A New Year, new opportunities. The chairman of the curiously named Betelgeuse Investment Funds gazed out across the rain-lashed Thames from behind the protection of his plate-glassed office. This view would not be his to enjoy for much longer, he mused. Even assuming that his business could maintain its independence during a period when he expected the consolidation of the investment management industry to move up a notch or two, cost pressures were forcing a rethink on whether prestigious riverside offices were appropriate. An opportunity to relocate to comfortable, less expensive offices thanks to a different postcode would add usefully to the bottom line. In this business, it was not enough just to grow your assets under management. You had to grow your profits as well.Turning his attention to the opposite wall, where a darkened glass screen allowed him to watch his investment teams at work, the chairman cast his mind over the year just ended. It had not been 12 months of unalloyed joy but at least there had been a positive outcome for markets overall. Selling investment funds to a still sceptical public had been far from easy. Even though the Chancellor had confirmed the £7,000 upper limit on Isas would remain, this action alone seemed unlikely to be sufficient to stem increasing disenchantment in a supposedly tax-efficient vehicle that offered few tax advantages. The only one he could think of now was that you need not declare it on your tax return. With no income tax benefits and sufficient allowances on capital gains tax to mean that most investors could shelter their gains each year, the benefits of buying an Isa had been severely diminished – as sales figures demonstrated. In the corner of the open-plan office sat his latest venture and even that was proving difficult to bring to success. The hedge fund team, a combination of new hires and existing managers seeking a different challenge, were busy trying to demonstrate that they could make money whatever the market conditions. Their long/short approach had appeared to carry considerable intellectual authority but sales had been disappointingly low. Still, it did provide an alternative to their traditional, long-only funds and he had little doubt that they would come into their own one day. They needed to. Selling investment funds these days was a much tougher proposition now that so much of the buying power rested in the hands of professional managers running portfolios for investors. And the multi-managers were the worst to deal with. Drop down the performance rankings and the fund of funds that had given you so much support would dump you, just like that, in favour of the new star on the block. In this business, thought the chairman, that old political slogan – things can only get better – had to apply. Pausing only to initial the finance director’s risk report left on his desk earlier, he turned to his 2005 diary. This could be an important month, he thought. In the US, stock market analysts consider the performance of the indices during January will set the tone for the rest of the year. How might America behave in the weeks ahead? Interest rates were now higher than in the Eurozone, yet there seemed no end to the punishment being meted out to the dollar. Despite record inflows of capital, the twin deficit problem looked as intractable as ever. His own economists and strategists would doubtless be watching developments on the other side of the pond very closely as the year unravelled. Back home, a general election appeared a certainty. The smart money was on May to coincide with the local elections. Given the Government’s propensity to attract trouble at present, he did not think it would come up with any worthwhile excuses to delay. As to whether an election would mean a change of approach, that was anybody’s guess. It was hard to imagine that the Tories could come from behind and overturn such a substantial majority but difficult to believe the electorate would not start to signal their disapproval of a Government that, after two terms, was starting to look a little complacent. Turning back to the river, the chairman considered how much his industry had changed over time. Even the mighty London Stock Exchange looked like falling into foreign ownership. But change itself created opportunities. Now, where had he put his list of New Year resolutions?