Trends Watch: February 22, 2018

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks to James Koutoulas, CEO at Typhon Capital Management.

What is your outlook for alternatives, specifically managed futures?

We will see alternatives start to gain more traction toward the end of the year and as the equity gains start to slow and investors look for uncorrelated protection. The other interesting trend is advisors leaving big wire houses and looking for unique alternative investment opportunities that separate them from the crowd and help establish their own brand identity.

What is your outlook for the economy?

We have entered a rising interest rate environment that has been clearly signaled by the Federal Reserve. The passing of President Trump’s Tax Reform Bill has had a positive effect on equity markets in general. This should lead to extended expansion in the short term. However, from a year-over-year time perspective, we are closer to the next recession than the last.

What keeps you up at night?

The bond market. I am concerned that basis risk could have an antagonistic effect across the broader market. We have been constantly monitoring credit spreads looking for indications of an adverse change in structure.