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SALT 2011: Insight from the 3rd Annual Hedge Fund Industry Conference

Last week over 1800 from the hedge fund and related industries gathered in Las Vegas for the 3rd annual SkyBridge Alternatives (NYSE:SALT) Conference. A tad Davos, mixed with Wall Street outlooks, politics and even leadership insight from the world of professional sports, SALT was a whirlwind of daytime presentations followed by evening parties and even occasionally some downtime! 

Several themes wove their way through this two and half day event. The first concerned the outlook for our economy and business prospects for the near future. An early panel discussion on the global macro economic forecast was an ardent exchange between the bulls and the bears. Nouriel Roubini, the distinguished economist spoke about the housing market still being a disaster and firms not yet spending. On the other hand Jeremy Siegel, Professor of Finance at The Wharton School was far more optimistic and predicted that the Standard & Poor’s 500 Index may rise 12-15% by this time next year. Jon Corzine, speaking on a panel entitled: “A Leader’s Perspective: Understanding the Great Recession and the Road to Recovery” claimed optimism and noted that the global economy is, in fact, growing very substantially. The take-away on this topic is that the return to economic prosperity at this point is still very ambiguous. 

Another important and prevailing theme at the conference should come as no surprise. The rise of the East and for the most part China is the biggest story of the past 500 years according to Niall Ferguson, Tisch Professor of History at Harvard University. Ferguson gave a riveting talk on Geopolitics and Global Markets and provided a fascinating historical perspective on the evolving power shift from West to East. Ferguson believes this shift is unstoppable and we are in the midst of the end of the Western dominated world. The one snag in this transformation however is that that the Chinese are adopting all of our inventions (he referred to them as “killers apps”) save for personal rights and freedoms.  

Michael Milken mentioned this theme as well in his presentation on the promise of the 21st century. Milken noted that while Americans are supersizing their homes and cars the Chinese are focused on educating their children. He also pointed out that the 21st century will be about human capital. Overlay these two ideas and an important consideration quickly emerges. 

The SALT conference does an excellent job of interspersing very commercially focused discussions with those from a variety of charities that SkyBridge Capital supports. This serves to remind this for the most part, very affluent audience that they have a responsibility to focus not only on their investments but on the greater good of the precarious world we live in.

In this flurry of enlightenment I could not help but notice what was missing from this event. Given the previously mentioned tremendous focus on China and the increasingly important interdependence we have with the Chinese it would have been appropriate to have at the very least one speaker from this country. In fact, wouldn’t it have been interesting to hear from someone from the hedge fund industry from anywhere in the Far East (or even another emerging economy for that matter). Also, there was the quintessential lack of women presenters and panelists at SALT yet again this year. Those that were on stage were primarily moderators although the very last event of the conference was about “Wall Street’s Leading Ladies” and was hosted by 100 Women in Hedge Funds.  

One of the highlights of the SALT conference both this year and last was the opportunity to get “up close and personal” with some of the world’s most impactful leaders from a variety of arenas. In particular, listening to George W. Bush, Colin Powell and Gordon Brown speak with candor and genuineness was awe-inspiring no matter what one’s political leanings might be! 

All in all the event was a great success. It was oversubscribed and provided content that was both thought provoking and significant. SALT, once again very aptly accomplished its goal of providing a forum for the hedge fund industry to reflect, debate and perhaps even befriend.