TTU131: How CTAs manage their Cash ft. Mike Kastner, Principle & Co-Founder at Halyard Asset Management
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 13 February 2023
⏱️ 48 minutes
🧾️ Download transcript
Summary
Today, we are joined by Mike Kastner, Principle and Co-Founder at Halyard Asset Management, for a conversation on how they use fixed income instruments to manage the cash of many CTA portfolios. We discuss how managers have evolved in terms of the way they manage cash, how Halyard Asset Management construct a portfolio from a liquidity point of view and the current state of liquidity, how they approach credit rating and why they avoid buying paper from certain banks. We also unpack what they think the sweet spot for foreign exchange hedging is and how they approach risk management, why Kastner does not believe we are approaching a recession and that there is a likely chance of a significant fall in the long bond price, as well as what Kastner believes will happen in the housing market and much more.
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Episode Timestamps:
02:40 - Introduction to Halyard Asset Management
04:12 - History of Cash Management
07:16 - What happened with money market funds?
09:34 - Has the Cash Management space changed?
11:02 - Cash Management philosophy
12:23 - A liquid portfolio
17:39 - Drawing the safety line
19:25 - Considering ESGs
21:11 - Managing cash in different currencies
22:41 - Balancing the mandates
23:52 - Managing risk...
Transcript
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| 0:00.0 | It's clear there's parts of the economy that are in recession. |
| 0:10.0 | The bright spot is the hiring, the jobs market. |
| 0:13.0 | If for some reason the jobs market completely slows down and in fact goes in the exact opposite, |
| 0:20.0 | you start to see the unemployment rate |
| 0:22.7 | drift up above 4% 5% that could worry the committee the the Federal Reserve |
| 0:28.9 | Committee and if that happens they may be vested in cutting interest rates |
| 0:35.1 | and given their propensity to take the overnight rate to zero |
| 0:40.0 | several years ago, that would be a big concern. |
| 0:43.8 | I think it would be a big mistake for them to do that, but it is on my mind. |
| 0:50.8 | Imagine spending an hour with the world's greatest traders. |
| 0:58.0 | Imagine learning from their experiences, their successes, and their failures. Imagine no more. |
| 1:00.0 | Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world, |
| 1:07.0 | so you can take your manager, due diligence, or investment career to the next level. |
| 1:11.7 | Before we begin today's conversation, remember to keep two things in mind. |
| 1:15.7 | All the discussion we'll have about investment performance is about the past, and past |
| 1:19.9 | performance does not guarantee or even infer anything about future performance. |
| 1:24.5 | Also understand that there's a significant risk of financial loss with all investment |
| 1:28.2 | strategies, and you need to request and understand the specific risks from the investment |
| 1:32.9 | manager about their product before you make investment decisions. Here's your host, veteran hedge fund |
| 1:38.5 | manager, Nealz Kostrup Larson. |
| 1:46.2 | Hey everyone, and welcome to another edition of Top Traders on Plot, |
| 1:50.0 | where today I'm joined by Mike Kessner, |
... |
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