Reuters- Facing huge credit problems of their own, banks are increasingly yanking credit from hedge funds’ trading operations at the slightest hint of trouble, the head of one large hedge fund investment firm said on Tuesday.
The trend, which has been developing since the credit market took a dive last year, could send more hedge funds into abrupt liquidation, according to Jane Buchan, chief executive of Pacific Alternative Asset Management, a $10 billion fund that invests in 65 hedge fund as a fund-of-fund.
"If there is a rumor, (the banks) pull the line of credit," Buchan said at the Reuters Hedge Funds and Private Equity Summit in New York. "You want to be the first one to cut the credit lines, not the last one."
