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):
- 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.
Oh and it gets better.
But being hedge funds, of course, wherever there's impending catastrophe, there's money to be made:
• 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
• 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.