Boston Globe- Stock hedge funds sat on a record amount of cash as the industry posted its biggest quarterly decline in almost six years.
Equity managers, who oversee about one-third of the $1.9 trillion in hedge funds, held an estimated $90 billion of cash in January, a hoard that dropped to $64.8 billion the next month, according to data compiled by Merrill Lynch & Co. The last time equity funds held cash outside of their trading accounts was in 2004, according to Merrill. At that time the Standard & Poor’s 500 Index was up less than 2 percent through October.
Hedge funds are private, largely unregulated pools of capital whose managers can buy or sell any assets, bet on falling as well as rising asset prices, and participate substantially in profits from money invested.
