Aladdin Capital’s Hunter Prescribes ‘Cathartic Event’ for Europe

Aug 30 2011 | 8:05am ET

Constance Hunter, chief economist at hedge fund firm Aladdin Capital Management, said that Europe could recover more quickly if a “cathartic event” forced policy makers to make tough decisions sooner than later. Without a jolt to the system, she added, current fiscal and monetary policies risk prolonging Europe’s economic woes. She gave her assessment in a conversation with FINforums’s Chairman John Seigenthaler in advance of her appearance at the FINforums Annual Hedge Fund Summit on September 14 in New York City.
In her discussion with Seigenthaler, Hunter identified three events that could force dramatic change. Potentially most impactful would be bank failures, as the European Central Bank has no mechanism similar to that of the U.S. for taking over failed financial institutions. The second event could be delivered via a German electorate that votes for politicians who opposed aiding the European Union’s economically beleaguered countries.
“The reality is that decisions may not be made in the European Commission’s offices in Brussels, but on the streets of Munich and Bonn,” Hunter said.
The third event could occur if European Central Bank members take a more hawkish approach and decline to extend credit by purchasing country bonds.
“The paradox is that Europe needs growth at a time when it is imposing austerity measures that are hampering growth. The problem is that current policies could allow Europe to muddle through in the same way that Japan has been able to muddle through,” she added. 
Hunter will join an A-list of asset managers, geopolitical analysts and institutional investors at the hedge fund summit who will discuss: The global outlook for Q4 and beyond; The best investment strategies for finding alpha; Techniques for successful marketing and capital raising; Regulatory and compliance updates; The rise of alternative hedge fund structures; and more.
John Seigenthaler, former NBC News Anchor and current CEO of Seigenthaler PR-NY, will chair the day-long event. Joseph McAlinden, chief investment officer of Catalpa Capital Advisors, will give the opening remarks and Dannel Malloy, Governor of the State of Connecticut, will present the lunchtime keynote. Following panel discussions, FINforums will present an institutional investor roundtable. The summit, sponsored by Smarsh and Eze Castle Integration, will be capped by a cocktail reception.
FINforums organizes editorially-driven events for the hedge fund industry that include topical panel discussions, insightful fireside chats and newsworthy keynote addresses by hedge fund industry leaders. FINforums is a joint venture of FINalternatives, Hedge Fund PR and John Seigenthaler of Seigenthaler Public Relations

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