Equity financing risks glossed over by Credit Suisse fines

29 August 2023Banksequity derivatives, equity financing, hedge fundsNick Dunbar

At first glance, the $388m of fines imposed last month on Credit Suisse (via its new owner UBS) ought to draw a line under the Archegos scandal. But providing equity financing to hedge fund and family office clients is a lucrative business for large banks which involves systemic risk.

Archegos, deleveraging and the instant bear market

12 August 2021Fundscounterparty credit risk, equities, hedge fundsNick Dunbar

Using Credit Suisse’s Archegos report, we explore how without any fundamental change in corporate earnings or economic sentiment, deleveraging mechanisms can produce an ‘instant bear market’

The $3 trillion hidden exposure behind the Archegos blowup

30 April 2021Banksequity financing, hedge funds, prime brokerage, repo lendingNick Dunbar

How the push for growth turned equity financing into a hotbed of regulatory arbitrage

Looking in SEC disclosures for the next LTCM

15 August 2018Articles, Fundsfinancial reporting, hedge funds, leverage, LTCM, SECNick Dunbar

The SEC is cracking down on hedge funds that fail to provide Form PF disclosures. Risky Finance has turned the published statistics into a visualisation tool and asks whether a new LTCM could be lurking in the data.

Lehman Anniversary Special: Fooling Some of the People All of the Time

16 September 2013Book ReviewsDavid Einhorn, Fooling Some of the People All of the Time, Greenlight Capital, hedge funds, short sellingNick Dunbar

David Einhorn John Wiley & Sons, 2011 In his 1991 novel Time's Arrow, Martin Amis tells the story of a Nazi war criminal as if lived backwards in time. The time reversal shockingly inverts the morality of the protagonist's actions---as an old man he snatches toys from children and sells them for money, while in…

From hedge fund manager invective to EU veto

13 December 2011Articlesderivatives, eurozone, hedge fundsNick Dunbar

Hearing David Cameron's justification for his rejection of last week's proposed EU treaty changes on the basis that he was defending the City of London as a financial centre, I was reminded of a talk given back in April by Michael Hintze, the head of $11 billion hedge fund CQS and a major Conservative party…

An imaginary wolf pack

22 December 2010Articlescredit default swaps, eurozone, hedge fundsNick Dunbar

1st December 2010 Politicians' attempts to blame hedge funds for the euro zone crisis are desperate. Disappointingly for the conspiracy theorists, the idea that a cabal of Soros-style speculators is engineering a meltdown is an unlikely explanation of current market turmoil. What appear to be coordinated bets against European sovereigns have less sinister explanations. Firstly,…

Winner takes all

20 May 2010Articlesderivatives, financial innovation, hedge fundsNick Dunbar

Reading about the German government's abrupt decision to restrict sovereign credit default swaps, I was reminded of July 2009 when I met John Paulson at the New York offices of his eponymous hedge fund. I was prepared to be impressed. It isn't every day that you meet a man who has just made six billion…