Hedge funds globally have been increasing short positions amid heightened geopolitical tensions and ongoing concerns about the stability of the private credit market, according to new research from treasury and liquidity management solutions specialist Hazeltree.
The firm’s February 2026 Crowdedness Report indicates that global hedge fund positioning shifted modestly toward the short side as market volatility intensified. The data comes from anonymised trading activity across approximately 16,000 securities on Hazeltree’s securities-finance platform, representing more than 600 hedge funds.
Securities lending activity has also climbed significantly, with institutional utilisation rising around 50% over the past six months across most regions, suggesting a broader increase in short-selling demand. While utilisation in EMEA has been more volatile, the overall trend still points higher.
According to the report, hedge fund positioning remained concentrated across four key sectors globally: information technology, industrials, financials and consumer discretionary. These sectors ranked among the most crowded for both long and short positions across the Americas, EMEA and Asia-Pacific, highlighting how managers are simultaneously expressing directional views while hedging risk within the same industries.
At the individual stock level in North America, long positions became increasingly crowded in companies including Lam Research, Mastercard and Applied Materials. On the short side, hedge funds boosted bearish bets against Oracle and Nebius Group.
Tim Smith, managing director of data insights at Hazeltree, said February’s trading patterns were shaped by sharp swings in global markets as geopolitical conflicts intensified. The ongoing war in Ukraine and the emergence of new tensions in the Middle East involving Iran, Israel and the US have contributed to heightened volatility across asset classes.
At the same time, Smith pointed to rising concerns about the private credit sector, noting increasing redemption pressure at alternative asset managers such as Blue Owl Capital and Blackstone.
Technology stocks, particularly software companies, also experienced a sharp sell-off during the month as investors reassessed valuations in light of rapid advances in artificial intelligence. The downturn, sometimes referred to as a “SaaS-pocalypse,” has been driven by fears that new AI-driven automation tools could undermine traditional subscription-based software business models.
Hazeltree’s analysis shows that crowded positioning trends were broadly consistent with late 2025, though hedge funds appear to be adjusting exposures more actively as market uncertainty rises. The firm calculates its crowdedness score by measuring how many funds in its network hold long or short positions in a given security relative to peers within the same region and market-cap group.
