A Davos Grows in the Desert: Why the SkyBridge Conference Matters

Anthony Scaramucci, managing partner of SkyBridge Capital introduces a panel moderator at the SkyBridge Alternatives (SALT) conference in Las Vegas, Nevada, U.S., on Wednesday, May 11, 2011. Ronda Churchill/Bloomberg News
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Hedge fund-of-funds manager Anthony Scaramucci is often referred to by his nickname, "the Mooch." His hair is coiffed, his shirts are pink, and he likes to spout eyebrow-raising quotes with the recklessness of a man who's living in a powder keg and giving off sparks. Take, for example, what he told New York Magazine : "I am a total shit-stirrer ... My middle name could be Shit-stirrer, except then my initials on my shirt would be a.s.s., and I can't have that."

In other words, Scaramucci isn't who you'd imagine as the creator of an event that finds statesmen like Bill Clinton and Colin Powell rubbing shoulders with economist Austan Goolsbee and Hollywood director Oliver Stone. Yet his SkyBridge Alternatives Conference (SALT), named for his firm Skybridge Capital, has grown from just another hedge fund pow-wow in Las Vegas into a gathering of influential thinkers, politicians, and philanthropists -- all with a celebrity sheen.

At this year's event, which kicked off Tuesday and runs through Friday, participants will hear former Israeli Prime Minister Ehud Barak discuss geopolitics with Leon Panetta. They'll watch Obama advisor Robert Wolf moderate a discussion on citizenship vs. partisanship between Scott Brown, Barney Frank, Harold Ford, and Karl Rove. Between sessions, SALT-goers might run into Al Pacino. Or watch him speak later, after which the band Train will perform. Also on the speaker list are Wall Street players like Mike Novogratz, Dan Loeb, John Paulson, and Sam Zell.

This lineup sets SALT apart from the long list of global hedge fund confabs. Such events usually are thrown by conference companies and driven by sponsors. Or they're hosted by investment banks and act as marketing exercises for hedge fund managers who want to attract new investors.

To be sure, SALT is still a flurry of hedge fund activity -- with money managers and bankers and reps from the big institutional investors networking by the pool. And there are plenty of panels with names like "Covering Your Assets: A Crash Course on Investing in a Macro Driven Environment" and "From Peril to Profit: the Art of Activist and Distressed Investing."

But SkyBridge believes that SALT has the potential to become a place for big ideas with wide appeal. "We invite the people who organize conferences that we admire and can learn from," says Victor Oviedo, a SkyBridge partner who helped conceive of SALT. "We're not at the level of a Davos or a Sun Valley or Milken Conference, but we're working toward that and learn a lot from those events."

SALT has grown from 500 attendees in 2009 to more than 1,800 this week. And, as at Davos or Sun Valley, some of the hottest events are not on the SALT agenda, but are the exclusive cocktail and dinner parties thrown by banks and financiers during the event. And SALT is giving more time to philanthropy, hosting a spinning class to benefit cancer research and having Human Rights Campaign president Chad Griffin discuss how business is supporting the fight for gay civil rights.

When asked why he and SkyBridge started SALT, Scaramucci said: "Originally I just wanted to raise the profile of my firm and the industry."

And Scaramucci wanted to defy president Obama, whom he supported in 2008 but then abandoned in 2012 in favor of Mitt Romney. It was February of 2009 and Obama had just excoriated bailed-out financial firms for misusing taxpayer money. "You are not going to be able to give out these big bonuses until you pay taxpayers back," Obama had said at a town hall meeting. "You can't get corporate jets. You can't go take a trip to Las Vegas or go down to the Super Bowl on the taxpayers' dime."

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Unsurprisingly, lots of firms cancelled events in Vegas, and the industry took cover. "I wanted people to know that we, at SkyBridge and as an industry, were still alive," Scaramucci says.

So Scaramucci and Oviedo decided to throw a big conference in Las Vegas where hedge fund managers could meet and try to make sense of what had happened in the marketplace.

"Not understanding the system as a whole had led to problems of the meltdown in the first place," Oviedo says. "That's why we decided to have speakers who could discuss geopolitics and public policy, since what happens in the Middle East or Korea affect the economy and investment strategies." By 2011 it was clear that those big-picture discussions were among the most popular, along with panels on philanthropy.

SkyBridge is still learning as it goes along, planning SALT based on what firm employees find interesting and on participant feedback. "I want people with a point of view who will spark conversation," says Scaramucci. "It's an ideological conference." Oviedo, who is a Democrat, adds that he has been careful to feature speakers from across the political spectrum to provide a balanced debate.

Make no mistake, SALT has been SkyBridge's most successful marketing tool. When the firm opened in 2005 it had three employees and no assets. After the financial crisis put many funds-of-funds out of business, industry insiders debated the future of firms like SkyBridge, and some investors left. But SkyBridge now has about $7.6 billion in assets under advisement or management, even though Scaramucci remains a polarizing figure.

And SkyBridge's big conference has pushed into Asia, holdings its first SALT Singapore last fall. "We still don't have a plan for what SALT will become," says Oviedo. "We're still just focused on making the type of conference we want to attend. So expect more speakers who think outside the box of the financial world. Expect discussions and debates about things that hedge fund managers don't think about every day. And expect memorable storytelling and ideas."

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A Davos Grows in the Desert: Why the SkyBridge Conference Matters
One critical question is what sort of celebrity Twitter user Buffett will turn out to be: the laissez-faire famous person who rolls with the hoi polloi's punches, or the hypersensitive control freak who cannot brook the slightest mischief or criticism? There's only one way to find out which alternative Buffett favors, and that's to test him through vigorous trolling.

There are lots of options. Many conservatives dislike Buffett -- whom they might be expected to admire, given his enormous investing success and cheerful advocacy for the U.S. economy -- because of his support for Barack Obama. Particularly galling has been his endorsement of the president's proposal for higher taxes on upper income earners, encapsulated in the so-called Buffett Rule. Buffett's invocation of his secretary, who he has said pays more in federal taxes as a proportion of income than he does, has become a source of mockery; why not ask Buffett why the secretary of the richest investor on Earth isn't a member of the one percent herself? Seems only "fair," to use a word the president favors in this connection.

For those on the left, Buffett's status as arch-capitalist dealmaker offers a few openings. There have, for instance, been questions about what he knew, and when he knew it, before making a $5 billion investment in Bank of America (preferred shares, of course) in August 2011. Shortly after Buffett's purchase, word got out of extensive job cuts (40,000 employees) and the firings of two executives -- restructuring moves likely to raise the bank's stock price. "Did [Buffett] have inside information that other investors were not aware of?" asked bank analyst Richard Bove. "Did he know that there were going to be these two major announcements at the time he made his investment? If he did know, I think it is illegal." These questions are under 140 characters, so have at it.
Bagging the scalp of a verified Twitter user for your followers list can seem like a daunting task. You can do it, though, take it from me: for some reason, I'm being followed by POLITICO's chief economics reporter.

Buffett -- who currently follows zero accounts, despite having received tweets of welcome from such luminaries as @BillClinton, @BillGates, and @BarackObama -- seems like a hard nut to crack. You might have a slight advantage if you're female, since, in the words of a recent essay written for Fortune (and promulgated as his second tweet), "Buffett is bullish... on women." It might also help if your avatar is a picture of a Cherry Coke Can. Buffett failed to identify his favorite soda in a blind taste test conducted by Bloomberg, so we're guessing it's the #branding he likes.
Once you've gotten Buffett to follow you, you'll be able to send him a DM, Twitter's private and confidential telegram. This is an ideal step toward actually hanging with Buffett, which is generally a possibility only for those rich enough to partake in charity auctions. (Last year's winning bid for lunch with Buffett was $3.46 million.)

Some activities that might pique our subject's interest, and which you might consider suggesting: playing bridge, which Buffett once said "is such a sensational game that I wouldn't mind being in jail if I had three cellmates who were decent players and who were willing to keep the game going twenty-four hours a day"; flying around in his private plane, which he once identified as one material thing that makes his life more enjoyable; or reading the newspaper. Buffett owns more than 70 of them, reads five a day, and recently admitted, "It's almost unnatural how much I love newspapers."
Sometimes, those with large Twitter followings will lend their extensive reach to lesser entities looking to spread a worthy message. As a consequence, the retweeted account often gains additional followers. #WinWin.

Buffett has just surpassed 400,000 followers, an impressive rate of influence-accrual. And he has an intense affection for charity, having pledged to donate more than 99% of his wealth. So your best bet, if you want that @WarrenBuffett RT, is to ask nicely on behalf of a good cause.

 Buffett has given $50 million toward anti-nuclear proliferation efforts, calling the bomb "the great problem of mankind," and in 2006 auctioned his 2001 Lincoln Towncar (with "THRIFTY" vanity license plate) to benefit Girls Inc. So, something anti-nuclear and feminist? "Launch women-owned businesses, not thermonuclear warheads." Could work.
For companies, a stock purchase by Buffett is more than a welcome dose of capital; it's a vote of confidence from history's most storied value investor (i.e., one who seeks strong businesses whose shares are underpriced). An endorsement via Twitter could have similar significance.

The recent hack of the Associated Press account showed that even fraudulent tweets can have dramatic effects on trading. Crack Buffett's Twitter password, send a few market-moving tweets under the aegis of that coveted blue-and-white check mark, and you might be able to make off with a lot of money. Or you could just short Berkshire Hathaway and announce the famously long-serving Buffett's retirement, effective immediately. That would be simpler.

I should add that, although one legal expert told 9NEWS that "the prosecution and punishment for whoever hacked the Associated Press Twitter account ... is uncertain," the federal charges against former Reuters deputy social media editor Matthew Keys show that the government is willing to make aggressive use of the Computer Fraud and Abuse Act of 1984 in cases that catch its interest. So you mess with Buffett's Twitter business at your peril. We certainly don't condone such unscrupulous use of social media. #ItWasJustAThought.
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