Lasry, Briger, Perry say how to play Europe
July 19, 2012
Lawrence Delevingne, Rob Copeland
At the Delivering Alpha conference, investment picks from Chanos, Ackman, Cooperman and others run the gamut; short H-P and long P&G.
A host of big name U.S. hedge fund managers looked across the pond July 18 at the second annual Delivering Alpha Conference, as many said they are positioned to profit handily from the European economic tumult and overblown fears of fiscal calamity.
Some agreed on how to make money: Richard Perry of Perry Capital and Marc Lasry of Avenue Capital said on separate panels that they were buying European debt because the risk premium was so high. Perry recommended owning Spanish and Italian sovereign debt, likening their low prices and high yields to oversold residential mortgage backed securities after the financial crisis.
Fortress Investment Group co-chairman Peter Briger struck a more cautious tone, saying opportunities loom in distressed European credit, but it was too early. “We’re just not that excited,” he said, noting a large cash holding. “Right now, prices are just not that interesting.”
The following is a list of the actionable investment advice offered by hedge fund managers at the New York City conference, which was organized by AR’s sister publication Institutional Investor and CNBC.
|
Manager
|
Firm
|
Recommendation
|
|
Andrew Feldstein |
BlueMountain Capital Management |
Go long high yield bonds from Prospect Medical Holdings (PZZ), JELD-WEN (private window and door maker) and Scholar Funding re-performing FFELP student loans. |
|
Beau Taylor |
Taylor Woods Capital |
Go long crude oil, particular Brent, which is preferable to West Texas Intermediate (WTI). |
|
Bill Ackman |
Pershing Square Capital Management |
Go long Procter & Gamble (PG) and JCPenny (JCP). |
|
Bruce Richards |
Marathon Asset Management |
Buy structured credits, high-yield corporate bonds. Avoid U.S. government debt. |
|
Dwight Anderson |
Ospraie Management |
Invest in farmland. Avoid corn, wheat and grain markets. |
|
Jennifer Fan |
Arbalet Capital |
Corn is risky. Chinese GDP numbers are volatile and may impact commodities prices. |
|
Jim Chanos |
Kynikos Associates |
Go short Hewlett Packard (HPQ). |
|
Kathleen Kelley |
Queen Anne's Gate Capital Management |
Shorting the euro is difficult, so short British pound sterling and platinum. Both could decrease in price 20% to 30%. Go long U.S. dollar. |
|
Leon Cooperman |
Omega Advisors |
Go long stocks like AIA Group (AAGIY), Capital One Financial Corp (COF), Express Scripts Holding Co. (ESRX), Gannett Co. (GCI), Halliburton Co. (HAL) Kinder Morgan (KMI), Metlife (MET), QUALCOMM (QCOM), Watson Pharmaceuticals (WPI), Western Union Co. (WU), Apple (APPL), KKR & Co. (KKR). Avoid U.S. government bonds. |
|
Marc Lasry |
Avenue Capital |
Buy European debt, particularly that of banks in private markets. Higher investment returns available for long-term positions. |
|
Nathan Sandler |
ICE Canyon |
Bullish on emerging markets generally. Cuba, North Korea and Sudan could be good investments in the next few years ?with political reforms. |
|
Peter Briger |
Fortress Investment Group |
Hold cash. Opportunities in European distressed debt looming but not yet obvious. |
|
Richard Perry |
Perry Capital |
Buy European debt, particularly Italy and Spain sovereign bonds. Also shop at Barney's (owned by Perry Capital). |
See also: Picks from Loeb, Cooperman, Falcone won big at Delivering Alpha Conference