Monday, 22 December 2014
Last updated 1 hour ago
May 3 2007 | 2:00pm ET
Hedge funds may be on the brink of collapse, according to the Federal Reserve Bank of New York. Or, they might not be.
“Recent high correlations among hedge fund returns could suggest concentrations of risk comparable to those preceding the hedge fund crisis of 1998,” the year Long-Term Capital Management blew up, writes capital markets economist Tobias Adrian in a report issued Wednesday. But he quickly noted that the metrics pointing in that direction could be misleading.
Adrian noted that low volatility is making things look more precarious than they are. “The unusually high correlation among hedge funds in the current environment is therefore attributable primarily to low hedge fund volatility,” he writes, adding that an LTCM-style meltdown is unlikely.
The New York Fed is unlikely to take the prospect of another LTCM lightly: It led the $3.6 billion bail-out of the notorious hedge fund in 1998.
Dec 1 2014 | 10:21am ET
As 2014 winds down, Northern Trust Hedge Fund Services executives took some time to share their outlook on trends facing the industry in 2015. Read more…
Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.