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

Huge Institutional Investors Shifting Capital Allocation


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.