The oil price collapse over the past eight months has presented investors with stock-picking opportunities to add returns, said Emmanuel Roman, CEO of Man Group.
“The reality is the supply of oil will remain high,” he said, speaking Wednesday at the National Association of Pension Funds' annual investment conference in Edinburgh. “We believe that offshore is going to be far more unattractive than onshore — you are better off drilling in North Dakota than the Gulf of Mexico. When you look at the high-yield market in the U.S., 15% to 20% is in the energy and power sector.” He said there are yields going up, situations that are “distressed,” and “we think there is a great opportunity and alpha in terms of the opportunity between high yield and stock — (it) is going to be enormous.”
Mr. Roman said that market is “big, liquid and complex — you have to do a lot of in-depth analysis. And that is exciting. That is a good place to put money.”
Mr. Roman presented 10 topics to conference delegates, including oil, which was referenced as “There Will Be Blood: the Oil Price Collapse.”
He also addressed the issue of man vs. machine, in a section of his speech titled “Machine 1: Human 0.”
“We have a big quant business,” he said. He compared the rise of quantitative management to that of passive investment. “When passive started, no one felt it was going to last.” Yet, every year more money goes into passive management. “For quant I think it will be something very similar. People will look and say there is space for good fund managers, but we need to put more money (in quant strategies). We will see more money managed by computers. It is cheaper, faster and the client is better off.”
Other topics included the need for France to make structural reforms, including a higher retirement age. “There is no way you can retire at 55 and live for another 40 years.”
Man Group has $72.3 billion in assets under management.