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Many investors have experienced huge wealth destruction over the past two years as a result of the economic downturn, with poor performance across most asset classes. As a result, IFAs will be re-evaluating their asset allocation models and risk/reward profiles and wondering whether they should still rely on equity growth funds to deliver long-term returns for their clients.

This view is further strengthened when taking into account the recent demise of traditional companies such as General Motors and AIG, both core equity holdings for many global and US fund managers for many years.

Despite these ominous warnings, the role of equity investment funds as a cornerstone of asset allocation for IFA clients is unlikely to be under serious threat. Until the current economic crisis changed the financial landscape, equity-backed investments had served investors well. They are, therefore, likely to retain a key role as the asset class that typically delivers long-term growth and inflation hedging.

The difficulty for advisers is identifying which sectors will deliver returns over the long term – if traditional bellwethers like General Motors can fail, where do they look for reliable growth? The key is to identify the investment themes of tomorrow. General Motors was an iconic 20th-century stock. What will be the 21st-century equivalent?

The pace of scientific and entrepreneurial progress continues to accelerate, while sectors such as healthcare, communications, transport and energy will be transformed as new technologies are adopted. Within a generation, technological solutions will have been found to meet many of the pressing needs of today. The next generation of scientists and entrepreneurs will be addressing new challenges, some of which investors may not even be aware of.

Businesses that are unknown now will be household names in the not-too-distant future. This can very easily be seen in practice. This year marks the 25th anniversary of the FTSE. Of the original 100 stocks in the index in 1984, only 23 companies remain. Companies such as Amstrad, Baltimore, Freeserve, Psion and Telewest were each hailed as the great new companies of their time.

But these household names, as well as many other once successful corporate giants, have faded, carrying shareholder value with them. New corporate giants have emerged in their place. Consider the rapid rise of Autonomy, Sage, Shire Pharmaceuticals or Vodafone, most of which were venture-backed start-ups 25 years ago. More are emerging all the time.

The business cycle is a continual process: as old businesses decline, they are replaced by new sunrise industries. Savvy IFAs will spot these emerging businesses early and be able to generate high returns from them for their clients before they attract the attention of the herd.

Sometimes it is hard to identify the new sunrise businesses amid the noise made by the dinosaurs in their dying years. There is little doubt some elements of General Motors will re-emerge on the stock market and make their way back into Oeic investments, but the company will never deliver the growth it did in the early and exciting years of the automobile. The ‘new GMs’, which are already developing their products and services in the world’s university departments and science parks, will be those companies that create the technology for new, clean forms of personal transportation.

How, then, can investors take advantage of the growth opportunities these sunrise companies present? They are below the radar screen of many fund managers. In more bullish times, they had opportunities to access emerging businesses as they listed on stock markets. But during periods of uncertainty, such as the current time, these opportunities are few and far between - there has not been a UK technology flotation for more than 15 months. Instead, many companies have engineered their own acquisition as an alternative means of maximising shareholder value, effectively bypassing the public markets and denying many fund managers - and, in turn, IFAs and their clients - the opportunity of participating in their growth.

One way IFAs can help their clients gain exposure to sunrise opportunities is to invest in Enterprise Investment Scheme (EIS) funds. These are managed by specialist fund managers who take stakes in emerging growth businesses and are active in shaping and building companies to maximise shareholder value. The best EIS fund managers have significant expertise in the sectors in which they invest and the skills and experience to be able to provide hands on support. This approach combines the advantages of a diversified portfolio, which reduces risk for the investor, and the potential to harness high returns.

Returns can be further enhanced by various tax benefits, designed by the government to stimulate investment in growth businesses. These include income tax relief, immunity from capital gains tax and even a shelter from inheritance tax.

There is a constant need to combat the decline of large-cap, sunset stocks by embracing strategies that capture the emerging businesses in the UK, often from the knowledge economy. The post-recession economy will be forged by those businesses that generate strong profit growth without the use of excessive debt.

As the UK rises out of the current recession, technological innovation will continue. Ian Davis, global managing director at McKinsey & Company, recently commented: "For talented contrarians and technologists, the next few years may prove especially fruitful, as investors looking for opportunities with high potential shift their attention from financial engineering to genetic engineering, software and clean energy."

With valuations reaching record lows and investors enjoying the negotiating power to structure investments with both downside protection and upside opportunities, the idea of making an allocation to unquoted high-growth companies through a specialist investment manager is increasingly attractive. Capital deployed in unquoted companies today will be realised over a 3-5 year period, at a time when many market commentators anticipate conditions will have improved significantly, opening up the prospects for generating high returns.

The UK has a good track record in fostering entrepreneurship and building successful businesses in the knowledge economy. Across the country, laboratories and science parks are alive with activity, as scientists and entrepreneurs develop innovative businesses plans. The cycle continues. Scientific progress and innovation will provide the engine to propel the economy forward into the new post-recession era. Forward-looking IFAs who integrate a sunrise component into their wider asset allocation strategy can help their clients to future-proof investment returns – and provide them with valuable tax benefits as well.

Lucy Foster is head of investor services at Oxford Capital Partners