Have you heard? It's hard out there for a hedge fund manager or private equity executive these days, at least according to two billionaire titans of those industries.
On his panel at the Bloomberg Markets Most Influential conference, Julian Robertson, co-founder of Tiger Management, a hedge fund that amassed more than $20 billion in assets in the late '90s, said he remembers the glory days of the hedge fund world, when making money was basically as easy as stealing it.
"It is much harder to run a hedge fund today than it used to be, and that's because there are more hedge funds to compete with," Robertson said. We had a field day before people knew about shorting — it was almost a license to steal. Now it's almost a license to get hosed, and a lot of people are giving up the ghost."
Robertson's panel-mate Bill Conway, cofounder of The Carlyle Group, one of the biggest private equity firms in the country, agreed that times are getting tougher in his business.
"When I started in private equity it was so much easier, we made a bunch of money on the first day [of a new investment]," Conway said. "Now we never make money on the first day. Now a million dollars gets you $10,000, and people are saying, 'I can't live like that.'"
Both billionaire investors also said they believe the market is in the midst of a growing valuation bubble, despite the fact that there are still good, fairly valued companies. But those are fewer and farther between.
"I think one has to be careful, and there are still some great companies around. One of them [Alibaba] just became public last week," Robertson said. "That's a fabulous company. If Alibaba and others do as well as people project them to do, they're probably reasonably valued. We're always looking for bargains. There are opportunities in the liquid space, no question about that."
Conway added that he is feeling the effects of a bubble on the private equity side, and worries that the cause could be something that nobody will see coming.
"It's certainly easier to sell than to buy," Conway said. "There are still things you can find to buy. We are a big fan of taking companies public. The problem I have about the bubble bursting is, while I agree with it intellectually, I do not see the catalyst to make the bubble burst. And that's what makes it really horrible, when you can't see it coming. I don't think it's going to be China, or Ebola, or ISIL or something like that. So I don't know what it's going to be."