Alternative Investment Funds as Potential Catalysts in the Realization of Systemic Risk

Over the last decades, hedge funds and private equity funds have evolved from niche products for a few sophisticated investors only into major forces in financial markets. They include high-profile investment vehicles whose names conjure-up images of uncorrelated returns, leveraged buyouts, and sophisticated trading strategies. An integral part of the world of finance, such funds and their managers now have an outsized influence on financial stability and global systemic risk. This book describes how these fund types might create systemic risk, then describes both the UCITS and AIFMD frameworks, and, finally, proposes novel approaches to regulating systemic risk. It is an optimal reference work for academic readers, policymakers, and practitioners alike, who are interested in gaining an understanding of systemic risk, the existing legal framework, and possible future developments.

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