Beyond established strategies, hedge funds are becoming more active in the energy, private equity, and real estate sectors. The hunt for unexploited profit opportunities is also prompting funds to become active in more unfamiliar territory, including: middle-market lending, asset-backed financing, exchange-traded funds (ETFs), and reinsurance.
George Van, Chairman of the hedge fund group said that his firm’s research demonstrates that “statistics belie the widely-held belief that hedge funds, generally, use large amounts of leverage.” Van’s analysis shows that 20% of hedge funds are not leveraged, and 50% use leverage equivalent to less than 100% of their equity. Among the most highly leveraged funds are those employing macro and market neutral arbitrage strategies; 60% of these funds had a leverage of two times, or higher.
The week on Risk.net, July 7-13, 2018Receive this by email