Business

Context’s Summit vs. Scaramucci’s SALT

Just like they have for each of the last 10 years, hundreds of hedge fund managers made their annual pilgrimage to Las Vegas last week for the hottest – with temperatures exceeding 100 degrees – alternative investment conference in the United States.  And just like in previous years, there was CNBC doing live cut-ins to catch all the action and Maria Bartiromo from Fox Business preparing for the centerstage interview. The hedgies were back in Vegas, baby, saying hello to old friends, courting prospective clients and taking in the spectacles on the Strip.

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Context
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There was just one thing missing:  Anthony Scaramucci.

Having advised the SALT Conference on its public relations and marketing for years, I flew out of New York wondering whether the absence of the Mooch and his team in Vegas during the month of May would feel like not having Santa Claus around the North Pole in December. No SALT and no pepper?

Instead, Context Capital Partners did more than just pick up the slack for SkyBridge Capital this year by bringing its inaugural Leadership Summit to town. As most industry participants know, Context is the ultimate top match-maker between those seeking to invest money wisely and those who are more than eager to aid in that effort by managing capital.

As evidence, Context facilitated over 19,000 allocator-investor meetings in just the last year.  The firm’s main Summit each winter in Miami is where match-making between investment managers and the likes of pensions, endowments and family offices was perfected, if not invented.  Scores of makeshift booths are set up for one-on-one introductions that lead to many hedge funds leaving with multi-million-dollar commitments for new mandates.

A brilliant concept, no doubt, but this is Vegas, baby!  What about Kobe, Caitlin, Jewel and all of my other SALT favorites? And what do you mean Lenny Kravitz isn’t performing?

Interestingly, the folks from Context decided they weren’t going to try to replicate the SALT Conference – not even a mini version. Context CEO Ron Biscardi made this clear during his opening remarks, when he talked about the “common threads“ that have changed so radically in the alternatives industry over the past 10 years. This set the tone for an event that focused on the next wave of shifts and trends in the space, including:

  • Large allocators have a reinvigorated interest in alternatives as the current cycle enters late stages;
  • They are reducing their exposure to traditional equity and credit strategies;
  • There is increased interest in emerging managers; especially given certain legacy players’ mediocre performance in recent years
  • Strategies with less liquidity and longer-term horizons are back in vogue, and;
  • Environmental, Social and Governance (ESG) factors will remain a legitimate consideration in asset allocation models.

The event’s discussions examined a variety of catalysts impacting the allocator mindset and, in turn, how hedge fund managers think. Speakers, including the likes of Dick Cheney and Leon Panetta, honed in on the economic implications of a potential trade war, the push for diversity in business, biases that can get in the way of acknowledging financial risks, and the intensification of partisan politics and geo-political tensions.

Context also differentiated its event by sharing meaningful data about the allocation decisions of family offices, pension funds, endowments and large sovereign wealth plans. The results showed that after several years of criticism over fees and performance, investor sentiment has turned. Not only are asset owners optimistic, but about 70% of those surveyed have plans to increase their net exposure to alternatives this year. Even more interesting is that less than 1% plan to decrease their net position.

And to prove yet again that there’s no place better than Vegas for some good luck, the benchmark hedge fund index beat the S&P for the first time in a decade the day before the Summit began.

On a more granular level, greater than half of institutions surveyed by Context said they plan to increase their allocations to ESG strategies in 2018, while roughly 70% made clear they have no interest in crypto.

For attendees, it was a certainly a more business-centric couple of days than what we saw during the SALT era. But as we neared the close of the session, just as I started to feel a tinge of nostalgia for the Vegas conferences of old, Context pulled an ace out of its sleeve. When the room hushed during the Cheney-Panetta panel as a call with a question was piped in, we heard the unmistakable voice of Anthony Scaramucci – or at least the closest that Mario Cantone of Comedy Central could sound like him. The laughs from the past were back.

Article By Rich Myers

Rich Myers is Managing Partner of Profile Advisors, a Manhattan-based communications firm that advises investment firms.