The Great Annual GS Hedge Fund Symposium

"A conference is a gathering of important people who singly can do nothing, but together can decide that nothing can be done."

Fred Allen (John F . Sullivan) (1894-1956)

Each year in mid-November, a 2 day event absorbs the attention of over a thousand hedge fund allocators from around the world. It is the Annual GS Tokyo Hedge Fund Symposium - 2006 will mark the 7th.

Urban legend has it that in the early 2000s, the conference which was put on by the HK conference provider, Terrappin, ran into a dispute with the then sole-sponsor, GS Prime Brokerage. GS, which had been paying somewhere in the region of US$3 million to sponsor the event wanted to reduce that amount but Terrappin balked. Those were the dark days of investing in Japan which proved tough-sledding for many managers.

The result was stunning. GS pulled out of the originally scheduled December timeslot at the Four Seasons hotel and planned their own event a couple of weeks earlier - just enough time to still attract many of the original conference attendees and to see them jump on their flights and go back home. The turn of events almost devastated Terrappin's Hedge Funds World-branded conference. Luckily, the Nikkei rebounded strongly in 2003 resulting in more than enough attendees to go around that benefited both GS and Terrappin.

GS prime brokerage has thrived in Asia, and today, their Symposium is their single most important branding exercise in the region. New and established Japan, Asia and Global managers (typically numbering 40-50) are showcased to screened guests in a "speed-dating" type of environment. Only serious investors are encouraged to attend which was why there was believed to have been an unwritten rule not to focus on certain local investors (regional banks) with a "hot money" reputation. Moreover, teams of junior managers were discouraged so that only senior decision-makers could be flaunted in front of GS PB HF clients.

Imagine the scale of this network and the goodwill that GS has managed to generate when it comes to generating trading commissions by nurturing managers and leading investors to the HF water-well!

Not even a local Japanese bank or broker can compete to bring more managers and investors to Japanese financial markets!

What about the results? Well, this author took a look at the 2003 GS Symposium brochure and manager profiles and discovered the following interesting attendee facts and figures: there were 61 funds "promoted" by 40 investment management firms back then. The areas of expertise covered Japan Long/Short Equity (8 managers); Asia Established Managers (4); Convertible Arbitrage (4); Asia Long/Short Equity (5); Asia Multi-Strategy (5); Global Multi-Strategy (5); Global Long/Short Equity (5); and, Japanese Equity Market Neutral (3).

The moderators of the various panels were predominantly fund of hedge fund managers (European and US), one US family office, an U.S. university endowment, a GS fund of fund manager, and representatives from a Japanese lifer, Japan's largest agricultural co-op bank, and a Japanese non-lifer.

Finally but not least, of the list of managers this author found that out of 40 managers approx. 10 of them have since endured fund or firm closings, departing senior PM employees or outright sale to other entities. Repeat: 10 out of 40 of those managers that presented at the 2003 Symposium underwent substantial business-related change that might be construed as potentially negative.

That is not to say managers at the Tokyo Symposium are any more/less risky than the experience of hedge funds anywhere else in the world. It does underscores one potential risk factor which might might be termed as "fashion roadkill". Mahalo.