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Sohn 2018 Was A Wake For The Golden Era Of Hedge Funds

Sohn 2018 Was A Wake For The Golden Era Of Hedge Funds

So, the 2018 Sohn Investment Conference definitely happened yesterday.

In some respects, it was like Sohns of the past: The venue was packed with hedge fund types and their hangers-on, Avery Fisher Hall sparkled, CNBC still showed up to film the whole thing and a lot of money was raised for the vital fight against childhood cancer.

And yet, in many more respects, Sohn 2018 was very different from previous versions: the troika of hedgie legends that made Sohn “Sohn” was visibly missing a member, the ideas overall felt tamer, the program as a whole felt looser, limper and considerably less “star-studded.”

While the organizers of Sohn admirably kept up the aesthetic quality of the whole affair and nothing felt acutely amiss, there seemed to be an air of resignation hanging in the ample air of Avery Fisher Hall, a silent acknowledgment that it is finally time to bury and mourn the gods who brought about the golden age of hedge funds.

When you think Sohn, you think Ackman, Einhorn and Gundlach. The conference has come to rely on these three characters as tentpole performers in its staid, finance nerd circus. But Bill Ackman is no longer “Bill Ackman” and even he realizes that, so the man most synonymous with Sohn was not even in attendance this year. His absence was felt keenly and commented upon with frequency by those in attendance, many of whom openly mocked his presentation last year and are already kicking dirt on his professional grave. But even a weakened Ackman is more of a draw than most hedge fund managers having the best year of their investment career, so it takes a lot to replace him on the agenda. In days of yore, Sohn could have turned to reliably verbose bold-faced names like Paul Tudor Jones, Paul Singer, Seth Klarman, David Tepper, Stan Druckenmiller, Jim Chanos or Howard Marks. We’ll be subtle and just say that none of those people appeared at Sohn this year.

The people that did present were not the most famous faces in the hedge fund game, but a spot at Sohn has the juice to make you one if you come out with some bold call that pans out the right way. Unfortunately, what was talked about from the New York Symphony stage yesterday was not exactly the stuff from which legends are made. To our [admittedly dumb] ears, the investment ideas on the whole were well-researched and likely had financial merit, but there was nothing that made the theatre whisper with gossipy excitement. No one got up and sent the press room into a tizzy with something wild and crazy and we didn’t notice any niche controversies being born. Even the whippersnappers of “Next Wave Sohn” kept it somewhat vanilla. [That said, we have to offer props to Nathaniel August of Mangrove Partners for putting “Fuck” in a slide.]

And the living ghost of Bill Ackman was no help on this account either. The bloody saga of Herbalife started with a Sohn presentation, and CNBC’s Scott Wapner was at Lincoln Center yesterday, flogging his new book on the subject less than 20 yards from the door to the auditorium. It spoke volumes that his tome about what once happened at Sohn got more attention than what went on inside. Bill Ackman and Carl Icahn loomed large at Sohn 2018, but by their absence.

At points, it seemed like the organizers of Sohn tried to acknowledge the relative “meh” of this year’s program. From the stage, a conference official let the audience know that Jeff Gundlach was wearing a pretty amazing suit, and that his appearance was coming soon. Any event that is suddenly relying on the sartorial stylings of a bond trader is in obvious trouble, but even we have to admit that it was a pretty spectacularly ridiculous suit. That said, Jeff Gundlach’s suit kind of stole the whole show, and that’s not great.

In terms of market-moving presentations, Chamath Palihapitiya of Social Capital presented a strong enough case for Box that the AI company saw a real boost in trading, and Chamath’s fireside chat with Bill Gurley turned into a Silicon Valley mean girls burn book-writing session as Gurley threw subtle shade at Google, Hertz and SoFi. These were enjoyable moments, but they were also thanks to venture capital guys, not the 2 and 20 cowboys that everyone used to come to see.

As the afternoon wore on, it became more and more obvious that the real theme of Sohn 2018 was “Hedgie Ragnarok.” The guys who made hedge funds “sexy” [never have quotes done heavier lifting] were not on stage or in attendance. We saw Whitney Tilson casually schmoozing during lunch, and Marc Mezvinsky was there for a few minutes, carrying a tote bag and looking as if he wandered by on the way home from Zabars, looked up at suits on the Avery Fisher Hall balcony and thought “Oh shit, was Sohn today?” [which, if so, baller move]. We didn’t see Leon Cooperman pacing around and waiting for his hit on “Halftime Report,” nor did we catch a glimpse of Dan Loeb unsubtly staring around the room with a coy grin wondering who to pick a public fight with next.

What we did get was an agenda anchored by David Einhorn.

In case you haven’t heard, D-Hornz is not having the best run of luck recently, and his “Bubble Basket” looks more like a puddle of soapy water that makes money disappear. But Einhorn is one of Sohn’s most favorite sons, and he know better than almost anyone how to make a presentation hum in front of that crowd. So what better place for David Einhorn to swing for the fences and save a conference that was being dominated by Jeff Gundlach’s obviously emotionally unhinged tailor?

Einhorn presented his short trade of a mid-sized bond insurer.

Suffice it to say that we watched more than two dozen people decide their time would be better spent getting on line for cocktail our than hearing out Einhorn’s investment thesis.

But Einhorn did do one thing that put a beautiful coda on Sohn 2018, he wore the same tie that he wore to his first Sohn in 2002.

We don’t pretend to know if Einhorn intended to convey a deeper meaning with his choice of neckwear, but we definitely felt a little misty at the end of a long day spent mourning the golden age of hedge funds, sitting in Avery Fisher Hall, looking at a piece of hedge fund history…and the tie he chose to wear.

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