IMF: Hedge fund assets near $13tn, warrants closer scrutiny
Hedge fund assets have more than tripled to nearly $13 trillion in early 2026 from $4 trillion in 2013, the IMF said, warning their use of leverage and opacity can inject risks into the financial system. They now account for 9% of the Treasury market, up from 4% in 2022.
By Pete Schroeder WASHINGTON, Oct 6 (Reuters) — Hedge funds have more than tripled in size in the last decade and now play increasingly critical market roles, the International Monetary Fund said Tuesday, while warning that the funds' use of leverage and overall opacity can inject risks into the financial system. The findings were published Tuesday by the IMF as it released a chapter of its Global Financial Stability Report, which will be released in full on Oct. 13.
Here's what the group found: Hedge funds are playing an increasingly prominent role in trading, liquidity and risk transfers, as assets at the funds now stand at roughly $13 trillion in early 2026, up significantly from just $4 trillion in 2013 Hedge fund growth has primarily come through leverage, including synthetic leverage through derivatives Such funds have grown their footprint significantly in sovereign bond markets, particularly US Treasuries.
Hedge funds now account for 9% of the Treasury market, compared to just 4% in 2022 While greater hedge fund presence can boost market efficiency, the IMF warned they can also amplify stress when markets deteriorate, particularly due to those firms' use of leverage and fewer constraints on risk The IMF warned that hedge funds remain "inherently opaque," making it difficult to accurately gauge their risks and exposures. com)