Opinion
Wagner: Private credit is too competitive to deliver attractive risk-adjusted returns
“When I look at what's going on in that market right now, it strikes me as pretty competitive and not really a great place to find attractive risk adjusted returns.”
Insight
Wagner: Slow-moving climate risk creates mispricings against volatile annual reinsurance swings
“Year to year, you don't have big changes in the risk of a large hurricane. Over 10 years, 20 years you do, which is kind of what we've seen, but it's a slow moving increase in risk. That's what's fascinating to us is because you can have these year to year cha…”
Disclosure
Wagner: Finepoint buys Asian derivatives at 80% discount due to pod shorting
“So we actually have recently found a derivative in an Asian market That we're buying for 10 to 20% of what we think it's worth, so 80 to 90% discount, and it's solely the result of the fact that there's a market in Asia that has such a large demand to be short…”
Insight
Wagner: Cheap value investing fails because tech disruption accelerates business decline
“One of the reasons that value investors have underperformed in the last 10 years is that
There's a lot of technological disruption that's taking place, and it takes place faster than it used to.
When we underwrite a mediocre business and we project out cash fl…”
Insight
Wagner: The Japanese government is the country's biggest activist investor
“The government, I tell people, is the biggest activist investor in Japan.”
Assertion Contradicted
Wagner: Over 90% of the Japanese stock market is passively managed
“I'd never been able to exactly quantify this number. I think over 90% of the market is passively managed. There's very, very few fundamental bottoms up investors in Japan.”
Assertion Supported
Wagner: Florida wind reinsurance yields over 50% for 1-in-10 risk
“The way I characterize it is if you underwrite a risk that has a one in 10 chance of happening, historically that would get priced that you get paid 15 or 20% to take that risk. That number's over 50%. So the pricing around a unit of risk in Florida wind now i…”
Disclosure
Wagner: Finepoint Capital holds over a majority of its assets in Japan
“If you would have said to me, hey, Herb, when you started FinePoint, what's the chance that you're going to have Over a majority of your assets in Japan, I would have said you're crazy. And here we are.”
Insight
Wagner: Tepper Aggressively Exploited Major Market Dislocations and Otherwise Did Nothing
“And when there was massive dislocations amongst fundamentals and prices, he would really jump in, price assets, learn how investors were thinking about them, and be very aggressive at the right time. When there wasn't great things to do, he would do nothing.”
Insight
Wagner: Less than 5% of market participants are truly long-term investors
“I always say to people, everyone thinks they're a long-term investor. I think less than five percent of people are truly long-term investors based on my experience, but they were truly long-term.”
Assertion Supported
Wagner: Credit dealer capital is down over 90% in 15 years
“Because the dealer community and capital's down by 90 plus percent over the last 15 years or so, the price movements that you see in credit tend to be very severe.”
Disclosure
Wagner: Finepoint avoids emerging markets due to sovereign and macro risks
“One of the areas that we have gravitated away from over the years is take emerging markets, for example. So the sovereign risk, the macro risk often are the most important risk in any asset you're looking at in a specific emerging market. We don't think we're …”
Disclosure
Wagner: Finepoint passed on distressed Chinese property developers
“Also take, for example, when the Chinese property developers all blew up, when Evergrande blew up back in 2023, we spent a lot of time trying to figure out, could we understand the risk? We ultimately decided we couldn't because so much of it was dependent upo…”
Insight
Wagner: Grounding downside risk in opaque situations enables aggressive sizing
“What I found is that in these situations that are fast moving and opaque, if you can ground yourself in some kind of downside scenario and get conviction around that, Then you can actually make something really large, and you can be very aggressive.”
Assertion Partly supported
Wagner: Japanese corporates and households are net cash, offsetting sovereign debt
“So the Japan sovereign leverage is high, but net of the central bank is actually manageable. The banking system is well capitalized now. Corporates in Japan And then households, they're all net cash.”
Prediction Not checkable as stated
Wagner: Most Japanese companies will eventually adopt governance reforms
“I don't exactly know what percent of companies are actually taking positive action, but it's a well less than a majority. I think eventually most companies will do it.”
Insight
Wagner: Reinsurance pricing varies dramatically across structures due to market opacity
“The way that it's priced across different structures, vehicles, and different markets is dramatically different. So actually, one of the hardest parts about reinsurance is just sourcing the risk. It's an opaque market. It's a lot of bilateral contracts.”
Disclosure
Wagner: Finepoint analysts do not have individual P&Ls
“Nobody has their own P&Ls here. Everyone is really aligned to find the best investments.”
Disclosure
Wagner: Foundation will spend down all assets during lifetime
“Our foundation is not going to be multi-generational. We're going to give all the money away during our lifetime. We really feel like societal problems are compounding a lot faster than I can compound capital.”
Assertion Not checkable as stated
Wagner: 1990s distressed debt trades bought companies at two times cash flow
“Back then, we used to value every company at four times cash flow, and you'd buy them at two times cash flow. And you would make gobs and gobs of money for many, many years.”
Assertion Supported
Wagner: Appaloosa runs higher concentration and volatility than Baupost
“Appaloosa has more volatility than what Baupost does. So Baupost has a very robust hedging program, just a much different culture of the organization, more diversified in terms of what they owned. And so Dave tended to be a lot more concentrated, a lot more ag…”
Disclosure
Wagner: Finepoint shifted from buying cheap assets to requiring catalysts
“We ended up pivoting a number of years ago
We don't want to be dependent upon what the market tells us something is worth, and that's why a lot of what we do is catalyzed.
So that was one of the big huge change that I made in my investing style, probably start…”
Disclosure
Wagner: Finepoint Capital credit exposure is at historic low levels
“Even though we're sitting here in the summer of 2025, our credit exposure is at historic low levels.”
Assertion Supported
Wagner: Hitachi led Japanese governance reforms by divesting subsidiaries
“IT services, for example, Hitachi was really one of the leading companies in this area. So they started making a lot of these changes and really started to Sell off listed subsidiaries, sell off excess assets, reinvest in growth businesses.”
