Institutional Investor's Alpha Magazine - November 2007 - (Page 25)

Interview Bill Lipschutz Change B ill Lipschutz is obsessed with trading. Not content with the conventional world of stocks and bonds, Lipschutz seized upon the currency markets early in his career and never let go. After rising to fame during the 1980s as one of the architects and then head of the global foreign exchange desk at Salomon Brothers, he is now principal of his own currency trading ﬁrm, Hathersage Capital Management. Lipschutz’s trading acumen has earned him a profile in Jack Schwager’s book The New Market Wizards: Conversations With America’s Top Traders (1992). Ironically, U.S. pension and endowment investors don’t share Lipschutz’s passion for foreign exchange — the biggest, most liquid, most transparent market there is. But if institutions have been slow to catch on to the alphagenerating potential of currency trading, Lipschutz predicts that is about to change. “There are very sophisticated investors who are not there yet,” he admits. “Any large institutional investor is going to be equity-centric. They think of currency management as a way of mitigating the risk of owning non-basecurrency assets.” Unsure whether foreign exchange trading returns are the Currencyof By Frances Denmark result of skill or luck, investors with an equity mind-set have long been suspicious of currency as an asset class. In the past few years, though, the tide has turned, as investment Bill Lipschutz made his consultants have expanded their searches on behalf of a name in the 1980s growing number of alphaseeking pension clients. But as one of the world’s the real avalanche of new astop currency traders. sets will come from giant sovereign wealth funds in Today he is looking China, the Middle East and Russia, says Lipschutz, who to capitalize on is gearing up to receive them. China’s sovereign fund alone institutional investors’ is growing by $25 billion a newfound appetite month, he adds. Since 1990, Lipschutz has for foreign exchange. traded from his home ofﬁce in a duplex in New York’s Greenwich Village. Four huge Macintosh computer screens sit atop a modern desk planted at one end of his architecturally designed workspace, which was featured in a 1999 NOVEMBER 2007 • INSTITUTIONAL INVESTOR’S ALPHA • 25

Table of Contents Feed for the Digital Edition of Institutional Investor's Alpha Magazine - November 2007

Institutional Investor's Alpha Magazine - November 2007 Contents Letter from the Editor Longs & Shorts Pension Corner: Patriot State The Good Guys: College Connection Interview: Currency of Change Cover Story: Comeback Kid Strategies: Masters of Art Research Center: Alpha Awards: Top Technology Providers Top Analysts Alpha Bytes: Critical Choice Unhedged: Commentary: Banking on a Bubble

Institutional Investor's Alpha Magazine - November 2007

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