Financial News: “Hintze: Trump will deregulate most since Reagan”
Financial News reports on CQS founder and CEO Sir Michael Hintze’s end of year note to investors, in which he highlighted the potential impact of Donald Trump’s election on financial markets:
Writing in a December note to investors, Sir Michael said that "more de-regulation than at any other time since Reagan's Presidency is certainly on the agenda", which along with the continuing disintermediation of banks, and volatility in markets, will create investment opportunities.
However, he said the direct impacts of Trump deregulation on financial markets were likely to be limited, as US banks are unlikely to withdraw from the Basel III Accord, a global rulebook that requires banks to adhere to capital adequacy standards, and that bank proprietary trading desks “will continue to be absent as market participants”.
Financial News also noted CQS’s strong performance during 2016, which proved to be a difficult year for many in the industry:
The fund that Sir Michael manages, the CQS Directional Opportunities Fund, has grown in assets this year and has delivered a return to investors of over 30%, according to performance data seen by Financial News. Other funds managed by the firm have also delivered positive returns.
Sir Michael said that he felt "energised about the investment environment", adding that the firm had been shifting its portfolio in the last few months, saying "we have traded actively and duration has shortened" - meaning the fund has reduced its sensitivity to rising bond yields.