AI Hedge Fund Exits Public Equity Book; Potential $100B+ Unwind
An AI-driven hedge fund reportedly liquidated its entire public equity portfolio this month. With a NAV of $45 billion, high leverage could have pushed the gross unwind well above $100 billion.
Reports indicate that an AI hedge fund has exited its entire public equity portfolio this month. As of July 1st, the fund’s Net Asset Value (NAV) was approximately $45 billion.
NAV represents the fund’s equity capital after accounting for borrowings—not the total size of its positions. The fund is known for employing extreme leverage. At 2x leverage, a $45 billion NAV would support roughly $90 billion in gross market exposure; at 3x, about $135 billion; and at 4x, around $180 billion. This means the actual unwinding of securities could have exceeded $100 billion.
Despite the potential scale of the sell-off, markets have held up well. The commentary frames this as part of a new era where AI-driven strategies introduce heightened volatility.
Source: The Kobeissi Letter