Cursor disappears (invisible) after exiting TDM

I've recently purchased a 0.5m thunderbolt cable to connect my Macbook pro to my 27" iMac. All is fine until I exit Target Display Mode (apple F2). At that point the cursor disappears. Very annoyingly, I can just about trace it's whereabouts via the various cues on web browser windows, and through trial and error navigate to the apple menu and restart, whereupon it's all back to normal.

Anyone know why this is or how I can prevent it from happening?

iMac running OSX 10.7.5

intel core i5

AMD Radeon HD 6770M 512mb