Hedge Funds Northern Africa

Hedge Funds Northern Africa

Hedge Funds Cautious Over Events in Northern Africa

The political events in Northern Africa and the Middle East regions have caught most people off guard including intelligence officials, politicians and other observers. Hedge funds appear to be backing off making investments around the events due to the uncertainty. Only a few hedge funds have made trades on oil and credit protection.
Only a handful are starting to hunt ways to profit with investments, for example, in oil and credit protection.

"It's a little like the financial crisis in 2008. Many managers are saying, 'how am I supposed to figure this one out?,'" said Morten Spenner, who heads hedge fund of fund manager International Asset Management.

"If (Libya's) Gaddafi said tomorrow, 'Look, we've sorted it all out', oil prices could fall as much as 5 or 6 dollars a barrel in a day. And you could be really badly hurt."

A sudden burst of anti-government protest in Tunisia last month has sparked violent uprisings in Egypt and oil-rich Libya, paralyzing economies and threatening asset values across the North African region and beyond.

Macro hedge funds normally like to take bets on which country or company might suffer most or bounce back fastest from a debt crisis or a recession, but are wary of trying to second-guess governments or politically charged situations. Source

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