Investment guru Jim Rogers and other hedge fund managers see opportunities in global markets, including energy technologies.
Looking for new and diversified investment opportunities for your hedge fund? Stay clear of India or Russia, but do start scrutinizing the commodity markets of China, Brazil, and Canada, where opportunities will abound over the next 10 years or so. And don’t overlook improved energy technologies.
That was just some of the advice Jim Rogers, the hedge fund guru, global traveler, and co-founder of the Quantum Fund, offered up on Monday to a crowd of 300 or so hedge fund managers, investors, and their advisors.
The occasion of his talk was the three-day Hedge Funds World Global Opportunities Conference at the Pierre Hotel, where hedge fund managers, analysts, and consultants from up to 30 countries discussed matters such as “Where are the opportunities for U.S. hedge fund managers and investors in Latin America?,” “Looking for hedge fund returns in Eastern Europe,” and “Analyzing the Asian hedge funds boom.”
The conference comes at a time when the hedge fund industry–which is based primarily in the United States—is maturing and also becoming far more global in its orientation, with the number of U.S. firms in existence up to 3,307 as of last year, up 74 percent from 1,903 in 1999, with 1,406 new funds created in 2004 alone, according to Hedge Fund Research, a hedge fund-tracking outfit based in Chicago.
Of course, with a greater number of hedge funds in existence, the search for new market opportunities around the globe continues by leaps and bounds. “With this New York-based conference, we are trying to bring the growing hedge fund world to U.S. players,” said Leon Kaplan, head of hedge funds capital markets/Asia Pacific for Terrapinn, the event organizer.
While many attendees sat quietly in the hotel ballroom listening to Mr. Rogers, monitoring their investments and email via handheld devices, Mr. Rogers was outspoken about his disdain for investment opportunities in India and Russian markets.
“As an investment destination, India is a sham,” he said. “It’s a bit of a mess as far as being a country, and it’s the single worst bureaucracy in the world.” He said his opinion is based in part on his own personal travels through India on his BMW motorcycle, a subject he has written about in books like Investment Biker and Adventure Capitalist. “Russia is a disaster,” he added. “[President] Putin has very little control in Russia now. I certainly wouldn’t put any money there.”
Instead, Mr. Rogers, a well-known enthusiast for commodity investments, was upbeat about agricultural sectors. “If you’re investing in commodities, I would invest in agricultural sectors right now,” he said. “Sugar is 85 percent below its all-time high and even coffee is 60 to 70 percent below its all-time high. I am much more bullish on agriculture than on energy or metals at this time.”
He also predicted alternative energy sources are “going to boom,” while atomic and nuclear energy will make a comeback, which will bring improved technologies to the fore.
Other speakers at the conference included Neil Brown, managing director of Citigroup Alternative Investments, U.S.A., and Albert Saporta, managing director of AIM&R, a Swiss-based manager of three hedge funds. Mr. Saporta projects that, due to rising interest rates and rising costs of money, hedge fund managers will be inclined to take on more risk in the months ahead and that in turn, we can expect to see more forays by hedge funds into competitive situations with private-equity funds, making buyout-type investments.
Patrick Armstrong of Insight Investments, the London-based asset management arm of Halifax Bank of Scotland, was typical of other attendees at the event. While sipping coffee and standing amid a cluster of exhibit booths touting offshore commercial bank services, trading analysis software, and independent research services, Mr. Armstrong explained that his purpose in attending the event was simply to “do a lot of networking” and “to identify good managers and good investment ideas.”
Source: Red Herring