A Wealth of Alternatives…(or Spectacular Salt!)

May 23, 2010 at 2:15 pm

This past week The Bellagio Hotel in Las Vegas was host to the 2nd Annual Skybridge Alternatives (SALT) Conference.  Skybridge Capital, the distinguished asset manager initiated this conference in 2009 bringing together approximately 500 alternative investment leaders at its inaugural event. This year the conference was over-subscribed with about 1,500 fortunate attendees. It was a high-energy, fast-paced event with luminaries from both within the hedge-fund industry and elsewhere.

Anthony Scaramucci, Founder and Managing Partner of Skybridge was a dynamic and gracious host leading us through three days of fascinating panels and keynote speakers. Scaramucci is a regular contributor to CNBC and author of Goodbye Gordon Gekko: How to Find Your Fortune Without Losing Your Soul. Also, in mid-April Skybridge announced it was buying Citi’s $4.2 billion fund-of-hedge-funds business. In spite of these credentials I predict that we will hear a lot more about Anthony Scaramucci in the future.

The conference began with a panel discussion on best practices for the hedge fund business. Two distinct trends in the industry laid the groundwork for discussion. The first is that more and more institutional investors have begun to and are continuing to invest in the alternatives space. This is important because in order to continue its growth trajectory the hedge fund industry must branch out from its traditional high net-worth investors. However, institutional investors have their own sets of requirements that necessitate a layer of disclosure and infrastructure that is somewhat new to the industry.

The second and equally important development is that there is a meaningful movement towards increased transparency in the hedge fund industry. This completely overlaps with the abovementioned trend. Institutional investors want to understand what they are investing in and their due diligence is rigorous. Furthermore, as a result of the events of the past few years new regulation is imminent. Those hedge funds that succeed in the future understand this and will strengthen their operational infrastructure.

One of the highlights of the first day’s events was guest speaker Frank Abagnale. Abagnale was the subject of Steven Spielberg’s movie “Catch Me if You Can.” At first Abagnale dazzled us with a first-hand account of his remarkable life during which he impersonated a pilot, doctor and lawyer. But the message he left us with was profound. He spoke about both his father and wife’s influence on his life. His father, whom he affectionately referred to as “daddy” never missed a day to tell his son that he loved him. His wife’s support provided Abagnale with the foundation to succeed. Abagnale has a thirty-five relationship with the FBI where he trains and teaches and according to his web site more than 14,000 institutions have adopted Abagnale’s fraud prevention programs.

Abagnale’s presentation was appropriate for any audience as was Michael Milken’s and Bill Clinton’s. Milken was captivating with a presentation entitled: “Unprecedented Times – Unprecedented Opportunities” during which he touched on education, immigration as well as health and obesity. Clinton capped the day with a discussion of his current endeavors and courteously answered audience questions.

The conference was fertile ground for networking and many of those in attendance were as interested in the content as in meeting each other. Scaramucci voiced his vision of helping the industry grow and thrive by providing a forum for both learning in addition to the cultivation of relationships.

Day 2 of the conference allowed the audience to attend focused sessions on a variety of topics. Strategy and resourceful investing, a workshop for emerging managers and family office were amongst the topics covered. I spent my time listening to “Real-Life Stories from the Worlds of Finance, Media and Sports.” Maria Bartiromo moderated a panel including Reggie Jackson and Bobby Valentine.  The importance of the team to the success of the organization was described as essential.

Mitt Romney explained his views to the audience in a keynote address bearing the same title of his book “No Apology: The Case for American Greatness.”  Romney was crisp, to the point and candid. He compared and contrasted the public and private sectors. His opinions included the idea that the private sector is less forgiving while one of the major challenges of the public sector is the (obvious) lack of privacy.

It would be remiss not to briefly mention the 3rd day’s keynote speaker, General Peter Pace, United States Marine Corps (Ret.) and Sixteenth Chairman of the Joint Chiefs of Staff (2005-2007). Pace described Cyberwarfare as something he is very concerned about. The United States Joint Forces Command has characterized Cyberwarfare as follows:

Cyberspace technology is emerging as an “instrument of power” in societies, and is becoming more available to a country’s opponents, who may use it to attack, degrade, and disrupt communications and the flow of information. With low barriers to entry, coupled with the anonymous nature of activities in cyberspace, the list of potential adversaries is broad. Furthermore, the globe-spanning range of cyberspace and its disregard for national borders will challenge legal systems and complicate a nation’s ability to deter threats and respond to contingencies.

Clearly a new threat which I believe many in the audience were learning about for the first time.

There is so much more to report about this conference but I have tried to provide some of the highlights. The flurry of daytime activity was supplemented by night-time gatherings where possibly much of the connecting and cementing of relationships occurred. The pace was fast and intense and subject matter held something for all constituents of the industry. Although there were 1,500 attendees, one had the impression of a small and select group trying to better themselves and an industry that has gone through so much change. At the risk of sounding cliché, I think a major take-away and overriding theme of this event was that in spite of the well-known ambition and drive that characterizes many participants in the hedge fund space, we must remember our humanity and not lose touch with basic morals and values. “Main Street” would have been well-served to see this side of Wall-Street!

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Entry filed under: Business, Uncategorized.

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