Appetite for risk seems to have returned - but only, so to speak, for "simple risks" such as equities and bonds. There is a simple reason for the return of the risk appetite, when the fundamentals have not been sorted out: when people are paid to be "active", they HAVE to be "active" if they don't want to lose their jobs.
On the other hand, appetite for what might be called "complex risks" is yet to return (and a good thing, too?):
Chicago-based Hedge Fund Research claims to have found that hedge fund assets are still on their way down; in the final quarter of 2008 investors withdrew $152 billion while, in the 2nd quarter of 2009, withdrawals were at a lower level of $43 billion.
Though there was an increase in the value of hedge fund assets by $100 billion in the second quarter, this was entirely due to an improvement in investment performance (and that, as far as I can see, was itself due to the effects of all the stimulus packages around the world rather than any extraordinarily intelligent actions on the part of hedge fund managers - I am not implying that they were doing anything stupid, simply that they were doing, as far as can be worked out, what might be called "normally intelligent" things).
So "simple risks" may be accepted or declined with greater alacrity right now, but the appetite for "complex risks" is still declining
Professor Prabhu Guptara
What kind of risk-appetite has returned?
- By Professor Prabhu Guptara
- Published 07/30/2009
Professor Prabhu Guptara
Professor Prabhu Guptara is Executive Director, Organisational Development, Wolfsberg (a subsidiary of UBS - one of the largest banks in the world). He is also Freeman of the City of London and of the Worshipful Company of Information Technologists, and Chartered Fellow of the of the Chartered Institute of Personnel and Development; he is also Fellow: of the Institute of Directors, of the Royal Commonwealth Society, and of the Royal Society for the Encouragement of the Arts Commerce and Manufactures; and he continues to supervise PhD research at the University of Fribourg (Switzerland) as well as to be Visiting Professor at various Universities and Business Schools around the world.
Earlier roles include: a Governor of the Polytechnic of Central London, Member of the Council of the British Institute of Management, of the International Federation of Training & Development Organisations (IFTDO), of the Association for Management Education and Development (UK), of the South East Regional Council of the Confederation of British Industry.
Judge, 1988 National Training Awards, 1980 Commonwealth Poetry Prize, 1990 & 1991 Deo Gloria Prize for Fiction; Chair of the Panel of Judges, Deo Gloria Prize 1992 & 1993.
Experience with an enormous range of organisations including: Akzo Nobel (Netherlands), the Associated Banks Institute (Germany), Barclays Bank (UK), British Petroleum (UK), the Council of Europe, Cultor (Finland), Deutsche Bank (Germany), Groupe Bull (France), Federation of Finnish Engineers (Finland), the International Management Association of Japan, Kemira (Finland), Kraft Jakob Suchard (Switzerland), Leadership Academy (Finland), Nokia Telecommunications (Finland), Novo Nordisk (Denmark), Sedgwick International Insurance and Reinsurance Brokers (UK), Singapore Institute of Management, Sonatrach (Algeria), Sun Alliance (UK), UNCTAD, Valeo (France), and so on.
Organiser, chair and lecturer by invitation for numerous international conferences, he has contributed widely to radio and television in the UK and other countries (The Money Program, Any Questions) and has written for Financial Times (London, UK), The Guardian, The Times and other publications; articles, for example, in The Gower Handbook of Management, The Gower Handbook of Quality, and the International Encyclopedia of Business & Management (Routledge).
A CD-ROM has been issued of his lecture at the Professorenforum, University of Zurich, titled "Making the World Better - Why it does NOT happen...and what TO DO about it"
Further information available from rbadertscher@coba.ch
His best-known research publication is "Top Executives in the Global 100 Companies and their IT-Competence" (ADVANCE: Management Training Ltd., UK, and Wolfsberg Executive Development Centre, Switzerland, 1998); and he is included in Debrett's People of Today and in Who's Who in the World. Professor Prabhu Guptara lives in Switzerland.
