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Trends Watch: May 17, 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 Mitch Sacks, Principal, Grand Slam Asset Management. 

What is your outlook for the hedge fund industry?

There has been this whole move to passive over the last five-ten years which has coincided with a bull market in fixed income and equities. To some extent, it hasn't been tested with volatility. Additionally, Facebook, Google and other tech names seem to be under pressure. To the extent that the bubble deflates, we will see an improved return profile from active managers over the passive ones.

What is your outlook for the economy?

Near term, we are very positive due to the combination of tax reform, full employment and wage inflation. The only sort of overhang we see is if there is a spike in inflation that can tamper things, especially if there is a potential trade war. Also, there is a negative aspect in high-yield fixed income assets. If this bubble pops, that can provide a negative stimulus.

What keeps you up at night?

There are two things keep us up at night. First, there is the potential of a trade war. We don't think there is going to be one, but if there is one, that would concern us. Second is the increased government regulation, especially in the European Union. We think that could put some damper on businesses if regulations were to increase and would also hinder economic growth worldwide.

Elana Margulies-Snyderman is an investment industry reporter and writer who develops articles, opinion pieces and original research designed to help illuminate the most challenging issues confronting fund managers and executives.

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