The Week in Review: This is a hedge fund that flowers

The question wrapped in the enigma of Man Group's share price is whether the explosion of investment in hedge funds is a bear market fad or something sustainable in the long term. Man is the UK's biggest hedge-fund manager and its shares have surged as it harvests cash from wealthy investors who have decided to duck out of the traditional equity market.

The probability is that hedge funds are here to stay. Even if stronger equity markets do tempt back some investors, the bear market has taught the need to diversify. Hedge funds should account for more than the present 2 per cent of investments.

As of this week, the company is looking after $28bn (£17bn) of other people's money, and for fees that would bring a tear to the eyes of traditional fund managers. With no reason to suspect Man will be derated, the shares still look worth having.

Land Securities

The property group, the biggest in Britain, says the value of its office properties has fallen 10 per cent in the past year, but space at shopping centres up and down the country is still in demand, more than making up for the fall in the other half of the portfolio. Office valuations are not showing much sign of stabilising, and retail values are at risk if there is a sharp or extended decline in consumer spending. For economic optimists only.

ITnet

It is also a tale of two halves at ITnet, a services firm you might hire if you wanted to introduce or upgrade your organisation's IT system. Its work for the commercial sector is under pressure as customers, especially finance sector ones, cut spending to conserve profits. Yet the public sector-focused half of its business is on the up. While the shares are not cheap, holders should hang on for when commercial sector work picks up.

Intec Telecom Systems

Intec sells inter-carrier billing software to telecoms companies that helps them calculate what they owe and are owed for calls between networks. Given its customers are generally cutting their spending recent results have been reasonable and the company estimates it has £40m of this year's £50m forecast revenues in the bag. But, with prices still under pressure, the shares are high enough until there are surer signs of an upturn.

Countryside Properties

Countryside Properties, a mid-sized housebuilder, has the problem that it is concentrated in the South-east, just when the market has turned in this previous hotspot. At least its areas of focus are those with good potential and the backing of government for development. It has juicy holdings in the Thames Gateway and M11 corridor, designated as the areas needed to house London's ballooning workforce, but the payback will be long term. In the meantime, avoid.

Paragon

The City has long seen Paragon, the buy-to-let mortgage lender, as a disaster waiting to happen. The yuppies who bought properties to rent would come unstuck, tenantless and overstretched on their mortgage. Paragon's cries to the contrary should not fall on deaf ears. It is mainly a northern lender, picking on big university towns where demand is always high. Its average loan is only £77,000, only 75 per cent of the property value and the credit quality of its customers is strong. Buy.

Imagination Technologies

Imagination Technologies has come a long way in 18 months. The computer-chip designer was a favourite in the tech boom but at the time it was a one-trick pony, with its games chip. Now, the company has other products, having spotted the potential of digital radio early. Its digital radio chip goes in almost all such radios sold in this country. It is also developing chips for digital TV, car navigation systems and mobile phones, so there are good reasons for showing faith.

Marlborough Stirling

Many insurance companies have closed their books to new business to conserve capital and are offloading administration to the likes of Marlborough Stirling. But it is yet to clinch a major long-term contract and the business is in considerable discomfort. It is still without a chief executive after the sudden departure of Graham Coxell in March. Avoid.

Luminar

As founder and chief executive of Luminar, the country's biggest nightclubs operator, Steve Thomas deserves his reputation as Mr Disco. But tougher times on the high streets has meant even he has struggled to keep the nation dancing, and there is a lack of sparkle at some of Luminar's older clubs. No need to rush in.

Investec

Having spent years trying to pull up its South African roots, Investec is pleased it is still among that country's biggest investment banks. Indeed, so poor was the performance of its businesses in other parts of the world, that its homeland - where financial services and corporate lending is booming - accounted for 80 per cent of profits. This group may be at the bottom of the cycle for profits and sales, but it looks expensive compared with other commercial banks. Avoid.

Medisys

Medisys is "on the brink" of launching its Futura safety syringe, in which a device pulls back the needle to stop hospital staff pricking themselves. It is also "on the brink" of launching its Flight blood-sugar monitoring kit. Shareholders have been taken to, and pulled back from, the brink several times and there is precious little faith in this company. The stock has run up too far. Sell.

Mothercare

Mothercare, the children's retailer, could do with a bit of Disney-style magic, and Ben Gordon, the new chief executive from Disney Stores, looks as if he might be able to write a fairytale ending. He appears to have stabilised the business. With nearly £500m of annual turnover, the profit uplift could be considerable. That makes it worth joining our plucky hero's new band of followers.