Deteriorating credit quality among bond issuers combined with high leverage could be a 'systematic risk' to the high-yield hedge fund market if the global economy does not pick up.
James Hedges, president of LJH Global Investments, said falling credit quality and debt prices had driven fixed-income hedge funds' returns since October.
'But if the economy does not pick up soon it could represent a substantial risk,' he said.
Lowering credit quality made monitoring funds of hedge funds' aggregate
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