Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Huge Institutional Investors Shifting Capital Allocation

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The largest institutional investors in the world are increasingly looking for investments that generate positive "contractual" cash flows, as opposed to mark-to-market paper gains, according to both panelists and attendees at the Skybridge Alternatives Investor Summit.

Greg Zuckerman of the Wall Street Journal moderated a panel with the misleading title "A Balancing Act: Current Trends in Alternative Asset Allocation."

I say misleading because the phrase "balancing act" implies a tight rope walker carefully stepping forward.

But the panelists were not hesitantly tapping toes on a wire — they were very confident in their desire to move away from "global macro" and toward cash-flow-producing fixed-income investments.

"We're looking at strategies that throw off cash flow ... substantive gains," said Skybridge Capital managing partner Ray Nolte.

"We're trying to get away from macro and mark-to-market gains," Mark Okada, co-founder and chief investment officer of Highland Capital Management, L.P. said.

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