A statistical portrait of the hedge fund industry the SEC issued this month fails
to provide a full picture of the risks fund operators pose to the financial system,
according to risk-management professionals.

The Oct. 16 release represents the SEC’s first attempt to aggregate private-fund
data that managers report via Form PF, a Dodd-Frank Act creation that mandates
disclosure of market exposures, leverage and liquidity in an effort to gauge systemic
risk. Two data points in particular would appear to show the average hedge fund is
well positioned to absorb another market shock.

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