Hedge Funds Are Wrapper in Fee Structure: Singer

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July 31 (Bloomberg) -- Ramius President and CEO Michael Singer discusses Argentina’s debt default and hedge funds on “Market Makers.” (Source: Bloomberg)

And bolder.

In hundred $75 billion in their coffers, 272 campaigns worldwide.

They are going after really big things -- entire nations will stop the regime husband and wife have not done a great job running the country.

The peso broke and it's been unmitigated disasters one after the other.

Billionaire investors will step in and take advantage.

Let's are you invested with elliott?

You run an alternative investment form, right?

We are not invested with elliott.

I just had to ask.

Let's think of elliott management and pulsing her for a moment.

What happens if argentina just decides not to pay?

That is the approach they have taken up until now.

It sounds like an activism more between hedge fund and sovereign nation, it sounds like a great story and it has been a great story but does it end up working out for singer?

I can give you the ultimate answer, but one i do that, we invest a lot of money with pulsing or.

He is a winner and he and his team will figure out the right tactics step-by-step as distressed investors come out ahead.

I cannot map it out -- you can't map out a scenario where he doesn't win?

He's one of the greatest hedge fund investors of all time.

The don't want to take him out.

It is a losing battle.

Tell me what strategies are winning right now.

I'd love to.

Me tell you about a throwback strategy.

Merger arbitrage.

Robert rubin, some legendary hedge fund managers -- eddie lambert came out of there.

It is an all-star crew.

Any 80's and 90's, it was a terrific strategy.

And and a volume was high and they made money.

After the tech bubble, it died and the went away as a single strategy.

Now it's back because m&a activity is rocking.

We haven't seen volume ike this since 2007. big massive deals over $10 billion.

This is where they love to play.

They can pick up spreads.

Companies are getting more expensive.

This is where you can make a bunch of money.

Here is your high yield substitute.

We are in a yield starved environment and i can tell you we have an event driven equity mutual fund and it does mergers and we follow the world's greatest -- the greatest currency in the arbitrage market is information.

There's so much more information available today in the late 80's and early 90's. how can it be as successful a strategy as it was then customer i have an answer.

It's a commoditized strategy.

It's picking up nichols in front of the steamroller.

Warren buffett did well picking up cigar butts.

That's a smart way to approach it.

Focus on the big deals and go outside the u.s.. use the appropriate amount of leverage and you will get a heck of a high yield substitute.

Our team does that terrifically.

You are known as an alternative guy.

What does that mean to you and how do you define it is to mark i like that you said i'm not a hedge fund guy because we show charts about how hedge funds performs.

Nobody ever puts up the line is as traditional asset management performs like this.

That wouldn't tell you anything.

It's just a wrapper and the fee structure.

Hedge, private equity enter capital, but don't call it hedge will stop their main bucket of strategy, tactical trading, event ribbon.

If you tactically make the right bets, you will perform well.

People don't that on all hedge fund strategies.

They might like long term strategy and might like some systematic strategies and don't want to do long-short credit.

But if we are approaching a bubble, does it make you feel uncomfortable that we talk about alternatives.

They sound pretty illiquid to me.

Hard assets stop fax hedge funds are being wrapped in mutual funds not to provide daily liquidity.

Almost every hedge fund reggie except certain credit strategies are very liquid.

You see almost everyone represented sold to retail investors eating the same benefits.

However, there are a number of hedge funds and even those being wrapped in the paper of a mutual fund whose underlying assets are far less liquid than the daily liquidity offered in the investable security.

Isn't that dangerous?

I don't know which one that one is an matching liabilities is critical and i have to hope smart managers will do that.

We have made that mistake for.

They have.

Here's what's happening and it's an interesting dynamic.

We announced a strategic alliance with them this year.

Hedge and traditional management, eyes would say they were the strangest bedfellows but we have an amazing partnership.

Alternative people who spent their career looking at alternative tonics and matching assets and liabilities learn the fund to fund his miss can pair off with traditional folks who don't know it as well but have great distribution.

Then you avoid those problems.

I am hopeful people won't make mistakes and rat mutual funds with illiquid strategies and have a headline that they can't make liquidity.

I have my angers cross because it will bring down all ships.

If you invest with the right folks -- if you map up with the right partner, you will get a good rod.

I'm not so worried about it.

Hedge funds are more look with

This text has been automatically generated. It may not be 100% accurate.


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