Hedge Fund Monitor
Liquidity
Liquidity measures the capacity for hedge funds to satisfy short-term funding needs, either through investment income, asset sales, or borrowing. If a hedge fund holds assets that are illiquid or subject to significant price declines during times of market stress, the hedge fund may be unable to liquidate its assets effectively in response to a loss of funding. Liquidity problems may also arise from a hedge fund’s inability to roll maturing debt, meet margin calls, or meet investor redemptions. Examples of liquidity metrics include borrowing maturity profile, ratio of liquid assets to short-term liabilities, investor redemption profile, and the ratio of unencumbered cash-to-assets.
Unencumbered cash ratio by size cohort (percent of gross assets)
Skip the ChartThe data are aggregated responses to SEC Form PF. Blank or null values are intentional to avoid potential disclosure of proprietary information of individual filers. Only responses from Qualifying Hedge Funds are included. See additional definitions and methodology on the SEC Form PF Data Sets page of the Hedge Fund Monitor.
The ratio of unencumbered cash-to-gross assets is based on SEC Form PF questions 33 and 8, respectively. Individual hedge funds’ ratios are weighted by their gross assets and then averaged. Size cohorts are based on hedge funds’ ranking each quarter by gross assets.
Series Used
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Suggested CitationOffice of Financial Research, "Hedge Fund Monitor," refreshed monthly, https://www.financialresearch.gov/hedge-fund-monitor/ (accessed ).