Liverpool legend Alan Hansen has praised the club's transfer policy under Kenny Dalglish suggesting their lavish investment in youthful talent will prove a shrewd business model in the future.

Liverpool have spent in excess of £100 million since the Fenway Sports Group took control of the club and although the likes of Jordan Henderson and Andy Carroll are yet to prove money well spent, the aforementioned former Anfield stalwart claims the long-term planning currently being engineered at the club will ultimately prove successful.

While keen to point out Liverpool's inability to compete on a financial level with Manchester City, Hansen suggests his former club are endeavouring to look more long term in order to re-establish the Reds in the higher echelons of English football.

Although Liverpool currently trail the two Manchester clubs in the Premier League title race, the aforementioned Match of the Day pundit believes the improvement at Anfield is already vast and only likely to continue to improve.

"Critical to the improvement has been Liverpool's transfer policy which has seen several young players with huge potential brought in, predominantly from other Premier League club," said Hansen in LFC magazine this week.

"There is no way that we, or any other club for that matter, can compete with Manchester City as far as transfer fees go.

"That leaves Liverpool with a question to answer. Do you sign what's left of the bigger named established players, or do you try and build a new team around youth?

"Liverpool have done the latter and that policy of buying younger players will, I believe, ultimately reap rewards and dividends, hopefully sooner rather than later."

Although the likes of Jordan Henderson and Andy Carroll have inevitably been brought to Liverpool with the future in mind, Hansen suggests Suarez's seamless transition at Anfield suggests the Uruguayan can be a mainstay now and for many years to come.

"Luis Suarez is a prime example of a player who has been an instant hit," Hansen told the latest issue of LFC magazine.

His performances, almost every single time he plays, have been sensational. He's got such quick feet that every time he gets the ball the anticipation levels amongst Liverpool fans rise. He's been fantastic to watch in 2011."