Key Takeaways
- • Hazeltree's February 2026 Crowdedness Report shows global hedge funds shifting slightly toward the short side versus the long side, with securities lending utilization up 50% over the recent six months in major regions (EMEA excepted, which was volatile but still higher).
- • Information Technology, Industrials, Financials and Consumer Discretionary were the most crowded sectors across the Americas, EMEA and APAC, appearing at or near the top of both long and short rankings, consistent with December 2025.
- • In North America, Lam Research, Mastercard and Applied Materials led long crowdedness increases, while Oracle and Nebius Group led short crowdedness increases.
- • Hazeltree attributed the positioning to private credit concerns, a new Middle East conflict involving Iran, Israel and the U.S., and an ongoing Russia/Ukraine war, alongside a software sell-off dubbed 'SaaS-pocalypse.'
Summary
Global hedge funds showed a slight shift toward short positioning in February 2026, according to the newly published Hazeltree Crowdedness Report. Hazeltree, a provider of treasury and liquidity management solutions for alternative asset managers, said the shift came against a backdrop of concerns over a private credit blow-up and ongoing wars in the Middle East and Russia/Ukraine. Securities lending institutional utilization increased by 50% over the recent six months in major regions, with EMEA the possible exception, where activity was volatile but still higher.
The report, based on anonymized data from about 16,000 securities on Hazeltree's securities-finance platform representing more than 600 global funds, found the most crowded sectors consistently fell into four groups: Information Technology, Industrials, Financials and Consumer Discretionary. Hazeltree noted that these sectors appeared at or near the top of both long and short crowdedness rankings in every region, which it said could reflect managers simultaneously expressing conviction and hedging within the same sector.
At the single-name level in North America, large-cap long crowdedness rose most sharply in Lam Research, Mastercard and Applied Materials, while Amazon and Microsoft saw declines of more than 10% month over month in long fund counts. Short crowdedness increased in large-caps Oracle and Nebius Group, with mid-cap increases in Aurora Innovation, BXP, Dropbox and The Campbell's Company. Regional movers in EMEA and APAC included ABB, AIB Group and Centrica on the long side in Europe, and Marks & Spencer, Sodexo and Soitec on the short side, as well as Toyota, Panasonic and Ibiden among large-cap APAC shorts.
Hazeltree Managing Director of Data Insights Tim Smith said February brought unprecedented market volatility, citing the new Middle East war involving Iran, Israel and the U.S., and an increase in private credit redemptions at managers including Blue Owl Capital and Blackstone. Smith also described a sharp software sell-off, triggered by advances in AI agentic tools that could threaten the revenue models of seat-based SaaS providers. Hazeltree defines its crowdedness score as a relative metric normalizing the number of funds longing or shorting a security within a region and market-cap group against its peers.
The report, based on anonymized data from about 16,000 securities on Hazeltree's securities-finance platform representing more than 600 global funds, found the most crowded sectors consistently fell into four groups: Information Technology, Industrials, Financials and Consumer Discretionary. Hazeltree noted that these sectors appeared at or near the top of both long and short crowdedness rankings in every region, which it said could reflect managers simultaneously expressing conviction and hedging within the same sector.
At the single-name level in North America, large-cap long crowdedness rose most sharply in Lam Research, Mastercard and Applied Materials, while Amazon and Microsoft saw declines of more than 10% month over month in long fund counts. Short crowdedness increased in large-caps Oracle and Nebius Group, with mid-cap increases in Aurora Innovation, BXP, Dropbox and The Campbell's Company. Regional movers in EMEA and APAC included ABB, AIB Group and Centrica on the long side in Europe, and Marks & Spencer, Sodexo and Soitec on the short side, as well as Toyota, Panasonic and Ibiden among large-cap APAC shorts.
Hazeltree Managing Director of Data Insights Tim Smith said February brought unprecedented market volatility, citing the new Middle East war involving Iran, Israel and the U.S., and an increase in private credit redemptions at managers including Blue Owl Capital and Blackstone. Smith also described a sharp software sell-off, triggered by advances in AI agentic tools that could threaten the revenue models of seat-based SaaS providers. Hazeltree defines its crowdedness score as a relative metric normalizing the number of funds longing or shorting a security within a region and market-cap group against its peers.
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