Trends Watch: May 4, 2017

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 Bahman Mossavar-Rahmani, Founder and CIO of UAS Asset Management.

What is your outlook for the hedge fund industry?

Hedge funds with a well-defined investment approach and a history of solid execution will continue to have a place in diversified portfolios. On the other hand, hedge funds that place bets, effectively acting as high cost trading vehicles, will have meteoric moments but limited lives. Overall, new entrants to the industry will continue to experience a high attrition rate.

What is your outlook for the economy?

Trying to predict the economy over the short haul is a distraction and an exercise in futility. We have an optimistic long-term view of the American economy and the world economy in general. Our optimism is based on favorable demographic trends and accelerating advances in technology.

What keeps you up at night?

In the U.S. we are concerned that over-regulation, if not reversed, will clog the free enterprise system and slow the rate of innovation and growth. We are also concerned that fraying morality, ethics and values on one hand and growing social, economic, and political divisions on the other will erode the fabric of our democracy and its system of checks and balances.

Globally, we are alarmed by a rise in authoritarianism in countries like Russia and Turkey and the nuclear threat from North Korea. Longer term, we are concerned about large scale job loss and resulting social tensions due to advances in artificial intelligence. We are also concerned about potentially catastrophic declines in consumer and financial market confidence brought about by persistently high debt-to-GDP levels.

We are confident that the above domestic and international concerns will ultimately be addressed and that America will continue to provide critical leadership in world affairs.