LAS VEGAS (Reuters) – A hedge fund business gathering in Las Vegas this week was far much less decadent than these of the previous, as massive cash buyers targeted much less on playing and champagne-soaked “Sin City” celebrations and extra on the grind of vetting fund managers.
After years of underperformance which have humbled hedge fund managers, buyers welcomed the extra sober strategy at the Context Leadership Summit, stated Michelle McCloskey, who helps assemble portfolios of hedge funds as Man Group’s President of the Americas.
“It’s not such a party atmosphere anymore” she stated in an interview, “which is far better aligned with the preferences of most institutional clients.”
Instead of Anthony Scaramucci’s splashy SkyBridge Alternatives Conference — which featured celebrities, rock live shows and pool events — buyers attended a brand new, subdued gathering. It was organized by Context Summits, greatest recognized for “speed date” occasions the place funding executives who select hedge funds for rich households and funds of funds shortly grill managers about their monitor data, funding methods and risk-management practices. In spare, curtained cubicles in an Aria Resort and Casino ballroom, buyers might meet with personal debt specialist Direct Lending Investments, non-performing loan-focused Legacy Capital Group, company event-focused Paulson & Co and cryptocurrency professional Pantera Capital, amongst others.
The business’s efficiency has turned a nook these days, with the typical hedge fund rising zero.four % this yr, beating the slumping Standard & Poor’s 500 Index for the primary time in years, in response to Hedge Fund Research.
“Now people are seeing hedge funds as a diversifier and not as a substitute to what they already have in the portfolio,” stated Lionel Erdely, chief funding officer for options at $22 billion Investcorp Group.
With market volatility and inventory worth dispersion anticipated to select up, analysts and buyers stated hedge funds are beginning to look extra engaging, notably smaller managers with area of interest methods.
Erdely stated he likes funds that make investments in non-performing loans, notably from Italy. Jeff Assaf, chief funding officer of $four billion ICG Advisors, recommends personal credit score methods, which usually pursue debtors banks keep away from.
Las Vegas was for years the $three.2 trillion hedge fund business’s social gathering venue of selection. The epitome was Scaramucci’s “SALT” event with billionaire managers like Steven A. Cohen, Paul Singer and Kenneth Griffin.
That event was canceled this yr for the primary time since 2009 after Scaramucci briefly joined the Trump administration and tried, unsuccessfully, to promote SkyBridge.
The Context event, created to fill the void, was decrease key by design.
“We don’t want to ever be viewed as a boondoggle,” Context’s Ron Biscardi stated in an interview. “We’re about a serious business event for our industry.” It retained some glitzier parts, together with a reasonably attended late-night celebration at Lavo Lounge and some high-level panels of paid audio system, together with former Vice President Dick Cheney, former Defense Secretary and CIA Director Leon Panetta, and former Federal Reserve Vice Chairman Stanley Fischer.
At one networking event, Reuters discovered clusters of managers sporting color-coded badges, khaki pants and blazers, discussing area of interest actual property funds and financial institution lending over beers and sliders.
Context drew an estimated 750 attendees to its Vegas event, lower than the two,000 who flock to its flagship Miami event every January, or the roughly 2,000 who attended SALT.
In an interview this week, Scaramucci stated his event will return in May 2019. He will transfer again to SkyBridge as co-managing associate after the sale to a division of Chinese conglomerate HNA Group fell via in April, though a distribution partnership is deliberate.
SALT will possible be in Las Vegas once more however probably slimmed down by a number of hundred individuals, Scaramucci stated. SkyBridge can also be contemplating new ideas for programing, although he expects it to stay a must-attend event for the hedge fund business.
“The brand is big enough,” he stated, “and people want it.”
Reporting by Svea Herbst-Bayliss and Lawrence Delevingne; Editing by David Gregorio