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CEO A-list
Fixed Income
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Alpha
Apply fundamental analysis in a systematic way.
Quantitative and analytical skills are very important.
No substitute for hard work.
Big data has an increasing role in investments.
Be mindful of unit economics.
Be mindful of CEO profit optimization and what they do with
profits.
Japan has problems: corporate governance, no population
growth, low productivity growth. Mr. Morrison: what was that
about Sony?
Be mindful of regulatory and geopolitical influences.
Know what you can lose and dont be afraid to cut losses.
Hedge funds
CEO A-list
Fixed Income
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Intro
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Intro
The panelists
Fixed Income
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Intro
Introduction
IF: Crosslink
Crosslink is both a Venture Fund & Hedge Fund.
It took her 11 years to arrive at her now ideal job.
Media plays a role in disruption. Before:TV, now: Internet.
MBA accelerated exposure to business.
Hedge funds
CEO A-list
Fixed Income
Objectives
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Objectives
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Objectives
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Objectives
Hedge funds
CEO A-list
Fixed Income
Fees, etc.
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Fees, etc.
Fees, etc.
Dorsal
1.5% management fee, 20% carry. Earlier performance quotes
are net of fees.
Diversified alpha not just TMT (Telecom, Media, and
Technology?).
Resonate
Good time for smaller hedge funds since larger funds crowding
each others trades.
Lumpy returns on long side with steady alpha on short side.
Crosslink
Believes algorithmic trading is inducing volatility.
DJM: hedgefunds like volatility. However, there is a feedback
loop. From what I gathered, leverage declines with volatility. To
de-lever you must close positions. This induced selling could add
to volatility and create a feedback loop.
Average leverage of these funds: 150%.
Hedge funds
CEO A-list
Fixed Income
CEO Characteristics
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
CEO Characteristics
Optimizes profits.
Invests and deploys profits optimally.
Invest in existing operations.
Invest in R&D.
Pay down debt.
Pay dividends.
Repurchase shares
Hedge funds
CEO A-list
Fixed Income
Alternative investments
CEO Characteristics
CEO characteristics
Highly decentralized resources. I wonder if the CSU
administration is aware of this. Wheres my new computer?
Adjectives of personality: pragmatic, analytical, frugal.
Smaller boards with large ownership stake.
Strong #2s in their companies (e.g., Munger with Warren Buffett).
CEOs tend to be more towards the foxes (know a little about a
lot) and #2s were strong hedgehogs (know one thing well).
Why not Jobs, Walton, Larry Paige, etc.: These geniuses not
replicable. (DJM: Dont believe that. Read Outliers by Malcom
Gladwelll and you will see how luck played an important role in their
success.)
Hedge funds
CEO A-list
Fixed Income
Alternative investments
CEO Characteristics
Hedge funds
CEO A-list
Fixed Income
Intro
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Intro
The panel
Fixed Income
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Intro
Warmup discussion
Franklin Templeton (PJ)
Maximize gains in dollars so stable currencies are important.
Bullish on India & Mexico (DJM: a little India biased?)
Charles Schawb Investment Management (OA)
Notes diverse actions from central banks around the world.
Mellon Capital (AZ)
Long equity and bonds because of attractiveness.
Long dollar / short euro did well this year.
Mindful of policy support and growth differentials.
BlackRock (RK)
Bank of Japan is going to print 60% (or was it 16?) of GDP in
Yen.
Problems with Japan: Corporate governance, ROE is low, poor
investment choices.
Japanese companies are paying more out to shareholders
(dividends and repurchases).
Hedge funds
CEO A-list
Fixed Income
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Intro
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Intro
The panel
Fixed Income
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Intro
Warmup discussion
Goldman Sachs (JX)
Does not like equities. (DJM: Yackman doesnt like bonds. So what? No
one has a monopoly on the truth.)
Monetary policy divergence is an opportunity. UK, US, and NZ on a
different monetary track than Europe and Japan.
Long/short currency positions.
Regulation impacts market mechanisms.
CalPERS (MR)
US rates have remained low a long time.
Rates fell even after QE stopped last month.
Rates will remain low since we are now less consumption oriented.
(DJM: falling real wages for the 99%)
Wells Capital Management (NN)
Companies borrow money simply because they can. Avoid these
companies.
Metals & mining companies are struggling. (DJM: Hows FCX doing?)
Ton of money thrown at shale gas yet earnings are low. Sees cracks in
the model.
Hedge funds
CEO A-list
Fixed Income
Other topics
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Other topics
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Other topics
Hedge funds
CEO A-list
Fixed Income
Intro
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Intro
The panel
Fixed Income
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Intro
Warmup discussion
Forward Funds (CS)
Access to alternatives is growing. (DJM: e.g., SDOW)
Forward Funds (JO)
Alternative investment: Not stocks or bonds. Long/short, real
estate, derivatives, and continually evolving.
People dont like volatility.
Liquid Alts: can get money back the next day. (DJM: are liquid
alts correlated with the market?)
Monitor leverage, volatility, liquidity.
Probitas partners (MH)
Alternative investments comprise 8 to 30% of state funds and
upwards of 50% of endowments.
Core investment products dont produce high enough returns to
meet obligations. (DJM: so take more risk with my pension
fund?)
Hedge funds
CEO A-list
Fixed Income
Liquidity
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Liquidity
Hedge funds
CEO A-list
Fixed Income
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Not cheap?
Before: Give me your money, pay me to keep lights on
(management fee), lets talk in 10 years about the upside and my
20% of that.
Now: Given the magnitude of pension investments management
fees far exceed the costs of keeping the lights on.
Probitas Partners (MH)
It is important to see how management style and team have
changed after the 10-12 year lockup period.
Medical office buildings.
Forward Funds (JO)
Hong Kong Real Estate
Agricultural commodities: after strong harvest and subsequent
price declines, prices should rise.
KKR (SC): Europe, special situations
Hedge funds
CEO A-list
Fixed Income
Outline
1
Hedge funds
Intro
Objectives
Fees, etc.
CEO A-list
CEO Characteristics
Global markets panel
Intro
Oil price outlook
Investment approach and career guidance
Fixed Income
Intro
Other topics
Alternative investments
Intro
Liquidity
Fees and assets
Private equity vs. hedge funds
Alternative investments
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Largest hedge funds have not earned their 20% upside fee.
Private equity does not have much downside protection.
Private equity can exercise control (inject capital, make
management decisions, etc.) to mitigate downside.
Give me lead Ill turn it into gold. Give me beta (risk) Ill turn it
into alpha (excess returns). Both are unlikely.
Alternative investments: Dont know portfolio at time of purchase.
Just have info on team and strategy.
Hedge funds
CEO A-list
Fixed Income
Alternative investments
Omega
Apply fundamental analysis in a systematic way.
Quantitative and analytical skills are very important.
No substitute for hard work.
Big data has an increasing role in investments.
Be mindful of unit economics.
Be mindful of CEO profit optimization and what they do with
profits.
Japan has problems: corporate governance, no population
growth, low productivity growth. Mr. Morrison: what was that
about Sony?
Be mindful of regulatory and geopolitical influences.
Know what you can lose and dont be afraid to cut losses.