Flying into Dallas from Sao Paulo (where I produced the Opalesque Brazil Roundtable available in our archive: www.opalesque.com/index.php?act=archiveRT), the contrast struck me
hard and unexpectedly. When jogging around Dallas, I saw that every second shop on Commerce, Main, or Elm Street was closed and
empty – Dallas seems to have that feel of a hard recession. There were even empty parking spaces on all streets at all hours -
unthinkable in buzzing Brazil, which is cranking to be the fifth largest economy in ten or fifteen years.
Enter Kyle Bass, who basically says this is just the beginning. Bass is one of the handful money managers on the planet, who correctly
identified the subprime meltdown, who set up the right trades and made a fortune for himself and his investors. (For a splendid
recount on this feat, follow this link: www.opalesque.com/fullarticle/40904/Background_How_shorted239.html.)
In this Roundtable, Bass adds a lot of scary details and color to his current investment thesis of a the Keynesian end that awaits Greece,
Japan and the “Club Med” (Italy, Spain), with the U.S. not be far behind. Bass says he is “not contrarian for contrarian sake” and he
“can't wait to be long” - after this secular crisis has been overcome through debt restructures.
Bass says politicians have front row seats to observe and reflect on Japan, which is “the best opportunity I have ever seen in my life.
It is the most convex opportunity I have ever seen. If you take the time to look at the numbers, you realize why they have had seven
finance ministers in three years, five in the last year-and-a-half. The whole scenario is playing out exactly as you would expect it to
play out, right under everyone's nose, and no one says a word about it....”
This Roundtable is a thrilling discussion between (global) macro scenarios and equities-centric investment approaches that may leave
countless investors with bloodless net returns, deceived by “attractive valuations” while real assets could end up ruling supreme.
But what is a real asset? How safe is your Gold ETF or futures and futures options on precious metals really, when you compare open
interest against the registered and eligible inventories behind those instruments?
This Roundtable further covers:
Overview on the Texas hedge fund industry: inflows, structure, upcoming managers
Texas is different: Why emerging hedge fund managers can get meetings with Texas billionaires
Quantitative, qualitative, or the “blink”-effect? How Texas investors and family offices select managers
Why do so few investors have permanent allocations to CTAs and managed futures, and what is the price for that?
With no state income tax and relatively healthy state finances (unlike any other state, Texas is blessed with a $9 billion slush
fund), local managers expect an influx of colleagues from other states where top marginal rates may get close to 60%.
This inaugural Opalesque Texas Roundtable was sponsored by the CME Group. We also thank our 2010 Roundtable Series Sponsors Custom House Group and Taussig Capital, as well as Akin Gump for providing the meeting
venue for our team:
Kyle Bass, Managing Partner, Hayman Capital
Don Hodges, Founder, Hodges Capital Management
Shaun Jordan, Director, Abraham Trading Company
Craig Caudle, CEO and Principal, Liberty Funds Group
Terry Beneke, CIO, Antares Capital Partners
Guilllermo de León, Manager of Investments, Salient Partners
Barry Greenberg, Executive Director Texas Hedge Fund Association, Partner, Akin Gump
The Opalesque Roundtable Series offers unparalleled intelligence on the most important global hedge fund jurisdictions and their players. The Roundtable Series is a free publication from Opalesque and is continually updated. Please scroll down to view the full selection of our Roundtables - covering the globe!