AI Fund Unwind Simulator
A leveraged fund does not fail because its thesis is wrong. It fails because its financing is shorter than its conviction. Adjust gross leverage, concentration and the size of the decline to see where the margin call arrives. Scenario model, not advice.
Forced deleveraging
Financing counterparties call for additional margin faster than the book can be reduced voluntarily. Liquid listed positions are sold first because they are the only sleeve that clears at scale, which concentrates what remains into the least liquid holdings.
The model applies the adverse move in full to the concentrated sleeve and at half weight to the remainder, then tests whether the liquid share of the book can fund redemptions. It is a teaching instrument for the mechanics described in this piece, not a forecast and not investment advice.
Read the accompanying analysis: The Situational Awareness Unwind