SALT Conference 2015 Panel III – Right Time, Right Investments

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SALT Conference Panel III – Right Time, Right Investments: Managing Volatility & Risk to Maximize Investment Returns

Ray Nolte

Co-Managing Partner & Chief Investment Officer, SkyBridge Capital

Don Brownstein

Founder & Chief Executive Officer, Structured Portfolio Management (SPM)

Richard J. Byrne

President, Benefit Street Partners – Providence Equity Partners

Jeffrey Kronthal

Managing Partner & Co-Chief Investment Officer, KLS Diversified Asset Management

Bruce Richards

Co-Managing Partner & Chief Executive Officer, Marathon Asset Management

Michael Y. Weinberger

Partner & Portfolio Manager, York Capital Management

Notes from the SALT Conference 2015 Panel III – Right Time, Right Investments: Managing Volatility & Risk to Maximize Investment Returns

Bruce Richards –  When the Fed moves, do the markets go risk off

Who will force the Feds hand? The markets? Employment?

Greek risk in Europe…low probability event that they leave the Euro, but large tail

Dodd Frank and Volcker rule causing liquidity concerns – thank you govt! (sarcasm)

Govt is forcing banks to step back

Stand ready to provide liquidity

Buying billions of loans from European banks – non performing

Rates will stay low in Europe for a long time

Need to expand liquidity to3-5-7 years if investors want returns they are accustom to

Loans is an interesting place to be

The markets are very rich right now!!!!

Don Brownstein – Risk- we tend to focus and over emphasize the wrong things.  These are the things we tend to concentrate on

Because they are said over and over again… putin, yellen, fed, geopolotical — these events tend to be a non factor in your returns.  If everyone else is worrying about these things then the market has priced them into the market

We have very little ability to focus on shorter term real risks that others aren’t thinking about

What will really impact your returns… the transient risks. Focus on longer term risk

Michael Y. Weinberger – Risk is permanent impairment of capital. That is risk.

Volatility is the opportunity.  paid a premium to take on volatility right now in the market

Perceived risk and volatility in the short term is creating an opportunity

Allocators who care about monthly numbers or volatility cause a negative feedback loop. Managers shouldn’t have to manage volatility, especially on a monthly basis

He sees a tremendous amount of M&A going forward, except in banks due to regulation

Be very aware of style drift – you should know what investors are good at and tell them to stick with it

Richard J. Byrne – Don’t pay up for liquidity —which probably isn’t liquid anyways

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