29/11/2011 Author: Kirstie Brewer

Hedge funds anticipate eurozone defaults and global growth slowdown

Hedge fund managers are bracing themselves for eurozone sovereign defaults and hold a more bearish outlook on global and Chinese growth than the 2012 International Monetary Fund (IMF) forecast, a global survey conducted by Aksia, the independent hedge fund research and advisory firm, reveals.  

The global survey, which canvassed the views of 125 hedge fund managers, with $800bn in assets between them, found that 42% saw potential for default or restructure by Italy and Spain, with 60% anticipating a similar outcome for Greece.

A resounding 94% called for further monetary easing from the European Central Bank and 65% saw a very real possibility that Eurobonds will be issued to help stem the crisis.

Meanwhile, the US Federal Reserve’s ‘Operation Twist’, designed to suppress long-term interest rates, was deemed a failure by 80% of respondents, who said that ultimately, it would have little to no impact on the markets.