The Daily Alpha: The #SALTConference, Hedge Fund Bar Etiquette, and Gold Prices

May 10 2016 | 10:35pm ET

The Daily Alpha – May 10, 2016 
By Garrett Baldwin

“I think hedge funds are coming off what’s clearly been a difficult 6-9 months. But if you look back, they tend to go through these cycles every 4 to 5 years.”

That’s co-managing partner and CIO of SkyBridge Capital Ray Nolte offering his expectations for the hedge fund industry ahead of the 2016 SkyBridge SALT Conference.

It’s known as “spring break for hedge funds” as a reason, with world-renowned guest speakers, celebrities, politicians, and musicians all speaking on major stories and trends impacting the world today. Of course, as Nolte explains, a lot has changed at this conference over the years. 

“SALT was set up as an industry-wide event originally, and I think now it's moved to an even broader platform than just alternatives or just hedge fund managers,” he told Matthew Bramowicz at AssetTV. “We’re going to try to cover political issues, the economy, obviously hedge funds and the hedge fund industry, but also traditional investing, asset allocation, philanthropy, current events…and kind of blend all of that together in a place where people can talk about those ideas.”

On Wednesday and Thursday, we’ll be providing live updates to FinAlternatives, The Alpha Pages, and Futures during what will be a very impressive roster of speakers. Look for updates from Michael Bloomberg, John Boehner, Mark Cuban, Kobe Bryant, Will Smith, Ron Howard, Dennis Miller, Mike Greenberg, Larry Summers, and Robert Rubin.

“There are lots of Wall Streeters smoking cigars. Be prepared for a dry-cleaning bill afterwards!”

That’s Kathleen Lauster, managing director at Silver Leaf Partners.

The Salt Conference is one of the top networking events for hedge funds and investors in the country. But eFinancialCareers offers a fun piece today on the best places to network with “with New York City’s bankers, asset managers, hedge funders, and private equity mavens.”

In New York, there’s no shortage of places to go. And while conferences require travel, you’d be surprised at who you can meet at Happy Hours around Manhattan.

Here are the top places to network in Manhattan… and… perhaps more important… the rules and etiquette.

"Continued worries about China, continued worries about the euro zone, keep interest rates benign, keep currencies weak, and so investors are looking for liquid, convertible gold to help them through this period."

That’s George Gero, a managing director at RBC Wealth Management, offering his insight on why money managers will be looking to gold as an asset in the months ahead.

In fact, hedge fund manager David Einhorn has built a nice stake in gold, and he’s expecting that Europe’s “kitchen-sink” monetary policy efforts and the Bank of Japan’s never-ending decent into monetary madness will only help spur gains from the yellow metal. 

“Last year was tough for the swing-for-the-fences hedge fund managers who became synonymous with money-making in years past.”

That’s not the meat of the story.

The meat is the next sentence, from DealBook and the New York Times.

“The top 25 hedge fund managers still took home nearly $13 billion in 2015, according to an annual ranking by Institutional Investor’s Alpha magazine.”

That will be a major talking point of this election…

That we need to tax the top 1% more money… That this group of managers made more money than every Kindergarten teacher combined in the United States, according to Vox.

It’s not higher taxes or closing loopholes that I really oppose… It’s the deployment and lack of accountability that will not ever be addressed even if the wealthiest pay more money...

Even if they increased taxes on these 25 people by 10%, that would be an extra $1.3 billion sent to the public war chest. From there, all bets are off on how that money will be used.

That’s approximately the amount of money ($1.1 billion) that was identified as wasteful Washington D.C. spending “on projects that included an Army research study into the bomb-detecting abilities of elephants, puppet shows in Vermont and the creation of a dog bite prevention website, among others” in 2014.

In fact, the U.S. spent $294 billion on expired programs in 2014 alone.

Even if you took every dollar these 25 people made and redistributed it to Americans… that would be a personal check for $4 for everyone.

I propose a new Bernie Sanders Slogan: “Get Your Four Bucks Back, America.”

Sure, let’s keep sending Washington money… because they’ll eventually get around to fixing the crumbling infrastructure that is apparently less important than bomb-sensing elephants and whatever other pet program they pumped into that $787 billion stimulus bill back in 2009.

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