A Different Perspective on Alternative Investment Opportunities

Clayton Press, a speaker at the marcus evans Alternative Investments North America Summit Spring 2010, shares his knowledge on some of the difficulties facing senior alternative investment executives in North America.

Interview with: Clayton Press, Managing Partner, Clayton Press LLC


Amelia Island, FL, January 27, 2010 - FOR IMMEDIATE RELEASE

There is no immediate, definitive answer to the question of which investment opportunities offer the potential for rewards in the current economic environment. But quick decisions, without adequate due diligence and risk assessment, will not easily lead to prosperity. There are numerous opportunities available, according to Clayton Press, Managing Partner of the management consulting practise Clayton Press LLC, with clients in North America and Europe. A speaker at the marcus evans Alternative Investments North America Summit Spring 2010, taking place in Florida, February 21-23, here he discusses the major issues concerning family offices and Chief Investment Officers,who are investing in alternative asset classes.

What investment opportunities has the crisis created in this sector?

Clayton Press: Investors are looking for value and certainty. They are going back to basic industries and moderate risk opportunities. There are specific sectors, particularly those that have had a strong influx of government funds such as transportation, energy, construction and green technology, where growth and investment are both necessary and assured.

I work with family offices and philanthropic investors, therefore I may have a different perspective. In my opinion, the overarching issue is actually providing value irrespective of the type of investment. Are investors actually obtaining value from their investments? There has been an enormous amount of change over the past two years in terms of investment strategies – the investors with whom I work are now more conservative and cautious, and looking for genuine longer-term value. There was a time when they were basing decisions on short-term ROI promise, rather than decisions based on years of tracking industries and understanding business fundamentals.

What are the most promising areas for institutional investors to gain exposure in? What do you think will perform particularly well in 2010 and what would you not recommend?

Clayton Press: If I use the US as a model and look at where government investments have been channeled, I believe that there is great potential in some very basic infrastructure industries, especially certain aspects of infrastructure construction or redevelopment, such as roads and transportation, water, energy, and specific green technologies. There are attractive prospects in health and insurance reform for a variety of investors who are looking for new ways to serve clients. My clients are generally interested in investments that provide concrete benefits and tangible value; I cannot emphasize this strongly enough.

Higher risk, speculative investments certainly remain interesting, but somewhat taboo among my client base. Many non-profit organizations, for example, experienced extraordinary damage during the September 2008 financial crisis and thereafter. Their recovery has been slow, hence, like private investors, they are working to rebuild.

I am cautious about speculative investments in alternative asset classes, like certain luxury goods and art. Art is an area in which I have considerable knowledge, but I consider the art market a mirage. It operates independently of virtually every other business sector that is out there, and there is no direct relationship between the product and its value. With art, you are also dealing with personal taste as opposed to genuine value, which is very difficult to put a price on.

There are certain essentials that have not received enough attention; aspects of the energy market, particularly the newer technologies, are absolutely going to drive down the cost of energy. Certain areas of the pharmaceutical and medical industries are very fascinating, and as we continue the discussion on access to what are now expensive health products, from the delivery of services to insurance, we will start seeing very smart and unique products and services, which will be offered much more economically to larger populations. This is another area where there is extraordinary opportunity. There will also be, for example, the possibility of entering the insurance industry through collective buyer groups, resulting in radical, positive changes and dynamic growth. There is the possibility that people could leave traditional insurance providers and move to a government consortium. The innovators are considering the rising opportunities in any kind of healthcare reform.

What long-term strategies would you recommend to those investing in alternatives asset classes?

Clayton Press: Conduct highly detailed analyses, weigh your options, be diligent, balance risk, and choose wisely. There is plenty of money out there. There is no question about that. The difference is the reluctance of people to invest in a market and expose themselves to risk. Alternative investment managers are trying to minimize their risks right now, which is an intelligent way to proceed. Many were doing this before the financial crisis, but in my world, the consensus is that a number of people got extremely greedy, neglecting their clients and focusing on their own ROI or fees.

I have a more conservative, perhaps European, view; this is a distinguishing hallmark of the way I proceed with investment analysis and advice. I am not looking for a quick return, but for a year-on-year return over a fairly significant period of time, often ten years.

Doesn’t going slow mean missing out on opportunities?

Clayton Press: Depending on your needs, slow is absolutely okay. It is like going to a banquet – you do not have to eat everything in front of you. The satisfied gastronome paces him or her self. There are times when I am pushed or, even cornered, to make decisions on investment opportunities. When that happens, I tend to recoil. I do not want that much pressure; I do not want to feel that any investment is that urgent.

My views are based on several years of experience. I have seen where hasty decisions – based on emotion by otherwise very intelligent people – have led to disappointment in both the short and longer terms. There have been just too many occasions over the last 20 years in particular, where sudden large-scale irrational behaviors have led to readjustment or realignment in the markets. We saw that in the dot.com era, mortgage industry lending products, and hedge funds, and we are more-than likely going to see that around commercial real estate as well. Take your time in making wise decisions.


Contact: Sarin Kouyoumdjian-Gurunlian, Press Manager, marcus evans, Summits Division

Tel: + 357 22 849 313

Email: press@marcusevanscy.com

About the Alternative Investments North America Summit Spring 2010

This unique forum will take place at The Ritz-Carlton, Amelia Island, Florida, February 21-23, 2010. Offering much more than any conference, exhibition or trade show, this exclusive meeting will bring together esteemed industry thought leaders and service providers to a highly focused and interactive networking event. The summit includes presentations on infrastructure investing, real estate, distressed investing, hedge funds and risk management.

For more information please send an email to info@marcusevanscy.com or visit the event website at http://www.alternativeinvestmentssummit.com/ClaytonPressInterview

Plese note that the summit is a closed business event and the number of participants strictly limited.

About marcus evans Summits

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