Liquidity and Hedge Funds
Market liquidity profoundly impacts hedge funds. Funds trading illiquid securities earns significant risk premium, report smoother returns, can better leverage on information asymmetries, and grapple with stronger capacity constraints. Importantly, the funding liquidity of hedge funds, or their ease...
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Institutional Knowledge at Singapore Management University
2009
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sg-smu-ink.bnp_research-10132018-06-13T05:03:46Z Liquidity and Hedge Funds TEO, Melvyn Market liquidity profoundly impacts hedge funds. Funds trading illiquid securities earns significant risk premium, report smoother returns, can better leverage on information asymmetries, and grapple with stronger capacity constraints. Importantly, the funding liquidity of hedge funds, or their ease of obtaining financing, can have a significant effect on the market liquidity of the securities they trade in, creating a downward liquidity spiral during economic downturns. We review the academic literature and deliver insights that resonate with recent market events. 2009-04-01T07:00:00Z text application/pdf https://ink.library.smu.edu.sg/bnp_research/14 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1013&context=bnp_research http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection BNP Paribas Hedge Fund Centre eng Institutional Knowledge at Singapore Management University hedge funds liquidity market liquidity Finance and Financial Management |
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Singapore Management University |
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Singapore |
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English |
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hedge funds liquidity market liquidity Finance and Financial Management |
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hedge funds liquidity market liquidity Finance and Financial Management TEO, Melvyn Liquidity and Hedge Funds |
| description |
Market liquidity profoundly impacts hedge funds. Funds trading illiquid securities earns significant risk premium, report smoother returns, can better leverage on information asymmetries, and grapple with stronger capacity constraints. Importantly, the funding liquidity of hedge funds, or their ease of obtaining financing, can have a significant effect on the market liquidity of the securities they trade in, creating a downward liquidity spiral during economic downturns. We review the academic literature and deliver insights that resonate with recent market events. |
| format |
text |
| author |
TEO, Melvyn |
| author_facet |
TEO, Melvyn |
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TEO, Melvyn |
| title |
Liquidity and Hedge Funds |
| title_short |
Liquidity and Hedge Funds |
| title_full |
Liquidity and Hedge Funds |
| title_fullStr |
Liquidity and Hedge Funds |
| title_full_unstemmed |
Liquidity and Hedge Funds |
| title_sort |
liquidity and hedge funds |
| publisher |
Institutional Knowledge at Singapore Management University |
| publishDate |
2009 |
| url |
https://ink.library.smu.edu.sg/bnp_research/14 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1013&context=bnp_research |
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