Jamie Dinan and Glenn Dubin are bullish on stocks while Eric
Mindich is wary of European credit, according to comments made
during a panel discussion today at Morgan Stanley's showpiece
hedge fund conference.
|| Dan Och
The respective heads of York Capital Management, Highbridge
Capital Management and Eton Park Capital Management gave their
views today at The Breakers hotel in Palm Beach, Fla. where the
annual event is held. The confab, which is closed to the media,
was again hosted by Morgan Stanley's prime brokerage division
and traditionally features some of the most prominent managers
in the industry (see Absolute Return's report on
comments made yesterday by Paul Singer, Jeff Vinik, Lee Ainslie
"U.S. equity markets offer a real decent return," Dinan
said, according to two people who attended the panel moderated
by Dan Stern of Reservoir Capital Group. "I am very upbeat at
14.5 times EPS and think by the end of year the markets could
be trading at 17 times EPS for the S&P." He also noted that
dividend yields exceed bond yields for big U.S. companies for
the first time in 50 years.
An external spokesperson for York, Kelly Smith of public
relations firm Abernathy MacGregor, declined to comment.
Another equity bull was Dubin. "I see big opportunities in
long/short equities," he said, according to two people in the
room. Dubin added that the biggest market trends today were
capital moving out of public credit and into equities; and
direct lending and mezzanine financing.
An external spokesman for Highbridge, Dave Millar of PR firm
RLM Finsbury, declined to comment.
Mindich took a more cautious tone on the U.S. The U.S.
economy is in decent shape but there is not yet a
self sustaining recovery and government action is still needed,
he said, according to witnesses. That's consistent with the
neutral view that $10.7 billion Eton Park expressed in its
yearend letter that noted "idiosyncratic" opportunities for
both equity longs and shorts (see
Eton Park bounces back).
Mindich also expressed a cautious view of Europe, noting
that important structural reforms have not yet happened even
though credit spreads have tightened. An external spokesman for
Eton Park, Jonathan Gasthalter of PR firm Sard Verbinnen &
Co., declined to comment.
A fourth panelist, Dan Och of Och-Ziff Capital
Management, said he noted "a sense of complacency in
credit" and that his firm is doing more in Europe and Asia,
according to two people in attendance.
Separately, Och was dismissive of the notion that larger
hedge funds cannot produce the same returns (Och-Ziff managed
$31.9 billion as of January 1). "We've been hearing that
question since we went over $1 billion...no large investor has
ever said to us 'we don't need a lot of return, just be safe,'"
Och said, according to the attendees. "We don't come to work to
An external spokesman for Och-Ziff, also Gasthalter of Sard
Verbinnen, declined to comment.
At one point, someone in the audience asked why the
panelists continued in their positions despite having already
achieved so much wealth. "When you're younger, you have more of
a propensity to make money," Dinan responded, according to two
people in the room. "I have less mojo but I have these young
guys around me who have more mojo." Dinan also said that York
will grow to manage $25 billion in five years, up from
$12.6 billion as of July 2012.
Dubin echoed his comments. "What gets me excited is building
businesses," he said, according to attendees. He said he's
spending his time building $29 billion Highbridge's
quantitative business and integrating its statistical arbitrage
futures strategy into the quantitative strategy.
The last question from moderator Dan Stern was 'What are the
biggest risks ahead?' For Dubin it was "the inevitability of
rates rising...inflation is one risk that could unsettle global
markets." For Dinan the "biggest risk is social unrest in
Europe." For Mindich it was that "governments have used most of
their capacity...in emerging Asia, credit spreads are too tight
The conference continues tomorrow with another panel, "High
conviction ideas in an uncertain world." The speakers are:
Stuart Spodek of BlackRock Fundamental Fixed Income; Eric
Bannasch of Cadian Capital Management; David Stemerman of
Conatus Capital Management; Arthur Cohen of HealthCor Group;
Carl Huttenlocher of Myriad Asset Management; and David Gallo
of Valinor Management. The moderator will be Joel Greenblatt of
Gotham Asset Management.
Morgan Stanley declined to comment.
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