The average standard leverage used in hedge fund strategies decreased to 1.1 times investment capital from 1.27 for the year ended March 31, according to Hedge Fund Research.
HFR stated in its HFR Leverage Report that the average margin to equity declined to 16.98% from 17.13% during the same time period.
About one-third of all funds do not use leverage, up 4% from a year earlier. More than half of the funds used leverage of between one and two times their investment capital, according to the report, while funds with more than $1 billion in assets used leverage of between two and five times their investment capital.
Global hedge fund assets rose to $2.02 trillion by the end of the first quarter.
HFR President Kenneth Heinz could not be reached for further comment.