As protestors continue to march in the streets, the world is coming to grips with a President named Donald J. Trump. The peaceful transition of power is currently under way and this act alone makes the United States — regardless of one’s view on the President elect – the envy of world. It is truly an amazing thing to witness. This peaceful change of control is something we should all be thankful for — again regardless of one’s views of Mr. Trump. It is truly amazing.
What does a Trump administration mean for the markets, commerce and, in particular, the investment management industry? I truly do not know. And I truly believe that anyone who says they know are full of crap. The reality is that Mr. Trump’s policies are a complete unknown. It is clear that he is for commerce, he is for free markets – to a point — and that he wants to get America working again. One can expect a rollback on regulation, and that should be good for the economy.
My take is that a Trump presidency is going to be good for the investment management industry. I don’t have any empirical evidence. The markets have reacted positively to Trump, even before he really has done anything. So far, so good. Hopefully the best is yet to come.
That being said, hedge funds have had a tough year. Managers have been attacked on all sides. Performance has not been great, investors are complaining about fees, and regulations have really put a stranglehold on the industry. The cure for all that ills the industry is performance. Once that turns around, fees won’t matter.
It is true that times are tough and I expect them to remain that way through the end of the year. But remember, it is during these times that people hunker down and get back to basics. I have spent the better part of the last few weeks meeting with both existing and emerging managers, along with some very sophisticated investors, and all had the same view: Investors need alpha generators and hedge fund managers are expected to provide it.
When it comes to getting alpha, hedge funds are one of the only solutions. Investors understand that they have to pay for alpha and managers understand that they need to deliver it. It is symbiotic relationship that works when it works, as it hasn’t in 2016, because, well, the alpha wasn’t generated. I expect the industry to right itself in 2017 as the world settles down from Brexit and the U.S. election. All is not lost; there is still plenty of opportunity out there.
Operations for Alternatives rolls into Miami February 27/28, 2017. The event is going to be great. Huuuuge, as our President-elect might say. Once again, we have lined up a fantastic speaking faculty and, unlike other events, all conference participants are included in every aspect of the event. If you haven’t registered, do so today by clicking here.
Things that drive me crazy
I don’t understand the gall of restaurants charging $30 for a Caesar salad, let alone why patrons would buy one. Recently, in midtown Manhattan I experienced this first hand. It is obnoxious and outrageous that a restaurant would charge that much for some lettuce, croutons, a bit of chicken and a dab or two of dressing. I mean, come on. This is almost as bad as being charged for an iced tea refill