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Multistrategy hedge funds face rising risks from leverage and crowded trades

Reported · Written up by our desk · Equity Funds

Large multistrategy hedge funds are increasingly exposed to overlapping investments and elevated leverage, raising concerns that a market shock could trigger widespread losses and forced selling across the sector, according to research from PivotalPath. The ten major multistrategy firms examined in the study managed approximately $2.2tn in gross assets, including borrowed capital, at the end of 2025, more than triple their exposure in 2018. Their combined net assets stood at $360bn, implying leverage of approximately six times investor capital. Leverage was particularly pronounced among the si

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