December 2, 2008 / 9:30 AM / 11 years ago

Man Group says banks more leveraged than hedge funds

ZURICH (Reuters) - Hedge fund Man Group said on Tuesday that banks were more highly geared than hedge funds and that bank deleveraging has been the main driver of asset-price declines.

“Hedge fund deleveraging has put pressure on asset prices as clients have redeemed. But the main point is banks are deleveraging and they are many times more leveraged than hedge funds,” said Chief Executive Peter Clarke.

Clarke also said that leverage across the hedge fund industry is now at around a third of leverage levels in 2007.

Speaking at the Hedge Funds World conference in Zurich, Clarke said he expected hedge fund outflows to continue into the first quarter of 2009, but he thought the “fear puzzle” would end there.

“At that point anyone who has had to get out has already got out. We might expect institutional inflows after that,” he said.

Reporting by Martin de Sa'Pinto

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