Hedge fund leverage: Batten down the hatches
Speakers at the EuroHedge Summit offered sound advice: leverage addicts were warned about the drug’s potency, and panickers were advised to panic in good time. Neil Wilson reports from Paris.
It was a gruesome first quarter for many hedge funds. On average, hedge funds globally dropped by more than 1.2% in March, to leave them down by an estimated average of 1.66% for Q1 as a whole, according to the HedgeFund Intelligence Global Index. But there were plenty of areas where the falls were much greater than the average.
Hedge funds in Asia were particularly hard hit, with the average fund dropping 2.52% in March to leave the AsiaHedge Composite down an estimated 5.36% for the first quarter. This was still significantly better than the Asia-Pacific equity markets – with the MSCI Pacific Free Net index dropping 9.57% over the same period.