Saturday, April 20, 2024

Use of securities as collateral soars in Q1: Citco

  • Securities-based margin movements rise by 66% in Q1; cash margin up just 10%
  • Margin calls increase by 14% in the turbulent market environment
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Hedge funds’ use of cash as an alpha-generating tool has soared in the higher-interest rate environment, in a return to the industry’s pre-2008 era, according to new research.

Funds are increasingly using securities instead as collateral, with securities-based margin movements rising by 66% last quarter, according to Citco.

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