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.


Lifestyle

Survey: Wall Street Banks Still Top Silicon Valley, Hedge Funds for Freshly-Minted MBAs

Jun 21 2016 | 9:01pm ET

Contrary to concerns that Wall Street isn't as appealing to new graduates as it...

Guest Contributor

The Future of the Blockchain in Financial Services Communications

Jun 17 2016 | 1:05pm ET

Over the past year, a large portion of the financial services industry has awakened...