Fed: Hedge Funds Boost Risk Appetite, Leverage

Apr 5 2013 | 10:28am ET

Hedge funds are hungrier for risk, according to a quarterly Federal Reserve survey of derivatives brokers.

Almost half of the firms polled for the Senior Credit Officer Opinion Survey on Dealer Financing Terms reported that their most-favored hedge fund clients had shown an increased appetite for credit risk over the past three months. About a quarter saw a similar increase among their other hedge fund clients and insurance companies.

A quarter of the over-the-counter derivatives dealers also noted that hedge funds had increased their use of leverage over the past three months.


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