Hedge Funds Are Sitting On $US1 Trillion Of Debt

America’s largest hedge funds have $US1.47 trillion in net assets and more than $US1 trillion in debt, according to a new report from the Securities and Exchange Commission.

The SEC issued the report — the first of its kind — to Congress last week, according to Bloomberg.

Under Dodd-Frank, legislators directed the SEC to collect information from hedge funds and private equity firms.

The new reporting rules require hedge fund managers with more than than $US1.5 billion in gross assets to file quarterly with the SEC (and for each separate fund with more than $US500 million, they have to further detail leverage and risk).

We also get a better picture of liquidity from the report. From Bloomberg:

20-seven per cent of their $US1.47 trillion in net assets could be divested within a day, according to the SEC. 50-three per cent of the net assets could be liquidated in a week or less, the large managers said, and 71 per cent would take no more than a month to sell. Fifteen per cent of assets would take more than six months to liquidate.

Of the entire $US1.47 trillion pool, investors could cash out about a quarter of their money within a month.

Read the full report at Bloomberg>

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