John Bader is Chairman and Chief Investment Officer of Halcyon Asset Management LLC, a leading global investment firm, which together with affiliates has approximately $12.5 billion in Assets under Management. He spoke at a panel at the SALT 2014 conference, along with several other speakers on the topic of rising rates. See below for some very informal notes from the discussion.
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Move Your Assets? Maximizing Returns in a Rising Interest Rate Environment
John Bader (Halcyon asset mgmt)
Don Brownstein (structured portfolio mgmt)
Anand Desai (starting new hedge fund in 2 weeks, Darsana Capital)
Emanuel Friedman (comments off the record) (EJF Capital)
Ability to pick rates is about zero! forecasting rates is impossible
DB– The US is attempting to monetize its debt, ie not fully pay back china
AD– The rates market is very deep and liquid, tough to gain an edge
inkling is that rates will continue to rise slowly
looking for 10-20 stock to own and 35-40 companies to short
looking for high fcf yield and pricing power
less capital intensive businesses
Best ideas —
EF speaking, but off the record
JB- 30 year bull market in credit, spreads are very narrow
opportunities are in the hedged space. S&P fairly valued
focus on event driven situations and special situations
corporate
putting capital to work in M&A’s
Corporate proactivism –boards starting to take steps to restructure themselves, before activists coming in. Specifically, John Bader says that the recent wave of activism is now spawning “corporate pro-activism” Meaning that we are seeing more boards acting like activist investors, with companies pre-empting activists by taking actions to restructure and create value ahead of pressure.
