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Black Swans Keep Hedge Funds on Defensive

Thursday, 14 Apr 2011 | 5:58 PM ET
Hedge Funds Hoard Cash
Emma Sugarman, BNP Paribas says hedge funds are hoarding cash because black swan events are keeping them on the defensive. Investors are looking for managers who are deft at moving funds around.

Some hedge funds have begun hoarding cash. How come?

Are they preparing from some kind of disaster?

Get all the details from Emma Sugarman of BNP Paribas. Watch the video now!




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Trader disclosure: On April 14, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Adami owns (AGU); Adami owns (GS); Adami owns (INTC); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Adami owns (C); Finerman and Finerman's firm own (AAPL); Finerman and Finerman's firm own (BP); Finerman owns (C); Finerman and Finerman's firm own (CVS); Finerman's firm owns (HAIN); Finerman's firm owns (HPQ); Finerman's firm owns (JPM) and (JPM) leaps; Finerman owns (JPM); Finerman and Finerman's firm own (MSFT); Finerman's firm owns (TGT); Finerman's firm owns (UNG); Finerman owns (USO); Finerman's firm owns (WMT); Finerman's firm is short (IWM), (MDY), (SPY), (XRT); Finerman's firm is long S&P 500 puts; Finerman's firm is long Russell 2000 puts; Finerman's Firm Owns (BAC) Leaps; Terranova owns (JPM); Terranova owns (VRTS); Terranova owns (V); Terranova owns (BX); Terranova owns (GS); Terranova owns (UPL); Terranova owns (HOC); Terranova owns (TCK); Terranova owns (BAX); Terranova owns (OXY); Terranova owns (XOM); Terranova owns (AKAM)

For Tim Seymour:
Seygem Asset Management Owns (PBR)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
Virtus Investment Partners Owns More Than 1% Of (CSVI)
Virtus Investment Partners Owns More Than 1% Of (EXR)
Virtus Investment Partners Owns More Than 1% Of (FCFS)
Virtus Investment Partners Owns More Than 1% Of (IGE)
Virtus Investment Partners Owns More Than 1% Of (KRC)
Virtus Investment Partners Owns More Than 1% Of (LDR)
Virtus Investment Partners Owns More Than 1% Of (NCRI)
Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
Virtus Investment Partners Owns More Than 1% Of (XLF)
Virtus Investment Partners Owns More Than 1% Of (XLI)
Virtus Investment Partners Owns More Than 1% Of (XLK)
Virtus Investment Partners Owns More Than 1% Of (XLU)
Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of DOMINO'S PIZZA UK & IRL PLC

For Brian Kelly
Accounts Managed by Kanundrum Capital are long (UPL)
Accounts Managed by Kanundrum Capital are long (RDC)
Accounts Managed by Kanundrum Capital are long (EBAY)
Accounts Managed by Kanundrum Capital are long (TSN)
Accounts Managed by Kanundrum Capital are long (GLD)
Accounts Managed by Kanundrum Capital are long (SLV)
Accounts Managed by Kanundrum Capital are long (DBA)
Accounts Managed by Kanundrum Capital are long (NLY)
Accounts Managed by Kanundrum Capital are long SLV calls
Accounts Managed by Kanundrum Capital are long GLD calls
Accounts Managed by Kanundrum Capital are long (MCP) calls
Accounts Managed by Kanundrum Capital are long (CLF) puts
Accounts Managed by Kanundrum Capital are long (SPY) puts
Accounts Managed by Kanundrum Capital are long VIX calls
Accounts Managed by Kanundrum Capital are long silver futures
Accounts Managed by Kanundrum Capital are long gold futures
Accounts Managed by Kanundrum Capital are long natural gas futures
Accounts Managed by Kanundrum Capital are long oil futures
Accounts Managed by Kanundrum Capital are short (XLF)
Accounts Managed By Kanundrum Capital Are Short (SMH)

For Ryan Jacob
Jacob Internet Fund Owns (GOOG)
Jacob Owns Shares Of Jacob Internet Fund

For Scott Nations
**No Disclosures

For Emma Sugarman
**No Disclosures

For Peter Misek
Jefferies Is A Market Maker In (AAPL), (RIMM)

For Betsy Graseck
Citigroup may be deemed to control Morgan Stanley Smith Barney LLC due to ownership, board membership, or other relationships. Morgan Stanley Smith Barney LLC may participate in, or otherwise have a financial interest in, the primary or secondary distribution of securities issued by Citigroup or an affiliate of Citigroup that is controlled by or under common control with Morgan Stanley Smith Barney LLC.

As of March 31, 2011, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in Morgan Stanley Research: Citigroup Inc.

Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of Bank of New York Mellon Corp, Citigroup Inc., Fifth Third Bancorp, KeyCorp, Northern Trust Corp., PNC Financial Services, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

Within the last 12 months, Morgan Stanley has received compensation for investment banking services from American Express Company, Bank of America, Bank of New York Mellon Corp, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

Within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking services from American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

Within the last 12 months, Morgan Stanley has provided or is providing investment banking services to, or has an investment banking client relationship with, the following company: American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

Within the last 12 months, Morgan Stanley has either provided or is providing non-investment banking, securities-related services to and/or in the past has entered into an agreement to provide services or has a client relationship with the following company: American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

Morgan Stanley & Co. Incorporated makes a market in the securities of American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, Fifth Third Bancorp, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

Morgan Stanley & Co. International PLC and its affiliates have a significant financial interest in the debt securities of American Express Company, Bank of America, Bank of New York Mellon Corp, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Discover Financial Services, J.P.Morgan Chase & Co., KeyCorp, Northern Trust Corp., PNC Financial Services, Regions Financial Corp, State Street Corporation, SunTrust, U.S. Bancorp, Wells Fargo & Co.

CNBC.com with wires.

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