CNBC’s Michelle Caruso-Cabrera reports the highlights of an asset manager panel from the Delivering Alpha conference including what Mary Callahan Erdoes, J.P. Morgan Asset Management CEO, had to say.
JPMorgan's Erdoes: Currency Risk Weigh Heavily On Our Mind
GrizzlyRock Value Partners was up 34.54% net for 2021. The fund marked 10 years since its inception with a 198% net return, resulting in an annual return of 11.5%. GrizzlyRock enjoyed 14.8% long alpha against the S&P 500 and 26.9% against the Russell 2000. Q4 2021 hedge fund letters, conferences and more The fund's short Read More
I would say cautious still telling people to be fully invested. But Mary Callahan Erdos I think put it best where she said listen. Years pass the financial crisis we were pushing investors to go beyond their comfort level. They were fearful about getting into the market we said no you've got to get it. Now we're at the point where they're very comfortable being in the market and now we have to tell them OK let's look at your portfolio and maybe it's time to the risk maybe those things that you were so nervous about. They've grown tremendously and you got to pull back them a little bit of that and it's a little bit of a struggle because they don't want with a very very comfortable with they don't see risk on the horizon. State Street Global Advisors I was there also kind of nodded his head in agreement that they were also telling people look really go look at your portfolio because what's happening we are getting the unwind of QE right. One of these big events in the world we're looking at a potential trade war such as so there's a lot of risk there. That being said now also sticking with the United States right when it comes to asset allocation. And then with America and I've got this for Sarah Calahan Erdos as of the very end what should I have asked do you expect me to ask you. And she said their biggest concerns when they're in the risk management meetings is currencies. I'm kidding. And we were talking today about of course the Chinese want lower.
I think we have that soundbite do we have it the risk we haven't talked about on the asset management side and where you deploy assets is currencies and I would say that's probably one of the things that weighs heaviest on our mind are these are these currency moves and they're becoming more pronounced in violent and I call it. I said you're talking about like Argentina Mexico should know something about the U.S. dollar as well. So one of those Lazarou the three the only hedge fund manager on the panel avenue does play a lot of special situations and certainly in fixed income land in particular he said what he's struggling a bit with the Fed and the central banks of the world doing what they're doing finding special special situations right now struggling and performance I should say only to find deals.
Exactly. And that if and when we get to the point where the central banks of the world are less interventionist it will be easier to find deals. He has found somebody who says they're not big enough in scale really to be as meaningful as he would like them to be at the moment. But he expects that to come eventually. For example he just bought the debt of a title company in Spain. They use a lot of tile construction in Spain. They loaded up on a lot of debt when times were good in Spain without having that housing boom. Right. And then they're even dog and half. So it becomes very difficult to pay your debts when your dog goes down by half. And finally the bank has started the bank that have started to unload it.
So we've got a pretend cents on the dollar but about 40 million dollars and the amount is 14 billion. Right. I mean it's not you know maybe it's time to look at for acquittal I don't know. Well he says people come to him and want to give him money and he says I've got nothing to do with it. So interesting on Spanish housing by the way. Blackstone one of the largest owners yes fantasizing we're talk to John Gray Not long from now actually right here from delivering alpha. For now let me send it back to what Carl was still thinking.