kaal:claim:2748096-022

Concern about hedge fund leverage is empirically overstated: since the collapse of LTCM in 1998 the industry's exposure to leverage has been relatively modest, especially compared with the mean leverage of investment banks and broker/dealers.

Source quote, verbatim

evidence exists that the hedge fund industry's exposure to leverage has been relatively modest since the collapse of LTCM in 1998, especially compared with the mean leverage of investment banks and broker/dealers (Ang, Gorovyy, and Van Inwegen 2011).

From

Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016), Leverage, p. 8
https://ssrn.com/abstract=2748096 · source PDF

Cite as

Wulf A. Kaal, Timothy A. Krause, Hedge Funds and Systemic Risk (2016). SSRN: https://ssrn.com/abstract=2748096

Holds when

post-1998 period
comparison benchmark is investment banks and broker/dealers

Classification

empiricalsupport: evidencedsystemic-riskempirical-evidenceprivate-funds

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