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SALT Conference Panel III – Right Time, Right Investments: Managing Volatility & Risk to Maximize Investment Returns
Co-Managing Partner & Chief Investment Officer, SkyBridge Capital
Founder & Chief Executive Officer, Structured Portfolio Management (SPM)
President, Benefit Street Partners – Providence Equity Partners
Managing Partner & Co-Chief Investment Officer, KLS Diversified Asset Management
Co-Managing Partner & Chief Executive Officer, Marathon Asset Management
Partner & Portfolio Manager, York Capital Management
Notes from the SALT Conference 2015 Panel III – Right Time, Right Investments: Managing Volatility & Risk to Maximize Investment Returns
Bruce Richards – When the Fed moves, do the markets go risk off
Who will force the Feds hand? The markets? Employment?
Greek risk in Europe…low probability event that they leave the Euro, but large tail
Dodd Frank and Volcker rule causing liquidity concerns – thank you govt! (sarcasm)
Govt is forcing banks to step back
Stand ready to provide liquidity
Buying billions of loans from European banks – non performing
Rates will stay low in Europe for a long time
Need to expand liquidity to3-5-7 years if investors want returns they are accustom to
Loans is an interesting place to be
The markets are very rich right now!!!!
Don Brownstein – Risk- we tend to focus and over emphasize the wrong things. These are the things we tend to concentrate on
Because they are said over and over again… putin, yellen, fed, geopolotical — these events tend to be a non factor in your returns. If everyone else is worrying about these things then the market has priced them into the market
We have very little ability to focus on shorter term real risks that others aren’t thinking about
What will really impact your returns… the transient risks. Focus on longer term risk
Michael Y. Weinberger – Risk is permanent impairment of capital. That is risk.
Volatility is the opportunity. paid a premium to take on volatility right now in the market
Perceived risk and volatility in the short term is creating an opportunity
Allocators who care about monthly numbers or volatility cause a negative feedback loop. Managers shouldn’t have to manage volatility, especially on a monthly basis
He sees a tremendous amount of M&A going forward, except in banks due to regulation
Be very aware of style drift – you should know what investors are good at and tell them to stick with it
Richard J. Byrne – Don’t pay up for liquidity —which probably isn’t liquid anyways