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Laxman Pai, Opalesque Asia: According to new data from the International Organization of Securities Commissions (IOSCO), leverage remains contained in the global investment fund industry.
The umbrella group of global regulators published a report, based on comprehensive regulatory data, which goes beyond hedge funds for the first time to cover all sorts of investment funds. The report found that leverage levels are limited overall.
This report, covering not only hedge funds, but also open-ended and closed-ended funds, is the first of its kind by IOSCO and is underpinned by a broad data survey to which 50 IOSCO members have contributed; representing almost $US50 trillion, or 67% of the total asset under management of the global investment funds universe.
Leverage across asset management remains relatively low. Hedge Funds' gross leverage, as measured on a gross notional basis, stands at 12.4x net asset value, which, as reported in the previous hedge fund survey, has increased from 7.8x. Their net leverage stands at 1.1x.
Open-ended funds' gross leverage stands at 1.68x net asset value while their net leverage stands at 1.12x. Closed-ended funds' gross leverage stands at 1.12x and net leverage stands at 1.03x, noting however that these figures may obscure higher levels of possible leverage on the balance sheet of the corporates in which private equity funds for example are invested.
Similarly, hedge funds appear, in aggregate, to have sufficient portfolio li...................... To view our full article Click here
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