Lasry, Briger, Perry say how to play Europe

By Lawrence Delevingne, Rob Copeland

Thu Jul 19, 2012


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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