During the second week of May, Northland Wealth attended the eighth annual SkyBridge Alternatives (“SALT”) Conference in Las Vegas. This invite only conference brings together a diverse group of thought leaders from the worlds of finance, economics, politics, entertainment, sports and philanthropy. This year’s lineup included esteemed investment titans David Rubenstein and Ken Griffin, prominent business and political figures Michael Bloomberg and John Boehner, and sports and entertainment personalities Kobe Bryant, Caitlyn Jenner and Will Smith, among many others.
The major theme emerging from this year’s gathering was the uncertainty and continual evolution of the financial industry and political landscape in the United States, which have both seen significant upheaval in the past several years.
As a result of poor performance for many hedge funds, discussions about the merits of investing in this area and the viability of what could be considered their excessive fee structure, took center stage, at what’s been called the Super Bowl of the alternative investment industry. While most managers expect fees to continue falling, a difference of opinion exists over whether the recent industry contraction is structural or temporary.
While there was a decided pessimism among many of the top hedge fund managers in attendance, it did nothing to keep investment professionals away from SALT, with the number of delegates rising from 1,800 in 2015 to 2,100 this year.
Another prominent theme was the effort by the industry to combat Wall Street’s negative reputation. David Rubenstein, co-founder of The Carlyle Group suggested an unusual response to a traditionally secretive industry: public relations. “All of us have an obligation to try to explain what the hedge fund industry and the private equity industry does that is useful,” Rubenstein said, noting cash-strapped public pension clients, investments that improve companies, and creating jobs. “We shouldn’t be upset about what we do. We should be proud.”
The same theme continued with an interview with John Boehner, the Former Speaker of the House of Representatives. “Don’t expect politicians to stop beating up on Wall Street,” Boehner said. “If you look at what Wall Street does in terms of job creation and economic growth, you have a great story to tell. But if you don’t tell it, no one will.”
Michael Bloomberg, the multi-billionaire founder of Bloomberg and former Mayor of New York, left the room, according to one journalist “audibly lamenting his decision to stay out of the 2016 presidential race”, which he explained as a simple calculus about the odds of success, or lack thereof, for a third party candidate. In light of research that 40% of all jobs could be automated within 10 years. He urged both the government and private sector to “find ways to make people as productive as possible and give them the dignity of a job.” If we have a singular focus on increasing productivity through automation, people are going to “set up the guillotines” because of the “rich-poor divide.”
The conference provided an unprecedented opportunity to listen, learn and network with the brightest minds and investors from around the world. As the only Canadian wealth manager outside of the Canadian pensions attending, we are honored to be invited to this event. The knowledge acquired, and trends observed, continue to influence the method through which we construct portfolios to achieve our client’s objectives.