Hedge funder Hintze: Nothing is going to blow up the markets
Top U.K. hedge fund manager Sir Michael Hintze echoed consensus market forecasts in a relatively bullish 2014 outlook piece for clients.
"I see more 'pot holes' than 'black holes,'" the founder of $12.6 billion CQS wrote. "Markets have run a long way and expectations are high, however, I think the overall direction of markets is probably upwards, albeit at a more moderate pace than in 2013."
Hintze highlighted several investment ideas for the coming year. One was floating rate and short duration bonds, such as asset backed securities like commercial mortgage-backed notes and senior structured loans, especially in Europe.
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Another was European convertible bonds. "[They're] well positioned to benefit from increased corporate activity and have attractive event/takeover protection," Hintze said.
A third was European stocks, which CQS believes offer some bargains because of "mispriced" assets.
Hintze said he isn't too concerned with a major market downturn. "What I mean by 'black holes' is that I cannot see anything presently blowing up the markets," Hintze said.
"I sense no one else can see it either, and that in itself is a potential danger. Policy makers and central banks have, by-and-large, put in place guidance and policies to mitigate many of the systemic risks out there over the last few years."
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On the U.S., Hintze was also bullish. "The overall picture is encouraging," he wrote. "In the US, the economic momentum continues and the longer-term fundamentals (cheap energy, self sufficiency in agriculture, positive demographics and innovation) are supportive."
Hintze's views translated into strong profits so far this year. Through November, the $2.3 billion CQS Directional Opportunities fund is up 13.5 percent—after gaining 35.9 percent in 2012.
A spokesman for CQS declined to comment.
—By CNBC's Lawrence Delevingne. Follow him on Twitter