NEW YORK (HedgeWorld.com)–Making the case that growth stocks are coming out of their five-year doldrums relative to value stocks, Richard Driehaus pointed to the U.S. housing boom as the riskiest part of the economic landscape.
In other parts of the world, however, his investment team is identifying housing-related businesses with significant growth potential.
Driehaus Capital Management Inc., Chicago, manages mutual funds and long/short equity hedge funds totaling about US$3 billion combined assets.
Speaking at a press conference, Mr. Driehaus suggested that while the U.S. stock market may prove to be difficult for both bears and bulls, it has promising sectors such as energy and health care.
But he sees consumer and financial stocks as vulnerable because households have borrowed heavily and some 60% of bank lending capacity is in mortgages. With housing prices at record highs, the market appears to be peaking.
“With the high level of mortgage lending by banks, there could be more risk than we think,” he said.