Julian Robertson Sees Opportunity Betting Against Fixed Incomeby
Veteran money manager describes it as a long-term ‘sure thing’
Meanwhile, he warns, ‘there are a lot of sharks in the water’
Tiger Management’s Julian Robertson is betting against fixed income amid expectations of rising interest rates.
“I see it as a long-term sure thing to go short the bond market,” Robertson, 84, said Tuesday at Grant’s 2016 Fall Investment Conference in New York, adding that he has some exposure to this position. “In the meantime there are a lot of sharks in the water looking to eat us right up as we swim to shore,” he said, explaining that caution has held him back from taking larger positions.
Robertson, who founded Tiger in 1980 and built it into one of the world’s largest hedge funds, said that for now he’s wagered against Italian sovereign debt, which yields less than U.S. government bonds. He said he’s watching German sovereign debt, whose negative yields seem “absurd.”
“There are a lot of fixed-income bets we should all be looking at,” Robertson said.
The former hedge fund manager, who now oversees his own fortune, echoed previous criticism that he’s leveled at the Federal Reserve for keeping U.S. interest rates ultra-low for an extended period.
“I think we’ve lost our way,” he said.
Robertson blamed recent underperformance of hedge funds compared with market indexes on increased competition across the industry.
“There’s too much talent in the same game and shorting, which when I got into the game was a license to steal, is now a license for bankruptcy,” he said.
Even so, Robertson hasn’t lost faith in the industry that made him rich.
“Despite the fact that I think we’ve all been beaten around for the last several years, the hedge fund is a great way to run money,” he said.