IMF says hedge funds' market footprint growing, merits closer scrutiny
TLT•Hedge funds' assets have more than tripled, reaching roughly $13 trillion in early 2026, the IMF said, and they now account for 9% of the U.S. Treasury market, up from 4% in 2022. The IMF warned that leverage and limited transparency can increase financial-system risks.
1. Funds expand their reach
Hedge funds have grown from about $4 trillion in assets in 2013 to roughly $13 trillion in early 2026, the IMF said in a chapter published Tuesday from its Global Financial Stability Report. The full report is scheduled for release on Oct. 13.
2. Leverage and market risks
The IMF said hedge funds play increasingly prominent roles in trading, liquidity and risk transfers, with growth primarily coming through leverage, including synthetic leverage through derivatives. Their share of the U.S. Treasury market rose to 9%, from 4% in 2022.
3. Call for closer monitoring
The IMF said a greater hedge fund presence can boost market efficiency but may amplify stress when markets deteriorate, particularly because of leverage and fewer constraints on risk. Calling the funds “inherently opaque,” it urged policymakers to close data gaps and strengthen risk monitoring.
