Hedge Fund Leverage Falls By Half

Mar 3 2009 | 11:22am ET

Hedge funds cut leverage by almost half last year, according to new figures from Britain’s financial regulator, and borrowing has fallen even further since then.

Leverage dropped to 1.15 times assets in October, according to the Financial Services Authority. The figure was about 1.9 times in October 2007, and was 1.44 times in April. What’s more, hedge funds cut their borrowing even faster than their lenders required.

The FSA report also shows that hedge funds have more “dry powder” since it began measuring four years ago.

The FSA, which measures leverage in the industry twice annually, surveyed hedge funds managing some US$595 billion in assets, held in 13 banks, from around the world.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...

 

From the current issue of