This week, CQS Founder and CEO Sir Michael Hintze spoke on a panel at the Milken Institute Global Conference about “The Alternate Reality of Alternative Investments.”
An excerpt from Sir Michael’s remarks is included below:
Q. Michael, you run one of the most successful hedge funds in the world. What are you looking at for opportunities these days? And what themes are you looking at?
A. We look across the whole capital structure - equity and credit - even though we are very much focused on credit to try to extract value.
The key, frankly, of why people would want to come to the alternative world…is that the world has changed. If one wants to be able to get alpha the reality is that it no longer sits in banks...This has created a huge opportunity for the alternative investment industry.
If I look at why in 2008 we were able to do pretty well, it was because we had the operational infrastructure to deal with it...We are paid to take investment risk, obviously, and hopefully make investment returns, but at the same time we made sure that we took that operational risk down to a dull roar.
Q. Michael, you have a good global perspective. What do you see out there in the world today?
A. The value comes from where there's dislocation. And the massive dislocation has happened out of the central banks, whether it's through QE, or now forward guidance... For us it's an opportunity but also it's a heck of a risk in my view…sooner or later the chickens will come home to roost and we'll get back to a normal market.
You can watch the video of the panel on the Milken Institute website.