The weather is wanting here in Monaco:
On the plus side, bright sunlight is probably not what everyone needs right now, after a night propping up the bars of Monte Carlo’s hotels.
(On an entirely unrelated note, late night snooping around the marina has not yet brought FT Alphaville any closer to substantiating reported sightings of the Maltese Falcon — Elena Ambrosiadou’s submarine-equipped sailboat superyacht. At two in the morning it seemed like it could be… though probably wasn’t.)
No matter.
Today the actual conference – GAIM 2010, the highlight of the hedge fund asset raising/idea swapping/client hobnobbing calender – begins. The main event this morning in the Grimaldi forum – a sort of chi-chi vision of Milton Keynes on the Med – was a panel of some of the hedge fund industry’s biggest names debating the global economic outlook.
Fund managers were reduced to sitting in the aisles. Really.
But it was worth it, for nothing else, to see Leda Braga – President of BlueCrest – and Lee Robinson – co-founder of Trafalgar – take intellectual chunks out of each other. Mr Robinson is not known for his… reticence.
Ms Braga – who’s BlueTrend fund made 40 per cent in 2008 and was still up in 2009 – was fairly confident the hedge fund industry had learned its lessons.
Mr Robinson, not so much.
“One of the most powerful lessons was living through 2008,” said Ms Braga. “It was a maturing year for us.”
“It’s absolute nonsense that lessons have been learned,” said Robinson. “May was about contagion, contagion, contagion. If you’re a hedge fund and you didn’t understand contagion that you dont deserve to be in business,” he added.
(By way of context, May was a rather difficult month for the $9bn BlueTrend: -8.3%.)
“May 4 was the scariest day I’ve seen for a long time,” Robinson continued. “If Greece had gone bust then so would Portugal and Spain and the entire banking system would have come down.”
Which left Man Group’s Peter Clarke to play moderator: “Clearly there’s been a sorting of people that haven’t learned their lessons.”
(And for the record, Mr Clarke says Man has learned its own lessons. AHL has reduced its beta exposure and, according to Mr Clarke has “lots” of volatility and downside protection – particularly at turning points like last months’.)
Last word goes to Ms Braga, however, who in spite of May’s dip is nevertheless still up 1.49 per cent YTD after all (and who, of course, also oversees Bluematrix, BlueCrest’s stat arb fund, which was up 3.93 per cent in May):
We’re not here to earn management fees… we’re here to monitor risk and to carry on taking it. We’ll check every gauge, twice, three-times, but if we believe our fundamental view is right, we should be trading.
Roll on June.
Related links
www.ft.com/hedgefunds
www.twitter.com/samgadjones
Article Series - GAIM conference 2010
- Arrival of the superhedgies
- 'We're here to take risks'
- Mammon and Montrachet
- The mirror crack'd