WHEN: Today, Wednesday, September 29th
WHERE: CNBC Delivering Alpha Conference
Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with Brad Gerstner, Altimeter Capital Chairman and CEO, from the CNBC Delivering Alpha Conference, which took place on Wednesday, September 29th.
Mandatory credit: CNBC Delivering Alpha Conference
GERSTNER ON MARKET THOUGHTS
We expect the NASDAQ still has another 10% to 15% it can give back to us again that is just, you know, us returning to the historical, the pre COVID peaks in terms of multiples for growth stocks, that’s a healthy thing.
GERSTNER ON NET EXPOSURE
So, you can, you know, when we’re managing our hedge fund, we think a lot about that our net exposure today is 50% versus 90% last year. At the same time, we’re deploying venture capital as aggressively as we ever have because we think the next 10 years is going to be a period of even more value creation than the last 10 years. The secular curve around technology and value creation is as steep as ever.
GERSTNER ON TRAVEL ROTATION
On July 1st of this year after a big run up in United and Expedia, we distributed those returns to our investors, which was the deal that we had made with them. You know, I still think the travel stocks have, you know, there’ll be fine returners from here. There are going to be some winners and losers, but the easy gains off the COVID bottom have certainly been made, and, you know, we’ve rotated our portfolio just into better ideas and that’s what we get paid to do.
GERSTNER ON SNOWFLAKE
We share with our investors that it’s going to be, you know, on a look through basis. I obviously have a lot of exposure personally, we’ve distributed some shares out of our early venture funds to our partners because we think that’s the appropriate thing to do, but it’s still the largest holding in our hedge fund. We think that this is going to be a very high returner.
GERSTNER ON ZOOM AND PELOTON
We were taking down our growth exposure, you know, in Q1 of this year so we didn’t buy them then. But when they started coming off to what we thought they had overshot so they started trading at multiples that were below pre COVID multiples. Right. And really that’s the underwriting we’re focused on, right, has that multiple contraction occurred in the individual name or not. And it was that trigger that we thought that retracement provided an excellent point of entry to, to companies that, again, we think people under appreciate the size of the future market.
GERSTNER ON CHINA UNCERTAINTY
You can look at this as, you know, China as a national enterprise with one CEO, and it’s the president the country, and, you know, so you no longer have any of the major founders, you know, actively involved in any of the major internet companies in China. I don’t think you’re going to see additional Chinese IPOs in the United States. I think you’re, you know, all Chinese companies are going to be directed to the Hong Kong stock exchange. And so, this is a period, if nothing else, of radical uncertainty about the future path.
The decisions that the Chinese administration, President Xi make with respect to the go forward is going to, you know, over the course of the next six to 12 months is going to have a huge bearing I think on the relationship with the international financial community. And certainly, there’s a possibility that this just is another bump in the road, that everything reverts back that Baba and all these stocks rip again. But I don’t think you can, anybody can say that with a high level of certainty.
GERSTNER ON SHORTING SPACS
Those shorts have worked fabulously for us, you know, over the course of this year. It’s generated a lot of alpha, for the great causes that we represent, and I don’t think that was any surprise to anyone who looked at I mean the surprise was the fact that every, you know, every dog walker and celebrity could go raise a vehicle and raise the capital, you know, to take companies public. They added no value and they had totally misaligned incentives.
