There are two very distinct ways to think of the hedge fund managers meeting right now in Boca Raton for the annual GAIM USA conference. If you side with the Occupy Palm Beach protesters, you believe that they're responsible for the global financial crisis and that they serve as "pawns and agents of the global elite."
If you listen to the hedge fund managers, they too have been victims of a downturn. Consider Ash Williams, who oversees public pension funds with the Florida State Board of Administrators. When the Wall Street Journal asked Williams if hedge fund managers can sleep at night, he responded: "I suspect we sleep like babies. We wake up every hour and we cry ourselves back to sleep."
Still not sure whether they're villains or victims? Here then is a breakdown of the conference's schedule for today, with a bit of unbiased background to help you decide.
Opening remarks from conference chairman Alan J. Andreini
Background: There are financial roller coasters, and then there's the financial equivalent of driving off a cliff, like what happened at Brencourt Advisors LLC, where Andreini is chairman of the executive committee. Back in the heady days of 2007, Brencourt controlled $2.4 billion in assets, mostly in stocks and credit markets. You can probably see where this is going: Brencourt imploded in 2008, with a 17 percent loss. Investors fled and pulled out $2 billion, mostly in a year's time. Fund manager William Collins told the Journal he wasn't prepared for the financial crisis. "As you're growing assets, your job is to not fall for that sugar. But we all did."
Good versus evil: Brencourt banked its profits on acquisitions and swooping in after bankruptcies, a risky practice that turned sour quickly when the economy collapsed. But then again, who else saw this coming?
Industry Panel: Asset Flows, Capacity, and the Impact of the Next Phase of Institutionalization -- What Directions Will the Hedge Fund Industry Take in 2012 and Beyond?
Background: Among the speakers is Afsaneh Beschloss, president and CEO of the Rock Creek Group and owner of one of the most stacked résumés from the GAIM conference. Beschloss previously served as a managing director at the Carlyle Group, which has taken flack for being partly owned by the nation of Abu Dhabi. Before that, she was treasurer and chief investment officer at the World Bank Group, managing $65 billion in assets for an organization that's both beloved and hated the world over. Oh, and she also worked for J.P. Morgan, one of the regular targets of the Occupy protesters, especially for its lavish compensation for executives.
Good versus evil: If you're the type to think money managers do no good, you will do no better finding an example of the industry. If you think that's a load of dung, then you'll be impressed that she has an economics degree from Oxford and is married to presidential historian Michael Beschloss.
The Resolution or Persistence of Global Macroeconomic Imbalances: Consequences for Economic Growth?
Background: The esteemed panel includes Oliver Fratzcher, formerly of Caisse de Depot et Placement du Quebeck, formerly of the World Bank, formerly of Deutsche Bank, formerly of ABN Amro Bank in London. His bio also boasts that he served earlier in his career as an economist at the International Monetary Fund, meaning he likely helped formulate his economic policies at an organization either seen as a global stabilizer for our economy or the pawn of big business looking to rape Third World countries.
Good versus evil: If you've closed your checking account in favor of a credit union to protest big banks, then surely you don't like this guy. Bank of America still going well? You and Oliver could be pals.
How Robust is Your Alpha?
Background: A featured panelist here is Ronen Schwartzman, founder and CEO of Ten Capital Advisors. Schwartzman is a former special-ops intelligence officer in the Israeli Air force and spent four years with Bear Stearns managing equity and fixed-income portfolios for businesses and individuals.
Good versus evil: Did you catch that part in the bio about Bear Stearns? Nobody sank headlong into shaky mortgage securities more than Bear Stearns, which helped lead to its collapse. Schwartzman and fellow Bear Stearns executives, meanwhile, now speak at conferences like this one as financial experts.
Investing in the New Geopolitical Paradigm, with Sami Robbana, head of global macro strategy for Credit Suisse
Background: If the crowd decides to ask Robbana some tough questions about Credit Suisse, this session could spill right over to the 4:30 workshops. Potential topics of discussion: the 2008 tax probe in Brazil that accused Credit Suisse bankers of money laundering; the $536 million fine the bank paid to the state of New York in 2009 over financial transactions with Iran; or the Justice Department's ongoing probe into possible tax evasion charges that some analysts have suggested could result in a $1 billion fine.
Good versus evil: All those Credit Suisse accusations sound just fine if you're among the 1 percenters looking for a tax shelter. Otherwise, Occupy protesters could probably make up a few signs dedicated to this session alone.
After Raj: How Will Insider Trading Convictions of 2011 Impact the Industry and the Way in Which It Does Business in the Future?
Background: This extended session includes an appearance by Laurence Herman, general counsel at the Gerson Lehrman Group, a fine organization to talk about the dangers of insider trading. The group specializes in providing experts, especially to hedge funds and other investment companies looking for doctors and scientific brainiacs to offer their opinions. Gerson Lehrman boasts 50,000 docs who can tell investors what they think about upcoming pharmaceuticals and whether they ought to make money. The problem is not everyone believes that doctors working for extra coin from hedge funds will offer unbiased opinions, with critics charging that the experts will be too concerned with future employment instead of honesty.
Good versus evil: Perhaps Herman is the perfect person to talk about insider trading and the dangers thereof, and whether that's good or bad depends on whether you're a hedge fund manager or someone who's lost money from one.
Lounge Reception in the Palm Court of the Boca Raton Resort and Club, sponsored by J.P. Morgan Chase
Background: The firm founded by a man who inspired the rich dude from Monopoly (no kidding) has had a rough ten years. J.P. Morgan Chase paid an $80 million fine in 2002 for deceiving investors with biased research, settled a class-action lawsuit about its role in Enron by dolling out $2.2 billion, shelled out $2 billion in 2005 for its role in the WorldCom fraud case, settled a probe for $722 million after the company was accused of nearly bankrupting an Alabama county, and overcharged thousands of families of active-duty soldiers on their mortgages, possibly violating federal law and accidentally foreclosing on some of them.
Good versus evil: Even the Monopoly man himself might have trouble defending this record.
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