Elana Margulies

05/10/2011 Author: Elana Margulies

Allocators eye macro and distressed debt

Investors, anticipating the beginnings of a global double dip recession, are showing continued interest in distressed and macro strategies, as they look to ward off the fall in equities.   

At the Information Management Network’s 2011 Fall Investment Series, which took place in Miami last week, chief investment officers from institutions ranging from non-profits to private wealth managers made the argument for ‘recession-proof’ strategies.

Laurance Hoagland Jr, CIO of the William & Flora Hewlett Foundation, in the conference’s keynote discussion, told delegates that one year ago, the allocator decided to boost its target for distressed investments from 10% to 15%. “Investors understand this distressed cycle isn’t a typical distressed cycle,” he said. “This is a deleveraging and monetary crash.”

The University of Connecticut Foundation also has its eyes set on distressed debt; Lehigh University is ramping up exposure to macro managers; and the Krusen Family Office expects both strategies to do well.

The University of Connecticut, which is seeking distressed opportunities in various asset classes, argued at the event that investment could be seen as a provider of liquidity while Lehigh has been employing macro managers to get currency trading exposure.

Charles Krusen, CIO of the Krusen Family Office, explained why both distressed and global macro were poised to do well, adding global macro would continue to prosper due to major changes in its asset classes, including currencies, commodities and a renewed interest in emerging markets.

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