How ‘re-correlation’ risk could cause a pod-shop unwind
Some think an underappreciated vulnerability might one day lead to a 2008-type crisis
Capstone Investment Advisors has been among the beneficiaries of a wave of enthusiasm for multi-strategy hedge funds in recent years. And yet Tom Leake, the $12 billion firm’s head of solutions, is telling Risk.net about how it could all come crashing down.
“Many believe there could one day be a hedge fund equivalent of a Lehman or 2008 type event,” he says. “A big, correlated unwind would be very painful for the financial community.”
Plenty has been said and written about the meteoric rise of so
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