So you’re determined: you’ll invest with the stars only

These days, the alternative investments market seems like a star managers’ seller’s market: everyone wants to invest with the stars and hardly a penny finds its way toward lesser managers. Quality, no quality, performance or no performance – either you’re big and famous, or you don’t exist as far as the world’s “sophisticated” investors are concerned. It’s like the investment management industry is shaping up along the lines of the showbiz industry. The distribution channels are for celebrity-managers-only.

Well, look how well that worked out for show-biz. We’re getting the Beyonces, Lady Ga-Gas and Muses galore shoved down our throats, as if nobody makes decent music anymore. Somebody must be making good music out there – but for the average TV watcher/radio listener like myself, I’ve got no clue who or where they are. Ever heard of Mavis Staples?

While with the music industry, the result of this restricted scene might leave your aesthetic senses a wee bit underwhelmed, it’s a different deal in the financial services. You end up with stars like John Wood, Brian Hunter, Jeffrey Larson, Jerome Kerviel, Luca Bechis, Tim O’Brien, Philippe Bubb, Lars Steffensen, or Victor Niederhoffer that leave their bedazzled investors with pennies on the dollar. Or no pennies at all. Not to mention that Bernard Madoff was a bright shining star… until he wasn’t.

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