Man Group manager says hedge funds reducing risk over Greece

9th Jul 2015 10:36

Hedge funds have been cutting back on their risk due to the situation in Greece, according to a Man Group manager."Hedge funds have been in risk reduction mode over Greece," Chris Huggins, the manager of Man Group's GLG Cross Asset Value Offshore told Bloomberg News in a telephone interview."Following any Grexit event, we would wait for more clarity on any European/European Central Bank policy response," Huggins added."The price action of the last couple of weeks is likely to have strengthened the conviction among European leaders that markets can handle a Grexit."The fund manager put the chances of Grexit at 60/40.In a similar vein, analysts at Citi on Thursday morning made Grexit their base case scenario.Greece's exit from the Eurozone is the most likely outcome, either via a short-term exit (next few months) or over the next 1-3 years, the US-based bank's analysts said in a research report e-mailed to clients."Short-run Grexit risks have increased sharply, but a short-term deal is nevertheless still likely (we should know by Sunday). Even if the short-term Grexit risk is eliminated by such a deal, Grexit risk will remain material following such a deal, bringing the cumulative probability of Grexit over the next 1-3 years above 50%.""A Grexit would almost certainly be initially negative for risk assets", Huggins also said.Earlier in the day the Hellenic Capital Market Commission (HCMC) announced the Athens Stock Exchange would remain closed until 14 July.At 1032 BST shares in Man Group were leading gains on the second-tier index, jumping 9.02% higher to 152.41p.