Title: Hedge fund leverage
Description: "We investigate the leverage of hedge funds in the time series and cross section.  Hedge fund leverage is counter-cyclical to the leverage of listed financial intermediaries and decreases prior to the start of the financial crisis in mid-2007.  Hedge fund leverage is lowest in early 2009 when the market leverage of investment banks is highest.  Changes in hedge fund leverage tend to be more predictable by economy-wide factors than by fund-specific characteristics.  In particular, decreases in funding costs and increases in market values both forecast increases in hedge fund leverage.  Decreases in fund return volatilities predict future increases in leverage"--National Bureau of Economic Research web site.