Summary
A 40% decline in hedge fund trading volume resulted in a dramatic reduction in hedge funds’ overall presence in the U.S. market.
Analysis
All types of institutions reported an increase in fixed-income trading volume last year except hedge funds. A 40% decline in hedge fund trading volume resulted in a dramatic reduction in hedge funds’ overall presence in the U.S. market.
The results of Greenwich Associates’ 2009 U.S. Fixed-Income Investors study reveal that hedge funds have acted more forcefully than other types of institutions to manage counterparty risk and otherwise adjust their trading practices in response to the credit market crisis.
Hedge funds are more likely than other types of institutions to say they have cutback on the total number of dealers they use for fixed-income trading, shifted trading volume to dealers with the least counterparty risk and reduced the concentration of their trading business held by any single dealer.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
