YouSaid · the spoken record

Kyrill Asatur

lines on the record: 77
first: 2022-07-18
most recent: 2022-07-18
sittings or episodes: 1
sources: podcast

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“On Twitter, I've been trying to get more active there. My handle is Wall Street Hobbs. It's W-A-L-L-S-T-H-O-B-B-E-S. And obviously Centerfin.co. I'm at Cairo at Centerfin.co. And happy to engage with people. Always happy to chat and have a dialogue.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“In a tougher place because they're facing the same kind of recessionary pressures that the US is facing, but they have the additional problem in that the ECB has been even, you know, so they have inflation, they have recessionary fears, but the ACB has yet to really change their kind of stance. And so there's a higher probability of things breaking there. And you're seeing that a little bit in terms of fragmentation of government security's yields into various different countries. And that's something worth following. But that's one place that maybe if you nothing seems obvious at the moment. It's a very tough environment. But if I had to choose a place that seems where we can take some action right now, it would be to just. Kind of get out of European equities at this point.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, very active internal discussion, you know, generally speaking, we've been bullish on emerging markets, but obviously emerging markets have this headwind of the dollar that we've experienced. Emerging markets are also there's decent correlation between commodities and emerging markets. So it's kind of similar.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“From a technical perspective, there's no reason why it can't go that high. That would be potentially really interesting if that were to happen. But it seems like the more likely thing is that that strength should abate in the coming months. And I think that that's just going to be, you know, I don't think there's anything to do about that, except for the fact that that's going to be bullish for commodities. And we already have a decent amount of exposure there. And so I think that would be, that's actually, we think one of the things that's been part of what's been holding or the recent weakness in commodities has been due to this dollar kind of crazy dollar strength that we've witnessed.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so we were literally just talking about this this morning. The dollar has been kind of a rocket ship. If you look at the chart, it looks like a tech stock from two years ago. And that has ramifications, right? That has ramifications fundamentally on companies. So U.S. multinational companies that derive some percentage of their revenue from outside the US, that's going to put pressure on that part of their business. It also has ramifications on the prices of commodities and has ramifications on other countries globally. And so I think we were discussing from a technical perspective, and again, this seems to be, I'm hearing more and more of this, so it seems like it's becoming consensus. But if you look at DXY, it's trading at 108, which looks really high on a short-term chart. But if you pull up a longer-term chart, it made a high of 120 back in, you know, 2002.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Discussing the world, and is the world ending or what's going to happen here? And one of the things that we had high conviction on is that macro as a strategy probably will become a much more viable strategy going forward because, again, not to beat a dead horse, but I think we're in a regime shift in markets because monetary policy has shifted from easy to tight and rates are going higher globally except for places like Japan where they're trying to hold them down. And I think these are all things that are worth paying attention to because it's going to create opportunities, not for us, but for those managers. And hopefully we'll find the managers we will want to work with to capitalize on some of those big moves.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“First of all, do we know the manager? Do we know them well? What does their process look like? Because the other thing that I think is interesting that I think you and I touched on offline is macro is not a really good strategy kind of post-financial crisis, similar to long short equity. And I think it's because we just had this kind of one way monetary policy globally, right? It was just, you know, an easy monetary policy. And so it's very hard when there's not a lot of changes going on as a macro manager to consistently make money, right? You either, you know, your best thing would have been to just buy risk assets and just, you know, hold on and buy the dip every time like we talked about. But the truth is that nobody's paying that manager to do that. They can do that themselves. I think I remember, you know, very distinctly our CIO, Ktunai in March of 2020 when COVID first hit, we were talking and kind of the”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Across different asset classes and geographies with the one kind of common theme that all of these views were implemented from a top down perspective instead of bottoms up perspective. So instead of looking individually at a company, a Coke versus Pepsi example, they're really looking high level and they're saying our US stocks expensive relative to European stocks or Japanese stocks or are interest rates in the US rich relative to yields in Japan or the Eurozone. So they're making they're analyzing things at a very macro level and then they're positioning their funds to take advantage of those views. And so I think as we progress here and as we talk to more and more managers and include potentially include them in the portfolios, it'll be the same exact thing as with any other manager.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, so currently we do not have a macromanager exposure for clients. We do actively speak to very smart macro managers on a regular basis, and that kind of helps inform our macro views and how we think about asset allocation. But I think global macro is one of these strategies. And to take a step back, I think global macro is one of the earliest hedge fund strategies when the hedge fund industry was still very, very nascent in the 1970s, I think 1960s, 70s. A lot of the managers that kind of emerged at that point, and these are like legendary names like Druken Miller and Soros and Paul Tudor Jones and Lewis Bacon, the basis of how they invested, I think almost always came down to macro, global macro. And what that means is why it's hard to define is because I basically gave them free reign to do whatever they want.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“I really wouldn't say so. I think a lot of these companies still, I think the space is still early. And so I think that you've seen massive drawdowns, as I'm sure you're familiar with. And some of these stocks might look cheap at a very high level.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“That makes sense. Do you have, and of course, everything that we say in this podcast is not investment advice. Do you have a single company in crypto that you're just wildly bullish on that you think is super undervalued at this current stage?”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“It's not, it's no longer, I think, a regulatory thing, but I do think Think it's more complex than, and there are certain companies that have made some strides, as I'm sure you're aware of, in allowing for RIAs to own crypto directly for clients. And it's not, you know, it's definitely something on our roadmap. But at this stage, we think that that's the, it's not by any means an analytical decision. It's more of structural decision, I would say.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“And that preference, that choosing the crypto companies over cryptocurrency, digital assets, is that a preference that you're making that's purely from an analytical sense or is it a regulatory thing? Like you want to own crypto, but you just can't because of the law.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Correct. Yeah. So similar to our discussion on commodities and commodity equities, there are now crypto equities. There's now enough of them that you can have a diversified basket of companies that are highly correlated to what's going on in crypto. And we think that at this stage, that's appropriate in a small way.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“So, yeah, so we have a small allocation. We actually have just a 1% allocation to a, well, currently an ETF that is highly correlated to crypto. This wasn't available even 12 months ago, but there's been, if you follow, I'm sure you know there's been a bunch of products that have been launched that kind of give exposure. And that we think is the appropriate exposure today for clients in the space because you have the kind of added benefit of these are publicly traded companies and publicly traded ETF. So there's a little bit of protection against some of the negative elements of crypto that I'm sure you hear about all the time. But yes, we do.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“On it, but I think that it's still early, and so we need to see how things kind of turn out before we make any decisions as a pertains to clients.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“It gets caught up in these narratives and boom and bus cycles and whatnot. But at the end of the day, I think Bitcoin to me makes sense. And I think Bitcoin will continue to be around. And I think that Bitcoin belongs in client portfolios or some small exposure to crypto belongs in client portfolios, but it needs to be sized accordingly because it's super volatile and super early in its life. And so that's what we recommend. That's what I've been recommending even before Sunderfin to friends and family is one to three percent of exposure into the space. Some people have listened to me. Some people have not listened to me. Some people have a lot more exposure. And that, you know, that felt great until very recently. So yeah, so I think that there's something in Bitcoin. I believe in that. I do believe there's some stuff going on in crypto that is also very, very interesting and we follow and are fairly educated.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“At the bank, it's at the bank. It's not your money. The bank is holding it for you. Bitcoin is super unique in that if you hold it in your private wallet with your private keys in a cold wallet, nobody, unless they physically take it from you, nobody can take that Bitcoin, right? And so my view is really informed by, I grew up in the Soviet Union. We left there as refugees in the late 80s. We were not allowed to bring anything with us. So, you know, any, you know, we didn't have any wealth, but we weren't allowed to bring anything out of the country, right? And so if you kind of take a step back and you think about what's going on in the world right now, is there a need for a sovereign less money, right? Like a money that's not tied to any country or any government. I think there is. And I think that's the use case. And I think that crypto kind of built on that.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“The million dollar question. So we talked about this a little bit offline, but behind me is actually a copy of the Bitcoin white paper. So clearly I'm a buyer of the space and a believer in the space. But I think I need to make it clear that I think crypto became, and I think it's all a function of the same thing, which is this very easy monitoring environment that provide liquidity into risk assets and speculative assets. And crypto is kind of prominently at the top end of that speculative ladder. But I do think that Bitcoin as a concept makes sense to me. And the reason is that Bitcoin has this very unique property in that it is money or value that has no intermediary, right? So if you have, you know, no matter how much money you have, if you have it.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“So, all of our accounts are held at a broker dealer custodian, and we're the investment manager of them. So that's how it's structured. And I think that our goal would be that we can help our clients kind of see the point of view. Obviously, it's the clients' money. And so we're kind of beholden to them to do what they want to do. But I think that at least in our experience thus far, I think that we've been able to explain to folks how we're positioned, why we're doing what we're doing. We put this all out there. So, you know, it's all out there. We have published our views publicly. So, you know, people can go back and read and grade us. And we're never going to be 100% right. But I think the decisions we make are thoughtful based on everything that we're experiencing and observing. And I think that thus far anyway, our clients have been very happy to kind of let us help steer.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“In this environment. And so I think that's something that needs to be actively monitored. And we have a very healthy dialogue around that pretty much on an hour-by-hour basis.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“We're not buying the dip, nor are we shorting the rally. Again, I think we need to balance, we have to take a step back every time we have these discussions and think about a time horizon that we're working with, right? So we're working with 10, 20, 30 year time horizons. And so we have to balance our view of what to do tactically versus that long perspective. And so what that's meant is just tactically tweaking the portfolios as these markets have been developing. And that's an ongoing process. And that's why we think we talked about it earlier that what Centerfin is not categorically is a robo advisor because we think that having some sort of predetermined rules around rebalancing and asset allocation that don't dynamically change what's going on in the market, we think that's not going to lead to good results.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Whether or not the retail investors will be the last to capitulate. And our CIO, I think, has maybe a contrarian view where he thinks the retail investors actually have a much longer time horizon, which is true, because they're not beholden to themselves. They're not beholden to any other stakeholders. And I think my view is if you look at history as a guide, the retail investors eventually capitulate also. And so, and that may be the, you know, you were asking about science, but if we stop seeing that by the behavior from retail investors in the kind of near to medium term future here, that might be the sign of a bottom.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“About which fund manager they like and who's been performing well for them and who's not. And that tends to kind of drive their behavior. Now, not to say that there's not super high quality asset allocators out there. There are, but I think that some of those biases that are typically really associated with retail investors exist with institutional investors as well. And the other thing I'd say is that I think right now is very important to point out that there's recency bias. And so we were talking about before, you know, the Fed put and buying the dip. I think that there's kind of, again, I think that's across the board, permeating the institutional and retail investor universe. And as we talked about before, the hedge funds have gone kind of risk off and defensive. The retail investors have yet to do so. And we have this debate in terms.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, great, great question. I think in my experience, dealing with institutional investors for my whole career, almost 20 years of kind of interfacing with institutional investors, I think my conclusion has been that they are prone to the same behaviors as retail investors, right? So they're humans, right? It's not a knock at all. These are human beings that are in these roles of allocating capital to either directly into the markets or to managers to manage on their behalf. And at least to speak to managers and manager selection and manage our allocation and asset allocation, what I've experienced with institutional investors has been a lot of the same kind of biases as retail investors. So there's a lot of performance chasing. There's a lot of groupthink, right? So institutional investors like to get together and they talk.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Correct. Yeah. And institutional investors, they prefer that, right? Because who likes to see during COVID crashing, 35% in six weeks, nobody likes to see that kind of drawdown.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“And at the company level, right? And so companies using cheap debt to lever up their, to use that as financing, some companies may be able to support it, some companies may not, right? And so I think we're going to see a washout of this. And so I think for us, we'd rather wait and see how this all plays out before we make any big decisions that way.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Quarterly performance numbers, you're not getting weekly or monthly estimates or anything like that. And so I think institutions like not having that mark-to-market. And the environment's been very conducive to it. That's another one where I think there's been a lot of money raised in venture. And I think it's supported a lot more startups than would have been viable in a different market regime. And so, you know, I mean, I think there'll be books written on this later, but I do think at a very high level, all the capital that was kind of pushed into the system, kind of post-financial crisis and post-COVID created an incentive structure that caused for bad asset allocation decisions to be made, both on the investing level from professional investors, retail investors.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“So not currently, and it's not, I wouldn't say never, but it's not in the current even pipeline or kind of roadmap for us. The reason is I think, again, my personal view on private equity is private equity is just levered equity, right? What do most private equity managers do? They buy a company, they take it private, they put a bunch of debt on it, and then they hope that they get an exit on their equity that's higher than what they paid for it. And so I think that, again, that worked really well in the environment that we were living in, not quite sure how it's going to work going forward. But I've always been kind of skeptical of the strategy. It's been very popular with institutions. And I think it's largely because performance has been good, but I think it's also largely because there's not as much mark to market as there is in public securities. And so, you know, you're getting, you know, you're getting.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Is probably going to be more relevant than it has been in the prior decade or so because you have this turn in, I think what we're seeing is we've seen this massive move to passive investing over the last decade because that's what's been working. And it's because we had this liquidity just driving asset prices higher. We've seen a turn. And so I think that that's going to create opportunities for stock picking. And I think that it's going to set it up for long short managers to actually generate some decent performance and outperformance.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“And that's what helped maybe the lower quality funds not be as evident than they would be otherwise. I think what's happened since the financial crisis because interest rates have been at or near zero since then is that that interest element and that rebate element went away. In fact, on the short side, you now have to pay to short stocks. And that kind of like turned that structural element upside down. right and so that's made that's made performance for long short funds challenging and i think that we're we're you know you know if i were to make a call you know bullish or bearish on the hedge fund industry”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“You had a gross exposure of 100% net exposure of 20%. So on your 40 cash, you were receiving interest minus whatever prime brokerage takes as their cut. On your short balance, one of the things that I think people is lost on people is that there used to be a rebate, a short rebate. So whatever you would get paid a short rebate on your short. So on that 40%, you would get paid some percentage also minus whatever the banks take. And so combine that with whatever beta you have in your portfolio, you were structurally creating a decent return. And if you were to add some alpha, right, if you were actually making alpha on the long and short side, you were getting into double digit kind of net returns for investors while taking less risk. And so I think it was a structural issue that helped a lot of.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Both the leverage and a short availability to long short funds. So I'm fairly familiar with how structurally how everything works. So I think there was a structural advantage to long short funds pre-financial crisis because interest rates were above zero, which they're going back to now. And so you got paid, you know, so let's say you ran 60, 40. So you ran 60 long, 40 short. So you had 40 cash.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, it's a great question. So I do think that. Their positioning does have an impact on markets, especially in this environment. So we were just talking, I mentioned we were just talking to this technical strategist. And these surveys are widely available now. So this is not like anything that's super surprising. But, you know, hedge funds have been kind of in risk-off mode to your point for a while now. What hasn't happened is actually retail has actually been buying dip this whole time. But hedge funds have been degrossing in risk off mode since kind of the late last year, some earlier this year. And I do think it affects markets. But I think to answer your question in a different way, I think that my personal view on long short is there's a structural kind of pre-financial crisis, and this is when I first started in the hedge fund industry sitting inside Prime Brooker at Goldman, which provided.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“I want to go back to the long short. So I know that because the spread between two stocks can be quite small, like Long Disney and Short Netflix, they let these players, they lever it up a lot because they're like, oh, it has an R squared of 0.95. But what if, you know, Disney has an earnings analysis or the correlation changes and suddenly they, you know, are on the hook for some serious losses and then they have to degrowth their entire book. And so they reduce their positions massively across the board. To what degree when we see, you know, oh my God, this stock's up 10% or this sector ETF is down 4%, to what degree is that due to sort of the long short players? They run a pretty big line, right?”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“No, this is, I think that's a great, great, nuanced, and thoughtful question because I think this is where our experience in the industry comes in. It's understanding, first of all, knowing the managers and having kind of firsthand knowledge. This is not, you know, we're not like going through rankings on Morningstar or anything like that, right? Like we know these folks, we've been in the business with them for a long time. So knowing who are the not only the quality investors, but who are the quality people because at the end of the day, you're investing with people and you want to make sure that they're, you know, super high quality individuals. And understanding what their strengths and weaknesses are and is their fund or business set up to take advantage of whatever they're trying to take advantage of. And so there's no, I don't think there's any hard and fast rules. I think for every market and every kind of strategy, it's going to be different. But that's kind of where our”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, how do you think about size? Because on the one hand, you want to trend follower, right? You want to invest with someone who has done really well over the past 10 years, but someone who's done really well over the past 10 years would have like a billion dollars under management. And it's a lot harder to trade with a billion under management than 30 million under management. So are there certain sizes where, oh, you won't do, you know, if it's smaller than 30 million, we won't do it. If it's bigger than 10 billion, we'll never do it or no.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, that's a great question. Very near and dear to my heart of a question. It is somewhat of a cyclical strategy. I think our view is that if you're a manager that has, you know, oak tree is a good example, right? They have tens of billions of dollars in each fund vintage. They're an amazing long-term investor that's been around for a very long time. When there's not stuff to do, I honestly don't know what Oak Tree does when there's not a lot of stuff to do. That's why I think our view would be to focus on managers that try to stay relatively small and focus on things that are sub the oak tree size in terms of the investable universe. And if you do that, I think that there's a much more sustainable strategy that can, you know, there's always something that's breaking. And so if you're not too big, you can actually.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“And what do so, I imagine those distress type funds very profitable during times like 2008, pretty profitable in 2020, although the distress did not really last long enough for people to gain a position. But what do distressed funds do when there is no distress? And, you know, credit spreads are at two and everything is hunky-dory.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Well, you have to remember the distressed investor is not owning it at 80. They step in when it comes to 60, and usually they step in when it's at 20 or 30, right? And so the high yield funds are no longer owning that asset. So they experienced that first leg down. The distress guys come in later. And that's why it's not correlated to those assets. It's really a strategy that's based on an event. And the event might be restructuring, might be liquidation. It's not so much, you know, at the whims of the market, so to speak.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“That surprises me. Because, you know, if it's. Distressed bond becomes distressed when a high yield bond sells off from 80 cents to 59 cents, right? So as it's falling, as it's a falling knife from 80 to 59, high yield is not doing well. So wouldn't that correlate immediately to distress?”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“30 cents of value in that bond. But there's two different outcomes for that, right? You can restructure the company if the debt is trading at 30 cents. You're probably going to restructure the company. And you're going to receive equity in the new company that comes out of the restructuring. And hopefully the business model is sound and that equity will trade higher with the market. The other obviously the other scenario for distressed debt is liquidation, right? So the business, you know, if the stakeholders decide that the business is not a going concern, they're going to liquidate the assets and hopefully the value you get for those assets is more than that 30 cents that you paid for that bond. So that's kind of distressed at super interesting, not very correlated to either credit or equity assets, which is why we think it's interesting.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Has too much leverage, starts to have financial stress, the credit or the bonds or the bank debt or the loans of the company start to trade down in the market, distress debt investors, they step in at that point. And so what happens is that you have this very interesting dynamic. And we touched on it offline, but you have this very interesting dynamic is where you have certain firms that are their mandate is to own certain credits, right? They might have to have a certain rating. They might have to have a certain price when that breaks, when that price breaks or that rating gets lost, they have to sell those assets. And that's when the distressed debt investors step in because they're the ones that are going to help transition the company. They're only buying into it because they think there's value, right? So if you're buying a bond at 30 cents on the dollar, you think there's more.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Energy focus managers obviously, there's not a lot of those, but that's an interesting area of financials is another, not a lot of managers in that space, but it's another interesting area. Consumer stocks, there are some managers that are focused on just consumer stocks and real estate stocks, actually, that's kind of an interesting area where that's relatively new, but I think that that's where there are managers that can actually add value away from equity long short, there's, you know, to your point, distressed debt, I spent after Goldman, I joined a fund that was run by 2x Goldman Distressed Debt Prop investors, and that's a really interesting asset class because these are people that operate in the credit markets, really in the markets for highly levered companies. And they only really get involved when, as I mentioned before, when things break, right? So when a company that”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Than if you were just to own stocks, right? Because when markets go down, you're not going to go down as much as the market because you're also short stocks. Hopefully you're picking the right stocks. And when markets go up, you're actually outperforming the market. And so the overall return profile is a higher quality return than just owning stocks. And so what I've observed in my experience the equity long short space is the managers that I think stand out to us are sector focused managers. So these are managers that actually focus on specific sectors. So TMT tech media telecom has been a big sector, obviously very popular over the last five or six years. That's an interesting sector where if somebody's only focused on those stocks, that smaller universe of stocks, it's more likely that if they're good, over a period of time, they'll provide decent performance above whatever the underlying bench.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, no, we can spend hours talking about all the different types of alternatives, but to break it down into maybe kind of broad buckets, I would say, you know, the biggest, and let's just stick to hedge funds for the time being, but there's also obviously venture capital and private equity, which broadly speaking are part of alternative investing strategies. And so I think in the hedge fund space, the largest category today is equity long short. To your point, this is where a manager might be picking stocks long and short, positioning the portfolio to be long stocks that they think are going to outperform the market and short stocks they think are going to underperform the market. And so that's probably 60 to 70 percent of the market, if I remember correctly based on the latest stats. And what that does is it designs a return, again, if you're both long and short stocks, it designs the output of that is a return that's very different.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, definitely is hard to invest in a hedge fund without a lot of money for sure. So that's you're pooling the client's money. That's interesting. And then walk us through the different alternatives because the word alternatives, it can be very confusing. So there's long short, which is like long Disney short Netflix. Then there is distress debt, which is actually where you came from, right? How you started? So you're buying really off-the-run credit bonds that are trading at deep discounts. What else is there in the alternatives world? And why is it so important as a diversifier?”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Institutions actually pulling back from alternatives over the last five or six years. I think it creates an opportunity for us to come in and offer a different path for some of these hedge funds. And so we just have the know-how and the relationships to be able to diligence these managers and implement the strategies in client portfolios in a way that I don't think any other group really has that's doing something similar.”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Creates a diversifier for the portfolio, for the overall portfolio of stocks and bonds, because that's the core portfolio. And it also provides access to sometimes asset classes that are just not in stocks and bonds, right? And so our point of view was first of all, we have the know-how and the relationships to be able to diligence and understand between all of the managers out there who makes sense and who doesn't make sense. We have the relationships to actually access them because I think if you were to even five or six years ago, if you were to kind of pitch what we're pitching, I don't think it would have been a very easy thing to do. But I think that in this environment and this focus on retail and”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT
“Yeah, absolutely. So that was a big part of the thesis and really to take a step back. I think when we started talking about it, we were basically just looking at the way that a lot of the institutions that we've been dealing with or working with or working at for a couple of decades collectively manage money for the long term, they and the institutions I'm referring to are kind of endowments and pension funds and the like. They've been managing money in this way where they are including alternative assets into their asset allocation portfolio. And it's really designed to, it serves different purposes and different for different institutions and depending on their portfolios. But really it's trying to access a return stream that's not as simple as stocks and bonds. That's a little bit of a different return stream that's getting its driver of returns is different. And so it”
2022-07-18 · Forward Guidance · Making Informed Decisions as an Individual Investor | Kyrill Asatur · IDENTIFIED FROM THE TRANSCRIPT