I wrote in these pages last year that rumours of the demise of the alternative investment industry were much exaggerated. But it was a close-run thing! The average hedge fund was down between 20 per cent and 25 per cent (but it is worth remembering that this was still better than the public markets); outflows amounted to about one third of hedge fund industry assets; private equity fundraising slowed down dramatically as the valuation on existing portfolios continued to decline; and, investors didn’t want to know. It is encouraging to note that sentiment is much improved and the alternatives sector appears to have found its feet again after an extremely difficult two years. For the purposes of this article, we will focus chiefly on hedge funds and private equity.