CQS Cayman LP is a London-based, multi-strategy credit-oriented asset manager that was launched 20 years ago by billionaire Sir Michael Hintze, who is its Senior Portfolio Manager. Aside from its main headquarters, which is in London, the fund provides offices in Hong Kong, Sydney, and New York as well. CQS Cayman LP has its focus on the credit sector with expertise in corporate and structured credit, loans, convertibles, and asset backed securities. Currently, it has around $18 billion in assets under management.
Sir Michael Hintze had the beginnings of his investment career at Salomon Brothers, after which he joined CSFB and Goldman Sachs. He graduated from the University of Sydney with a B.S. in Physics and Pure Mathematics, and B.E. in Electrical Engineering, and from the University of New South Wales with M.Sc. in Acoustics. He also earned an M.B.A. from Harvard Business School and received a DBA (honoris) from the University of New South Wales.
The fund’s Chief Executive Officer is Xavier Rolet, who was also CEO of the London Stock Exchange just before he joined CQS Cayman LP. Xavier cut his teeth on the International Arbitrage desk at Goldman Sachs & Co in New York, and during his long career, he also worked for Credit Suisse First Boston, Dresdner Kleinwort Benson, and Lehman Brothers in France. He earned his M.Sc. in Management Science and Finance from the KEDGE Business School, and an M.B.A. from Columbia Business School, and a post-graduate degree Paris-based Institute of Advanced Studies in National Defence. In a recent interview published on Bloomberg, which actually presented the sidelines of a Milken Institute conference in Tokyo, Xavier Rolet shared his views on a few important issues.
First, he talked about China and Japan and explained that his fund invests globally and that it has a serious presence in Asia. When considering the configuration of the curve in Japan, Xavier recognizes the opportunities for Japanese investors to take their investment overseas and through CQS Cayman LP offers assistance for it. And when asked about whether he thinks that Europe is in trouble at the moment, Xavier Rolet responded that in spite of the current circumstances, “Europe still offers a few good opportunities”, especially in the distressed sector. But, if someone is to look for the growth in AUM and to look at the global GDP, they will notice that China and the US stand for almost 50% of nominal GDP on a global basis, whereas “50% of assets under management growth last year were in China alone, and this where investors today are looking for opportunities”.
Furthermore, Xavier Rolet discussed the details of the Chinese economy, explaining that it is at the crossroads, switching its focus towards the consumer economy and an expansion of capital markets. “China is reconfiguring itself to look a little more like the US”, hence it is starting to provide great opportunities for investors.
Speaking of the global economy, Xavier Rolet is optimistic in spite of the obvious slowdown. Even though, as he acknowledges, every major flattening of the curve of the US in history, was only an introduction of a serious economic slowdown, and sometimes even recession, this time he is optimistic because he thinks the current conditions are actually technical.
“We consider that these conditions at the moment are rather technical. They are linked in part to Treasury issuance, particularly on the short-end of the curve; the Fed’s balance sheet is essentially of a longer duration.” – said Xavier Rolet, concluding – “These are temporary conditions, we believe the credit cycle has a few more years to go.”
For more details of the interview, take a look at the video below:
This article was originally published at Insider Monkey.