGRIEVE explains why ¥70 trillion of Japanese offshore assets are at risk

Image showing a Dollar symbol which looks like an aerial view of an offshore island
Image showing a Dollar symbol which looks like an aerial view of an offshore island
USD650 billion (JPY70 trillion) of Japanese assets are invested in Cayman Islands vehicles

1 APRIL 2020: the world’s largest offshore financial centre, the Cayman Islands, has reported 15 cases of COVID-19 and one death. The chief medical officer has confirmed that the Cayman Islands now have “community transmission” of the virus. The islands are in lockdown, with a nightly curfew and all flights cancelled. There are reports of the islands’ premier, Alden McLaughlin, allowing in one British Airways flight in the coming days, to enable out-of-work expats to leave.

In this article we will consider the potential devastating impact of the virus on the 4,000 financial services workers in the Cayman Islands who administer JPY70 trillion of Japanese assets currently under management in Cayman investment vehicles. We start with an overview of Cayman’s investment industry. …

About

Matthew Feargrieve

Matthew Feargrieve is an investment management consultant with more than twenty years experience of advising fund managers.

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