Hedge Funds Morph Into Bond Dealers in Post-Crisis World
This article is for subscribers only.
Hedge funds are serving as the middle man in more bond trades as regulatory changes limit the amount of risky assets Canadian banks can hold on their books.
Picton Mahoney Asset Management and RP Investment Advisors are among the Toronto-based firms banks are turning to in the wake of regulatory changes put in place to prevent a repeat of the 2008 global financial crisis. The funds say they are doing what regulators want, transferring risks away from systemically important institutions. Sprott Asset Management LP’s Michael Craig is among the critics saying the risks have only migrated to the loosely regulated shadow banking system.