Milken Unmasked: Frivolity and Fear as Elite Descend on LA

(Bloomberg) -- It's the Milken Gala, unmasked. Back are the financial world's glitterati, dealmakers and celebrities, all gathering at the Beverly Hills confab as it returns to its pre-pandemic spring schedule for the first time this week.

That should spell gentle optimism as the world's most influential people cavort between panels, wellness sessions and the puppy playtime on offer at the Milken Institute Global Conference. But as they assemble to deliberate the world's biggest issues, there's a rare cocktail -- and not the good kind -- of mounting global challenges that will test the sunny West Coast mood.

The famed gathering, in its 25th year, has outlined its focus as the power of connection, celebrating “the forces that bring us together while confronting the issues that keep us apart.” It's a fitting theme for a world jolted by war in Ukraine just as the highest inflation in decades raises the specter of recession and the dregs of a global pandemic refuse to disappear.

“The conference will be a juxtaposition,” said Bob Kricheff, portfolio manager and global strategist at Shenkman Capital Management Inc. “Excitement of being able to see everyone three dimensional and unmasked, but dampened given concerns over the invasion in Ukraine, a decline in U.S. GDP, rates and meaningful losses across most asset classes.”

And as markets agitate amid the geopolitical turmoil, Gwyneth Paltrow and Goldie Hawn will rub shoulders with financial titans and corporate America's biggest chiefs by the sparkling pool at The Beverly Hilton. Citadel's Ken Griffin, Goldman Sachs Group Inc.'s David Solomon and General Motors Co. Chief Executive Officer Mary Barra will address the crowds, with academics, sports stars, entrepreneurs and politicians among the thousands set to gather.

With the war in Ukraine entering its 10th week, the crisis and its impact on the economy, markets, trade as well as its significance for democracy will likely infiltrate many more than the seven or so panels that reference the invasion.

Steven Mnuchin, secretary of the treasury under President Donald Trump, will join Peter Beyer, who served as the transatlantic coordinator for Chancellor Angela Merkel's government, to discuss the turmoil alongside exiled former Russian oil tycoon Mikhail Khodorkovsky, who was once the country's richest person.

Inflation Fears

And for a conference gathering the who's who of the investing world, inflation and the Federal Reserve's efforts to quell it with rate hikes will dominate much discussion. With April one of the worst months across asset classes in more than a decade as investors fled risk, attendees will likely line up to hear from the likes of Citigroup Inc. CEO Jane Fraser and Guggenheim Partners' Chief Investment Officer Scott Minerd on a global capital markets panel.

“There will be lots of people trying to predict the future with great confidence,” said Kricheff. “The majority of predictions will be about when does the Fed stop tightening. The only problem with that is the Fed itself probably doesn't know the answer yet.”

To take the edge off, there'll be after-parties, sessions of regenerative mind-and-body yoga, puppy playtime, guided meditation and Jedi mindfulness training. For those who want more of an escape, virtual reality headsets will be on offer to experience the metaverse -- a hot topic in the investing world and where cryptocurrencies play a significant role.

Crypto Content

And as more and more money pours into crypto and blockchain technology, the conference has perhaps its most sizable digital asset contingent yet. There will be several crypto-related panels, including two on the metaverse and one on digital nationalism. A slew of crypto executives, investors and developers such as Brian Armstrong, CEO of Coinbase Global Inc., will also attend.

For many attendees, the goal is purely business, to meet contacts and strike deals. Apollo Global Management LLC CEO Marc Rowan, and Thoma Bravo LP managing partner Holden Spaht are speakers. Both firms were named in the fray surrounding Elon Musk's offer for Twitter Inc., which he agreed to buy on April 25.

Mike Milken, who founded the eponymous institute hosting the conference in the early 1990s, is set to moderate a number of panels. The billionaire “Junk Bond King” worked at Drexel Burnham Lambert in the 1980s before he was convicted for securities fraud, sent to prison and banned from the securities industry for life. Trump pardoned him in 2020.

Almost half a century ago, Valerie Red-Horse Mohl was a part-time assistant for Milken at Drexel Burnham Lambert. Now she's about to be a speaker at her first Milken conference.

The co-founder of finance startup Known Holdings and East Bay Community Foundation's chief financial officer expects the mood at the event to be “cautious as opposed to ominous,” she said. “People are definitely talking about recessions. What's going to happen with the volatility in the markets?”

Whatever tone the mood takes, there should be levity as the conference wraps up Wednesday -- with a Beach Boys concert.