SALT losing its spice for hedgies in Vegas
LAS VEGAS — Working at a hedge fund isn’t the party it used to be.
The annual Skybridge Alternatives Conference for hedge funds, known as SALT, was lavish as ever, with free-flowing booze, a roster of guests like Joe Biden, David Cameron and Mike Tyson, and a late-night concert from Duran Duran.
Nevertheless, several attendees noted that SALT this year was somehow “low energy” — and they weren’t necessarily talking about former Florida Gov. Jeb Bush, who spoke at the event on Friday.
Indeed, SALT founder Anthony Scaramucci didn’t seem quite as ubiquitous and bright-eyed as he did at last year’s event. More than once, “The Mooch” spoke of dusting himself off after his promised White House gig did not “materialize.”
Meanwhile, Bill Ackman of Pershing Square Capital admitted that he has something to prove after years of negative returns, and — in a surprise appearance Friday — Jon Corzine admitted feeling “remorse” for the blowup of his MF Global fund in 2011.
It was telling that sightings of onetime kingpin Steven Cohen lurking in the hallways created more buzz than most of the speakers — despite the fact Cohen remains barred from the industry until next year under a settlement with securities regulators.
Carlyle Group chief David Rubenstein played the cheerleader as usual, saying Thursday that there is $1.4 trillion in “dry powder” itching to get into alternatives in search of double-digit returns. But even his colleagues weren’t buying the enthusiasm.
After years of subpar returns, the hedge fund industry has slowly been reducing its usual “2 and 20” model in which funds collect 2 percent of assets under management and 20 percent of profits.
Hedge fund fees “are coming down, but they’re still too high,” noted short-seller Jim Chanos said in a Thursday afternoon session.
Ackman, whose own fund adjusted fees amid years of subpar returns, echoed Chanos’ statements, saying you can’t take 20 percent of profits when you’re getting only 5 or 8 percent.
Returns at Ackman’s fund last year, by the way, were down more than 13 percent.