2014 Investor Outlook: Morgan Creek’s Mike Hennessy sees investors playing “time arbitrage”

By Simone Foxman

Wed Jan 15, 2014

Predictions for the next year from the co-founder of $7 billion fund of funds Morgan Creek Capital Management.

2014 Investor Outlook: Cambridge Associates | Clearbrook | GAM | Goldman Sachs Asset Management | J.P. Morgan Alternative Asset Management | Liongate Capital Management | Morgan Creek Capital Management | Morgan Stanley Alternative Investment Partners Protégé | Wells Fargo

  Michael Hennessy, co-founder of $7 billion fund of funds Morgan Creek Capital Management.

What hedge fund strategies will do best in 2014? Why?

Last year we broadly favored equities over credit, but after a surprisingly exceptional 2013 in equity markets, we would now be more guarded and strongly advocate for diversification among a wide array of asset classes, strategies, and risk factors. We still favor equities over credit, especially considering where rates and spreads are and the risk-reward profiles therein. Within equity, we would favor a long-short approach where a skilled manager goes long "good" companies and shorts "bad" companies, pulling a spread out of the differential. We think this makes sense due to...

ISSN: 2151-1845 / CDC10004H

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