Hedge Funds Performance

Gross, net exposures shrink sharply, according to Goldman research


Hedge funds have sharply reduced both their asset base and their net exposure to the equity market amid tightening credit and greater volatility, according to research issued this morning by Goldman Sachs.

An analysis of 705 hedge funds showed that funds had reduced their long equity assets by 31% between the second and third quarters, to $607 billion. With short positions at $513 billion, this group of hedge funds appears to have net long positions of just 17%, compared with 47% a year ago, Goldman reported.

“Lower net exposure to the equity market suggests hedge funds may have returned closer