Mapping the Future

Since 2007 the UK economy has been in freefall. One of the worst financial crises ever to hit on a global level, the initial credit crunch became a worldwide recession teetering on the edge of a depression. The accompanying job losses, business closures and stagnation in prosperity have lingered on for years, with a light only now really just appearing at the end of the tunnel. This is why there has been an announcement by the government of a £375 billion investment plan – the National Infrastructure Plan – designed to create jobs, attract investment and boost growth.

Projects supported by the investment include those in energy, communications, water and transport – 646 in total, of which 291 have already got underway. The move is designed to tackle perceived under-investment by the government and slow progress with some infrastructure projects. It is also likely that the government will sell off its stake of the Eurostar rail service, which amounts to around 40%.

The Royal Chartered Institute of Surveyors, led by its president Michael Newey, welcomed the news and added that it hoped the government would look to investment in local transport and infrastructure systems as well as national ones.

Running concurrently with the government plans is a £25 billion investment by companies across the UK insurance industry in a series of infrastructure projects. A new European ruling sees insurance companies incentivised to invest in a wider range of assets. As a result, companies such as Aviva, Standard Life, Legal & General, Prudential, Friends Life and Scottish Widows have all announced plans for heavier investment in infrastructure.

In the past two years, Legal & General have already invested around £3 billion in projects such as university accommodation, and has plans to expand further into construction projects. Headed up by Chief Executive Nigel Wilson, the company plans to fund housing development projects, for properties both for sale and rent, and those in the social housing sector. A lack of affordable housing across the UK has been another sticking point in the recovery process, and the company hopes its investments can help to boost the property market.

With a little more hope on the economic horizon, infrastructure projects and investment are giving the nation a chance to recover from the financial crisis. While it is clear that recovery will not be quick, it seems that there are a number of signs that it will happen in the not-too-distant future.

Take the Tax-Free Incentive

Death and taxes are the two sure things in life, according to Benjamin Franklin. While we can look after our health and do our utmost to delay the former, there really isn’t too much you can do to avoid the latter, at least not without breaking the law. But there are legal schemes and investments you can enjoy which offer tax breaks or tax-free savings, and a new government initiative has been announced which will see savers able to increase the amount of tax-free savings they can invest in an Individual Savings Account (ISA). The new regulations will also be extended to children’s savings accounts, encompassing Junior ISAs and Child Trust Funds.

 

The new limits would see savers able to increase their investments in their ISAs to £11,880 (for the year 2014-15), and they can save half of this in a cash ISA. For children’s accounts, the Junior ISA and Child Trust Fund limit has been raised to £3,840.

The reason for the new limits is to recognise the negative effects that inflation has had on the amount people can save. Essentially, with limits remaining the same savers are able to save less and less in real terms, and the new ceilings have been introduced to recognise this.

 

There is also consultation underway – and speculation rife – that children with a Child Trust Fund may be able to transfer their savings across to a Junior ISA. These replaced Child Trust Funds in 2011, but existing fund holders have up to now been unable to move these savings across to enjoy the often better conditions attached to a Junior ISA.

 

This would be excellent news for young savers, according to investment brokers Hargreaves Lansdown. Led by Chief Executive Ian Gorham, the company believes that operating two separate schemes is confusing and removes the incentive for people to put money aside for their children.

 

There is a wide range of ISAs and Junior ISAs available, offering different interest rates and other incentives to savers. Those looking for an ISA can use comparison sites or look to bodies such as respected consumer champion Which? magazine. With Chief Executive Peter Vicary Smith at the helm, the company gives consumers impartial advice about the best products on the market.

 

Saving hasn’t been too easy in recent times, with very low interest rates and a lack of disposable income proving something of a double whammy to stop people putting aside money. The new announcement by the government is a sign that they are recognising that people need proper encouragement to save within the legal guidelines.

High profile hedge fund launch on the horizon

Sutesh Sharma, previously the head of proprietary trading at Citigroup, is launching the widely anticipated Portman Square Capital this coming Autumn.  With $500 million behind the London-based venture it is one largest start-ups in 2012.

Portman Square bears the name of its Marylebone location and will house trader teams specifically hired for their specialism in event-driven equity trading, convertible bond arbitrage, and volatility trading.

Eleven of the world’s most prominent hedge fund firms – including Alan Howard’s Brevan Howard, Kenneth Griffin’s Citadel and Louis Bacon’s Moore Capital – are behind the launch of Portman Square. Old Lane portfolio managers Lalit Das and Yusuf Khan will both join as partners.

In 2005 Mr Sharma, along with Vikram Pandit, launched Old Lane, one of the biggest hedge funds ever. It was later acquired by Citi in 2008.  Although traders from Citi will be joining Portman Square later on in the year, the bank is not investing in this particular venture.

Mr Sharma’s resumé reveals an impressive $2 billion portfolio, averaging a $280 million annual return.  However, the initial launch size and approach for Portman Square is being carefully managed to ensure its success.

Following in the footsteps of Mr Sharma, other traders including Mike Stewart from JP Morgan are also transforming in-house projects into stand alone funds.  Azentus Capital launched in 2011 raising over $1 billion, making it the biggest hedge fund launch since the worldwide financial crisis began.

Alpha Clone ETF’s

ETF’s made to mimic the buying strategies associated with the best hedge fund managers where rolled out by Alpha Clone today.

Doubters possess voiced concerns concerning the ability of a rules-base index to ensure that you duplicate hedge-fund techniques. Proponents say hedge fund ETF’s give investors access to these complicated methods along with lower fees with no lock-up periods which is a major breakthrough.