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Rehypothication | Risk | Rights | Definition | What is it?

Richard C. Wilson (September 25th, 2008) Writes:
Rehypothication RisksRehypothication Risks, Rights & CostsRehypothicationHere is a short article about the Rehypothication by prime brokerage firms, the definition of it, the risks of prime brokers using the strategy, the rights of hedge funds who loose access to their assets and what happens to the cost of prime brokerage services when hedge funds request for their assets not to be rehypothicated.Here is a short excerpt from the article:The dangers for hedge funds of having their assets rehypothecated became painfully clear last week: $22bn of the $40bn held by Lehman’s European prime brokerage had been rehypothecated. Hedge funds trying to reclaim the rehypothecated assets have found themselves in the queue of general creditors, likely to get back only a proportion of their money.Even those hedge funds which had ...

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