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Bailey McCann, Opalesque New York:

Hedge fund managers covering a range of credit strategies were generally bearish on the state of the fixed income market at the Skybridge Alternatives Conference currently underway in Las Vegas, Nevada.

"I think something has fundamentally changed," said Michael Novogratz, the CEO of Fortress Investments during a presentation in the morning. Fortress has approximately $67.5 billion in assets under management, and Novogratz says that he's currently long the market but that it also may be necessary to get out "before the music stops."

He noted peak high prices for fixed income securities in recent weeks and also said that if inflation goes up in the US, "that shows proof of concept. No one will wait and you will have a major repricing of assets."

His viewpoints were echoed by Richard Byrne, head of credit at Providence Equity Partners in another panel. He said that credit markets are more expensive compared to fundamentals than they were before the financial crisis.

In terms of opportunities, Novogratz is looking at Brazil - noting that the finance minister has made great strides in terms of making the country more business friendly. He also cited opportunities in China. "China is so interesting because there are 1.2 billion people to sell your stocks to and they are investing."

Elsewhere in the market, investors that are willing to live with volatility could be pleasantly surprised. "Volatility is the opportunity......................

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