Seeking Alpha – Britain’s Financial Services Authority (FSA) recently found that hedge fund leverage was nearly extinct (for now). In what is billed by the FT as the “only authoritative data on the opaque industry”, the FSA found that the average hedge fund had leverage of 1.15x, down from about 2x a year ago and 1.44x as late as last spring. According to the FT, the FSA defined leverage as long positions over NAV, “ignoring short positions.”

But what happens when you account for shorts? Regular readers may remember the chart below left from a recent European Central Bank report.

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Tags: authoritative data, european central bank, financial-services-authority, fsa, last-spring, leverage, seeking alpha

New York Post – The heat is getting turned up under Alan and Philip Milton, the brother team that runs Greenwich-based Windmill Management and its embattled SageCrest hedge funds.

A lawyer for an investor in the SageCrest II hedge fund is threatening to fight the Miltons’ Chapter 11 filing for the $500 million fund – claiming the duo made the court filing last Sunday night, in part, to head off the possible appointment of a forensic accountant to probe the fund’s books.

WoodCreek Capital, was due in court Aug. 18, the day after the Miltons filed to liquidate their funds, to seek a pre-emptive lien on some of SageCrest assets and access to inspect their books.

WoodCreek had filed a $5.8 million lawsuit against the Miltons’ fund claiming the duo had reneged on a promise to honor their withdrawal from the fund.

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Tags: adverse-effect, cocktail-party, disapproval, first-avenue, last-spring, losses, MA, proceedings, sentiment-indicators, successes, value-investors