The Sohn Investment conference, a pediatric cancer research fundraising event, brings together leading fund managers who share insights and investment strategies with wealthy investors. This year, 17 managers took turns on the stage at Lincoln Center to share their views on everything from promising sectors to global economic policy.

Many of the managers spent part of their 15 minutes worrying about the fragile global economy, especially discussing the impact of debt on developed countries. Kyle Bass, of Hayman Capital Management, went so far as to call Japan “completely insolvent.”

A few said the U.S. Federal Reserve’s monetary policy was distorting the bond market, and may lead the nation into a long period of stagnant growth.

However, it was for the stock picks and predictions that the 3,000 investors came, some paying up to $100,000 a ticket. Here, there was much more agreement, with the energy sector emerging as the clear favorite among the managers. Here, almost any company having to do with extraction, processing, transporting, and servicing the petroleum industry could be a winner.

Perhaps most surprising of all the presentations was the last one of the day, given by David Einhorn of Greenlight Capital. After discussing his favorite energy stock, Oil States International Inc., he recapped the returns on 31 firms he had discussed at previous Sohn Conferences. On average, he said, they returned 20%. Not bad, but not spectacular, especially considering that 13 of the stocks lost money.

The morning before the May 8th conference opened, the Financial Times published a similar sort of analysis, looking at last year’s conference tips. What the business publication found was that, “An investor who followed every top idea from the 12 speakers last year would have made 19 per cent, less than the 22 per cent gain available from a passive index fund tracking the US stock market.”

Einhorn, the Financial Times noted, recommended Apple and Martin Marietta Materials, both of which saw big declines in their share price.

There is nothing new about funds participating in distressed securities or trading in the credit markets, especially for the high-yield funds. An analysis by Man Investment from April 2008, nearly the beginning of the Great Recession, offered insights into the opportunities presented by the cascade of credit problems, observing that “distressed markets are inefficient and hedge funds can often buy securities at deep discounts, benefiting from forced selling by other market participants.”

The latest development is for hedge managers to leverage the peer-to-peer credit market in a way that engages investors and borrowers directly.

“This new asset class has started, we’re probably in the top of the second inning, and there’s going to be tremendous growth,” Ron Suber told FINalternatives. He recently teamed with Sequoia Capital and two colleagues from his days at Merlin Securities to  take over Prosper Marketplace. The firm is a sort of exchange that vets borrowers then connects them with lenders. Loans max out at $35,000. Lenders, Suber said, “have cash and it’s not getting interest from the banks, or not very much interest and they don’t want to buy more stocks or more options or more futures or more real estate, they actually want to get a diversified portfolio of consumer credit where they can get…9% interest accrued daily and, more importantly, paid monthly.”

Two companies currently lead the P2P lending market: Prosper and Lending Club. Together they account for $2 billion in business, a fraction of the overall consumer credit market.

Because the loans are small, and multiple investors may be involved in a single loan, sometimes participating with as little as $25, banks and other lenders tend to shy away, especially since the loans are unsecured. The funds earn their money by charging loan origination fees and assessing a monthly service fee on the lenders.

Tahira Dosani, LeapFrog’s director of global engagement and strategic projects, says the firm has been making relatively small, equity investments in the insurance industry in Africa and Asia. The average size is about $12 million.

LeapFrog looks for companies that traditionally have targeted the middle- and upper-middle classes in developing countries, but now are eying low-income people. Somewhere between the top tiers of a country and the absolute bottom economically, is a rising group of workers, aspiring to a higher standard of living. These earners, Dosani says, describing them in an interview with FINAlternatives as “emerging consumers” will buy financial services that are “relevant, quality and affordable.”

Does it really make sense to target this group? Yes, says Dosani, observing that insurance allows them to take calculated business risks that would be impossible if there was no safety net. She told the publication:

“For example, a farmer that’s looking at planting a new type of crop, and this new type of crop, a new type of seed, has a 95% chance of success…He still may not do it because that 5% chance of failure means starvation for his family and very few people are willing to play Russian roulette with their family’s lives. But if he had crop insurance and had that cushion under him, it would enable him to take that risk, which is a smart, calculated risk that really can fundamentally help him emerge from poverty.”

LeapFrog’s role is not only financial, but strategic. It maintains a staff of actuaries and experienced  professionals who have done business in these undeveloped and developing countries. They can analyze pricing plans and offer guidance on such broad issues as sales, and distribution, and in administration.

One novel method of providing coverage, explains Dosani, is for insurance companies to partner with mobile operators. Because mobile contracts are rare, telecoms provide insurance as a loyalty reward. In South Africa, where HIV rates are high and carriers of the virus are all but impossible to insure, LeapFrog has invested in AllLife, a company providing life insurance to people living with HIV.

These micro-investments, besides doing good, are also profitable. The target, she told FinAlternatives, is “above-market rate returns but there is a social mandate as well, and the way we see it, there’s no trade-off between the two.”

While Hedge Fund Alert declared, ”It’s becoming increasingly difficult for traders to find work in the hedge fund industry,” Green Key partner Brian Blake was more optimistic about financial sector hiring. Brian, who heads our Permanent Recruiting group, was quoted in the article discussing the increase we are seeing in operations and compliance positions.

In addition, Brian and his recruiting team are finding an increased demand for professionals in alternative asset management, as well as across the board in financial services.  As Brian reported in a blog post last year, “There still remains a shortage of quality accountants in the marketplace today… CPAs remain in short supply in all industries.”

With the Cayman Islands threatening to open up thousands of financial companies and hedge funds to public scrutiny, and other Caribbean shelters weighing tax increases, Florida is looking better and better. Funds long headquartered in New York, Boston and elsewhere in the Northeast have been flocking to Florida where there’s n either snow nor state income tax.

Kelly Smallridge, president and CEO of the Business Development Board of Palm Beach County, Florida, says almost 30 hedge funds alone have relocated to the Palm Beach environs in the last few years, and more are planning moves. Palm Beach County is among the top three or four wealthiest counties in the U.S., with many of the residents clients of the very funds that have moved or which will.

Evan Rapoport, CEO of HedgeCo.net, a data base and website for hedge funds, said, ““You weigh all of the benefits for being here to those in New York, and they outweigh them every time.”

Demand for office space in Palm Beach has pushed the vacancy rate down from  27% at the height of the recession to around 16% today, Smallridge said. So strong is the demand, she added, that the county opened a special unit just to handle inquiries from hedge funds and other alternative asset managers, and assist them in relocating.

Other parts of South Florida have also seen a jump in the number of financial firms looking to relocate. Last year, ESL Investments, a hedge fund, moved from Greenwich, Conn to the Bay Harbor Islands area of Miami-Dade County. The firm, headed up by billionaire investor Eddy Lampert, now looks out at the ocean, rather than snow.

To be sure, firms are still doing business and opening offices in Manhattan. eVestment, which tracks the hedge-fund industry, reported that in both 2009 and 2010, 92% of new funds chose Manhattan over other areas. Data for 2011 shows the trend continued. “There are blips in the data, but it’s clear launches shifted toward New York after the crisis,” Peter Laurelli, eVestment’s head of research, told The Wall Street Journal.

Despite the allure of white sand beaches and a wealthy populace, most funds still feel a need for a New York office. Said Rapoport, “We still need a physical presence in the tri-state area. His firms has 6,000 square feet of office space in Florida, but still has an office in New York, which it shares with some hedge funds.

“A seed-stage company funded 12 to 18 months ago, with traction but not breakaway growth, will have a more difficult time getting series-A funding,” said Brian Hirsch, co-founder of Tribeca Venture Partners. “There’s still a fairly short list of venture funds in the local market that will fund traditional series A, and there are hundreds of seed-funded companies. Something has to give.”

Deal volume in 2013 is expected to be as strong or stronger than in 2012, which, though the third quarter, was running 15% higher than in 2011. Jonathan Sherry, co-founder of the venture tracking firm CB Insights, said it was seed money investing that boosted the volume. and there’s no sign of its slowing down.

Crain’s says that whether at the seed or A stage, what interests VCs most are companies focused on business-to-business and with a clear path to profitability. Healthcare and financial services are particularly attractive.

“The financial services market is so vast and segmented that even solving a prescribed problem can be a gargantuan business,” said Roger Ehrenberg, managing partner of IA Ventures.

The picture nationally is not as tight for A-funding rounds, but the shift to business-to-business plays is equally pronounced. A survey by the National Venture Capital Association and DowJones Venture Source found 61% of the VCs predicting increases in funding for business IT and 57% for healthcare IT. Only 35% thought it likely consumer IT would see increased funding activity this year.

Decreases were predicted by 61% for clean technologies. medical devices (53%) and biopharmaceuticals (49%).

According to 45% of the venture capitalists, the hardest funding round to obtain in 2013 will be
Series A; 28% cite Series B as the hardest round to raise followed by Seed / Angel funding at 13%.

So, too, are investment managers. What they are finding, says Phil Niles, a director with Butterfield Fulcrum, a Canadian fund administrator, is that in many cases their disaster planning was “notably insufficient,” or, worse, they “did not have true disaster recovery plans.”

Declaring it “nearly inexcusable for any business based in New York City to lack a robust business continuity plan, ” Niles says too many investment firms pinned their continuity planning on the expectation that employees would work from home. Planning, such as it was, was based on the loss of access to offices. With data backed up in remote locations, employees could continue to work remotely.

However, Hurricane Sandy left much of New York and surrounding communities without power, internet connections, and flooded streets. Mass transit in Manhattan shut down. And in other areas, fuel shortages kept workers from reaching offices.

“This left many investment managers short on internal resources with no foreseeable way to bring these employees back online,” Niles points out, in a widely distributed article he wrote for Advanced Trading.

Many managers utilize a fund administrator like Butterfield Fulcrum, where “a complete set of books and records, including portfolio and investor details, are housed on behalf of the investment manager at a separate location.” While such arrangements put those investment managers “instantly further ahead” of those without an outside provider, it “is not solely sufficient, as it does not address the portfolio decision making, internal staffing, or IT infrastructure needs of the investment manager.”

Niles observes that because the storm forced the closure of the two largest exchanges in the U.S. — NYSE and NASDAQ — no trades were being made, so the impact of poor or non-existent disaster plans wasn’t felt the way it would be had the exchanges remained open and only a few investment managers were affected.

“Have no illusions,” Niles warns, “Investor due diligence requests for the foreseeable future will be probing the disaster recovery plans of investment managers at length. This alone should be reason enough for investment managers to give further thought and review to their disaster planning strategies.”