Trends Watch: January 4, 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 Peter Lupoff, Principal, Lupoff Friends and Family Interests.

You’ve just converted to a family office. Why, and what is your outlook for alternatives?

After my stint at Millennium, I launched event-driven manager Tiburon Capital Management and ran it from 2009 until this past spring. It was a nice run, but operating as a family office allows me to manage to absolute return objectives without concern for liquidity or benchmarks. There is the adage, “a camel is a horse designed by a committee.” I found myself in the camel-building business but am trained to build horses. Alternatives face attacks on many sides: straight up un-hedged market returns in 2017, ETFs that deliver this cheaply, the concomitant ‘active vs. passive’ intellectual war and the prospect of machine-learning investing supplanting human/active. There remains an important place for active over passive, human, technologically-enhanced, over straight-up machine. Inevitable down markets in the future will prove this out.

What is your outlook for the economy?

The U.S economy is relatively robust. The ardor of Washington to deliver tax reform to help create jobs is a head fake. The market and economy are two different things. So long as earnings can continue to grow, the market can continue its ascent. The fear that our economic recovery since 2008 is both the longest and shallowest historically maybe missing the point, that post-QE and sea-changes in worker/commodity over-supply globally, this might be what recoveries look like going forward. Driving the car looking in the rear view mirror just might be wrong here. Nonetheless, I have expanded exposures to other non-U.S. markets.

What keeps you up at night?

My snoring. Under-appreciated geopolitical risk in the U.S.