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"The charge they've taken on their leveraged loan book," Mr. Adamson said, "is less than people might have expected.
Hedge funds often rely on prime brokers to manage their cash, execute their leveraged trades and lend securities so they can short sell.
Many of these K.K.R. portfolio companies will seek to use the proceeds from the share sales to reduce the debt they took on from their leveraged buyouts.
Dell also pointed to the example of Clear Channel, where two private equity firms agreed to leave a stub as part of their leveraged buyout.
Their leveraged bets went sour, and the derivatives they thought insured them against any shock turned out to be worse than worthless.
Many hedgehogs will tell you that market volatility is caused less by their leveraged machinations than by the growth of program trading.
Similar(36)
They would create their own hedge funds; invest in their own leveraged buyouts; trade for their own accounts, and not just on behalf of their clients; and make more money.
Medically, the companies minimized their costs: some leveraged their size to reduce input costs while others simplified the services they offered, and most had strategies to make human resources more affordable.
Their heavily leveraged balance sheets magnify even a small rise in delinquencies.
Equity derivatives are flourishing, which means brokers are increasingly making their own leveraged bets in order to write hedging contracts for clients.
This sum will be seized on by critics of the Glazer family, who continue to point to the massive sums incurred by the club as a direct result of their controversial leveraged takeover in 2005.
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