Hedge funds have become a dominating force in structured-product trading. According to Greenwich Associates, hedge funds account for 95% of the U.S. trading volume in distressed debt, and 55% of leveraged loans. In addition, hedge funds represent 61% of the trading volume of high-yield credit derivatives and 60% in structured credit. Overall, trading volumes in high-grade flow credit derivatives has grown 15% compared with last year, while high-yield flow credit derivatives trading volume were up roughly 10%.
Hedge Funds Dominate Structured Products
