About one-third of hedge fund managers surveyed said they increased the leverage in their portfolios over the past 12 months, according to new data from Greenwich Associates. Also, a quarter of the 36 hedge fund companies surveyed said their prime brokers were willing to extend them more credit than they had six months before.
Greenwich consultant Peter D'Amario said in a statement that the increase in leverage and easier credit availability were not causes for concern on their own. Coupled with a big increase in pension fund investment in hedge funds, however, these signs might indicate an overheated market to the SEC, which might be more inclined to intervene in the hedge fund market later this year.
