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- Clearwater : 88 % of fund managers increased stress test spending
A Clearwater Analytics survey of 250 senior executives and fund managers in the US, Europe and Asia Pacific found 88% had increased spending on fund stress testing over the past year, citing rising interest rates, limited liquidity and geopolitical instability. To reduce the risk of severe losses, 56% of asset managers plan to use protective puts, 54% will focus more on defensive stocks, 49% will enhance quantitative risk modelling or stress testing, and more than a third will use volatility products tied to the CBOE Volatility Index. Kirat Singh, president of risk and alternative assets at Clearwater Analytics, said traditional risk assumptions are being challenged, so managers need faster access to accurate consolidated data.
- French repo market remains stable despite hedge fund bond …
France's short-term repo market has stayed largely stable despite a sharp sell-off in government bonds, according to Bloomberg, suggesting the turbulence has not yet become a broader financial crisis. Hedge funds have been cutting exposure to French sovereign debt amid political and fiscal uncertainty ahead of the 2027 presidential election, widening bond spreads and raising volatility. French repo rates have held around 12 basis points above the central bank deposit rate, according to CME Group data, only slightly above their three-month average. Market participants describe the situation as a crisis of confidence rather than a systemic funding breakdown, but the Banque de France has warned that high leverage and concentrated trades could amplify stress. Fitch and S&P rate France A+, while Moody's, which rates it higher, is scheduled to review the country later in October.
- European bond market turmoil places hedge funds under …
Hedge funds face growing scrutiny over their expanding role in European sovereign debt markets after a sharp sell-off in French government bonds raised concerns about liquidity and systemic risk, according to Reuters. French 10-year yields surged to 24-year highs in early October, and the premium over German bonds recorded its largest 2-day increase since the euro zone debt crisis, with investors saying rapid unwinding of leveraged hedge fund positions may have amplified volatility. Hedge funds now account for more than half of trading in Europe's roughly $13tn government bond market, up from 30% in 2020, according to ECB estimates, and the IMF says their sovereign exposure has more than doubled since 2022. Regulators are focusing on repo markets, where French debt makes up about €100bn of the €250bn in euro zone sovereign bonds pledged as collateral. Some fund managers said strategies were not materially disrupted, and some investors added French bonds during the sell-off.
- Analysis - Europe bond market turmoil shines a spotlight on hedge fund role in key markets
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- Why Berkshire's Latest Move Proves It's Not Really a Warren Buffett Company Anymore
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