Bloomberg Hedge Fund Smmit 2012 next discussion panel consists of Chris Concannon, Partner, Virtu Financial, LLC, Jacob Gottlieb, Managing Partner and CIO, Visium Asset Management, Carrie A. McCabe, CEO and Founder, Lasair Advisors LLC and Andrew Redleaf, Founder and CIO, Whitebox Advisors LLC.
9:09AM EST: Andrew Redleaf, Founder and CIO, Whitebox Advisors LLC says that credit has not been a great investment this year for the hedge fund. Andrew thinks that credit is more interesting than equities. He thinks fixed income will far outperform equities in the coming years.
9:11AM: Jacob Gottlieb, Managing Partner and CIO, Visium Asset Management asks how low can spreads go? He questions whether investors can make the returns on credit, which they made in the past.
9:12AM: Carrie A. McCabe, CEO and Founder, Lasair Advisors LLC notes that she works in institutional investors, and sees great interest in sector specific funds, especially as correlation comes down.
9:15AM: Chris Concannon, Partner, Virtu Financial, LLC, likes FX and has made markets on 17 different venues. He expects consolidation.
9:16AM: Jacob Gottlieb, Managing Partner and CIO, Visium Asset Management believes that as Basel regulations start to impact banks, the financial institutions cannot absorb the inventory. That provides an opportunity for investors such as hedge funds.
9:18AM: Andrew Redleaf, Founder and CIO, Whitebox Advisors LLC has ten principles of trading, he discusses his third principal. He says he looks at how cheap a package of securities is.
9:19AM: Money flowing out of fund of hedge funds, what is changing?
9:20AM: Carrie A. McCabe in 2007, market was 50% fund of funds, today its closer to 35%. Many large institutions do not have the expertise to pick individual hedge funds, and this could be causing the divestment from FOFs.
9:21AM: Fund of funds are here to stay, but the industry is changing and becoming more personalized.
9:23: Chris Concannon talks about lack of liquidity in the market, which he sees contuing, and doubts that will change unless risk appetite increases.
9:24: Jacob Gottlieb flows into fixed income are massive, and eventually the bubble will burst. Investors will not want to hold low yielding fixed income, while central banks print, sending inflation up. Additionally, rates could start to go up, which could be another catalyst to switch from credit to equity.
9:25: Carrie A. McCabe talks about long short mutual funds. She notes that they have had poor performance due to regulatory constraints. She also says that most people who run the long short mutual funds, have a long only background, which she does not find too attractive.