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Gundlach, Heffernan: Hedge Funds look for Inflation Protection

Gundlach buying Chinese stocks, Gold stocks and Fine Art

In mid-October Jeffrey Gundlach, 53 anni, gave a speech to a luncheon crowd of about 200 financial advisers and investors at Los Angeles’s City Club.

The money manager’s theme: the financial catastrophe on the horizon

He recommends buying hard assets: Gemstones, art and commercial real estate are high on his list. And DoubleLine has been buying the stocks of Chinese companies, US natural gas producers and gold-mining firms because it considers them bargains now.

Mr. Gundlach himself has amassed a contemporary art collection of about 100 pieces, with works by Jasper Johns and Franz Kline.

The money manager drew on abstract painter Piet Mondrian’s double-line style for the name of his firm and its geometrical, crosshatched logo.

Mr. Gundlach, who correctly predicted the subprime mortgage disaster, has a proven record as a prognosticator, and the performance numbers to go with it.

At his former firm, TCW Group Inc., his Total Return Bond Fund earned an annual average of 7.9% in the 10 yrs ended in November 2009, according to the data.

His flagship $35.8 billion DoubleLine Total Return Bond Fund DBLTX gained an annual average of 13.2% from its inception in April 2010 through 28 November, topping the performance of his more famous neighbor to the south, Bill Gross, the co-chief investment officer at Newport Beach, California-based Pacific Investment Management Co. earned an average of 7.6% during the same period in his much larger, $281-B Pimco Total Return Fund. PTTRX.

Mr. Gundlach’s performance convinced Andreas Lehmann, Chairman of Luxembourg-based Alma Capital Investment Funds, to hire him to manage a fund for European investors. “Ultimately, what matters are the returns over time, and on that count, Jeffrey stands out,” Mr. Lehmann says.

If Mr. Gundlach’s outlook for the possibility of higher inflation comes true, his bond funds could suffer like most fixed-income investments.

Since he opened DoubleLine in December 2009, it had gathered about $50-B in assets as of mid-November, and it was the fastest-growing mutual fund firm ever in its first year, according to Strategic Insight, a New York- based research firm.

Shayne Heffernan buying Asian Farm Land, Singapore and China Stocks, Copper and Fine Art

Since the beginning of QE1 Shayne Heffernan has been looking for new returns.

Shayne Heffernan’s theme is scarcity, buying things that are not replaceable. His favorite theme has been food in Asia. South East Asia is one of the fastest developing regions in the world, more people in Asia are now moving in to a discretionary income situation, the first they will buy is more food, demand for food in the region will continue to grow for the next 20 years.

Copper is also high on Heffernan’s list, after making record returns in January/February 2012 he is again buying the metal and selected Copper miners. “Copper is the metal that drives our new world, the same way steel did 20 years ago” Heffernan aid at a recent investor meeting.

He went on to say that Singapore and China are undervalued exchanges and there is real value on offer in each provided one does the real research, on the ground and in country.

Also an avid art collector, Heffernan owns one of Asia’s best Renaissance Collections.

Read Heffernan’s 5 Steps to Inflation Protection

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