Showing posts with label Hedge Funds. Show all posts
Showing posts with label Hedge Funds. Show all posts

Thursday, June 28, 2007

Hedge Funds favor Small Caps

Where are hedge funds investing these days? A recent look at the market cap concentrations for various Hedge Funds, as tracked by Morgan Stanley. This data is from Q1 '07 (again, sorry for the poor quality of the image):





As you can see, the "smart money" is overall focused on smaller cap companies, although studies also show that these companies also tend to have higher risk profiles as well. It will be interesting to see how these allocations change over time, as folks on the street continue to talk about how Large Caps are undervalued relative to their peers. Will there really be a resurgence of Large Caps as part of a sector rotation or flight to quality as the credit markets deteriorate?

More on Bear...

A little more insight on the Hedge Fund collapse. References the CDO piece...

Close Call for a Bear Hedge Fund

Interesting article in today's NYT on the man behind the two Bear Stearns hedge funds involved in a recent bailout. As these funds get involved in CDO's and other illiquid financial instruments, difficulties arise...