Eclipse of the SALT

This year's shindig may have sucked, but it also may have been the last.
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By de:Benutzer:mrnett1974 (de:Benutzer:mrnett1974) [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

By de:Benutzer:mrnett1974 [GFDL or CC-BY-SA-3.0], via Wikimedia Commons

The ninth edition of SkyBridge Alternatives Conference, usually the hedge fund industry’s biggest, most boisterous and boosterish and over-the-top extravaganza, was a somewhat more subdued affair than usual. Sure, it had its moments—Jim Chanos getting a little too deep into the gin ‘n juice at the Snoop Dogg show, the holographic Jeff Gundlach—but those were rare glimpses of joy at an otherwise downcast shindig, and one of those glimpses of joy involved a guy too embarrassed to show his actual physical face at the Bellagio. Bill Ackman came to Vegas to throw shade at his colleagues before explaining that losing $4 billion is the best thing that’s ever happened to him. All the while, event impresario and local unemployed man Anthony Scaramucci was bringing everyone down, reminding them that he wasn’t even supposed to be there and that everything sucked about everything anyway, while doing his best Charlie Brown walk from panel to panel. And it worked!

Scaramucci’s downbeat mood pervaded the gathering of approximately 1,800 hedge fund managers, investors, bankers, lawyers, and accountants, in stark contrast with earlier years, when SALT hummed with electricity….

Many of the players seemed to be going through the motions. One speaker almost literally phoned it in: DoubleLine Capital co-founder and bond king Jeff Gundlach, the lunchtime keynote speaker for the first day of the conference, had a last-minute conflict that prevented him from traveling to Las Vegas and was beamed into the Bellagio’s grand ballroom via hologram. Meeting rooms appeared more sparsely populated than in years past, while attendance at the traditional Wednesday night poolside cocktail party, which this year featured a performance by the Gipsy Kings, was noticeably lighter than usual….

“It’s lame this year,” said one New York hedge fund manager, a veteran of several SALTs. Networking opportunities seemed thinner on the ground, he said, and the event lacked the energy of earlier iterations.

Luckily for said hedge fund manager, he might not have to do it again.

If Scaramucci recedes into the sunset, it will be hard to find another person with his outsize personality and unparalleled ability to bring political power brokers, movie stars, and Wall Street gurus to the (craps) table. Scaramucci will go on without SALT, at least for the most part — he retains a partial stake in the business and is said to be mulling starting a new investment venture. But whether SALT can survive without Scaramucci is an open question.

One former hedge fund manager, however, doesn’t get all the doom and gloom. Phil Falcone’s been out of the business since 2013, when he got booted from it. But from the outside, he’s not buying all of the early obituaries or Scaramucci’s musings about secular decline or Bill Ackman’s jab at 2 and 20. Sure, Bill, no one wants to pay you that anymore, but stop projecting.

"The fee structure may have to change a bit, but there’s always going to be the need for high-quality investors," he said. "Do you pay 2-and-20 for a fund that matches what’s happening in the S&P?"…

The industry isn’t in a permanent decline, Falcone said, because there is a "tremendous amount of capital out there." It has become tougher for smaller funds to succeed because the business has become much more institutionalized, he said.

One of the most exclusive and raucous Wall Street shindigs could be coming to an end [BI]
Some Hedge Funds Still Merit 2-And-20, HC2’s Falcone Says [Bloomberg]
Falcone on Vietnam Investment, Hedge Funds, Steven Cohen [Bloomberg video]

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