All of these investors are meaningfully exposed to systematic funding liquidity risk.

• Leveraged buyout (LBO) investors rely heavily on debt financing and the availability of credit.
• Merger arbitrage hedge funds require leverage/funding to maintain their positions.
• Mortgage loan investors (such as banks or REITs) often depend on short-term funding like deposits or repos to fund long-term assets.
• Convertible bond investors (arbitrageurs) rely on short selling and repo markets for leverage.
• Statistical arbitrage investors require significant leverage to exploit very small price inefficiencies.

When systematic funding liquidity dries up, all these strategies and investors are adversely affected.