George Soros at the Annual Meeting of the
World Economic Forum in Davos, Switzerland, Jan. 27,
2011 (Image: WEF/Photo by M. Wuertenberg)
Only a handful of well known hedge fund managers
are attending Davos this year. As they did
in 2010, many of the world’s largest money
managers skipped out on the gilded annual meeting of the World
Economic Forum in Switzerland, presumably in favor of staying
home to make more money.
Those who went made their presence known by
speaking on one of the event’s many panels, some
of which were closed to the press.
Paul Singer, founder of Elliott Management spoke on
the "Managing a 'Balance Sheet’ Recovery" panel,
trying to answer the question "As the strain on government
balance sheets grows, how can future fiscal crises be
George Soros, chairman of Soros Fund Management and
a frequent attendee at Davos, talked about global finance on
"Redesigning the International Monetary System: A Davos
"I think it is temporary because once the economy
picks up a little momentum, if it picks up a little momentum,
then the interest rates are going to go up and choke off the
recovery. So we are destined for stop-go, which is better than
no go at all," said Soros in a Bloomberg Television on-site interview.
Peter Weinberg, founding partner of Perella
Weinberg Partners, was a panelist for "Reshaping the US
Economy: The Impact Abroad."
Frank Brosens, co-founder of Taconic Capital
Advisors and past attendee, participated in a discussion titled
"The International Financial System: Back on Track?"
Other managers reported to be in Davos include
Louis Bacon Moore of Moore Capital Management, Bill Browder of
Hermitage Capital Management, Chris Cooper-Hohn, co-founder of
The Children’s Investment Fund Foundation and
Steven Cohen of SAC Capital Advisors.
The hedge fund industry took at least three notably
punches during the gathering.
Deutsche Bank chief executive officer Josef
Ackermann said hedge funds and other unregulated financial
companies may pose a systemic risk to the economy if oversight
isn’t increased. "You have an unregulated area
which becomes--as a consequence of all the regulatory
changes--more and more important," Ackermann said in an
interview with Bloomberg. "You may one
day wake up and realize that the systemic challenges are so big
that you will have to bail out or at least help support the
Larry Summers, the former Treasury Secretary, was
quoted by Bloomberg as
saying that regulators haven’t paid enough
attention to problems that could emerge in a "large, less
healthy buccaneer sector."
And this from Goldman Sachs President Gary Cohn:
"In the next few years, the unregulated sector will grow at an
exponential rate," he said, according to the Financial
Times (via Forbes’
Working Capital). "Risk is risk. My concern is that...risk
will move from the regulated, more transparent banking sector
to a less regulated, more opaque sector."
That, of course, wasn’t well received
in hedge fund land.
"All the major jurisdictions where hedge fund
managers operate--whether in North America, Europe or
Asia-Pacific--have rigorous regulation of the industry. And
this already rigorous regulation is being increased by new
legislation introduced since the crisis--for example the
Dodd-Frank Act in the United States, and the Alternative
Investment Fund Managers Directive in the European Union," said
Andrew Baker, chief executive officer of the Alternative
Investment Management Association, in a
"Some recent references to the
'un-regulated’ financial sector internationally
have been interpreted as referring to hedge funds. Given that
it would be completely mistaken to call the global hedge fund
industry 'un-regulated’, this interpretation is