Get your business listed on the Best Local Business Listing Network on the web!  

Miami “Hedge Fund Week” Is A Good Way To See How The Economy Will Be In 2022 And Beyond

Young men in tracksuits pitch a “blockchain play” that involves “an asset that isn’t crypto” at a party at a golf resort in the evening light. A man in a nice suit asks two men in fleece vests why he would invest in “tech growth play” now. Across the pool, two young people, both in their early 20s, wonder if it will be hard for family offices to listen to a play like their home equity investment product. A young girl says to a group of middle-aged men in tie-free suits that she is “building a metaverse” for family offices to buy NFTs on the blockchain.

It’s great to be back in Miami and at real-life financial conferences, where even the people who make money are happy to be back with other people.

The people who manage money and the people who want their money managed are back in South Florida for the last week of January, or “Hedge Fund Week.” This is almost two years after in-person events seemed to disappear out of the blue.

For example, at the iConnections Global Atls conference on South Beach, allocators like family offices meet with fund managers and other people who work in the field of investing to figure out where to put some of their money for at least the next few years. It’s all part of getting a sense of what people like and where the “smart money” might be going.

Since they were last together like this, they’ve seen the biggest market crash and the fastest recovery ever, real political turmoil, unprecedented central banking accommodation, and insurgent retail traders making meme stocks and the rebirth of crypto, so one would think that wealth would be looking for a safe place to keep its money. But that’s not the case at all.

In Miami, the mood is very different from “back to basics.” With interest rates set to rise, prices are going up, the retail trading boom is going away as quickly as it started, and a stock market that no one here seems to trust falling back into correction territory, the vibe is very different.

When Eric Noll, the CEO of Context, and I last met in person two years ago, the hedge fund industry was down a little bit, says Noll: So all I had to do was put my money in an index fund, and that was it.” That’s over, and now the alternative investment funds are coming in to show them what they can do at the cutting edge of what they can do.

When you go to Context, it’s hard to find a screen with equities markets on it. You can’t even hear people talking about the market at all. People don’t talk about the stock market very much. SPACs and growth are also not very interesting.

The things that you see and hear about are NFTs, the blockchain, some crypto, a lot of cannabis, and anyone who talks about a new idea about how to price oil can expect to be popular.

Money manager: “If you run a family office and know what you’re doing, you’re looking around and realizing that it’s time to move the car again.” It’s going to be very different soon, and you want to be part of that change.

In the last few years, the definition of a family office has changed a lot. Some family offices have grown to huge sizes, and some successful hedge funds have shut down and declared themselves to be a family office. But the main goal of all family offices is to make money for the next generation with the money they already have.

There is a lot of talk about “a lot of things,” says a family office manager who is “very recently out of college.” He says he “used to do the [venture capital] thing.”

I want to get us to the metaverse and crypto stuff, even if it means we have to get rid of some of the old things. Later, he says that he wants to invest in long-short hedge funds. To me, it’s important for us to have something that no one else has.

People who invest in NFTs have a special look to them. They are not only out of the reach of inflation, stock market “Apes,” and their parents’ understanding, but they are also unique and one-of-a-kind and tickle the same itch that people get when they buy a limited-run sneaker or handmade wallpaper.

It’s still the same thing, but now they’re being sold an entire asset class that’s the hottest new thing.

One fund manager says, “We’re in the fashion business,” as he looks around the crowded lobby of iConnections. “That’s fine, if we think we’re making good clothes.”

Metaverse: The young woman from the pool says it’s where everything is going to happen. People want to be there, too. On my NFTs, I’m getting help from some of the best people and the best blockchains. I already have a lot of very rich people on board.” A way to say this: “I’ve already been to the future.”

She also sounds like she wants to know if anyone has “any shrooms.”

But even if she doesn’t, she might be in the future, no matter how she does it now. There are a lot of speakers at Context who talk about crypto, space, private credit, and sports.

“We had a very well-known hedge fund manager, a long-short guy, come down here and do a fireside chat with us,” says Noll. “We asked the people who were there what they wanted him to talk about, and they didn’t have anything.”

On the other hand, a lot of people are talking about crypto platforming, crypto custody, building a metaverse and gaming. That fund manager isn’t there. Sobering hedge fund legend Marc Lasry has the only macro view on Monday. He says that inflation is going to be around for a long time, but then mockingly celebrates the fact that he hasn’t been asked about investments that required quadruple leverage.

Deals are made because of these speakers and conversations, and there are hundreds of official and even more unofficial breakout sessions at the events. There is a lot of interest, and there are a lot of places to meet.

A quick run-in with the twenty-something home equity guys at yet another poolside cocktail party reveals that they had a good day of meetings and are excited about getting allocations. Lasry’s mention of a credit venture play gets a lot of people excited.

A lot of people are afraid of the markets, says Noll. Because it gets me out of this market, I might be interested in an NFT fund or a cannabis fund.

If you tell an allocator that on Monday, the S&P 500 SPX, +2.43% fell into correction territory, he rolls his eyes and says that inflation is to blame.

He says: “No more, I don’t care about the market.” After lunch, I talked to some people who have a great idea about how to use European oil fields. The Web 3 investments I made before now have a safe place to fall back on.