Hedge Funds Banks
Hedge Funds Staying with Banks Despite Losses
Hedge funds are not behind recent falls in French bank stocks, say prime brokers, and have actually held onto their positions in European banks through the losses in the belief the sector is cheap and can ride out the current storm.
Despite another choppy day for French banks Societe Generale , BNP Paribas and Credit Agricole , hedge funds think the bank sector is trading on economic worries rather than fundamentals, say prime brokers, who execute trades and provide leverage for hedge funds.
Well-placed industry executives also report relatively little activity from hedge funds -- many of whom snapped up bank shares near the market low in 2009 -- in French banks relative to UK banks.
"There are some fundamental convictions that people have, and they feel they're going to stick with these convictions through this turbulent time, as the market is more macro-political in its direction than fundamental," said one prime broker who spoke on condition of anonymity. Source