Hedge Funds Not As Risky As Usually Perceived, Says OFR

The Treasury’s new Office of Financial Risk (OFR) has concluded that hedge funds are really not the risk-prone investment vehicles they are commonly thought to be. The OFR analyzed data, hitherto confidential, but made available to the OFR under the aegis of the Dodd-Frank Act, covering leverage levels, risk management and asset valuation practices of hedge funds. “While these results are very preliminary, they seem to contradict the idea that hedge funds typically employ risky strategies,” said Richard Berner, stressing that the results were as yet tentative and based on only a preliminary analysis. His findings were, understandably, welcomed by…