RT Journal Article
SR Electronic
T1 Reconsidering Hedge Fund Contagion
JF The Journal of Alternative Investments
FD Institutional Investor Journals
SP 27
OP 38
DO 10.3905/jai.2018.21.1.027
VO 21
IS 1
A1 Richard Sias
A1 H.J. Turtle
A1 Blerina Zykaj
YR 2018
UL https://pm-research.com/content/21/1/27.abstract
AB A widely held view concerning hedge funds is that they act as a negative disruptive force in financial markets due to “contagion.” Hedge funds are often viewed as culprits in both the 2007–2008 financial crisis and the 2007 quant crisis, for example. The authors evaluate both existing and new evidence of: 1) hedge fund contagion, 2) hedge fund crowding, 3) hedge funds’ role in the 2007–2008 financial crisis, and 4) hedge funds’ role in the August 2007 quant crisis. Contrary to conventional wisdom, the popular press, and most academic work, the authors find little evidence to support the view that hedge fund contagion has widespread negative effects on markets and mispricing.TOPICS: Real assets/alternative investments/private equity, financial crises and financial market history, tail risks