Interest in art is symptomatic of a more cautious approach

So far, the entire collection, consisting mostly of modern art from the early to mid20th century, brought in US$415.4 million (Bt15 billion), with commissions totalling $63.4 million for auction house Christie's.

The classification of art as an assets class is blurry at best, with only UBS and ING Private Bank offering any artrelated financial services. PostSeptember 2008, nobody knows how well such "investment of passion" will fare. But according to the most recent CapGemini/Merill Lynch Financial Advisory Survey, alternative assets, which include jewellery and antiques, are expected to occupy 11 per cent of total portfolio allocation this year. This is an increase from 9 per cent in 2007.

According to Randall Willette, managing director of Fine Art Wealth Management, the Saint Laurent sale, in the face of a 30percent to 50percent slide in auction prices, amounted to a correction and a flight to quality.

"The bottom is still unknown," he said. But as new "highnetworth individuals" tightened their purse strings, old masters and the Impressionists became a much safer investment than contemporary art, he added.

This reflected a wider sentiment too within the investment profession. Fund managers are rediscovering the wisdom in value investment, propounded by the likes of Benjamin Graham and his disciple Warren Buffet. "It's not sensible to take a strong macro bet in either direction," said John Authurs, investment editor at the Financial Times at a recent hedgefund panel discussion at the London School of Economics. The macropolicies now implemented across the world are unprecedented, he added.

"It is back to basics," said Sally Bridgeland, chief executive of BP Pension Trust, one of the largest pension funds in the UK, with 11 billion pounds (Bt564 billion) in assets under management. And that means careful stockpicking.

Once the shining beacon of alternative investment, the hedgefund industry has had its ecosystem disrupted. It was a case of a double whammy, as both assets and leverage plummeted. According to George Soros of Quantum Fund fame, last year's redemptions saw hedge funds shrink by 75 per cent.

Since the implosion, BP Pension Trust has received many letters from pensioners expressing their concerns over hedgefund investments. Although it does not invest through any hedge funds, the bad reputation and high management fees have put Bridgeland off from using it.

Still, the industry was hurt but not broken, said Sean Capstick, global head of capital introduction at Deutsche Bank. After the first quarter's "hangover", Capstick believes the industry will see more consolidation, as fees and investment terms and regulation will change, at least temporarily, given the ferocity of governments' clampdowns on bankers' bonuses and other compensation.

Stuart Roden, who ran the $11billion Lansdowne Partners hedge fund, said that the boutique fund would still stick too its longshort strategy. Though volatility has come down, the size of the global pie has been reduced too, from $10 trillion to $3 trillion. This means the surviving fund managers are chasing a smaller pool of capital.

Elsewhere, other kinds of alternative investments suffered for other reasons. The oncehyped carbon market, which grew from $30 billion in 2006 to $64 billion in 2007, is hanging in limbo. Regulatory uncertainty as to whether the Kyoto Protocol will come to an end in 2012 and many other politicaleconomic governmental factors have sent the prices of certified emissions reductions down from 32 pounds (Bt1,465) at its peak to a recent 9 pounds, said Javier Rojo, vice president of carbon finance at Climate Change Capital, which deals exclusively with lowcarbon investment and has assets under management of over $1.6 billion.

This is enough to send many investors back to the comfort of stocks and bonds - though the reception of recent two-year and seven-year US treasurybond auctions has been lukewarm at best. But perhaps to be boring is to be stable.