So it looks like the hedge funds are not so confident about the sovereign debt crisis either.
According to a survey by Aksia, an independent hedge fund research and advisory firm, 125 institutional-calibre hedge funds representing approximately $800 billion of assets under management (more than one-third of total hedge fund industry assets):
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– 60% of hedge fund managers see a similar prospect of Greece leaving the Euro
– 65% think EU member states may issue Eurobonds.
– 94% of managers call for further monetary easing by European authorities in the survey
– 80% believe the US Federal Reserve’s ‘Operation Twist’ will ultimately fail to impact financial markets.
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Oh and it gets better.
But being hedge funds, of course, wherever there’s impending catastrophe, there’s money to be made:
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• Most hedge fund managers see new financial regulations as “irrelevant” to their strategy – 21% believe
they will help their strategy.
• High correlations are not bad for all – 32% of hedge fund managers see “great opportunities” in this
environment.
• Hedge fund managers expect markets to remain range-bound over the next 12 months – driven by
macro factors rather than fundamentals. Global Macro is predicted to be the best performing strategy.
• 400 basis points is a common level at which managers with CDS spread-triggers begin moving prime
brokerage balances away from counterparties.
• Generational shift in industry transparency: 26% of funds under 2 years old provide full portfolio
disclosure – against 9% of funds over 10 years old.
• 54% of managers send position-level data to third party risk aggregators.
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