"For the second year running we have seen a firm that uses alternative investment classes as an integral part of its asset allocation process walking away as an outright winner. It seems strange that UK regulation still makes it almost impossible for all but the wealthiest and most sophisticated “qualified” investors to gain access to the best investment talent in the absolute return market. This is in stark contrast to the traditional long only market where the most talented managers are most likely to be managing mutual funds that are accessible by all.

"In an age of low inflation, where cash and bonds produce a real return over the inflation rate, many private investors might conclude that they are really absolute return investors and not benchmark relative investors after all. Certainly at the top end of the private investor market place we are seeing an increasing use of absolute return fund strategies to reflect a greater degree of investor caution. Perhaps this is a greater degree of investor reality, when you consider the potential of longer-term returns from equities compared with the risk free rate.

"The challenge for the private asset management industry is how to satisfy these investors in this new environment. There are issues of resources and there are regulatory challenges in being able to deliver in this area. The traditional advice for investors who want consistent returns: “why not buy an endowment policy to smooth out the returns?” has been cruelly exposed by a three-year equity market decline.

"We have seen in the institutional market how investors have moved away from their traditional reliance on balanced portfolios run by balanced managers in favour of constructing portfolios that rely on the specialist skills of a wide range of managers. The private client marketplace cannot be immune from this and indeed the popularity of picking specialist managers for private client portfolios has notably increased since the PAM Awards started three years ago.

"The PAM awards and the participation of so many leading managers, are part of the process of elevating the skills and the choice which is available for private investors in the UK and PAM strives to reflect the latest developments and current best practice in the message which these awards give to the investor community."

JAMES ANDERSON