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Investment View

“Candidly, your view on the growing sophistication of private investors is of as much help to me as knowing the grade of quarry stone used in the Channel Tunnel.” The marketing director of Beetlegeuse Investment Funds flinched at the onslaught from her chairman. “I need to explain to the financial press why sales of Isas and other investment products have fallen off a cliff. Our AGM is next week and there is about as much chance of me avoiding that question as our technology team hitting top quartile.”

Why did I forsake the world of FMCG for financial services, she thought. The fickle financial buying patterns of a public that jumped at shadows was another bowl of cereal altogether. She replied: “Evidence suggests we are holding our share in a market down 50 per cent compared with last year. In February 2000, more than 50 per cent of our net sales came from our Global Technology Super Heroes fund. Today, that fund is in net redemption and there is nothing else in our portfolio that goes anyway towards replacing the volumes. Compared with 1999, though, the decline is modest.”

The chairman&#39s eyes rolled skyward. It was perhaps unfair of him to berate the marketing director so. She had probably found selling cereal packets easier than shifting financial products this year. The reality was that life was tough at present. Realising that a second year of poor returns was in prospect had discouraged supporters of the equity culture.

There were other clouds on the horizon, too. Stakeholder was now a reality. The chairman regretted being bullied into signing up to this new initiative. Still, if he had not, perhaps his sales director would have left to join the European team in their hedge fund operation. That would have been another nail in the coffin of his credibility. With John Duffield and his New Star money sniffing around, this was no time to suggest you might be a leaky ship.

Perhaps Europe would come to his rescue. He had his sales office in Lyon. Admittedly, the location was chosen more for the quality of the local cuisine than the belief they could shift truckloads of Ucits on to a sceptical French public. Still, it was but a short journey from his house in Provence and a useful justification for spending more time in France.

His marketing director was looking at him expectantly. Perhaps he should make her head of sales. IFAs were less likely to refuse her exhortations to support their products. On the other hand, the sales director seemed remarkably good at keeping the support of the intermediary community, even if it did mean his corporate credit card took a heavy bashing. The chairman said: &#39&#39I need to demonstrate a strategy for coping with what might be poor selling conditions for some time. Do we have new products in the pipeline?&#39&#39 The marketing director was now in familiar territory. “We are looking at alternative investment strategies. Already, a number of our competitors are launching hedge funds of funds but we can go one better and produce a fund of hedge funds of funds operators. And that is just the beginning. Private equity is another area the business development team is examining. Witness the way in which venture capital trusts continue to prosper, despite the general malaise.”

The chairman relaxed. It would not be an easy AGM but the answer to his problems was apparent. A private press briefing ahead of the meeting. If the marketing director persuaded a bevy of her marketing lovelies to attend, he felt certain that most journalists would fail to turn up to the meeting, preferring to move straight on to the champagne.

Who knows? Perhaps they might even add a few pence to the share price. Then try and bid for me, Duffield. New Star? Don&#39t forget that Beetlegeuse is the daddy of them all.



Compulsory purchase

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